<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 28, 2000
REGISTRATION NO. 333-93393
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1 TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
COMMISSION FILE NUMBER 1-10140
AMERICA WEST AIRLINES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 86-0418245
(STATE OR OTHER JURISDICTION OF INCORPORATION OR (I.R.S. EMPLOYER IDENTIFICATION NO.)
ORGANIZATION) (602) 693-0800
4000 E. SKY HARBOR BOULEVARD (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA
PHOENIX, ARIZONA 85034-3899 CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
</TABLE>
------------------------
4512
(PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER)
------------------------
STEPHEN L. JOHNSON
SENIOR VICE PRESIDENT - CHIEF ADMINISTRATIVE OFFICER AND ASSISTANT CORPORATE
GROUP MANAGER
AMERICA WEST AIRLINES, INC.
4000 E. SKY HARBOR BOULEVARD
PHOENIX, ARIZONA 85034-3899
(602) 693-0800
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPIES OF CORRESPONDENCE TO:
SAMUEL M. LIVERMORE
COOLEY GODWARD, LLP
ONE MARITIME PLAZA
SAN FRANCISCO, CA 94111
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION
8(a), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER
OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION DATED JANUARY 28, 2000
PROSPECTUS
AMERICA WEST AIRLINES, INC.
EXCHANGE OFFER
PASS THROUGH CERTIFICATES, SERIES 1999-1
<TABLE>
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THE EXCHANGE OFFER--
CONSIDER CAREFULLY THE RISK We are registering new pass through certificates and
FACTORS BEGINNING ON PAGE 24 offering them in exchange for outstanding certificates
IN THIS PROSPECTUS. previously issued in September 1999 pursuant to an offering
exempt from the SEC's registration requirements. The terms
The certificates will and conditions of the exchange offer are summarized below
represent interests in and more fully described in this prospectus.
trusts only and will not
represent interests in or EXPIRATION DATE 5:00 p.m. (New York City time)
obligations of America West , 2000
or any America West
affiliate. WITHDRAWAL RIGHTS Expire before 5:00 p.m. (New York City
time) on the expiration date
We are relying on the
position of the SEC staff in INTEGRAL MULTIPLES Outstanding Certificates may only be
certain interpretive letters tendered in integral multiples of $1,000
to third parties to remove
the transfer restrictions on EXPENSES Paid for by America West
the new certificates.
NEW CERTIFICATES--
Pass through certificates are securities that evidence an
ownership interest in a pass through trust. The new
certificates will represent the same fractional undivided
interest in the trusts as the outstanding certificates they
are replacing. The new certificates will have the same
material financial terms as the outstanding certificates,
which are summarized below and described more fully in this
prospectus. The new certificates will not contain terms with
respect to transfer restrictions or interest rate increases
and will only be available in book-entry form.
</TABLE>
<TABLE>
<CAPTION>
CLASS G CERTIFICATES CLASS C CERTIFICATES
<S> <C> <C>
PRINCIPAL AMOUNT $233,668,000 $20,158,000
INTEREST RATE 7.93% 8.54%
FIRST DISTRIBUTION DATE January 2, 2000 January 2, 2000
REGULAR DISTRIBUTION DATES January 2 & July 2 January 2 & July 2
FINAL DISTRIBUTION DATE
- Expected January 2, 2019 January 2, 2006
- Legal July 2, 2020 July 2, 2007
</TABLE>
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED THESE
CERTIFICATES OR DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE> 3
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS
You should rely only on the information provided in this prospectus
including the information incorporated by reference. We have not authorized
anyone to provide you with different information. We are not offering the
certificates in any state where the offer is not permitted. We do not claim the
accuracy of the information in this prospectus as of any date other than the
date stated on the cover.
We include cross-references in this prospectus to captions where you can
find further related discussions. The following table of contents provides the
pages on which these captions are located. You can find a listing of the pages
where capitalized terms used in this prospectus are defined under the caption
"Index of Terms" in Appendix I of this prospectus.
AVAILABLE INFORMATION
We are filing with the SEC a registration statement on Form S-4 relating to
the new certificates. This prospectus is a part of the registration statement,
but the registration statement includes additional information and also attaches
exhibits that are referenced in this prospectus. You can review a copy of the
registration statement through the SEC's "EDGAR" System (Electronic Data
Gathering, Analysis and Retrieval) that is available on the SEC's web site
(http://www.sec.gov).
We are required to file publicly certain information under the Securities
Exchange Act of 1934. All of our public filings are also available on EDGAR,
including reports, proxy statements and other information. You may also read and
copy all of our public filings at the SEC's public reference room in Washington,
D.C. or in their facilities in New York and Chicago. Please call the SEC at
(800) SEC-0330 for further information on the operation of the public reference
rooms. All filings by our parent corporation, America West Holding Corporation,
is also available at the offices of the New York Stock Exchange.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference information we file with the
SEC, which means that we can disclose information to you by referring you to
those documents. The information incorporated by reference is considered to be
part of this prospectus, and information that we later file with the SEC will
automatically update the information in this prospectus.
We incorporate by reference all annual, quarterly and current reports we
filed during 1999. These include the annual report on Form 10-K for the year
ended December 31, 1998, the quarterly reports on Forms 10-Q filed for the
quarters ended March 31, 1999, June 30, 1999 and September 30, 1999 and the
current report on Form 8-K filed on July 21, 1999. We also incorporate by
reference the portions of the proxy statement for the annual stockholder meeting
held on May 21, 1999, that were incorporated by reference in the Form 10-K. Any
future annual, quarterly or current reports and proxy materials filed prior to
the end of the exchange offer are incorporated by reference.
As a recipient of this prospectus, you may request a copy of any document
we incorporate by reference, except exhibits to the documents (unless the
exhibits are specifically incorporated by reference), at no cost, by writing or
call us at: Corporate Secretary, America West Airlines, Inc., 4000 E. Sky Harbor
Blvd., Phoenix, Arizona 85034; (480) 693-0800. In order to ensure timely
delivery of the documents, please make any such request no later than five
business days prior to the expiration of the exchange offer.
2.
<PAGE> 4
TABLE OF CONTENTS
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PAGE
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PROSPECTUS SUMMARY.................. 5
EXCHANGE OFFER...................... 5
THE PARTIES......................... 7
THE MATERIAL AGREEMENTS............. 7
FINANCING THE ACQUISITION OF
AIRCRAFT.......................... 8
THE TRUSTS.......................... 12
THE CERTIFICATES.................... 13
THE EQUIPMENT NOTES................. 16
ERISA CONSIDERATIONS................ 18
USE OF PROCEEDS..................... 19
RATIO OF EARNINGS TO FIXED
CHARGES........................... 19
THE COMPANY......................... 19
QUESTIONS OR REQUESTS FOR
ASSISTANCE........................ 21
CASH FLOW STRUCTURE................. 22
Selected Financial Data............. 23
RISK FACTORS........................ 24
Risk Factors Relating to the
Certificates and the Exchange
Offer............................. 24
Possible Effects if Aircraft
Appraisals do not Correspond to
the Realizable Value of
Aircraft.......................... 24
Effect of Subordination on
Subordinated Certificateholders... 24
Control Over the Collateral and
Potential Sale of the
Collateral........................ 25
Possible Changes to Agreements
Described in this Prospectus After
the Exchange Offer................ 25
Possible Effects of Appointing Owner
Participants...................... 26
Possible Effects from Unused
Deposits.......................... 27
Effects of Withholding Tax on
Foreign Investors................. 27
Limited Ability to Resell
Certificates...................... 27
Consequences of Failure to Exchange
Old Certificates.................. 27
Risk Factors Relating to the Policy
Provider.......................... 28
The Impact of any Decline in the
Financial Condition of the Policy
Provider.......................... 28
The Limited Nature of the Policy.... 28
</TABLE>
<TABLE>
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PAGE
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The Policy Provider as a Controlling
Party............................. 28
Risk Factors Relating to America
West and the Airline Industry..... 29
Competition and Industry
Conditions........................ 29
Our Ability to Borrow Funds in the
Future............................ 30
Labor Relations..................... 30
Control by Certain Principal
Stockholders...................... 31
Fluctuations in Fuel Costs.......... 31
Aviation Ticket Taxes............... 31
Security and Safety Measures........ 31
Other Regulatory Matters............ 32
Substantial Restrictions Imposed and
Promises Made in connection with
Current Loan Agreements and Debt
Instruments....................... 32
Year 2000 Compliance Program
and Risks......................... 32
Volatility of Stock Price........... 33
THE EXCHANGE OFFER.................. 34
General............................. 34
The Exchange Offer.................. 34
Tendering Outstanding Certificates
in the Exchange Offer............. 35
Book-Entry Transfer................. 37
Guaranteed Delivery Procedures...... 37
Withdrawal of Tenders............... 38
Conditions.......................... 38
Exchange Agent...................... 38
Transferability of New
Certificates...................... 39
Alternative Use of Shelf
Registration Statement............ 39
Fees and Expenses................... 40
REMAINING PROSPECTUS DISCLOSURE..... 41
DESCRIPTION OF THE NEW
CERTIFICATES...................... 41
General............................. 41
Certificates Represent an Ownership
Interest in the Corresponding
Trust............................. 41
Subordination....................... 42
Payments And Distributions.......... 42
Pool Factors........................ 45
</TABLE>
3.
<PAGE> 5
<TABLE>
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PAGE
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<S> <C>
Reports To Certificateholders....... 47
Indenture Defaults and Certain
Rights Upon An Indenture
Default........................... 47
Purchase Rights of
Certificateholders................ 50
PTC Event of Default................ 50
Merger, Consolidation And Transfer
Of Assets......................... 50
Modifications of the Pass Through
Trust Agreements and Certain Other
Agreements........................ 51
Obligation to Purchase Equipment
Notes............................. 53
Transaction Structure for Leased and
Owned Aircraft.................... 54
Mandatory Terms..................... 55
Possible Issuance of Class D
Certificates...................... 58
Liquidation of Original Trusts...... 58
Termination of the Trusts........... 59
The Trustees........................ 59
Book-Entry; Delivery and Form....... 59
DESCRIPTION OF THE DEPOSIT
AGREEMENTS........................ 61
General............................. 61
Unused Deposits..................... 61
Distribution Upon Occurrence Of
Triggering Event.................. 62
Depositary.......................... 62
Replacement of Depositary........... 63
DESCRIPTION OF THE ESCROW
AGREEMENTS........................ 63
DESCRIPTION OF THE LIQUIDITY
FACILITIES........................ 64
General............................. 64
Drawings............................ 64
Reimbursement of Drawings........... 67
Liquidity Events of Default......... 68
Liquidity Provider.................. 69
DESCRIPTION OF THE POLICY AND THE
POLICY PROVIDER AGREEMENT......... 70
The Policy.......................... 70
General............................. 72
Definitions......................... 73
The Policy Provider Agreement....... 73
</TABLE>
<TABLE>
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PAGE
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DESCRIPTION OF THE INTERCREDITOR
AGREEMENT......................... 74
Intercreditor Rights................ 74
Priority of Distributions........... 76
Priority of Distributions if a
Triggering Event Has Occurred..... 78
Voting of Equipment Notes........... 80
Addition of Trustee for Class D
Certificates...................... 80
The Subordination Agent............. 80
DESCRIPTION OF THE AIRCRAFT AND THE
APPRAISALS........................ 82
The Aircraft........................ 82
The Appraisals...................... 82
Deliveries of Aircraft.............. 83
Substitute Aircraft................. 84
Bridge Financing.................... 84
Conversion Option................... 85
DESCRIPTION OF THE EQUIPMENT
NOTES............................. 85
General............................. 85
Subordination....................... 85
Principal And Interest Payments..... 86
Redemption.......................... 86
Security............................ 88
Loan To Value Ratios Of Equipment
Notes............................. 89
Limitation of Liability............. 90
Indenture Defaults, Notice And
Waiver............................ 90
Remedies............................ 92
Modification of Indentures and
Leases............................ 94
Indemnification..................... 95
The Leases and Certain Provisions of
the Owned Aircraft Indentures..... 95
U.S. FEDERAL INCOME TAX
CONSEQUENCES...................... 104
Exchange of Outstanding Certificates
for New Certificates.............. 104
ERISA CONSIDERATIONS................ 104
PLAN OF DISTRIBUTION................ 107
LEGAL MATTERS....................... 108
EXPERTS............................. 108
APPENDIX I--INDEX OF TERMS.......... A-I-1
APPENDIX II--APPRAISAL
LETTERS........................... A-II-1
</TABLE>
4.
<PAGE> 6
PROSPECTUS SUMMARY
- - THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION FROM THIS PROSPECTUS AND DOES
NOT CONTAIN ALL OF THE INFORMATION THAT YOU NEED TO CONSIDER IN MAKING YOUR
INVESTMENT DECISION. TO UNDERSTAND ALL OF THE TERMS OF THE NEW CERTIFICATES,
READ THE ENTIRE PROSPECTUS AND THE EXHIBITS TO THE REGISTRATION STATEMENT OF
WHICH THIS PROSPECTUS IS A PART.
- - THROUGHOUT THIS PROSPECTUS, "WE", "US", "AMERICA WEST" AND THE "COMPANY"
REFER TO AMERICA WEST AIRLINES, INC. AND "HOLDINGS" REFERS TO AMERICA WEST
HOLDINGS CORPORATION, OUR PARENT COMPANY.
EXCHANGE OFFER
HISTORY
In order to finance the purchase or lease of up to ten aircraft for use in our
current operations as a commercial airline, pass through trusts initially sold
pass through certificates in September 1999 to Morgan Stanley & Co.
Incorporated, Donaldson, Lufkin & Jenrette Securities Corporation, Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Salomon Smith Barney Inc. We
refer to these pass through certificates that were sold in September 1999 as
"outstanding certificates" throughout this prospectus. The initial purchasers
then placed the outstanding certificates with institutional investors. These
initial transactions were exempt from registration requirements of the SEC but,
as a result, the outstanding certificates are not freely tradable.
By registering the new certificates with the SEC we are offering
certificateholders the opportunity to exchange their outstanding certificates
for the new certificates. A certificateholder who participates in the exchange
offer will receive new certificates that have the same financial terms as the
outstanding certificates and in an equal principal amount. For example, a
certificateholder owning Class G pass through certificates with a principal
value of $10 million and earning interest at a rate of 7.93% will be able to
exchange those certificates for new Class G pass through certificates with a
principal value of $10 million and earning interest at a rate of 7.93%. The main
difference is that the new Class G certificates, by being registered with the
SEC, will be free of the transfer restrictions currently imposed on the
outstanding Class G certificates.
PROCEDURES FOR EXCHANGING OUTSTANDING CERTIFICATES
To participate in the exchange offer, certificateholders must deliver their
outstanding certificates for exchange no later than 5:00 p.m., New York time, on
, 2000. This expiration date may be extended under some
circumstances. Certificateholders must also deliver a completed and signed
letter of transmittal with tender of their outstanding certificates. A letter of
transmittal has been sent to certificateholders and a form can be found as an
exhibit to the registration statement filed with the SEC.
Certificateholders should deliver the outstanding certificates and the letter of
transmittal to Wilmington Trust Company, the exchange agent for the exchange
offer, as follows:
<TABLE>
<S> <C> <C> <C>
Fax: (302) 651-1079
Mail or Wilmington Trust Company By Hand: Wilmington Trust Company
Overnight 1100 North Market Street, 1st Fl. 1105 North Market Street, 1st Fl.
Delivery: Wilmington, DE 19890-0001 Wilmington, DE 19890
Attn: Kristin Long Attn: Corporate Trust Operations
</TABLE>
Certificateholders may also tender their outstanding certificates through a
book-entry transfer or by complying with certain guaranteed delivery procedures.
In either case, however, a completed letter of transmittal must still be
delivered to the exchange agent before the expiration of the exchange offer.
Certificateholders may only tender outstanding certificates in integral
multiples of $1,000. Similarly, the new certificates will only be issued in
integral multiples of $1,000.
5.
<PAGE> 7
REPRESENTATIONS MADE BY TENDERING CERTIFICATEHOLDERS
To participate in the exchange offer, each certificateholder will be required to
make the following representations in the letter of transmittal:
1. The certificateholder is not an affiliate of ours nor a broker-dealer
tendering outstanding certificates acquired for its own account (an
"affiliate" is defined as a person who controls, is controlled by or is
under common control with us);
2. the certificateholder is acquiring the new certificates in the ordinary
course of its business; and
3. the certificateholder is not acquiring the new certificates with an intent
to distribute them.
RESALE OF NEW CERTIFICATES
We are registering the new certificates with the SEC in order to remove the
transfer restrictions that apply to the outstanding certificates.
Certificateholders who make the representations listed above will be able to
freely resell the new certificates. Certificateholders who are broker-dealers,
and who acquire new certificates directly from the trustee with an intent to
resell them, must deliver a prospectus in connection with any resale of new
certificates. We will make this prospectus available to broker-dealers to use in
connection with any resale of new certificates for six months following the
expiration of the exchange offer.
WITHDRAWAL RIGHTS
Certificateholders who have tendered outstanding certificates may withdraw their
certificates at any time before 5:00 p.m., New York City time, on the date the
exchange offer expires. To withdraw a tender of outstanding certificates,
certificateholders must submit a written notice requesting the withdrawal to the
exchange agent.
REGISTRATION, CLEARANCE AND SETTLEMENT
The new certificates will be represented by one or more permanent global
certificates, which will be registered in the name of Cede & Co., as the nominee
of The Depository Trust Company, or DTC. The global certificates will be
deposited with the trustee as custodian for DTC.
DELIVERY OF NEW CERTIFICATES
The exchange agent will deliver new certificates for all outstanding
certificates promptly following the expiration of the exchange offer.
TAX CONSEQUENCES
The exchange of new certificates for outstanding certificates will not be
considered a sale, exchange or other type of taxable transaction for Federal
income tax purposes. See "Certain Federal Income Tax Considerations" for a more
complete discussion of tax considerations.
FEES AND EXPENSES
We will pay for all expenses that arise in connection with the exchange offer.
FAILURE TO EXCHANGE OUTSTANDING CERTIFICATES
With some exceptions, certificateholders who do not exchange their outstanding
certificates before the exchange offer expires will no longer be entitled to
registration rights. In addition, these certificateholders will not be able to
offer or sell their outstanding certificates unless the certificates are
registered with the SEC or the sale is exempt from applicable federal and state
securities laws.
6.
<PAGE> 8
THE PARTIES
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Exchange Agent
Trustee
Subordination Agent
Paying Agent
Loan Trustee........................... Wilmington Trust Company
Depositary............................. ABN AMRO Bank N.V., acting through its Chicago branch
Liquidity Provider..................... Morgan Stanley Capital Services, Inc.
Policy Provider........................ Ambac Assurance Corporation
Appraisal Firms........................ AVITAS, Inc., AvSolutions, Inc. and Morten Beyer and
Agnew, Inc.
</TABLE>
THE MATERIAL AGREEMENTS
Every material agreement summarized in this prospectus was filed as an exhibit
to the registration statement of which this prospectus is a part. Below is a
list of each agreement and a brief description of the purpose of the agreement
in the transaction described in this prospectus.
Pass Through Trust
Agreements.................... These agreements between America West and
Wilmington Trust Company, as trustee, relate to
the formation of the pass through trusts that
issue the certificates and that hold the
equipment notes that generate the cash flow to
make payments on the certificates. Separate
agreements exist for the Class G trust and the
Class C trust.
Revolving Credit Agreement.... These agreements govern the liquidity
facilities provided by Morgan Stanley Capital
Services, Inc., as liquidity provider, to cover
up to three semiannual interest payments.
Separate agreements exist for the Class G and
Class C certificates.
Intercreditor Agreement....... This agreement governs the priority of
distribution of payments to certificateholders
and the rights of the various parties to
control remedies and alterations to the
financing agreements.
Exchange and Registration
Rights Agreement.............. This agreement governs our obligation to
register the outstanding certificates either by
completing an exchange offer or, alternatively,
filing a shelf registration statement.
Deposit Agreements............ These agreements govern the deposit of the
proceeds from the sale of the outstanding
certificates and the management of the funds
deposited prior to the application of the
proceeds to finance the aircraft. Separate
agreements exist for the deposits made from the
sale of Class G and Class C certificates.
Escrow and Paying Agent
Agreement..................... These agreements govern the holding of the
deposit proceeds under the Deposit Agreements
for the benefit of the certificateholders and
the ability of the trustee of each pass through
trust to withdraw these deposits to purchase
equipment notes. Separate agreements exist for
the Class G trust and the Class C trust.
Insurance and Indemnity
Agreement..................... This agreement governs the certificate guaranty
insurance policy provided by Ambac Assurance
Corporation, the policy provider, to support
the payments on the Class G certificates.
Note Purchase Agreement....... This agreement governs the terms of the
purchase of equipment notes by the trustee to
finance each aircraft.
7.
<PAGE> 9
FINANCING THE ACQUISITION OF AIRCRAFT
The sale of the pass through certificates referenced in this prospectus is a
means for us to finance the purchase or lease of up to ten aircraft that we will
use in our current operations as an airline engaged in commercial passenger
transport. The aircraft we will finance include five Airbus A319-132 aircraft
and five Airbus A320-232 aircraft that are scheduled for delivery from August
1999 to February 2000. As at the date of this prospectus, all but two of the
aircraft have been delivered and financed with the proceeds from the sale of the
certificates. The final date by which we may use the proceeds from the sale of
the certificates is no later than May 30, 2000, subject to extension through
August 31, 2000 under some circumstances. The following paragraphs describe the
general framework of the sale of pass through certificates and the financing of
the aircraft that are discussed in greater detail in this prospectus.
PASS THROUGH TRUSTS GENERALLY
We are utilizing a pass through trust structure for this financing. A pass
through trust structure involves the creation of a separate trust into which are
placed the equipment notes issued in respect of separate aircraft financing
transactions. The trust passes through to the holders of the certificates of
that trust all payments of interest and principal paid on the equipment notes
held in the trust. This is why we refer to the certificates as "pass through
certificates." Since in our transaction the equipment notes are being issued in
two separate series (reflecting different interest rates and priority of
payment), two separate trusts have been created, each to hold the equipment
notes of a single series.
PASS THROUGH TRUSTS ISSUE PASS THROUGH CERTIFICATES
In September 1999 the Class G trust sold Class G certificates in the principal
amount of $233,668,000 and the Class C trust sold Class C certificates in the
principal amount of $20,158,000. The certificates represent an ownership
interest in the trust property of the trust that issued that particular class of
certificates. The interest rate on the deposits and equipment notes relating to
Class G certificates is 7.93% and the interest rate on the deposits and
equipment notes relating to Class C certificates is 8.54%. The holders of the
Class C certificates receive a higher interest rate because their right to
payments of interest and principal on the related equipment notes is subordinate
to the right of the holders of the Class G certificates to receive payment of
interest and principal on the related equipment notes.
PROCEEDS FROM THE SALE OF CERTIFICATES WERE DEPOSITED UNTIL DELIVERY OF EACH
AIRCRAFT
The cash proceeds from the sale of the certificates were deposited with ABN AMRO
Bank N.V., the depositary, into one of two accounts corresponding to the trust
that issued the related class of certificates, except for those proceeds
relating to two of the aircraft, which were utilized on the date of issuance to
finance these aircraft. Therefore, deposits from the sale of Class G
certificates were placed into an account corresponding to the Class G trust
while deposits from the sale of Class C certificates were placed into an account
corresponding to the Class C trust. The deposits corresponding to the Class G
trust accrue interest at an annual rate equal to 7.93% and the deposits
corresponding to the Class C trust accrue interest at an annual rate equal to
8.54%.
PASS THROUGH TRUSTS PURCHASE EQUIPMENT NOTES TO FINANCE THE AIRCRAFT
On the issuance date of the outstanding certificates, a portion of the proceeds
from the sale of the certificates were utilized to purchase the equipment notes
of two aircraft that were financed on that date. Whenever the financing of one
of the remaining eight aircraft occurs, the trustee withdraws deposits from the
appropriate trust to purchase equipment notes of the appropriate series issued
with respect to that aircraft. These deposits are withdrawn to purchase
equipment notes regardless of whether we mortgage finance or lease finance an
aircraft.
Equipment notes are issued to finance each aircraft. The issuer of the equipment
notes depends on whether we elect to mortgage finance or lease finance an
aircraft. If we elect to mortgage finance an aircraft, we will be the issuer of
the equipment notes in respect of that aircraft. If we elect to lease finance
8.
<PAGE> 10
an aircraft, an owner trustee established for such purpose will be the issuer of
the equipment notes issued in respect of that aircraft. The Series G equipment
notes accrue interest at an annual rate of 7.93% and the Series C equipment
notes accrue interest at an annual rate of 8.54%. Payments of principal and
interest on the equipment notes owned by a trust are passed through to the
certificateholders of that trust.
AMERICA WEST MAY MORTGAGE FINANCE OR LEASE FINANCE EACH AIRCRAFT
We can elect to either mortgage finance or lease finance each of the ten
aircraft. If we mortgage finance an aircraft, then we issue the equipment notes
for that aircraft on a recourse basis in connection with a separate secured loan
transaction pursuant to an owned aircraft indenture we enter into with a loan
trustee. If we lease finance an aircraft, then a separate owner trustee issues
the equipment notes for that aircraft in connection with a separate leveraged
lease transaction pursuant to a leased aircraft indenture between the owner
trustee and a loan trustee. In either case, the equipment notes are secured by
the aircraft that we own or lease.
If we elect to finance an aircraft using the owned aircraft structure, we will
be using a form of financing called a mortgage financing. In a mortgage
financing of an aircraft, the aircraft is financed using the proceeds of debt
issued by the obligor, and the aircraft is mortgaged by the obligor in favor of
the lenders.
If we elect to finance an aircraft using the lease aircraft structure, we will
be using a form of financing called a leveraged lease. A leveraged lease
financing is a financing technique that enables the party that seeks to acquire
an asset, such as an aircraft, to finance the acquisition of the asset by means
of a lease at favorable costs and economic terms (compared to, for example, a
mortgage financing) by having another party act as the owner (and lessor) of the
asset. In order for a leveraged lease to make economic sense, the lessee must
have insufficient income and tax liability to take advantage of the tax benefits
associated with the acquisition of the asset and for the lessee to find an
investor that has sufficient income and tax liability to act as the owner and
lessor of the asset. The lessor, in effect, passes along to the lessee a portion
of the tax benefits in the form of reduced lease payments. The result of the
lease transaction is that the lessor makes an adequate return and the lessee's
net financing cost for the asset is less than if purchased. The "leverage" in a
leveraged lease financing is the borrowing by the lessor of a portion of the
purchase price of the asset from one or more lenders.
Accordingly, in a leveraged lease the lessor purchases the asset using its own
money and money borrowed from lenders and leases the asset to the lessee. The
lenders in a leveraged lease are granted a mortgage on the asset being financed
and an assignment of the lease of the asset; under such lease, the lessee is
obligated to make lease rental payments that are sufficient to pay the scheduled
debt service on the lessor's borrowings from its lenders.
In the leveraged lease of large-ticket items like aircraft, transactions are
often structured interposing an owner trust, that is, a special purpose trust,
created for the benefit of the investor in the asset, to act as the lessor, the
purpose of which is to insulate the lessee and lenders from the credit risk of
the investor and to insulate the investor from risks associated with the
ownership of the asset. In such a structure, the investor is called an "owner
participant."
We sometimes refer to the indentures for both leased aircraft and owned aircraft
collectively as "indentures" and the trustees of both leased and owned aircraft
as "loan trustees."
9.
<PAGE> 11
TRANSACTION STRUCTURE FOR LEASED AIRCRAFT
The following diagram illustrates transactions in connection with the purchase
of equipment notes by the trustees to finance a leased aircraft. Eight separate
transactions similar to the transactions illustrated in the diagram have
occurred and we anticipate that the balance of the aircraft will be financed
with the proceeds of the offering of the certificates on a lease finance basis.
[FLOW CHART]
- ---------------
(1) We may sell aircraft we own to the owner trust in a leveraged lease
transaction. In some instances, the owner trust may purchase aircraft
directly from the manufacturer or from other persons.
(2) Each leased aircraft is subject to a separate lease.
(3) Because the owner trustee assigns these payments to the loan trustee, we
make these payments directly to the loan trustee.
(4) Because the sale of the certificates may occur prior to the closing of each
leveraged lease transaction, the proceeds from the sale of certificates not
used on the certificates' issuance date for the financing of aircraft are
initially held in escrow by the escrow agent and deposited with the
depositary. The depositary holds these funds as interest-bearing deposits.
In connection with each leveraged lease transaction, amounts are withdrawn
from the deposit for the respective trust and used to acquire equipment
notes.
The diagram above shows how we would lease finance aircraft through the issuance
by an owner trustee of leased aircraft equipment notes. In this type of a
financing, the leased aircraft is sold to an owner trustee that, in turn, leases
the aircraft back to us. The owner participant, who is the beneficial owner of
the owner trust, contributes a portion of the purchase price of the aircraft.
The owner trust enters into an indenture with the loan trustee providing for a
security interest in the leased aircraft, the assignment of the lease and the
issuance of equipment notes to finance the remaining portion of the purchase
price of an aircraft. The owner trustee issues the Series G and Series C
equipment notes to an agent on behalf of the Class G and Class C trusts. As each
aircraft is financed, the Class G and Class C trusts either use the proceeds of
the initial sale of the Class G and Class C certificates (as was the case in
respect of two of the aircraft) or withdraw deposits to purchase the applicable
equipment notes and, in either case, passes the amounts through to the loan
trustee who, in turn, forwards the proceeds to the owner trust as payment for
the equipment notes. The owner trustee, then, using the equity contribution of
the owner participant and the proceeds from the sale of the equipment notes,
uses that money to pay the purchase price for the aircraft being financed.
10.
<PAGE> 12
TRANSACTION STRUCTURE FOR OWNED AIRCRAFT
The following diagram illustrates transactions in connection with the purchase
of equipment notes by the trustees to finance an owned aircraft. We do not
anticipate using this financing structure, but if we did, separate transactions
similar to the transactions illustrated in the diagram will occur for each owned
aircraft financed with the proceeds of the offering of the certificates.
[FLOW CHART]
- ---------------
(1) Because the sale of the certificates may occur prior to the financing of
each owned aircraft, the proceeds from the sale of certificates not utilized
on the closing date for the financing of aircraft are initially held in
escrow by the escrow agent and deposited with the depositary. The depositary
holds such funds as interest-bearing deposits. In connection with the
closing of each owned aircraft financing, amounts are withdrawn from the
deposit for the respective trust and used to acquire equipment notes.
The diagram above shows how we would finance aircraft that we own through the
issuance of owned aircraft equipment notes. In such a financing, we would enter
into an indenture with the loan trustee providing for the mortgaging of our
aircraft and the issuance of equipment notes by us. As each aircraft is
financed, the Class G and Class C trusts withdraw amounts from the applicable
depositary necessary to purchase the applicable equipment notes and pass such
amounts through to the loan trustee who will in turn forward the proceeds to us
as payment for the equipment notes. We then purchase the owned aircraft using
those proceeds and proceeds from our working capital.
11.
<PAGE> 13
THE TRUSTS
Pursuant to pass through trust agreements with Wilmington Trust Company, the
trustee, we formed a Class G trust that issued Class G certificates and a Class
C trust that issued Class C certificates. The trusts are the issuers of the
certificates and also purchase equipment notes used to acquire aircraft.
The certificates represent an ownership interest in the trust property of the
trust that issued that particular class of certificates. A certificate does not
represent an interest in, or rights to, the property of any other trust.
TRUST PROPERTY
The property of each trust consists of the following:
1. equipment notes of the related series issued in connection with the
financing of each aircraft;
2. rights to acquire equipment notes of the related series;
3. rights under an escrow agreement that was entered into to hold the deposits
from the sale of the certificates for the benefit of the certificateholders;
4. rights under an intercreditor agreement that was entered into to govern the
priority ranking of distributions received on the equipment notes;
5. all money received under a liquidity facility for that trust that was
entered into to make up to three semiannual interest payments on the
certificates if we do not meet our payment obligations on the equipment
notes of the related series;
6. with respect to the Class G trust, all amounts that may be received under a
certificate guarantee insurance policy to support payments on the Class G
certificates; and
7. funds that may be deposited with the trustee in accounts relating to the
trust.
12.
<PAGE> 14
THE CERTIFICATES
The chart below contains summary information about each class of certificates.
<TABLE>
<CAPTION>
CLASS G CLASS C
CERTIFICATES CERTIFICATES
----------------- -----------------
<S> <C> <C>
Aggregate Face Amount..................................... $233,668,000 $20,158,000
Ratings:
Moody's................................................. Aaa Baa3
Standard & Poor's....................................... AAA BBB
Initial Loan to Aircraft Value (cumulative)(1)............ 56.8% 61.1%
Expected Principal Distribution Window (in years)......... 0.3 - 19.3 0.3 - .3
Initial Average Life (in years)........................... 11.5 2.9
Regular Distribution Dates................................ Jan. 2 and July 2 Jan. 2 and July 2
Final Expected Regular Distribution Date.................. Jan. 2, 2019 July 2, 2006
Final Legal Distribution Date............................. July 2, 2020 January 2, 2007
Minimum Denomination...................................... $100,000 $100,000
Section 1110 Protection(2)................................ Yes Yes
Liquidity Facility Coverage(3)............................ 3 semiannual 3 semiannual
interest payments interest payments
Liquidity Facility Amount at July 2, 2000(3).............. $27,153,979 $2,187,035
</TABLE>
(1) The initial loan to aircraft values for each class of certificates
were determined as of July 2, 2000 and were based on the following
assumptions:
- all aircraft will be delivered prior to July 2, 2000;
- we will issue the maximum principal amount of equipment notes with
respect to all aircraft; and
- the aggregate appraised value of all aircraft will be $401,582,133
(this value is an estimate and reflects certain assumptions).
We have agreed that all agreements to finance the lease or purchase of
any aircraft will have a term requiring that, as of the date that an
aircraft is delivered, the initial loan to aircraft value for that
aircraft will be no more than the percentages set forth below:
<TABLE>
<CAPTION>
AIRCRAFT FINANCED MAXIMUM INITIAL LOAN
WITH RESPECT TO: TO AIRCRAFT VALUE
----------------- --------------------
<S> <C>
Series G Equipment Notes.......................... 57.0%
Series C Equipment Notes.......................... 62.0%
</TABLE>
(2) After each aircraft is delivered, a loan trustee with respect to that
aircraft will have the benefit of Section 1110 of the U.S. Bankruptcy
Code with respect to that aircraft, which will enable the loan trustee
to take possession of that aircraft within 60 days of America West
being a debtor under Chapter 11 of the U.S. Bankruptcy Code, unless we
agree to perform all of our obligations under the related lease or
mortgage financing and cure all defaults other than those relating to
our bankruptcy or financial condition.
(3) If we are unable to make regular payments of interest on the equipment
notes, then Morgan Stanley Capital Services, Inc., as liquidity
provider, will provide for the interest portion of those payments for
up to three consecutive scheduled payments.
13.
<PAGE> 15
CERTIFICATES REPRESENT AN OWNERSHIP INTEREST IN CORRESPONDING TRUSTS
Class G certificates represent an interest in the trust property of the Class G
trust and Class C certificates represent an interest in the trust property of
the Class C trust. The certificates are referred to as "pass through
certificates" because the payments of principal and interest on the equipment
notes owned by a trust are passed through to the certificateholders of that
trust.
PRO RATA OWNERSHIP INTEREST IN THE TRUST
A certificateholder's interest in a trust is a pro rata interest in the property
of that trust equal to the ratio of the aggregate face amount of all of the
certificates owned by the holder to the aggregate face amount of all of the
certificates issued by that trust.
INTEREST IN RESPECT OF EACH CLASS OF CERTIFICATES
The equipment notes held in each pass through trust represented by each class of
certificates accrues interest at a different rate set forth below.
<TABLE>
<CAPTION>
INTEREST RATE
-------------
<S> <C>
Class G certificates' related equipment
notes........................................ 7.93%
Class C certificates' related equipment
notes.......................................... 8.54%
</TABLE>
The holders of the Class C certificates receive a higher interest rate because
their right to payments of interest and principal on the related equipment notes
is subordinate to the right of holders of the Class G certificates to receive
payment of interest and principal on the related equipment notes.
SCHEDULED PAYMENTS
Certificateholders will receive scheduled payments of interest on each January 2
and July 2, beginning on January 2, 2000. Certificateholders will also receive
scheduled payments of principal on each January 2 and July 2 in certain years,
beginning on or after January 2, 2000.
PAYMENTS ON THE EQUIPMENT NOTES AND DEPOSITS FUND THESE SCHEDULED PAYMENTS
The scheduled payments are funded by (1) interest payments due on the same dates
for both the equipment notes and the deposits and (2) principal payments due on
the same dates for the equipment notes. This is why the interest rate designated
for each class of certificates equals both (a) the interest rate accruing on the
deposits corresponding to the trust that issued those certificates and (b) the
interest rate accruing on the equipment notes issued by the related trust.
SPECIAL PAYMENTS
In addition to scheduled payments, certificateholders may also receive special
payments if, prior to scheduled maturity, we redeem, or the trustee purchases,
the equipment notes from any of the trusts. Special payments, if due, would be
made within 20 days of the date that certificateholders receive notice that they
are entitled to the payment. These special payments will be made up of the
principal, interest and, in some instances, a premium payable by us.
14.
<PAGE> 16
PAYMENT RANKINGS
Under the intercreditor agreement, Wilmington Trust Company, as subordination
agent, will generally distribute regularly scheduled payments received with
respect to the equipment notes in the following order:
1. to Morgan Stanley Capital Services, Inc., the liquidity provider, to cover
any obligations to reimburse or pay all amounts owing to it under each
liquidity facility;
2. distributions due to Class G certificateholders;
3. distributions due to Class C certificateholders;
4. certain obligations owing to the policy provider;
5. distributions due to Class D certificateholders (if any exist); and
6. fees and expenses to the subordination agent and the trustees.
If a "triggering event" occurs, the subordination agent will not distribute
payments received with respect to the equipment notes to the holders of Class G
or Class C certificates until prior obligations are paid, including certain
administrative expenses, obligations to the liquidity provider and some
obligations to the policy provider.
"Triggering event" refers to (1) defaults under all indentures that result in an
event of default with respect to the most senior class of certificates, (2) the
acceleration of all of the outstanding equipment notes (provided that during the
aircraft delivery period the aggregate principal amount exceeds $100 million) or
(3) some bankruptcy or insolvency events involving us.
Payments made by the liquidity provider and the policy provider as well as
payments made with respect to the deposits are not subject to the subordination
provisions of the intercreditor agreement.
For a more detailed description of the distribution of payments received with
respect to the equipment notes, see "Description of the Intercreditor
Agreement--Priority of Distributions."
METHOD OF DISTRIBUTION
Distributions with respect to new certificates will be made to The Depository
Trust Company, or DTC, who will in turn distribute the funds to participants in
DTC who are credited with ownership of the new certificates according to their
respective share of beneficial interests in the new certificates. These
participants in DTC will then be responsible for distributing all payments to
beneficial owners of the new certificates.
LIQUIDITY FACILITIES FOR UP TO THREE CONSECUTIVE SCHEDULED PAYMENTS
A liquidity facility for each class of certificates is intended to enhance the
likelihood that certificateholders will receive the interest payable on the
certificates. Morgan Stanley Capital Services, Inc. is the liquidity provider of
each liquidity facility. If we do not make our regular payments of interest on
the equipment notes, the liquidity provider will provide for the interest
portion of the payments for up to three consecutive scheduled payments.
The funds that the liquidity provider advances to Wilmington Trust Company, as
subordination agent, to pay for up these payments are referred to as "interest
drawings." These interest drawings can not be used to fund any interest payments
on the deposits or any principal or premium payments due on the certificates.
Additionally, when the liquidity provider makes an interest drawing, the
subordination agent is obligated to reimburse the liquidity provider for the
full amount of the interest drawing ahead of the certificateholders, to the
extent funds are available.
15.
<PAGE> 17
The "final legal distribution date" for each class of certificates, which is the
final expected regular distribution date for that class of certificates plus
eighteen months (being the maximum period the liquidity provider will service
interest payments) is set forth below.
<TABLE>
<CAPTION>
FINAL LEGAL
DISTRIBUTION DATE
-----------------
<S> <C>
Class G certificates..................................... July 2, 2020
Class C certificates..................................... July 2, 2007
</TABLE>
The eighteen month liquidity period is the period required by the rating
agencies for transactions of this type, which period reflects the maximum time
it should take to repossess and liquidate the aircraft collateral.
POLICY COVERAGE ON THE CLASS G CERTIFICATES
Ambac Assurance Corporation, the policy provider, has issued a certificate
guarantee insurance policy to support the payment of interest accrued and
payable on the Class G certificates on each regular distribution date and the
payment of principal on the final legal distribution date of July 2, 2020 (or
earlier under some circumstances). The policy does not cover any amounts payable
on the Class C certificates or, if issued, the Class D certificates.
Additionally, the policy provider may be in a position to take actions that are
detrimental to the holders of the Class C certificates.
The policy does not cover (1) shortfalls attributable to the liability for
withholding taxes, (2) any premium, prepayment penalty or other accelerated
payment which may become due on or with respect to any Class G certificate, nor
(3) any failure of the subordination agent or the Class G trustee to make any
payment due to the holders of the Class G certificates from the funds received.
For a more detailed description of the policy and the limitations of its
coverage, see "Description of the Policy and the Policy Provider Agreement" and
"Risk Factors--Risk Factors Relating to the Policy."
DEPOSITS
The cash proceeds from the sale of the outstanding certificates were deposited
with ABN AMRO Bank N.V., the depositary, into one of two accounts corresponding
to the trust that issued the related class of certificates. Each deposit accrues
interest at an annual rate equal to the annual interest rate of the certificates
issued by the trust associated with that deposit. Interest accrued on the
deposits will be distributed to certificateholders on January 2 and July 2 of
each year, beginning on January 2, 2000 and ending when funds from a deposit
have been fully withdrawn. If any funds remain as deposits after the aircraft
are financed, those funds will be distributed to the certificateholders along
with accrued and unpaid interest and, if applicable, a premium payable by us.
CLASS D CERTIFICATES
We may elect to issue Class D certificates in order to provide supplemental
financing for an aircraft. Class D certificates would be issued by a Class D
pass through trust, and that trust would purchase Series D equipment notes
issued in connection with the aircraft related to the Class D financing. The
Class D certificates and the Series D equipment notes would be subordinate to
the Class G and C certificates and the Series G and C equipment notes,
respectively. We do not anticipate using a Class D structure and would not be
entitled to use this structure unless we obtained confirmation of the ratings on
the Class G and Class C certificates. We are not authorized to issue any other
equipment notes to finance the aircraft other than the Series G, C and,
possibly, D equipment notes.
THE EQUIPMENT NOTES
Equipment notes will be issued to Wilmington Trust Company, as subordination
agent, with respect to each financed aircraft in two series corresponding to the
trusts that will purchase them. These are referred
16.
<PAGE> 18
to as the Series G equipment notes and the Series C equipment notes. A trust
will purchase the series of equipment notes that has an interest rate equal to
the interest rate of the certificates issued by that trust.
ISSUANCE OF EQUIPMENT NOTES
As described above under "Financing the Acquisition of Aircraft," we can elect
to either mortgage finance or lease finance an aircraft and the structure of
each financial arrangement will differ as described in that section.
INTEREST AND PRINCIPAL PAYMENTS
The equipment notes will accrue interest at a rate equal to the annual interest
rate of the certificates issued by the trust that purchases them. Interest on
equipment notes is payable on January 2 and July 2 of each year, beginning on
January 2, 2000. We must also make scheduled principal payments on the equipment
notes on January 2 and July 2 of certain years, beginning on January 2, 2000.
MATURITY DATE
Equipment notes will mature on or before the expected final distribution date
for the certificates issued by the trusts that own them.
REDEMPTION AND PURCHASE
If normal use of an aircraft is disrupted under some circumstances, we must
either replace that aircraft or redeem the equipment notes issued with respect
to that aircraft. The redemption price in such a case would be equal to the
aggregate unpaid principal amount of such equipment notes, together with accrued
interest but without a premium. Under some other circumstances, we have the
right to redeem all of the equipment notes at a price equal to the aggregate
unpaid principal amount of those notes, together with accrued interest and a
premium. Additionally, if we lease an aircraft, the owner trustee in the
leveraged lease transaction or an affiliated entity may purchase all of the
equipment notes issued with respect to the leased aircraft under certain
circumstances, including a default by us of our lease obligations at a purchase
price equal to the aggregate unpaid principal amount of these notes, together
with accrued interest and, in certain limited circumstances, a premium.
SECURITY
Equipment notes issued with respect to each aircraft will be secured by a
security interest in that aircraft. In the case of a leased aircraft, the
corresponding equipment notes will also be secured by an assignment of certain
rights under the lease relating to that aircraft, including the right to receive
rental payments. In the case of an owned aircraft, the corresponding equipment
notes will be secured by the mortgage of that aircraft and an assignment of some
of our rights under a purchase agreement with the manufacturer of that aircraft.
Each equipment note will only be secured by the aircraft financed by that
equipment note and, if the aircraft is leased, by the lease related to that
aircraft, but not by any other aircraft or the lease related to any other
aircraft. In addition, any default that occurs with respect to any indenture or
lease of a leased aircraft will only affect that indenture or lease and will not
affect any other indenture or lease.
SUBORDINATION
The Series C equipment notes are subordinate to the Series G equipment notes. In
effect, this means that on each payment date under an indenture the principal of
and interest on Series G equipment notes will be made before similar payments
are made on Series C equipment notes. Additionally, as described in "Risk
Factors Relating to the Certificates and the Exchange Offer--Effect of
Subordination on Subordinated Certificateholders," if we default on equipment
notes, the holders of junior classes of certificates may not receive the full
amount of payments that they are due to receive.
17.
<PAGE> 19
POSSIBLE ISSUANCE OF SERIES D EQUIPMENT NOTES
If Series D equipment notes are issued to finance the lease or purchase of
additional aircraft, neither the Class G or Class C trusts would purchase Series
D equipment notes. Series D equipment notes acquired through the sale of Class D
certificates issued by a Class D trust would be funded from sources other than
those identified in this prospectus. If Series D equipment notes are issued,
these notes will be subordinate to the Series C equipment notes and the Series G
equipment notes and interest and principal on the Series D equipment notes will
not be paid until it has been paid on the other two series of notes.
OTHER INDEBTEDNESS
Other than the Series G, C and, possibly, D equipment notes, the owner trust for
any aircraft is not entitled to, and is prohibited from, issuing any other
certificates. As a result, the only indebtedness securing the aircraft will be
the authorized Series G, C and, possibly, D equipment notes.
INTERCREDITOR RIGHTS
In general, holders of a majority of the outstanding principal of equipment
notes issued pursuant to a particular indenture will direct the applicable loan
trustee as to whether or not to take certain actions in connection with that
indenture.
If an event of default under an indenture occurs, until the default is corrected
and subject to certain exceptions, the "controlling party" of that indenture may
accelerate and sell all (but not less than all) of the equipment notes issued by
that indenture.
The "Controlling Party" of an indenture means:
(1) the policy provider until payment of final distributions to the holders of
Class G certificates and no obligations owing to the policy provider remain
outstanding or, if the policy provider has defaulted and has not cured the
default, the Class G trustee;
(2) upon payment of the final distributions to the holders of the Class G
certificates and if either no obligations owing to the policy provider
remain outstanding or a default by the policy provider has occurred and is
continuing, the Class C trustee; and
(3) under certain circumstances, the liquidity provider with the largest amount
owed to it.
Possible actions that the controlling party could take include directing the
subordination agent to sell any or all of the equipment notes, instructing the
loan trustee under the applicable indenture to accelerate the equipment notes
issued under that indenture and foreclosing on the lien created under the
indenture.
Because the equipment notes are not cross-collateralized, proceeds from the sale
of an aircraft in excess of the amounts due on equipment notes related to that
aircraft will not be available to cover losses, if any, on any other equipment
notes.
For a more detailed discussion of the selection and powers of the controlling
party, see "Description of the Intercreditor Agreement--Intercreditor
Rights--Controlling Party".
ERISA CONSIDERATIONS
In general, subject to important considerations described under "ERISA
Considerations" in this prospectus, employee benefit plans subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended, or ERISA, or
Section 4975 of the Internal Revenue Code of 1986, as amended, or entities which
may be deemed to hold the assets of any such plan will not be eligible to
purchase the certificates, unless certain conditions apply and subject to the
circumstances applicable to those ERISA plans.
18.
<PAGE> 20
USE OF PROCEEDS
There will be no cash proceeds payable to us as a result of the issuance of new
certificates pursuant to the exchange offer. Proceeds from the sale of the
outstanding certificates not used on the certificates' issuance date to finance
aircraft were deposited with ABN AMRO Bank, N.V., the depositary, for the
benefit of the certificateholders of the trusts. Each trust has withdrawn or
will withdraw funds from the deposit relating to that trust to buy equipment
notes to finance the acquisition of ten new aircraft scheduled for delivery from
August 1999 to February 2000.
RATIO OF EARNINGS TO FIXED CHARGES
The following information for the period from January 1, 1994 through August 25,
1994 relates to America West's predecessor. Information for the period August
26, 1994 through December 31, 1994, for the years ended December 31, 1995, 1996,
1997 and 1998 and for the nine months ended September 30, 1998 and 1999 relates
to America West. The information as to America West has not been prepared on a
consistent basis of accounting with the information as to the predecessor due to
our adoption in August 1994 of fresh start reporting in accordance with the
American Institute of Certified Public Accountants' Statement of Position
90-7--"Financial Reporting by Entities in Reorganization Under the Bankruptcy
Code."
For the period from January 1, 1994 through August 25, 1994, $201.2 million
would have been required to achieve a ratio of earnings to fixed charges of 1.0.
The ratio of earnings to fixed charges for the period August 26, 1994 to
December 31, 1994, and for the years ended December 31, 1995, 1996, 1997 and
1998, was 1.38, 1.73, 1.24, 1.98 and 2.20, respectively. The ratio of earnings
to fixed charges for the nine months ended September 30, 1998 and September 30,
1999 was 2.35 and 2.28, respectively.
For purposes of calculating this ratio, earnings consist of earnings before
taxes, minority interest and extraordinary items plus interest expense (net of
capitalized interest), the portion of rental expense deemed representative of
the interest expense and amortization of previously capitalized interest. Fixed
charges consist of interest expense and the portion of rental expense
representative of interest expense.
THE COMPANY
We are the ninth largest commercial airline carrier in the United States,
operating through our principal hubs located in Phoenix, Arizona and Las Vegas,
Nevada, and a mini-hub located in Columbus, Ohio. We are the lowest cost major
airline in the United States. As of September 30, 1999, we served 60
destinations, including seven destinations in Mexico and one in Canada, with a
fleet of 121 aircraft. We offered service to an additional 40 destinations
through alliance arrangements with other airlines.
We seek to maximize our market share by operating primarily through a hub and
spoke network, the strategy employed by all but one of the major airlines in the
United States. We are the leading airline serving Phoenix based on available
seat miles and takeoffs and landings and the leading airline serving Las Vegas
based on available seat miles. Available seat miles is an airline industry
measurement of production. It represents one seat flown one mile. We believe
that the success of our operations in Phoenix and Las Vegas is in part due to
those cities' airports being among the world's largest 25 in passenger numbers
and those cities being among the fastest growing in the nation. In addition, we
believe that our hubs are well positioned for continued growth due to their
geographically favorable locations with strategic access to key Southwest and
West Coast markets, relatively low operating costs, year-round fair weather and
modern, uncongested facilities.
BUSINESS STRATEGY
Our strategy is to maximize shareholder value by capitalizing on our key
competitive strengths while maintaining financial flexibility. The principal
elements of our strategy are to grow our existing lines of business, to improve
our unit revenues, to maintain our strategic cost advantage and to ensure
financial flexibility.
19.
<PAGE> 21
Grow Our Existing Lines of Business
We intend to grow our airline operation by continuing to add service to new
destinations and increasing the frequency of flights to existing destinations
from Phoenix and Las Vegas. The Phoenix and Las Vegas markets are among the
fastest growing in the United States, and we believe that our Phoenix hub is
undersized relative to its potential. In execution of this strategy, we have
increased available seat miles, or ASMs, 25% over the past three years with the
majority of this growth focused on strengthening our position at Phoenix.
Compared with 1998, system ASMs are expected to increase approximately 7% in
1999 and approximately 10% annually through 2002.
We have also expanded our reach outside of our core markets through alliances
with other airlines. We have codesharing arrangements with Continental Airlines,
Mesa Airlines, EVA Airways of Taiwan, Air China International Corp., Northwest
Airlines and British Airways. Codesharing is a marketing arrangement in which
airlines share the same two letter code used to identify carriers in the
computer reservation systems used by travel agents. Codesharing arrangements
enable airlines to extend the number of airports and passengers they can serve
by utilizing the access other airlines have. These alliances have allowed us to
expand our passenger base without experiencing significant increases in capital
or operating expenses, and in some cases it has allowed us to achieve cost
savings by reducing redundant labor and facilities. We believe that these
alliances are an efficient means of developing new markets and increasing travel
opportunities for our customers and we plan to continue to pursue such
relationships with both domestic and international carriers.
Improve Our Unit Revenues
Due to our leisure oriented hub markets in Phoenix and Las Vegas, the
competitive nature of many of the Western U.S. markets where we fly, and our
size relative to our competition, our passenger revenue per available seat mile,
or RASM, is approximately 20% less than the industry average. RASM is a standard
industry measurement of the amount of passenger revenue an airline earns divided
by the total available seat miles of that airline. One of our primary
opportunities to improve profitability is to close that gap through three main
efforts: (1) growing in key business markets; (2) investing in scheduling and
revenue management systems; and (3) improving the quality of our products.
Maintain Our Strategic Cost Advantage
We are committed to maintaining our low cost structure, which offers us a
significant competitive advantage over other major airlines. We have achieved
this low cost structure primarily through employee productivity, favorable labor
costs per available seat mile and industry-leading aircraft utilization.
Ensure Financial Flexibility
The airline and travel industries are cyclical in nature. Because of this, an
important element of our strategy is to maintain financial flexibility as
protection against a downturn in the business cycle. A key component of this
strategy is our aircraft leasing plan. As of September 30, 1999, and through the
end of 2003, leases for 57 aircraft will expire. As a result, if economic
conditions worsen during that period, we will be able to delay our fleet and
aircraft-related financial obligations by electing not to renew these aircraft
leases or otherwise replace these aircraft. Another component of this strategy
is our compensation system, which gives us the flexibility to vary what we pay
employees depending on our overall performance. We further enhance our financial
flexibility by maintaining a $125 million senior secured revolving credit
facility with certain financial institutions.
We are a Delaware corporation. Our executive offices are located at 4000 E. Sky
Harbor Boulevard., Tempe, Arizona 85034, and our telephone number is (480)
693-0800.
America West Holdings Corporation is a Delaware corporation that became the
holding company for America West effective midnight December 31, 1996. The only
material assets of Holdings are the capital stock of America West and the
capital stock of The Leisure Company, a travel and leisure subsidiary.
20.
<PAGE> 22
QUESTIONS OR REQUESTS FOR ASSISTANCE
If you have questions or would like to request assistance with the mechanics of
exchanging your outstanding certificates in the exchange offer, please direct
them to Wilmington Trust Company as indicated below. In addition to the other
positions described in this prospectus summary, Wilmington Trust Company has
been appointed to act as the exchange agent of the exchange offer.
By Mail or Overnight Delivery:
Wilmington Trust Company
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Kristin Long
By Hand:
Wilmington Trust Company
1105 North Market Street, 1st Floor
Wilmington, Delaware 19890
Attention: Corporate Trust Operations
By Facsimile Transmission*:
(302) 651-1079
*Confirm successful delivery by telephone at (302) 651-1562
21.
<PAGE> 23
CASH FLOW STRUCTURE
Set forth below is a diagram illustrating the structure for the
certificates and certain cash flows.
[CASH FLOW CHART]
- -------------------------
(1) Each leased aircraft will be subject to a separate lease and the related
indenture; each owned aircraft will be subject to a separate indenture.
(2) Funds held as deposits relating to each trust will be withdrawn to purchase
equipment notes on behalf of such trust during the delivery period of the
aircraft. If any funds remain as deposits with respect to any trust at the
end of such period, those funds will be withdrawn by the escrow agent and
distributed to the holders of the certificates issued by such trust,
together with accrued and unpaid interest thereon and a premium, if
applicable. No interest will accrue with respect to the deposits after they
have been fully withdrawn.
(3) The initial amount of the liquidity facility for each trust, taken
together, will cover three consecutive semiannual interest payments with
respect to each trust, except that the liquidity facility for any trust
will not cover interest payable by the depositary on the deposits relating
to such trust.
(4) The policy covers distributions in respect of interest on and the
outstanding pool balance of the Class G certificates. The policy does not
cover premiums, default interest, withholding taxes or any amounts payable
in respect of the Class C certificates.
22.
<PAGE> 24
SELECTED FINANCIAL DATA
The selected data presented below under the captions "Statement of
Operations Data" and "Balance Sheet Data" as of and for (i) the years ended
December 31, 1998, 1997, 1996 and 1995, the period August 26, 1994 through
December 31, 1994, and the period January 1, 1994 to August 25, 1994, are
derived from the financial statements of America West, which financial
statements have been audited by KPMG LLP, independent certified public
accountants and (ii) the nine month periods ended September 30, 1999 and 1998
are derived from the unaudited condensed financial statements of America West
incorporated by reference in this Prospectus. In the opinion of management, the
unaudited condensed financial statements reflect all adjustments, which are of a
normal recurring nature, necessary for a fair presentation. The financial
statements as of December 31, 1998 and 1997 and for each of the years in the
three-year period ended December 31, 1998, and the report thereon, are
incorporated by reference in this Prospectus. The information presented below
under the caption "Operating Data" is unaudited. The financial statements of the
Reorganized Company reflect the impact of adjustments to reflect the fair value
of assets and liabilities under fresh start reporting. As a result, the
financial statements of the Reorganized Company are presented on a different
basis than those of the Predecessor Company and, therefore, are not comparable
in all respects.
<TABLE>
<CAPTION>
REORGANIZED COMPANY
------------------------------------------------------------------------------------------
NINE MONTHS PERIOD FROM
ENDED SEPTEMBER 30, YEAR ENDED DECEMBER 31, AUGUST 26 TO
----------------------- ------------------------------------------------- DECEMBER 31,
1999 1998 1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ---------- ---------- ------------
(UNAUDITED) (DOLLARS IN THOUSANDS EXCEPT OPERATING DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Operating revenues.................... $1,594,549 $1,475,866 $1,968,714 $1,874,956 $1,739,526 $1,550,642 $ 469,766
Operating income...................... 161,796 163,062 197,846 162,573 68,666(1) 154,732 38,871
Income before income taxes and
extraordinary items.................. 154,832 153,873 184,557 140,673 34,493 108,378 19,736
Income before extraordinary items..... 87,765 83,874 103,016 75,330 9,610 54,770 7,846
Extraordinary items(2)................ -- -- -- -- (1,105) (984) --
Net income............................ 87,765 83,874 103,016 75,330 8,505 53,786 7,846
BALANCE SHEET DATA (AT END OF PERIOD):
Working capital (deficiency).......... $ 22,611 $ (149,230) $ (104,356) $ (161,456) $ (170,907) $ 70,416 $ (47,927)
Total assets.......................... 1,776,091 1,622,212 1,594,644 1,547,331 1,597,677 1,588,709 1,545,092
Long-term debt, less current
maturities........................... 155,659 214,933 207,906 272,760 330,148 373,964 465,598
Total stockholder's equity............ 853,613 753,675 769,225 684,768 622,780 649,472 595,446
OPERATING DATA (UNAUDITED):
Available seat miles (in millions).... 19,329 18,070 24,307 23,568 21,625 19,421 6,424
Revenue passenger miles (in
millions)............................ 13,170 12,340 16,374 16,204 15,321 13,313 3,972
Passenger load factor (%)............. 68.1 68.3 67.4 68.8 70.9 68.5 61.8
Yield per revenue passenger mile
(cents).............................. 11.45 11.30 11.35 10.89 10.69 10.91 11.02
Passenger revenue per available seat
mile (cents)......................... 7.80 7.72 7.65 7.49 7.57 7.48 6.81
Operating cost per available seat mile
(cents).............................. 7.41 7.27 7.29 7.27 7.73(1) 7.19 6.71
Fulltime equivalent employees (at end
of period)........................... 11,422 10,458 10,067 9,615 9,652 8,712 10,715
<CAPTION>
PREDECESSOR
COMPANY
------------
PERIOD FROM
JANUARY 1 TO
AUGUST 25,
1994
------------
<S> <C>
STATEMENT OF OPERATIONS DATA:
Operating revenues.................... $ 939,028
Operating income...................... 107,506
Income before income taxes and
extraordinary items.................. (201,209)
Income before extraordinary items..... (203,268)
Extraordinary items(2)................ 257,660
Net income............................ 54,392
BALANCE SHEET DATA (AT END OF PERIOD):
Working capital (deficiency).......... $ --
Total assets.......................... --
Long-term debt, less current
maturities........................... --
Total stockholder's equity............ --
OPERATING DATA (UNAUDITED):
Available seat miles (in millions).... 11,636
Revenue passenger miles (in
millions)............................ 8,261
Passenger load factor (%)............. 71.0
Yield per revenue passenger mile
(cents).............................. 10.68
Passenger revenue per available seat
mile (cents)......................... 7.58
Operating cost per available seat mile
(cents).............................. 7.15
Fulltime equivalent employees (at end
of period)........................... 10,849
</TABLE>
- -------------------------
(1) Reflects a $65.1 million nonrecurring special charge relating to America
West's negotiation of its AVSA S.A.R.L. aircraft purchase agreement and
writedown of certain aircraft related inventory and equipment and
underutilized facilities as well as certain other adjustments. The special
charge increased cost per available seat mile by .30 cents for the year
ended December 31, 1996.
(2) Includes (i) an extraordinary loss of $1.1 million in 1996 relating to
prepayment of the 10 3/4% Notes, (ii) an extraordinary loss of $984,000 in
1995 resulting from the exchange of debt by America West and (iii) $257.7
million in 1994 resulting from the discharge of indebtedness pursuant to
the consummation of the plan of reorganization.
23.
<PAGE> 25
RISK FACTORS
RISK FACTORS RELATING TO THE CERTIFICATES AND THE EXCHANGE OFFER
POSSIBLE EFFECTS IF AIRCRAFT
APPRAISALS
DO NOT CORRESPOND TO THE
REALIZABLE
VALUE OF AIRCRAFT Aviation Solutions, Inc., AVITAS, Inc. and
Morton Beyer & Agnew have appraised the
aircraft we are acquiring with the proceeds
from the sale of the outstanding certificates.
These appraisals were based on various
assumptions and methodologies, which differed
among the appraisers. A copy of each
appraiser's appraisal letter is attached at
Appendix II of this prospectus.
In general, the appraised value of each
aircraft was calculated using the average or
median value of an aircraft, whichever was
lower, and then that value was projected for
the month in which the aircraft was scheduled
to be delivered. Appraisals based on different
assumptions and methodologies than those used
by the appraisers may produce very different
values for the aircraft.
An appraisal is only an estimate of value and
is not necessarily an accurate indication of
how much we will pay to purchase an aircraft.
In addition, the realizable value of the
aircraft if any remedies are pursued under the
indenture used to acquire that aircraft
following an event of default will depend on
several factors including:
- supply of other aircraft
- quality of other aircraft available
- supply of buyers
- general economic conditions
- condition of the aircraft
Accordingly, you should not rely on the
appraisal values as an indicator of the value
that may be realized if the aircraft are sold.
Based on the above, we cannot assure you that
the proceeds from a sale or other means of
disposal of an aircraft will be sufficient to
fully fund payments due to certificateholders.
EFFECT OF SUBORDINATION ON
SUBORDINATED
CERTIFICATEHOLDERS Payments on the subordinated class and/or, if
issued, classes of certificates will not be
made until the senior classes are paid those
amounts due to them. In addition, in some
circumstances, if we default on a series of
equipment notes, the subordination agent may be
required to distribute payments received with
respect to a more junior series of equipment
notes to those certificateholders scheduled to
receive payments on the equipment notes on
which the default occurred. In this situation
the remaining junior series of equipment notes
may not earn enough interest to fully fund
distributions due to the holders of the
corresponding class of certificates.
Accordingly, if we default on equipment notes,
the holders of one or more junior classes of
certificates may not receive the full amount of
payments that they are due to receive, even if
we eventually pay the equipment notes due in
full.
24.
<PAGE> 26
In contrast to payments on the equipment notes
just described, payment with respect to the
deposits are not subject to these subordination
provisions.
CONTROL OVER THE COLLATERAL
AND
POTENTIAL SALE OF THE
COLLATERAL The "controlling party" of an indenture used to
acquire an aircraft means:
(a) the policy provider until payment of
the final distributions to the
holders of the Class G certificates
and no obligations to the Policy
Provider remain outstanding or, if
the policy provider has defaulted and
has not cured the default, the Class
G trustee;
(b) upon payment of the final
distributions to the holders of the
Class G certificates, and if either
no obligations owing to the policy
provider remain outstanding or a
default by the policy provider has
occurred and is continuing, the Class
C trustee; and
(c) under certain circumstances, the
liquidity provider with the largest
amount owed to it.
Possible actions that the controlling party
could take include directing the subordination
agent to sell any or all of the equipment
notes, instructing the loan trustee under the
applicable indenture to accelerate the
equipment notes issued under that indenture and
foreclosing on the lien created under the
indenture.
Because the equipment notes are not
cross-collateralized, proceeds from the sale of
an aircraft in excess of the amounts due on
equipment notes related to that aircraft will
not be available to cover losses, if any, on
any other equipment notes.
From time to time, the market for equipment
notes may be very limited and we cannot assure
you that the proceeds from the acceleration or
sale of equipment notes will be sufficient to
cover expected distributions to
certificateholders. If proceeds from a sale are
insufficient to cover distributions expected to
be paid, certificateholders will not have any
claim for the shortfall against the Company.
For a description of the restrictions on the
right of the controlling party to sell the
equipment notes, see "Description of the New
Certificates--Indenture Defaults and Certain
Rights Upon an Indenture Default".
POSSIBLE CHANGES TO AGREEMENTS
DESCRIBED IN THIS PROSPECTUS
AFTER THE
EXCHANGE OFFER Listed below are situations that, should they
occur, could lead to revisions of some
agreements described in this prospectus, such
that those agreements would differ from their
descriptions in this prospectus.
Leveraged Lease Financing of an Aircraft
If we choose to lease an aircraft rather than
buy it, we must select an owner participant for
that aircraft. The owner participant will be
the beneficial owner of that aircraft and will
have
25.
<PAGE> 27
the right to request that revisions be made to
the participation agreement, lease and
indenture related to that aircraft.
Issuance of Series D Equipment Notes
If we elect to have a Class D trust issue
Series D equipment notes and fund the sale of
such notes by selling Class D certificates, the
parties that purchase Class D certificates will
have the right to request that revisions be
made to the participation agreement, lease and
indenture related to that aircraft.
Special Structure
We may structure the financing of an aircraft
other than by use of a mortgage or lease
financing, which will require us to request
that revisions be made to the participation
agreement, lease and indenture related to that
aircraft.
Regardless of the revisions requested, some
mandatory documents terms must be included and
the mandatory economic terms may not be
revised.
In addition, if any revisions are requested, we
must do the following:
1. certify to the trustees that any
revisions made to documents do not
materially and adversely affect the
certificateholders and, in the case of
a special structure, do not expose the
certificateholders, the liquidity
provider or the policy provider to any
material additional risks beyond those
to which they would have been exposed
absent the revisions;
2. in case of any material revisions,
obtain the consent of the policy
provider and the written confirmation
from each of Moody's Investors
Service, Inc. and Standard & Poor's
Ratings Services that the revisions
made to documents will not cause the
withdrawal, suspension or downgrading
of the rating of any class of
certificates; and
3. in case of a special structure, obtain
prior written consent of the policy
provider.
POSSIBLE EFFECTS OF APPOINTING
OWNER
PARTICIPANTS As stated above, if we choose to lease an
aircraft, we must select an owner participant
with respect to that aircraft. In addition to
having the right to request that revisions be
made to certain documents, prior to a default
under the applicable indenture the owner
participant will be able to approve the
selection of counsel that, pursuant to the
documentation, will furnish legal opinions, and
any appraisers or the accountants. This right
is to the exclusion of the loan trustee for
that aircraft.
An owner participant will also have the right
to approve the sublease of an aircraft to
sublessees not otherwise permitted by the
related lease and to approve of the bill of
sale used if an aircraft is ever substituted
after an event of loss.
26.
<PAGE> 28
Finally, an owner participant will have the
right to sell, assign or otherwise transfer its
interest in any leveraged lease, subject to the
relevant participation agreement and related
documents.
POSSIBLE EFFECTS FROM UNUSED
DEPOSITS There is no guarantee that the trustees will
use all of the deposits to purchase equipment
notes. The trustees will not be obligated to
purchase equipment notes if certain conditions
are not satisfied when an aircraft is
delivered. For a detailed description, see
"Description of the New
Certificates--Obligation to Purchase Equipment
Notes". In addition, less than all of the
deposits may be used to purchase equipment
notes.
The trustees will withdraw all deposits at the
end of the delivery period or, if earlier, when
the trusts buy the equipment notes for all ten
aircraft. In some circumstances, but not all,
we will also be required to pay a premium
designed to "make-whole" the certificateholders
receiving those deposits. Since the maximum
principal amount of equipment notes may not be
issued with respect to an aircraft and, in any
such case, the Series C equipment notes are
more likely not to be issued in the maximum
principal amount as compared to the other
equipment notes, it is more likely that a
distribution of unused deposits will be made to
the Class C certificates as compared to the
other certificates.
EFFECTS OF WITHHOLDING TAX ON
FOREIGN INVESTORS Taxes will be withheld from distributions made
with respect to original trusts and deposits
that are made to foreigners that have
beneficial ownership of certificates. These
taxes will be withheld because of the
possibility that the original trusts may be
treated as partnerships engaged in U.S. trades
or businesses for U.S. federal income tax
purposes.
By accepting an interest in a certificate,
foreign investors must agree to indemnify the
original trust and Wilmington Trust Company, as
the original trustee and paying agent, against
liability for improperly failing to withhold
tax.
Foreign investors may file a U.S. federal
income tax return to request refunds for any
amounts withheld, but there is no assurance
that they will receive the refund or that any
refunds will be received in a timely manner.
LIMITED ABILITY TO RESELL
CERTIFICATES Prior to the exchange offer, there was no
public market for the certificates.
Accordingly, a secondary market for the
certificates may not develop and even if one
does, it might not continue or it might not be
sufficiently liquid to allow you to resell any
of your certificates.
CONSEQUENCES OF FAILURE TO
EXCHANGE
OLD CERTIFICATES If you do not exchange outstanding certificates
for new certificates in this exchange offer,
you will be restricted from transferring
outstanding certificates in the future. In
general, outside of this exchange offer, you
may not offer or sell outstanding certificates
unless they have been registered under the
federal and state securities laws or you offer
or sell them in a transaction that is exempt
from such laws. We are not planning to register
the outstanding certificates under the federal
securities laws.
27.
<PAGE> 29
RISK FACTORS RELATING TO THE POLICY PROVIDER
THE IMPACT OF ANY DECLINE IN
THE
FINANCIAL CONDITION OF THE
POLICY
PROVIDER The "AAA" rating by Standard & Poor's and the
"Aaa" rating by Moody's of the Class G
certificates are based, primarily, on the
existence of a certificate guaranty insurance
policy insuring the complete and timely payment
of interest in respect of the Class G
certificates on each regular distribution date
and the payment of principal on or (under some
circumstances) before the final legal
distribution date. Any decline in the financial
condition of Ambac Assurance Corporation, the
policy provider, or the insolvency of the
policy provider, may result in the downgrade of
the ratings of the Class G Certificates and may
impair the ability of the policy provider to
make payments to the holders of the Class G
certificates under the policy. In addition, in
the event of the insolvency of the policy
provider under insurance insolvency
proceedings, it is possible that the
subordination agent would be unable to recover
the full amount due under the Class G
certificates on its unsecured claim against the
policy provider.
For information on the financial information
generally available with respect to the policy
provider, see "Description of the Policy and
the Policy Provider Agreement--The Policy".
THE LIMITED NATURE OF THE
POLICY The policy's support on interest payments and
principal payments is limited to the Class G
certificates and, as a result, the policy will
only run to the benefit of the holders of the
Class G certificates. Although drawings under
the policy for interest payments may be made on
each regular distribution date, drawings for
principal payments may not, except in certain
circumstances, be made until the final legal
distribution date for the Class G certificates.
The policy provides no coverage for the Class C
certificates or, if issued, the Class D
certificates.
THE POLICY PROVIDER AS A
CONTROLLING
PARTY Unless a default by the policy provider has
occurred, the policy provider will be the
"controlling party" unless the liquidity
provider has the right to become the
controlling party. As the controlling party,
the policy provider will generally be able to
direct the subordination agent in the exercise
of all remedies. These remedies may include
directing the subordination agent to sell any
or all of the equipment notes, instructing the
loan trustee under the applicable indenture to
accelerate the equipment notes issued under
that indenture and foreclosing on the lien
created under the indenture. As the controlling
party, the policy provider will be in a
position to take actions that are beneficial to
the policy provider and the holders of the
Class G certificates but detrimental to the
holders of the Class C certificates.
28.
<PAGE> 30
RISK FACTORS RELATING TO AMERICA WEST AND THE AIRLINE INDUSTRY
Below we have listed certain risks that we face as a business in general. If any
of these risks actually have a material adverse effect on our business,
financial condition or operating results, we may not be able to satisfy some or
all or our obligations under the leases (in the case of an aircraft we lease) or
the equipment notes (in the case of an aircraft we purchase). Depending on the
extent to which we are unable to satisfy these obligations, you may not realize
the expected return on your investment in the certificates, and in the worst
case, you may not get back the full amount of your initial investment in the
certificates.
COMPETITION AND INDUSTRY
CONDITIONS The airline industry is highly competitive and
industry earnings are typically volatile. From
1990 to 1992, the airline industry experienced
unprecedented losses due to high fuel costs,
general economic conditions, intense price
competition and other factors. Airlines compete
on the basis of pricing, scheduling (frequency
and flight times), on-time performance,
frequent flyer programs and other services.
The airline industry is susceptible to price
discounting, which occurs when a carrier offers
discounts or promotional fares to passengers.
Discounted fares offered by one carrier are
normally matched by competing carriers, which
may have the effect of lowering the profit per
passenger but not necessarily increase the
number of passengers who fly. In addition, in
recent years several new carriers have entered
the airline industry, and many of them have
low-cost structures. In some cases, these new
carriers have initiated or triggered price
discounting. The entry of additional new
carriers in many of our markets, as well as
increased competition from or the introduction
of new services by existing carriers, could
have a material adverse effect on our business,
financial condition and operating results.
Most of the markets we serve are highly
competitive and are served by larger carriers
with substantially greater financial resources
than we have available. At our Phoenix and Las
Vegas hubs, our principal competitor is
Southwest Airlines. A number of our larger
competitors have proprietary reservation
systems, which gives them certain competitive
advantages.
The air travel business historically fluctuates
in response to general economic conditions. The
airline industry is sensitive to changes in
economic conditions that affect business and
leisure travel and is highly susceptible to
unforeseen events that result in declines in
air travel, including:
- political instability
- regional hostilities
- recession
- fuel price escalation
- inflation
- adverse weather conditions
- labor instability
- regulatory oversight
29.
<PAGE> 31
If the rates of travel on the routes that we
serve decrease or if competition increases
between carriers, our business, financial
condition and operating results could be
materially adversely affected.
OUR ABILITY TO BORROW FUNDS IN
THE
FUTURE As of September 30, 1999, we owed approximately
$155.7 million of long-term debt (less current
maturities). Much of this debt is secured by a
large portion of our assets, leaving us with a
limited number of assets to use to obtain
additional financing which we may need if we
encounter adverse industry conditions or a
prolonged economic recession in the future. Our
high level of debt may also limit our ability
to fund general corporate requirements,
including working capital and capital
expenditures, limit our flexibility in
responding to competitive developments and
increase our vulnerability to adverse economic
and industry conditions.
In addition, as of September 30, 1999, we had
firm commitments to AVSA to purchase a total of
19 Airbus aircraft with four still to be
delivered in 1999. We also had an option to
purchase 46 more Airbus aircraft. The aggregate
net cost of these firm commitments is
approximately $800 million, based on a 3.5%
annual price escalation.
In October 1999, we entered into an agreement
with AVSA to purchase 15 Airbus A318-100 and 12
Airbus A320-200 aircraft. Deliveries for the
A320 aircraft will begin August 2000 and
continue through 2003. The A318s are scheduled
to be delivered in 2003 and 2004. We also
received 25 options and 25 purchase rights to
purchase aircraft in the "A320 family" of
aircraft (A318s, A319s, A320s and A321s) for
delivery in 2004 through 2008. As part of this
agreement, all options outstanding under the
previous agreement were cancelled. The
aggregate net cost of firm commitments under
this aircraft order is approximately $1.1
billion based on a 3.5% annual price
escalation.
We have arranged for financing from AVSA for
approximately 75% of the remaining aircraft to
be delivered under the purchase commitment
existing at September 30, 1999, but we will
have to look to outside sources to finance the
remaining commitments. We cannot guarantee that
we will be able to obtain enough capital to
finance the remainder of the aircraft, and if
we default on our commitments to purchase
aircraft, our business, financial condition and
operating results could be materially adversely
affected.
LABOR RELATIONS In the recent past, labor unions have made
several attempts to organize our employees, and
we expect that these efforts will continue.
Certain groups of our employees have chosen to
be represented by a union and we are currently
negotiating initial collective bargaining
agreements with some of these groups. We cannot
predict which, if any, other groups of
employees may seek union representation or the
outcome of collective bargaining agreements
that we may be forced to negotiate in the
future. If we are unable to negotiate
acceptable collective bargaining
30.
<PAGE> 32
agreements, we might have to wait through
"cooling off" periods, which are often followed
by union-initiated work actions, including
strikes. Depending on the type and duration of
work action we endure, our business, financial
condition and operating results could be
materially adversely affected.
CONTROL BY CERTAIN PRINCIPAL
STOCKHOLDERS Currently, three stockholders collectively
control approximately 50% of the total voting
power of America West Holdings Corporation, our
parent corporation. These stockholders, TPG
Partners, L.P., TPG Parallel I, L.P. and Air
Partners II, L.P. are all controlled by the
same company, TPG Advisors, Inc. We cannot
guarantee that the controlling stockholders
identified above will not try to influence
Holding's business in a way that would favor
their own personal interests to the detriment
of our interests.
FLUCTUATIONS IN FUEL COSTS Fuel is the principal raw material used in our
business, accounting for approximately 11% of
our total operating expenses in 1999. For
example, with our current level of fuel
consumption, if jet fuel prices increase by one
cent per gallon, our annual operating results
will decrease by $4.6 million for 2000. Among
the unpredictable events whose occurrence could
effect the price and supply of jet fuel in the
future are:
- geopolitical developments
- regional production patterns
- environmental concerns
In 1996, we implemented a "fuel hedging"
program to manage the risk and possible effect
that fluctuating jet fuel prices could have on
our business. The program primarily addresses
our exposure to fuel requirements on the East
Coast. West Coast jet fuel prices, however,
tend to be more volatile than jet fuel prices
in other areas of the United States and because
we primarily serve the Western United States,
we purchase a substantially larger portion of
our jet fuel requirements on the West Coast
compared to our larger competitors.
Accordingly, if the price of jet fuel goes up
substantially or the supply of jet fuel is
inadequate in the future and we have not
implemented adequate protection measures, our
business, financial condition and operating
results could be materially adversely affected.
AVIATION TICKET TAXES On August 5, 1997 President Clinton signed a
new aviation ticket tax into law that is
scheduled to stay in effect though September
30, 2007. As a result of the competitive
environment in the passenger airline industry,
we have been limited in our ability to pass on
the additional costs of these taxes to
passengers through fare increases.
SECURITY AND SAFETY MEASURES Congress recently adopted increased safety
measures designed to increase airline passenger
security and protect against terrorist acts.
Implementing these measures has increased
operating costs for the airline industry as a
whole. A recent report from
31.
<PAGE> 33
Congress' Aviation Safety Commission recommends
that airlines implement additional measures to
improve the safety and security of air travel.
We cannot predict which additional measures
Congress will impose or the impact that
implementing those measures will have on our
revenue, but it is possible that the impact
could be significant.
OTHER REGULATORY MATTERS The airline industry is heavily regulated. Both
federal and state governments from time to time
propose laws and regulations that would impose
additional requirements and restrictions on
airline operations. Depending on which and how
many of these laws and regulations are enacted,
the cost of operating an airline could increase
significantly. We cannot predict which laws and
regulations will be adopted or the changes and
increased expense that they could cause.
Accordingly, we cannot guarantee that future
legislative and regulatory acts will not have a
materially adverse effect on our business,
financial conditions or operating results.
SUBSTANTIAL RESTRICTIONS
IMPOSED AND
PROMISES MADE IN CONNECTION
WITH
CURRENT LOAN AGREEMENTS AND
DEBT
INSTRUMENTS We have borrowed money pursuant to certain loan
agreements and debt instruments with
significant operating and financial
restrictions. These agreements and instruments
contain terms that may significantly restrict
or prohibit our ability to take certain
actions, including our ability:
- to repay certain debts before they come due
- to sell assets
- to participate in certain mergers and
acquisitions
- to conduct future financings
- to make needed capital expenditures
- to implement certain measures that would
better enable us to withstand future
downturns in the airline industry or the
economy in general
In addition, several of these borrowing
arrangements require us to satisfy certain
benchmarks in respect of our financial
position.
We are currently in compliance with the
restrictions and requirements referred to
above, but any default would allow our lenders
to require us to repay the full amount of money
that we have borrowed, plus accrued and unpaid
interest. If this were to occur, we cannot
guarantee that we would have or be able to
raise the funds needed to pay off these debts.
Finally, we may be obligated to offer to
purchase certain amounts of the debts referred
to above. Such obligations would arise if
certain changes occur with respect to who
controls us or Holdings, our parent company, or
if we dispose of certain assets.
YEAR 2000 COMPLIANCE PROGRAM
AND
RISKS Many installed computer systems and software
products were programmed to accept only two
digits in the date code field. As of January 1,
2000, these date code fields needed to accept
four digit entries to distinguish years
beginning with "19" from those beginning with
"20." Otherwise, computer systems using time-
32.
<PAGE> 34
sensitive software could shut down or perform
incorrect computations.
We undertook a year 2000 project to identify
and assess the readiness of our computer
systems, programs and other infrastructure that
could be affected by the Year 2000 issue and to
remedy the problems identified. Our year 2000
project also included an assessment of the year
2000 readiness of key third parties on whom our
operations depend, including the Federal
Aviation Administration which manages the
nation's air traffic control system, local
authorities who manage the airports where we
operate, and vendors and suppliers who provide
us goods (such as fuel and catering), services
(such as telecommunications and data networks)
and permit us to continue operations,
consistent with the highest standards of
safety, in the event year 2000 problems arose.
To date, we have not experienced any material
year 2000 problems. However, monitoring will
continue at least through the first quarter of
2000, corrective action will be taken if we
encounter any previously-unidentified year 2000
problems internally or in interfacing with
third parties, and our contingency plans remain
available.
Our year 2000 project required us to replace
certain equipment and modify certain software,
and to devote considerable internal resources
and hire substantial external resources to
assist with the implementation and monitoring
of the project. We currently estimate that the
total cost of our year 2000 project has been
approximately $43 million. These costs, which
were funded from operation cash flows, included
approximately $8 million of system software,
equipment upgrades and replacements which would
have been incurred in the ordinary course of
business even in the absence of year 2000
issues. Approximately $36 million of these
costs have been expensed, and approximately $7
million have been capitalized. At this time we
do not expect to incur any significant
additional costs as a result of our year 2000
project unless our ongoing monitoring program
indicates that additional year 2000 corrective
action is required, in which case additional
costs (which could be material) might be
incurred.
VOLATILITY OF STOCK PRICE The stock market has experienced significant
price and volume fluctuations that have
affected the market prices of equity securities
of companies in the airline industry and that
often have been unrelated to the operating
performance of such companies. These broad
market fluctuations may adversely affect the
market price of the Class B common stock of
Holdings, our parent. In addition, the market
price of the Class B common stock is volatile
and subject to fluctuations in response to
quarterly variations in operating results,
announcements of new services by us or our
competitors, changes in financial estimates by
securities analysts or other events or factors,
many of which are beyond our control.
33.
<PAGE> 35
THE EXCHANGE OFFER
This section summarizes key provisions of the exchange and registration
rights agreement we entered into with the trustees and the initial purchasers of
the outstanding certificates, which we filed as an exhibit to the registration
statement of which this prospectus is a part.
GENERAL
Pursuant to the registration rights agreement, we agreed, at no cost to the
certificateholders, to register certificates with the SEC to allow holders to
trade the certificates. This registration event would take one of two forms set
forth below:
Registration Event
(1) Exchange Offer Registration Statement. An exchange offer would allow
holders to exchange the outstanding certificates for new certificates,
which will have terms identical in all material respects to the
outstanding certificates (except that the new certificates will not
contain transfer restrictions or interest rate increases as described
below and the new certificates will be available only in book-entry
form).
(2) Shelf Registration Statement. Alternatively, we agreed to register the
outstanding certificates for resale through a shelf registration
statement if (a) any changes in law or applicable interpretations of
the staff of the SEC would not permit us to effect the exchange offer,
(b) the exchange offer is not completed within 210 days after we
issued the outstanding certificates, which was September 21, 1999 or
(c) holders who are not eligible to participate in the exchange offer
request that we do so.
If we fail to complete the exchange offer or, alternatively, to have a
shelf registration statement declared effective within 210 calendar days of
September 21, 1999, the annual interest rate on the equipment notes and deposits
will be increased by 0.50% from the 210th day until either the exchange offer is
completed, a shelf registration statement is declared effective or the date on
which all of the outstanding certificates are transferable by holders (other
than affiliates or former affiliates of America West) without further
registration.
If during any 12-month period the shelf registration statement ceases to be
effective for more than 60 days, whether or not consecutive, the annual interest
rate on the equipment notes and, if applicable, the deposits will be increased
by 0.50% from the 61st day after the shelf registration statement ceases to be
effective until the shelf registration statement again becomes effective.
THE EXCHANGE OFFER
We agreed to register new certificates with the SEC to allow holders of all
outstanding certificates to exchange their certificates for the new
certificates. The new certificates will have the same material financial terms
as the outstanding certificates. The difference is that the new certificates
will not contain transfer restrictions or interest rate increases and the new
certificates will be available only in book-entry form. This prospectus,
together with a letter of transmittal, is being sent to all registered holders
of outstanding certificates as of [ ], to allow holders to
exchange their outstanding certificates.
Our Obligations to Effect an Exchange Offer
(1) File a registration statement to register the new certificates by
January 19, 2000;
(2) cause the registration statement to become effective by March 19,
2000;
(3) keep the registration statement effective while the exchange offer is
open, which must be no fewer than 30 days; and
(4) complete the exchange offer by April 18, 2000.
34.
<PAGE> 36
The exchange offer will commence upon effectiveness of the registration and
terminate 30 calendar days after the exchange offer commences, unless extended.
We have the sole discretion to extend the exchange offer by notifying the
exchange agent and mailing an announcement of the extension to the holders of
outstanding certificates. However, if the exchange offer is not completed by
April 18, 2000, the interest rate on the equipment notes and deposits is subject
to increase.
We have the right to delay acceptance of any outstanding certificates in
the exchange offer, to extend the exchange offer or to terminate the exchange
offer and not permit acceptance of outstanding certificates not previously
accepted if any of the conditions set forth under "--Conditions" occur. We can
also amend the terms of the exchange offer in any manner we deem advantageous to
the holders of the outstanding certificates. We will notify the exchange agent
as promptly as practicable in the event of any delay in acceptance, extension,
termination or amendment. If the exchange offer is amended in a manner we
determine is a material change, we will promptly disclose the amendment in a
manner reasonably calculated to inform the holders of the outstanding
certificates of the amendment. We have no obligation to publish, advertise, or
otherwise communicate any such public announcement, other than by making a
timely release to an appropriate news agency.
With some exceptions, holders of outstanding certificates who do not
exchange their outstanding certificates for new certificates in the exchange
offer will no longer be entitled to registration rights. They will also not be
able to offer or sell their outstanding certificates unless the outstanding
certificates are subsequently registered with the SEC or traded in a transaction
exempt from the Securities Act of 1933 and applicable state securities laws.
After the exchange offer is completed, with some limited exceptions, we will not
be required to subsequently register the outstanding certificates.
TENDERING OUTSTANDING CERTIFICATES IN THE EXCHANGE OFFER
Only a holder of outstanding certificates may tender certificates in the
exchange offer. The term "holder" with respect to the exchange offer means any
person in whose name outstanding certificates are registered on the books of the
Company or any other person who has obtained a properly completed bond power
from the registered holder. Any beneficial owner of outstanding certificates
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee who wishes to tender should contact the registered holder promptly
and instruct the registered holder to tender on his behalf. If a beneficial
owner wants to tender on his own behalf, he must, prior to completing and
executing a letter of transmittal and delivering his outstanding certificates,
either make appropriate arrangements to register ownership of the outstanding
certificates in his name or obtain a properly completed bond power from the
registered holder. The transfer of registered ownership may take considerable
time.
Subject to certain conditions (set forth under "--Conditions"), we will
accept for exchange all outstanding certificates validly tendered and not
withdrawn prior to 5:00 p.m., New York City time, on the date the exchange offer
expires. Outstanding certificates may be tendered only in integral multiples of
$1,000. There is no minimum principal amount of outstanding certificates that
must be tendered in order for the exchange offer to take place. The tender by a
holder of outstanding certificates will constitute an agreement between the
holder and the Company in accordance with the letter of transmittal.
Upon satisfaction or waiver of all of the conditions to the exchange offer,
all outstanding certificates properly tendered will be accepted and the new
certificates will be issued promptly after acceptance of the outstanding
certificates. The exchange agent will act as agent for the tendering holders of
outstanding certificates for the purposes of receiving the new certificates and
delivering new certificates to such holders. Any new certificates issued will be
of the same class and for an equal face amount as the outstanding certificates
tendered. For purposes of the exchange offer, outstanding certificates will be
deemed to have been accepted for exchange when, as and if we have given oral or
written notice thereof to the exchange agent.
35.
<PAGE> 37
Requirements for Tendering Outstanding Certificates in the Exchange Offer
(1) Complete, sign and date the letter of transmittal or a facsimile
thereof. The letter of transmittal will be mailed to registered holders with a
copy of this prospectus.
(a) Guaranteed Signatures May Be Required. Signatures on a letter of
transmittal or a notice of withdrawal, as the case may be, must be
guaranteed by any member firm of a registered national securities
exchange or of the National Association of Securities Dealers,
Inc., a commercial bank or trust company having an office or
correspondent in the United States or an "eligible guarantor"
institution within the meaning of Rule 17Ad-15 under the
Securities Exchange Act of 1934 unless the outstanding
certificates are tendered by a registered holder who has not
completed the box entitled "Special Issuance Instructions" or
"Special Delivery Instructions" on the letter of transmittal or
for the account of an eligible guarantor institution.
(b) Bond Powers May be Required. If the letter of transmittal is
signed by a person other than the registered holder of any
outstanding certificates, the outstanding certificates must be
endorsed or accompanied by bond powers and a proxy which
authorizes such person to tender the outstanding certificates on
behalf of the registered holder, in each case as the name of the
registered holder or holders appears on the outstanding
certificates.
(c) Fiduciaries Should Identify Themselves. If the letter of
transmittal or any outstanding certificates or bond powers are
signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, such persons should so
indicate when signing, and unless waived by us, evidence
satisfactory to us, of their authority to so act must be submitted
with the letter of transmittal.
(2) Mail or otherwise deliver the completed letter of transmittal, and any
other items noted below, to the exchange agent by 5:00 p.m., New York
City time, on or before the date the exchange offer expires. No items
should be sent to us.
(3) Any of the three methods discussed below can be used to deliver the
certificates representing the outstanding certificates to the exchange
agent on or before the date the exchange offer expires. The method of
delivery is up to the holder, who bears the risk of non-delivery.
(a) Send the actual certificates representing the outstanding
certificates to the exchange agent with the letter of transmittal.
If delivery is by mail, insured registered mail is recommended.
(b) If available, make a book-entry delivery of the outstanding
certificates into the exchange agent's account at The Depository
Trust Company, or DTC. Certain brokers, dealers, commercial banks,
trust companies and other nominees who hold outstanding
certificates through DTC must tender their certificates in this
way. Beneficial owners of outstanding certificates registered in
the name of a broker, dealer, commercial bank, trust company or
other nominee are urged to contact such person promptly if they
wish to tender outstanding certificates in the exchange offer.
(c) Holders who cannot deliver their outstanding certificates or who
cannot complete the procedures for delivery by book-entry transfer
of the outstanding certificates on or before the date the exchange
offer expires, must, in order to participate in the exchange
offer, tender their outstanding certificates according to the
guaranteed delivery procedures set forth below under "--Guaranteed
Delivery Procedures".
All questions as to the validity, form, eligibility (including time of
receipt) and withdrawal of the tendered outstanding certificates will be
determined by us in our sole discretion, which determination will be final and
binding. We reserve the absolute right to reject any and all outstanding
certificates if they are not properly tendered or are unlawful in the opinion of
our counsel. Unless waived by us, any defects or
36.
<PAGE> 38
irregularities in connection with tenders of outstanding certificates must be
cured within such time as we determine. Our interpretation of the terms and
conditions of the exchange offer (including the instructions in the letter of
transmittal) will be final and binding on all parties.
Neither America West, the exchange agent nor any other person is under any
duty to notify holders of outstanding certificates of defects or irregularities
regarding tenders of outstanding certificates, nor shall any of them be liable
for failure to give such notification. Tenders of outstanding certificates will
not be deemed to have been made until such irregularities have been cured or
waived. Any outstanding certificates received by the exchange agent that are not
properly tendered or cured of defects or irregularities will be returned to the
holder by the exchange agent, without cost to the holder, as soon as practicable
following the expiration of the exchange offer.
In addition, subject to some limitations, we reserve the right to purchase
or make offers for any outstanding certificates that remain outstanding after
the exchange offer expires, to terminate the exchange offer, and to purchase
outstanding certificates in the open market if permitted by applicable law. The
terms of any purchase or offer by us could differ from the terms of the exchange
offer.
BOOK-ENTRY TRANSFER
For purposes of the exchange offer, the exchange agent will establish an
account with respect to the outstanding certificates at DTC within two business
days after the date of this prospectus. Any tendering financial institution that
is a participant in DTC's book-entry transfer facility system must make a book-
entry delivery of the outstanding certificates by causing DTC to transfer such
certificates into the exchange agent's account in accordance with DTC's
Automated Tender Offer Program, or ATOP, procedures for transfers. Any holder of
outstanding certificates using ATOP should transmit its acceptance to DTC on or
prior to the expiration of the exchange offer (or comply with the guaranteed
delivery procedures set forth below). DTC will verify the acceptance of
outstanding certificates, execute a book-entry transfer of the tendered
outstanding certificates into the exchange agent's account at DTC and then send
to the exchange agent confirmation of the book-entry transfer, including an
agent's message confirming that DTC has received an express acknowledgment from
the holder that the holder has received and agrees to be bound by the letter of
transmittal and that the trust and America West may enforce the Letter of
Transmittal against such holder.
GUARANTEED DELIVERY PROCEDURES
If a registered holder of outstanding certificates desires to tender
certificates but the certificates are not immediately available, or time will
not permit such holder's outstanding certificates or other required documents to
reach the exchange agent before the expiration of the exchange offer, or the
procedures for book entry transfer cannot be completed on a timely basis, a
tender may be effected under the procedures set forth here. This procedure can
only be handled by a member firm of a registered national securities exchange or
of the National Association of Securities Dealers, Inc., a commercial bank or
trust company having an office or correspondent in the United States or an
"eligible guarantor" institution within the meaning of Rule 17Ad-15 under the
Securities Exchange Act of 1934. Prior to the expiration of the exchange offer,
we must receive from one of these eligible institutions a properly completed and
duly executed letter of transmittal (or a facsimile thereof) and a Notice of
Guaranteed Delivery, substantially in the form provided (by facsimile
transmission, mail or hand delivery). The Notice of Guaranteed Delivery must
identify the name and address of the holder of outstanding certificates, the
amount of certificates tendered and a statement guaranteeing that within three
trading days of the execution of the notice the certificates for all tendered
outstanding certificates (or a book-entry confirmation) will be deposited by the
eligible institution with the exchange agent. Actual delivery of the outstanding
certificates (or a book-entry confirmation) within the three day period is
required.
37.
<PAGE> 39
WITHDRAWAL OF TENDERS
Tenders of outstanding certificates may be withdrawn by a holder at any
time prior to 5:00 p.m., New York City time on the date the exchange offer
expires by notifying the exchange agent in writing. A notice of withdrawal must
specify the name of the person having tendered the outstanding certificates to
be withdrawn, identify the certificates to be withdrawn (including the principal
amount of the certificates) and if the certificates were transmitted, specify
the name in which the outstanding certificates are registered, if different from
that of the withdrawing holder. If certificates were delivered to the exchange
agent, then, prior to the release of such certificates, the withdrawing holder
must also submit the serial numbers of the particular certificates to be
withdrawn and a signed notice of withdrawal. The signatures on the notice of
withdrawal must be guaranteed by an eligible institution unless the holder is an
eligible institution. If outstanding certificates were tendered pursuant to the
procedure for book-entry transfer, any notice of withdrawal must specify the
name and number of the account at the book-entry transfer facility to be
credited with the withdrawn certificates and otherwise comply with the
procedures of such facility.
We will have final and binding authority to determine all questions as to
the validity, form and eligibility (including time of receipt) of notices of
withdrawal. Any outstanding certificates so withdrawn will be deemed not to have
been validly tendered for exchange for purposes of the exchange offer. Any
outstanding certificates which were tendered for exchange but which were not
exchanged for any reason will be returned to the holder thereof without cost to
such holder as soon as practicable after withdrawal. Outstanding certificates
which were tendered by book-entry transfer into the exchange agent's account at
the book-entry transfer facility will be credited to an account maintained with
the book-entry transfer facility for the outstanding certificates as soon as
practicable after withdrawal. Properly withdrawn certificates may be retendered
following the procedures described above at any time on or prior to the date the
exchange offer expires.
CONDITIONS
We will not be required to accept any outstanding certificates for exchange
and we may terminate or amend the exchange offer before the acceptance of
outstanding certificates, if we determine that we are not permitted to effect
the exchange offer because of any change in law or applicable interpretations
thereof by the SEC. In addition, we will have no obligation to, and will not
knowingly, accept tenders of outstanding certificates from affiliates of America
West (within the meaning of Rule 405 under the Securities Act of 1933) or from
any other holder who is not eligible to participate in the exchange offer under
applicable law or interpretations thereof by the SEC, or if the new certificates
to be received by the holder in the exchange offer would not be tradable by the
holder without restriction under the Securities Act of 1933 and the Securities
Exchange Act of 1934 and without material restrictions under the "blue sky" or
securities laws of substantially all of the states of the United States.
EXCHANGE AGENT
Wilmington Trust Company has been appointed as exchange agent for the
exchange offer. Questions and requests for assistance and requests for
additional copies of this prospectus or of the letter of transmittal should be
directed to the exchange agent addressed as follows:
<TABLE>
<S> <C>
By Mail or Overnight Delivery: By Hand:
Wilmington Trust Company Wilmington Trust Company
1100 North Market Street 1105 North Market Street, 1st Floor
Wilmington, Delaware 19890-0001 Wilmington, Delaware 19890
Attention: Kristin Long Attention: Corporate Trust Operations
Facsimile Transmission:
(302) 651-1079
Confirm by Telephone:
(302) 651-1562
</TABLE>
38.
<PAGE> 40
TRANSFERABILITY OF NEW CERTIFICATES
Based on interpretations by the staff of the SEC, we believe that most
holders of new certificates will be able to transfer the new certificates
without compliance with the registration and prospectus delivery requirements of
the Securities Act of 1933, as long as the new certificates are acquired in the
ordinary course of the holders' business and the holders are not engaged in, and
do not intend to engage in, a distribution of the new certificates and have no
arrangement with any person to participate in a distribution of the new
certificates. Broker-dealers who acquired outstanding certificates directly from
the trustee for resale under an exemption under the Securities Act of 1933, or
any holder that is an "affiliate" of America West (as defined in Rule 405 of the
Securities Act of 1933) must comply with the registration and prospectus
delivery requirements of the Securities Act of 1933.
The SEC staff interpretations relied on are set forth in no-action letters
issued to third parties, including Exxon Capital Holdings Corporation, SEC
No-Action Letter (available April 13, 1989), Morgan Stanley & Co., Incorporated,
SEC No-Action Letter (available June 5, 1991) and Shearman & Sterling, SEC
No-Action Letter (available July 2, 1993).
Other than broker-dealers and affiliates, holders who wish to tender their
outstanding certificates in the exchange offer will be required to make certain
representations to us in the letter of transmittal.
Representations Required by Holders to Tender Outstanding Certificates in
Exchange Offer
(1) The holder is not an affiliate of America West (as defined under Rule
405 of the Securities Act of 1933) nor a broker-dealer tendering
outstanding certificates acquired directly from us for its own
account;
(2) the holder will acquire the new certificates in the ordinary course of
its business; and
(3) the holder is not engaged in, and does not intend to engage in, a
distribution of the new certificates and has no arrangement or
understanding to participate in a distribution of the new
certificates.
Each broker-dealer that receives new certificates for its own account
pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of the new certificates. By so
acknowledging and by delivering a prospectus, the broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act of 1933. This prospectus, as it may be amended or supplemented from time to
time, may be used by a broker-dealer in connection with resales of new
certificates where the broker-dealer acquired the exchanged certificates as a
result of market-making activities or other trading activities. We agree to make
copies of this prospectus available to such broker-dealers for 180 days after
the exchange offer expires.
ALTERNATIVE USE OF SHELF REGISTRATION STATEMENT
If changes in the law or other circumstances do not allow us to effect the
exchange offer, we will, upon request of a holder not eligible to participate in
the exchange offer or under certain other circumstances, file a shelf
registration statement to allow resales of the outstanding certificates.
Our Obligations if the Shelf Registration Statement Alternative is Pursued
(1) File with the SEC as soon as practicable a shelf registration
statement covering resales of the outstanding certificates;
(2) use our best efforts to have the shelf registration statement declared
effective within 180 calendar days of September 21, 1999; and
(3) use our best efforts to keep the shelf registration statement
effective for two years after it is declared effective (or a shorter
period if all of the outstanding certificates covered by the shelf
registration statement have been sold or are freely transferable under
Rule 144 of the Securities Act of 1933).
39.
<PAGE> 41
FEES AND EXPENSES
We will pay the expenses of soliciting tenders in the exchange offer. The
principal solicitation for tenders is being made by mail; however, additional
solicitations may be made by telegraph, telephone, telecopy, electronic mail or
in person by officers and regular employees of ours. We will pay other expenses
incurred in connection with the exchange offer, including fees and expenses of
the exchange agent and trustee and accounting, legal, printing and related fees
and expenses.
We will not make any payments to brokers, dealers or other persons
soliciting acceptances of the exchange offer. However, we will pay the exchange
agent reasonable and customary fees for its services and will reimburse the
exchange agent for its reasonable out-of-pocket expenses. We may also pay
brokerage houses and other custodians, nominees and fiduciaries the reasonable
out-of-pocket expenses incurred by them in forwarding copies of the prospectus
and related documents to the beneficial owners of the outstanding certificates,
and in handling or forwarding tenders for exchange.
We will pay all transfer taxes, if any, applicable to the exchange of
outstanding certificates in the exchange offer. Certain other transfer taxes may
be imposed on the tendering holder unless satisfactory evidence of payment of
such taxes or exemption therefrom is not submitted with the letter of
transmittal.
40.
<PAGE> 42
REMAINING PROSPECTUS DISCLOSURE
The remaining sections of this prospectus identify in greater detail the
material terms of the agreements that apply to the pass through certificates and
our acquisition of up to ten aircraft with the proceeds from the sale of the
certificates. The following sections are summaries only and may not contain all
of the information you may consider important in deciding whether to exchange,
acquire or transfer certificates.
Every material agreement summarized in this prospectus was filed as an
exhibit to the registration statement of which this prospectus is a part. You
should read these agreements to get a complete understanding of the transaction.
Upon request, copies of these agreements will be furnished to any prospective
investor in the certificates. Requests for such agreements should be addressed
to Wilmington Trust Company, as trustee. See also "Available Information" at the
front of this prospectus to find out other ways you can obtain copies of these
agreements.
The references to section numbers in parentheses in the following sections
refer you to the relevant section of the agreement governing the terms
described. This will help you to locate the precise legal language governing the
terms we describe. Unless otherwise noted, the section references are to the
pass through trust agreements.
We have minimized the use of capitalized defined terms in the remainder of
this prospectus. However, in order to ensure the accuracy of our disclosure,
some terms remain capitalized. You can find the page on which the capitalized
term is defined by locating the term on the "Index of Terms" in Appendix I of
this prospectus.
DESCRIPTION OF THE NEW CERTIFICATES
GENERAL
Once registered with the SEC, new Class G certificates will be issued by
the Class G trust and new Class C certificates will be issued by the Class C
trust. A separate pass through trust agreement governs the issuance of each
class of new certificates. Holders of outstanding certificates will then be able
to exchange their outstanding certificates for these new certificates until the
expiration of the exchange offer. The terms governing both the Class G trust and
the Class C trust are substantially the same, except as described under
"--Subordination" below and except that the principal amount and scheduled
principal repayments of the equipment notes held by each trust and the interest
rate and maturity date of the equipment notes held by each trust will differ.
However, the financial terms of the new Class G certificates will be the same as
the outstanding Class G certificates and the financial terms of the new Class C
certificates will be the same as the outstanding Class C certificates.
CERTIFICATES REPRESENT AN OWNERSHIP INTEREST IN THE CORRESPONDING TRUST
Each new certificate will represent a fractional undivided interest in the
trust property of the trust that issued that class of certificates. (Section
3.01) The trust property of each trust consists of the items listed below:
TRUST PROPERTY FOR EACH TRUST
- --------------------------------
(1) equipment notes of the series relating to that trust acquired under
the note purchase agreement and issued in connection with the delivery
of each aircraft that we either buy or lease;
(2) the rights of that trust to acquire equipment notes of the series
relating to that trust under the note purchase agreement;
(3) the rights of that trust under the applicable escrow agreement,
including the right to request that the escrow agent withdraw deposits
to enable the trust to purchase equipment notes of the series relating
to that trust on the delivery of each aircraft during the delivery
period;
41.
<PAGE> 43
(4) the rights of that trust under the intercreditor agreement, including
any funds received under the intercreditor agreement;
(5) all money received under the liquidity facility for that trust;
(6) with respect to the Class G trust, all money received under the
certificate guaranty insurance policy; and
(7) funds from time to time deposited with the trustee in accounts
relating to that trust.
All payments and distributions made on or with respect to a certificate
will be made only from the trust property of the trust that issued the
certificate. (Section 3.11) The certificates do not represent an interest in or
obligation of America West, the trustees, any of the loan trustees or owner
trustees in their individual capacities or any owner participant. Accordingly,
the holders of the certificates must look to the trust property of the trust
that issued to it its certificates for receipt of expected cash flows which,
generally speaking on an ongoing basis, means the payments of principal of and
interest on the equipment notes of that trust.
Certificateholders of a trust have rights with respect to any deposits made
from the proceeds of the sale of the certificates issued by that trust. These
rights stem from escrow receipts that are affixed to each certificate. When
certificates are transferred, the rights with respect to the deposits are
transferred to the new holder. A certificateholder's rights under the escrow
receipts are not trust property of each trust.
SUBORDINATION
The intercreditor agreement sets forth terms and conditions of the
distribution of payments, including payments received by the subordination agent
in respect of equipment notes. Distributions on the Class G certificates will be
made prior to distributions on the Class C certificates and, if issued, Class D
certificates. If the Class D certificates are issued, distributions on the Class
C certificates will be made prior to distributions on the Class D certificates.
Distributions on all classes of certificates may be subordinate to other payment
obligations, including payments to the liquidity provider and policy provider.
For a more detailed description of the priority of payments, see "Description of
the Intercreditor Agreement--Priority of Distributions."
PAYMENTS AND DISTRIBUTIONS
The following description of distributions on the certificates should be
read together with the description of the intercreditor agreement because the
intercreditor agreement may change the effect of the following provisions in the
event of a default.
On regular distribution dates (January 2 and July 2 of each year) scheduled
payments of interest on the deposits and of interest or principal on the
equipment notes will be paid to certificateholders. The holders of the Class G
certificates will receive interest accruing on both the deposits corresponding
to the Class G trust and any Series G equipment notes purchased by the Class G
trust at an annual rate of 7.93%. The holders of the Class C certificates will
receive interest accruing on both the deposits corresponding to the Class C
trust and any Series C equipment notes purchased by the Class C trust at an
annual rate of 8.54%. The certificates are referred to as pass through
certificates because the payments on the deposits and equipment notes equal the
payments owing on the certificates and are "passed through" to the
certificateholders.
Payments of Interest
The deposits held with respect to each trust and the equipment notes held
in each trust will accrue interest at the applicable annual rate for
certificates to be issued by the trust shown on the cover page of this
prospectus. Interest will be payable on January 2 and July 2 of each year,
commencing on January 2, 2000 (or, in the case of equipment notes issued after
January 2, 2000, commencing with the first such date to occur after initial
issuance of those notes). Interest payments will be distributed to
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<PAGE> 44
certificateholders of a trust on each such date until the final distribution
date for that trust, except that payments on the equipment notes may be changed
as provided in the intercreditor agreement. Interest is calculated on the basis
of a 360-day year consisting of twelve 30-day months.
Morgan Stanley Capital Services, Inc., the liquidity provider, is providing
a liquidity facility for each class of certificates in an aggregate amount
sufficient to pay interest on the certificates at the applicable interest rate
for up to three successive regular distribution dates. A separate liquidity
facility was entered into with the Class G trust and the Class C trust. Holders
of Class G certificates will only receive drawings under the liquidity facility
for the Class G trust and holders of Class C certificates will only receive
drawings under the liquidity facility for the Class C trust. For a more detailed
description of the terms and limitations of the liquidity facilities, see
"Description of the Liquidity Facilities."
Payments of interest on the Class G certificates are also supported by a
certificate guaranty insurance policy issued by Ambac Assurance Corporation, the
policy provider. The payments under the policy will be made only after use of
any available funds under the liquidity facility for the Class G trust and any
funds in a cash collateral account previously funded from that liquidity
facility. For a more detailed description of the terms and limitations of the
policy, see "Description of the Policy and the Policy Provider Agreement."
Payments of Principal
Payments of principal of the equipment notes held in each trust are
scheduled to be received by the trustee on January 2 and July 2 in certain years
depending upon the terms of the equipment notes held in that trust, commencing
on or after January 2, 2000. The "final legal distribution date" for the Class G
certificates is July 2, 2020 and for the Class C certificates is July 2, 2007.
Payment of principal of the Class G certificates on the final legal
distribution date and, in some limited circumstances earlier, will be supported
by the policy provided by the policy provider. For more details on the policy,
see "Description of the Policy and the Policy Provider Agreement--The Policy".
Distribution of Scheduled Payments
On each regular distribution date, the paying agent distributes to
certificateholders any payments of interest on the deposits with respect to the
applicable trust. Also on each regular distribution date, the trustee
distributes to certificateholders any payments of principal and interest on the
equipment notes or with respect to other trust property held in each trust. Each
certificateholder of each trust will be entitled to receive its proportionate
share of any distribution in respect of scheduled payments of interest on the
deposits relating to such trust and, subject to the intercreditor agreement, of
principal or interest on equipment notes held on behalf of such trust. Each
distribution of scheduled payments will generally be made by the applicable
paying agent or trustee to the certificateholders of record of the relevant
trust on the record date applicable to that scheduled payment. (Sections 4.01
and 4.02, and Section 2.03 of the Escrow Agreement) If a scheduled payment is
not received by the applicable paying agent or trustee on a regular distribution
date but is received within five days thereafter, it will be distributed to such
holders of record on the date received. If it is received after the five-day
period, it will be treated as a special payment and distributed as described
below.
Distribution of Special Payments and Certain Policy Drawings
A trustee may receive from time to time payments of principal of, and
interest and premium on, the equipment notes on dates other than scheduled
payment dates. These special payments may occur if the equipment notes owned by
the trust are sold or redeemed early, in which case the payments will be
distributed on the date of such early redemption or purchase, or if scheduled
payments are more than five days late. The term "special payment" also refers to
any unused deposits distributed after the delivery period termination date or
the occurrence of a Triggering Event, together with accrued and unpaid interest
thereon and a premium that we pay. These unused deposits will be distributed 35
days after the paying agent receives notice of the event requiring the
distribution. This special payment will be scheduled to be
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<PAGE> 45
distributed on a date 35 days after the paying agent has received notice of the
event requiring the distribution unless that date is within ten days before or
after a regular distribution date, in which case the special payment will be
made on that regular distribution date.
Each paying agent, in the case of the deposits, and each trustee, in the
case of trust property or the premium payable by America West in connection with
distributions of unused deposits, will mail a notice to the certificateholders
of the applicable trust to inform them of the scheduled special distribution
date, the related record date, the amount of the special payment and the reason
for the special payment. This notice will be mailed at least 20 days before the
scheduled distribution of the special payment in the case of a redemption or
purchase of the equipment notes held in the related trust or any distribution of
unused deposits after the delivery period termination date or the occurrence of
a Triggering Event. In the case of any other special payment, the notice will be
mailed as soon as practicable after the trustee has confirmed that it has
received funds for the special payment. (Section 4.02(c); Section 1.02 of the
Escrow Agreement) Each distribution of a special payment, other than a final
distribution, will be made by the paying agent or the trustee, as applicable, to
the certificateholders of record of the applicable trust on the record date for
that special payment. (Section 4.02(b); Section 1.02 of the Escrow Agreement)
See "--Indenture Defaults and Certain Rights Upon an Indenture Default" and
"Description of the Equipment Notes--Redemption" for a description of the effect
of an indenture default or redemption on these payments.
In the case of the distribution of proceeds from any "No Proceeds Drawing"
or "Avoidance Drawing" as described in "Description of the Policy and the Policy
Provider Agreement--The Policy," the Class G trustee will mail a notice to the
certificateholders of the Class G trust stating the scheduled special
distribution date, the related record date, the amount of the distribution and
the reason for the distribution. This notice will be mailed at least 20 days
before the date these proceeds are scheduled to be distributed. Each such
distribution will be made by the Class G trustee to the certificateholders of
record of the Class G trust on the record date applicable to that distribution.
(Section 4.02(c))
Maintenance of Accounts
Each pass through trust agreement requires that the trustee establish and
maintain, for the benefit of the certificateholders of the related trust, one or
more non-interest bearing accounts to deposit payments representing scheduled
payments received by the trustee. The trustee is also required to establish and
maintain, for the benefit of the certificateholders of the related trust, one or
more accounts for the deposit of payments representing special payments received
by the trustee. These special payment accounts will be non-interest bearing
except the trustee will be required to invest amounts in the account in
permitted investments to the extent practicable. The trustee is required to
deposit any payments it receives in the appropriate account. (Section 4.01) All
amounts so deposited will be distributed by the trustee on a regular
distribution date or a special distribution date, as appropriate. (Section 4.02)
Each escrow agreement requires that the paying agent establish and
maintain, for the benefit of the holders of receipts relating to the deposits,
one or more non-interest bearing accounts. The paying agent is required to
deposit interest on the deposits in the appropriate account. All amounts so
deposited will be distributed by the paying agent on a regular distribution date
or special distribution date, as appropriate.
Final Distribution
The final distribution for each trust will be made only upon presentation
and surrender of the certificates for that trust at the office or agency of the
trustee specified in the notice given by the trustee of the final distribution.
The trustee will mail notice of the final distribution to the certificateholders
of that trust, specifying the date for the final distribution and the amount of
the distribution. (Section 11.01) See "Termination of the Trusts" below for a
more detailed description. Distributions in respect of certificates issued in
global form will be made as described in "Book Entry; Delivery and Form" below.
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<PAGE> 46
Weekend or Holiday Distribution Date
If any regular distribution date or special distribution date is a
Saturday, Sunday or other day on which commercial banks are authorized or
required to close in New York, New York, Phoenix, Arizona, Wilmington, Delaware,
or Hartford, Connecticut distributions scheduled to be made on that regular
distribution date or special distribution date will be made on the next
succeeding business day without additional interest.
POOL FACTORS
Pool Balance
The "pool balance" for each trust or for the certificates issued by any
trust indicates, as of any date, represents the portion of the original
aggregate face amount of the certificates issued by that trust that has not been
distributed to certificateholders. The pool balance as of any distribution date
will be computed after giving effect to any distribution to applicable
certificateholders to be made on that date. (Section 1.01)
Pool Factor
The "pool factor" for each trust as of any distribution date is the
quotient (rounded to the seventh decimal place) computed by dividing the pool
balance by the original aggregate face amount of the certificates of that trust.
It therefore represents the percentage of the original amount of certificates
issued by a trust that remains undistributed. The pool factor as of any
distribution date will be computed after giving effect to any special
distribution of unused deposits, payment of principal of the equipment notes or
payment of other trust property held in that trust to be made on that date.
(Section 1.01) The pool factor for each trust was 1.0000000 when the outstanding
certificates were initially issued and will decline as the pool balance of that
trust is reduced. The amount of a certificateholder's proportionate share of the
pool balance of a trust can be determined by multiplying the par value of the
holder's certificate of that trust by the pool factor for that trust as of the
applicable distribution date. Notice of the pool factor and the pool balance for
each trust will be mailed to certificateholders of that trust on each
distribution date. (Section 4.03)
Aggregate Principal Amortization Schedule
The following table shows an assumed amortization schedule for the
equipment notes held in each trust and resulting pool factors for that trust.
The actual aggregate principal amortization schedule applicable to a trust and
the resulting pool factors may differ from those set forth below. This is
because the amortization schedule for the equipment notes issued with respect to
an aircraft may vary from the amortization schedule below so long as it complies
with some mandatory economic terms for the financing of an aircraft.
The following table assumes the following:
- that each aircraft will be delivered in the scheduled month;
- that the trusts purchase equipment notes in the maximum principal amount
for all aircraft;
- that no early redemption or purchase of equipment notes occurs;
- that no default occurs in the payment of principal or interest on the
equipment notes;
- that no special distribution attributable to unused deposits is made
after the delivery period termination date;
- that no Triggering Event occurs; and
- that there is no drawing under the certificate guaranty insurance policy,
other than in respect of interest on the certificates.
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<PAGE> 47
If any of these assumptions do not occur, the assumed amortization schedule
below will differ.
<TABLE>
<CAPTION>
1999-1G TRUST 1999-1C TRUST
EQUIPMENT NOTES EQUIPMENT NOTES
SCHEDULED SCHEDULED 1999-1C TRUST
PAYMENTS OF 1999-1G TRUST PAYMENTS OF EXPECTED POOL
REGULAR DISTRIBUTION DATE PRINCIPAL EXPECTED POOL FACTOR PRINCIPAL FACTOR
- ------------------------- --------------- -------------------- --------------- -------------
<S> <C> <C> <C> <C>
January 2, 2000.............. $5,387,382.98 0.9769443 $3,085,129.91 0.8469526
July 2, 2000................. 0.00 0.9769443 0.00 0.8469526
January 2, 2001.............. 6,414,664.01 0.9494922 2,507,586.93 0.7225560
July 2, 2001................. 0.00 0.9494922 0.00 0.7225560
January 2, 2002.............. 7,060,279.46 0.9192772 3,770,663.17 0.5355005
July 2, 2002................. 0.00 0.9192772 0.00 0.5355005
January 2, 2003.............. 8,014,608.99 0.8849781 3,987,376.87 0.3376944
July 2, 2003................. 0.00 0.8849781 0.00 0.3376944
January 2, 2004.............. 9,365,617.80 0.8448972 3,958,605.13 0.1413155
July 2, 2004................. 0.00 0.8448972 0.00 0.1413155
January 2, 2005.............. 12,495,401.20 0.7914222 1,695,711.66 0.0576906
July 2, 2005................. 0.00 0.7914222 0.00 0.0576906
January 2, 2006.............. 13,083,696.06 0.7354295 19,162,926.33 0.0000000
July 2, 2006................. 0.00 0.7354295 0.00 0.0000000
January 2, 2007.............. 11,209,721.45 0.6874567 0.00 0.0000000
July 2, 2007................. 3,095,483.98 0.6742093 0.00 0.0000000
January 2, 2008.............. 3,1069003.55 0.6609169 0.00 0.0000000
July 2, 2008................. 6,408,747.64 0.6334902 0.00 0.0000000
January 2, 2009.............. 3,385,324.07 0.6190025 0.00 0.0000000
July 2, 2009................. 54670,310.34 0.5947359 0.00 0.0000000
January 2, 2010.............. 3,069,836.70 0.5815983 0.00 0.0000000
July 2, 2010................. 4,2439182.39 0.5634393 0.00 0.0000000
January 2, 2011.............. 2,501,500.00 0.5527340 0.00 0.0000000
July 2, 2011................. 6,422,511.70 0.5252483 0.00 0.0000000
January 2, 2012.............. 2,266,831.17 0.5155472 0.00 0.0000000
July 2, 2012................. 8,733,335.37 0.4781723 0.00 0.0000000
January 2, 2013.............. 4,991,073.36 0.4568126 0.00 0.0000000
July 2, 2013................. 7,171,109.55 0.4261233 0.00 0.0000000
January 2, 2014.............. 8,144,628.68 0.3912677 0.00 0.0000000
July 2, 2014................. 12,065,086.82 0.3396343 0.00 0.0000000
January 2, 2015.............. 6,717,588.43 0.3108858 0.00 0.0000000
July 2, 2015................. 4,8269264.36 0.2902315 0.00 0.0000000
January 2, 2016.............. 12,146,939.44 0.2382477 0.00 0.0000000
July 2, 2016................. 2,561,617.20 0.2272851 0.00 0.0000000
January 2, 2017.............. 14,110,504.32 0.1668981 0.00 0.0000000
July 2, 2017................. 4,443,412.96 0.1478822 0.00 0.0000000
January 2, 2018.............. 21,448,979.41 0.0560896 0.00 0.0000000
July 2, 2018................. 633,454.03 0.0533787 0.00 0.0000000
January 2, 2019.............. 12,472,900.58 0.0000000 0.00 0.0000000
</TABLE>
If there occurs (1) any change in the scheduled repayments or (2) any
redemption, purchase, default or special distribution, the pool factors and pool
balances of each trust so affected will be recomputed and certificateholders of
the affected trust will be notified promptly after the delivery period
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<PAGE> 48
termination date in the case of clause (1) and promptly after the occurrence of
any event described in clause (2).
REPORTS TO CERTIFICATEHOLDERS
On each distribution date, the applicable paying agent and trustee will
include a report with each distribution of a scheduled payment or special
payment to certificateholders. The report will set forth the following
information (per $1,000 aggregate principal amount of certificates for each
trust, as to (2), (3), (4) and (5) below):
(1) the aggregate amount of funds distributed on that distribution date,
indicating the amount allocable to each source including any portion
paid by the liquidity provider and/or the policy provider;
(2) the amount of the distribution allocable to principal and the amount
allocable to premium (including any premium we pay with respect to
unused deposits), if any;
(3) the amount of the distribution under the pass through trust agreement
allocable to interest;
(4) the amount of the distribution under the escrow agreement allocable to
interest;
(5) the amount of the distribution under the escrow agreement allocable to
unused deposits (if any); and
(6) the pool balance and pool factor for the trust. (Section 4.03)
As long as the certificates are registered in the name of DTC or its
nominee, on the record date prior to each distribution date, the applicable
trustee will request from DTC a securities position listing containing the names
of all DTC participants reflected on DTC's books as holding interests in the
certificates on that record date. On each distribution date, the applicable
paying agent and trustee will mail to each such DTC participant the statement
described above and will make available additional copies as requested by the
DTC participant for forwarding to certificateholders. (Section 4.03(a); Section
2.03 of the Escrow Agreement)
After the end of each calendar year, the applicable trustee and paying
agent will prepare a report for each holder of certificates at any time during
the preceding calendar year containing the sum of the amounts of distributions
listed in clauses (1), (2), (3), (4) and (5) above with respect to the trust for
that calendar year. If that person was a certificateholder during only a portion
of that calendar year, the report may contain information for only the
applicable portion of that calendar year. The trustee will also prepare any
other items that are readily available to the trustee and which a
certificateholder may reasonably request to prepare its U.S. federal income tax
returns. (Section 4.03(b)) The reports and other items described in this section
will be prepared based on information supplied to the trustee by DTC
participants and will be delivered by the trustee to DTC participants to be
available for forwarding by DTC participants to certificateholders in the manner
described above. (Section 4.03(b))
If the certificates are issued in the form of physical certificates, the
applicable paying agent and trustee will prepare and deliver the information
described above to each record holder of a certificate issued by that trust as
the name appears on the records of the registrar of the certificates.
INDENTURE DEFAULTS AND CERTAIN RIGHTS UPON AN INDENTURE DEFAULT
An event of default under an indenture could result in certificateholders
receiving less than full expected distribution of principal and interest on the
equipment notes held by the pass through trust that issued the certificates they
own. A list of these "indenture defaults" can be found under "Description of
Equipment Notes--Indenture Defaults; Notice and Waiver." An indenture default
for an aircraft we lease will include an event of default under the related
lease. We sometimes refer to an event of default under a lease as a "lease event
of default." Since the equipment notes issued under an indenture may be held in
more than one trust, a continuing indenture default under that indenture would
affect the equipment notes
47.
<PAGE> 49
issued pursuant to that indenture held by each such trust. There are no
cross-default provisions in the indentures or in the leases unless, in the case
of a lease, America West and the owner participant have otherwise agreed. This
means that events resulting in an indenture default under any particular
indenture may or may not result in an indenture default under any other
indenture, and a lease event of default under any particular lease may or may
not constitute a lease event of default under any other lease. If an indenture
default occurs in fewer than all of the indentures, payments of principal and
interest on the equipment notes issued under indentures with respect to which a
default has not occurred will continue to be made as originally scheduled.
Right to Cure
The applicable owner trustee and owner participant may have the right to
cure indenture defaults under a leased aircraft indenture that result from a
default under the related lease. The indenture default will be considered cured
if the owner trustee or the owner participant exercises any such cure right.
Resignation of Trustee In the Event of a Conflict of Interest
If the equipment notes outstanding under an indenture are held by more than
one trust, then each trust will hold equipment notes with different terms than
the notes held in other trusts. In these circumstances, the holders of
certificates issued by different trusts may have diverging or conflicting
interests. If the same institution acts as trustee of multiple trusts, the
trustee could be faced with a potential conflict of interest upon an indenture
default. In this event, each trustee faced with a conflict will resign as
trustee of one or all such trusts, and one or more successor trustees would be
appointed as replacements. Wilmington Trust Company is the initial trustee under
each trust.
Consequence of Continuing Indenture Default
If any indenture default under any indenture occurs and is continuing, the
Controlling Party may direct the loan trustee to accelerate the equipment notes
issued under that indenture and thereafter direct the loan trustee in the
exercising of remedies under that indenture and may direct the subordination
agent in whose name the equipment notes are issued to sell the equipment notes
issued under that indenture. See "Description of Intercreditor
Agreement--Intercreditor Rights--Sale of Equipment Notes and Aircraft" for a
more detailed description of the Controlling Party and its rights.
The proceeds of the sale of equipment notes will be distributed pursuant to
the provisions of the intercreditor agreement. Any such proceeds will be
deposited in the applicable special payments account and distributed to the
holders of the applicable trust on a special distribution date. (Sections 4.01
and 4.02) The market for equipment notes when an indenture default exists may be
very limited and the price is uncertain. If the equipment notes are sold for
less than their outstanding principal amount, the Class C certificateholders
will receive a smaller amount of principal distributions than anticipated and
will not have any claim for the shortfall against America West, any liquidity
provider, the policy provider, any owner trustee, any owner participant or any
trustee.
Following an indenture default, all payments received by the trustee or
with respect to equipment notes issued under the applicable indenture, other
than scheduled payments received on a regular distribution date, will be treated
as special payments and deposited in a special payments account. All amounts
deposited in the special payments and deposited in a special payments account
will be distributed to the certificateholders on a special distribution date. In
addition, if the applicable owner participant or owner trustee of a leased
aircraft exercises its option to redeem or purchase the outstanding equipment
notes issued under the applicable indenture, the proceeds from that redemption
or purchase will be deposited in the special payments account for the applicable
trust. These amounts will then be distributed to the certificateholders on a
special distribution date. (Section 4.01 and 4.02).
Any funds held in the special payments account for a trust will, to the
extent practicable, be invested and reinvested by the trustee of that trust in
permitted investments pending the distribution of those funds on a special
distribution date. (Section 4.04) These permitted investments include
obligations of the
48.
<PAGE> 50
United States or its agencies or instrumentalities in which the full faith and
credit of the United States is pledged and which mature in not more than 60 days
or a lesser time as may be required for the distribution of the funds on a
special distribution date. (Section 1.01)
Notice to Certificateholders of Default
Each pass through trust agreement provides that the trustee of the related
trust will, within 90 days after the occurrence of any default, give notice to
the certificateholders of that trust of all uncured or unwaived defaults known
to it with respect to that trust. However, in the case of default in a payment
of principal, premium, if any, or interest on any of the equipment notes held in
a trust, the applicable trustee will be protected in withholding a notice of
default if it in good faith determines that withholding the notice is in the
interests of the certificateholders. (Section 7.02) The term "default" as used
in this paragraph only means the occurrence of an indenture default with respect
to equipment notes held by the trust as described above, except that in
determining whether any indenture default has occurred, any related grace period
or notice will be disregarded.
Trustee Entitled to Security or Indemnity
Each pass through trust agreement requires the trustee to act with a
specified standard of care while an indenture default is continuing. In
addition, each pass through trust agreement contains a provision entitling the
trustee to be offered reasonable security or indemnity by the certificateholders
of that trust against costs, expenses and liabilities before proceeding to
exercise any right or power under the pass through trust agreement at the
request of those certificateholders. (Section 7.03(e)) While the type of
security or indemnity will depend upon the nature of the certificateholders'
request, the trustee is likely to seek an explicit agreement of the
certificateholders to indemnify it for the specified actions requested to be
taken and payment of the various fees and expenses it may incur in complying
with the request.
Rights of Certificateholders
Subject to qualifications in the pass through trust agreements and the
applicable intercreditor agreement, the certificateholders of each trust holding
certificates evidencing fractional undivided interests aggregating not less than
a majority in interest in that trust will have certain rights. This includes the
ability to direct the time, method and place of conducting any proceeding for
any remedy available to the applicable trustee or exercising any trust or power
conferred on the trustee, including any right of the trustee as controlling
party under the intercreditor agreement or as holder of the equipment notes.
(Section 6.04)
In some cases, the holders of the certificates of a trust evidencing
fractional undivided interests aggregating not less than a majority in interest
of that trust may waive any past "event of default" under that trust, including
an indenture default, or may direct the trustee or loan trustee to waive any
past indenture default and its consequences. Some defaults, however, may not be
waived. Defaults that may not be waived are as follows:
Defaults That May Not Be Waived
(1) a default in the deposit of any scheduled payment or special payment
or in the distribution thereof;
(2) a default in payment of the principal, premium, if any, or interest
with respect to any of the equipment notes; and
(3) a default in respect of any covenant or provision of the related pass
through trust agreement that cannot be modified or amended without the
consent of each certificateholder of the trust affected thereby.
(Section 6.05)
Each indenture will provide that, with some exceptions, the holders of the
majority in aggregate unpaid principal amount of the equipment notes issued
under that indenture may on behalf of all holders
49.
<PAGE> 51
waive any past default or indenture default. Notwithstanding these provisions of
the indentures, under the intercreditor agreement only the Controlling Party
will be entitled to waive any such past default or indenture default.
PURCHASE RIGHTS OF CERTIFICATEHOLDERS
Upon the occurrence and during the continuation of a Triggering Event, with
ten days' written notice to the trustee and to each certificateholder of the
same class:
- the holders of Class C certificates will have the right within 180 days
to purchase all, but not less than all, of the Class G certificates, and,
whether or not this right is exercised, the policy provider will
thereafter have the right to purchase all, but not less than all, of the
Class G certificates; and
- the holders of Class D certificates, if issued, will have the right to
purchase all, but not less than all, of the Class G and Class C
certificates
In each case, the purchase price will equal the pool balance of the relevant
class or classes of certificates plus accrued and unpaid interest on the pool
balance to the date of purchase, without premium, but including any other
amounts due to the certificateholders of such class or classes. In each case, if
prior to the end of the ten-day period, any other certificateholder of the same
class notifies the purchasing certificateholder that the other certificateholder
wants to participate in the purchase, then the other certificateholder may join
with the purchasing certificateholder to purchase the certificates
proportionately based on the interest in the trust held by each
certificateholder. (Section 6.01(b))
PTC EVENT OF DEFAULT
A "PTC Event of Default" under each pass through trust agreement means the
failure to pay within ten business days of the due date either: the outstanding
pool balance of the applicable class of certificates on the final legal
distribution date for that class or the interest due on that class of
certificates on any distribution date (unless the subordination agent has made
Interest Drawings, a withdrawal from the Cash Collateral Account for that class
of certificates, or a drawing under the policy, in an aggregate amount
sufficient to pay the interest and has distributed that amount to the relevant
trustee). Any failure to make expected principal distributions on any class of
certificates on any regular distribution date (other than the final legal
distribution date) will not constitute a PTC Event of default for those
certificates. A PTC Event of Default for the most senior outstanding class of
certificates resulting from an indenture default under all indentures will
constitute a Triggering Event. See "Description of the Intercreditor
Agreement-- Priority of Distributions" for a discussion of the consequences of
a Triggering Event.
MERGER, CONSOLIDATION AND TRANSFER OF ASSETS
We are prohibited from consolidating with or merging into any other
corporation or transferring substantially all of our assets as an entirety to
any other corporation unless all the requirements noted below are satisfied:
Requirements for Consolidation, Merger or Transfer of Assets
(1) the surviving successor or transferee corporation is a citizen of the
United States as defined in Title 49 of the United States Code
relating to aviation;
(2) the surviving successor or transferee corporation is a United States
certificated air carrier;
(3) the surviving successor or transferee corporation expressly assumes
all of our obligations in the pass through trust agreements, the note
purchase agreement, the indentures, the participation agreements and
the leases;
(4) we have delivered a certificate indicating that the transaction
complies with these conditions (Section 5.02); and
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(5) additionally, after giving effect to the transaction, no lease event
of default, in the case of a leased aircraft, or indenture event of
default, in the case of an owned aircraft, has occurred and is
continuing. (Leases, Section 13.2; Owned Aircraft Indenture, Section
4.07)
The pass through trust agreements, the note purchase agreement, the
indentures, the participation agreements and the leases do not and will not
contain any covenants or provisions that would give any trustee or
certificateholders protection in the event of a highly leveraged transaction,
including transactions effected by management or affiliates, which may or may
not result in a change in control of America West.
MODIFICATIONS OF THE PASS THROUGH TRUST AGREEMENTS AND CERTAIN OTHER AGREEMENTS
Each pass through trust agreement contains provisions permitting us to
amend or supplement the pass through trust agreement or the other material
agreements without the consent of the holders of any of the certificates of a
trust for the reasons listed below:
Basis for Amendments or Supplements to Pass Through Trust Agreements
(1) to reflect that another corporation is the successor to America West
and has assumed our covenants under the various agreements;
(2) to add to our covenants for the benefit of holders of certificates or
to surrender any right or power conferred upon us under the various
agreements;
(3) to cure any ambiguity or correct or supplement any defective or
inconsistent provision of the pass through trust agreement or the
other agreements, or to cure any ambiguity, correct any mistake or
modify any other provisions with respect to matters or questions
arising under those agreements;
(4) to comply with any requirement of the SEC, any applicable law, rules
or regulations of any exchange or quotation system on which the
certificates may be listed, any regulatory body or the registration
rights agreement to effect the exchange offer;
(5) to modify, eliminate or add to the provision of the pass through trust
agreement to the extent necessary to continue qualification under the
Trust Indenture Act of 1939 and to add to the pass through trust
agreement other provisions as may be expressly permitted by the Trust
Indenture Act;
(6) to provide for a successor trustee or to add to or change any
provision of the pass through trust agreement as to the trustee as
necessary to facilitate the administration of the trust created under
that agreement by more than one trustee;
(7) to provide certain information to the trustee as required under the
pass through trust agreement; or
(8) to modify or eliminate provisions relating to the transfer or exchange
of new certificates or the certificates upon completion of the
exchange offer or effectiveness of the shelf registration statement.
Any amendment or supplement listed above may be made only if it does not
adversely affect the status of the trust as a grantor trust under Subpart E,
Part I of Subchapter J of Chapter 1 of Subtitle A of the Internal Revenue Code
for U.S. federal income tax purposes. (Section 9.01)
Each pass through trust agreement also contains provisions permitting us,
with the consent of a majority in interest of the certificateholders of the
related trust and, with the consent of the applicable owner trustee in the case
of a leased aircraft (which consent cannot be unreasonably withheld), to execute
amendments or supplements to add any provisions to, or change or eliminate any
of the provisions of, the pass through trust agreement or the various agreements
or to modify the rights and obligations of the
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certificateholders, except that no amendment or supplement may, without the
consent of each affected certificateholder, have any of the effects set forth
below.
Amendments or Supplements That Require Consent of the Affected Holder
(1) Reduce in any manner the amount of, or delay the timing of, any
receipt by the trustee (or, with respect to the deposits, the
certificateholders) of payments on the deposits, the equipment notes
or other trust property held in the applicable trust or distributions
in respect of any certificate related to that trust, or change the
date or place of any payment in respect of any certificate, or make
distributions payable in coin or currency other than that provided for
in the certificates, or impair the right of any certificateholder to
institute suit for the enforcement of any such payment when due;
(2) permit the disposition of any equipment note held in the trust, except
as provided in the pass through trust agreement, or otherwise deprive
any certificateholder of the benefit of the ownership of the
applicable equipment notes;
(3) alter the priority of distributions specified in the intercreditor
agreement in a manner adverse to the certificateholders;
(4) reduce the percentage of the aggregate fractional undivided interests
of the trust provided for in the pass through trust agreement that is
required in order to obtain the consent of the holders for that
supplement or for any waiver provided for in the pass through trust
agreement;
(5) modify any of the provisions relating to the rights of the
certificateholders in respect of the waiver of events of default or
receipt of payment; or
(6) adversely affect the status of the trust as a grantor trust under
Subpart E, Part I of Subchapter J of Chapter 1 of Subtitle A of the
Internal Revenue Code for U.S. federal income tax purposes. (Section
9.02)
Actions by Trustee Upon Receipt of Consent to Amend or Supplement any
Agreement
In the event that a trustee, as holder (or beneficial owner through the
subordination agent) of any equipment note in trust for the benefit of the
certificateholders of the relevant trust or as Controlling Party under the
intercreditor agreement, receives (directly or indirectly through the
subordination agent) a request for a consent to any amendment, modification,
waiver or supplement under any indenture, any participation agreement, any
lease, any equipment note or any other related document, the trustee will
promptly send a notice of the proposed amendment, modification, waiver or
supplement to each certificateholder of the relevant trust as of the date of the
notice. The notice will request direction from the certificateholders regarding
the matters set forth below:
Information Requested by Trustee from Certificateholders
(1) whether or not to take or refrain from taking (or direct the
subordination agent to take or refrain from taking) any action which a
holder of that equipment note or the Controlling Party has the option
to take;
(2) whether or not to give or execute (or direct the subordination agent
to give or execute) any waivers, consents, amendments, modifications
or supplements as a holder of that equipment note or as Controlling
Party; and
(3) how to vote (or direct the subordination agent to vote) any equipment
note if a vote has been called for with respect to the amendment,
modification, waiver or supplement.
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Provided a request for certificateholder direction is made, in directing
any action or casting any vote or giving any consent as the holder of any
equipment note (or in directing the subordination agent in any of the
foregoing), the trustee will:
(1) if the trustee is acting other than as Controlling Party, vote for or
give consent to any such action with respect to the equipment note in
the same proportion as that of (x) the aggregate face amounts of all
certificates actually voted in favor of or for giving consent to the
action by direction of certificateholders to (y) the aggregate face
amount of all outstanding certificates of the relevant trust; and
(2) if the trustee is acting as the Controlling Party, vote as directed in
the direction by the certificateholders evidencing fractional undivided
interests aggregating not less than a majority in interest in the
relevant trust.
For purposes of the direction just described, a certificate is deemed
"actually voted" if the certificateholder has delivered to the trustee an
instrument evidencing consent to the direction prior to two business days before
the trustee directs the action or casts the vote or gives the consent.
Notwithstanding the foregoing, but subject to certain rights of the
certificateholders under the relevant pass through trust agreement and subject
to the intercreditor agreement, the trustee may, in its own discretion and at
its own direction, consent and notify the relevant loan trustee of the consent
(or direct the subordination agent to consent and notify the relevant loan
trustee of the consent) to any amendment, modification, waiver or supplement
under the relevant document, if an indenture default has occurred and is
continuing, or if the amendment, modification, waiver or supplement will not
materially adversely affect the interests of the certificateholders. (Section
10.01)
OBLIGATION TO PURCHASE EQUIPMENT NOTES
The trustees are obligated to purchase the equipment notes issued with
respect to the aircraft during the delivery period, subject to the terms and
conditions of a note purchase agreement. Under the note purchase agreement, we
agree to finance each aircraft in the manner provided in the agreement. We will
have the option of entering into a leveraged lease financing or a secured debt
mortgage financing with respect to each aircraft.
In addition, we may, subject to conditions specified in the note purchase
agreement, elect to convert a secured debt financing to a leveraged lease
financing by entering into a sale-leaseback transaction. These conditions
include the receipt by the related owned aircraft trustee of a legal opinion
that no holder of the certificates will recognize income, gain or loss for U.S.
federal income tax purposes in connection with the assumption by an owner trust
of our obligations under the equipment notes pursuant to such sale-leaseback. If
that opinion cannot be given, we will provide indemnification in favor of the
holders of the certificates in form and substance reasonably satisfactory to the
relevant owned aircraft trustee.
The note purchase agreement provides as follows:
- if we choose to lease an aircraft and enter into a leverage leased
financing, we will enter into a participation agreement, a lease and a
leased aircraft indenture relating to the financing of that leased
aircraft; and
- if we choose to purchase an aircraft and enter into a secured debt
financing, we will enter into a participation agreement and an owned
aircraft indenture relating to the financing of that owned aircraft.
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TRANSACTION STRUCTURE FOR LEASED AND OWNED AIRCRAFT
Transaction Structure for Leased Aircraft
The following diagram illustrates transactions in connection with the
purchase of equipment notes by the trustees to finance a leased aircraft. Eight
separate transactions similar to the transactions illustrated in the diagram
have occurred and we anticipate that the balance of the aircraft will be
financed with the proceeds of the offering of the certificates on a lease
finance basis.
[Transaction Structure for Leased and Owned Aircraft Diagram]
(1) We may sell aircraft we own to the owner trust in a leveraged lease
transaction. In some instances, the owner trust may purchase aircraft
directly from the manufacturer or from other persons.
(2) Each leased aircraft is subject to a separate lease.
(3) Because the owner trustee assigns these payments to the loan trustee, we
make these payments directly to the loan trustee.
(4) Because the sale of the certificates may occur prior to the closing of
each leveraged lease transaction, the proceeds from the sale of
certificates not used on the certificates' issuance date for the
financing of aircraft are initially held in escrow by the escrow agent
and deposited with the depositary. The depositary will hold these funds
as interest-bearing deposits. In connection with each leveraged lease
transaction, amounts are withdrawn from the deposit for the respective
trust and used to acquire equipment notes.
The diagram above shows how we would lease finance aircraft through the
issuance by an owner trustee of leased aircraft equipment notes. In this type of
a financing, the leased aircraft is sold to an owner trustee that, in turn,
lease the aircraft back to us. The owner participant, who is the beneficial
owner of the owner trust, contributes a portion of the purchase price of the
aircraft. The owner trust enters into an indenture with the loan trustee
providing for a security interest in the leased aircraft, the assignment of the
lease and the issuance of equipment notes to finance the remaining portion of
the purchase price of an aircraft. The owner trustee sells the Series G and
Series C equipment notes to the Class G and Class C trusts. As each aircraft is
financed, the Class G and Class C trusts either use the proceeds of the initial
sale of the Class G and Class C certificates (as was the case in respect of two
of the aircraft) or withdraw deposits to purchase the applicable equipment notes
and, in either case, pass such amounts through to the loan trustee who, in turn,
forwards the proceeds to the owner trust as payment for the equipment notes. The
owner trustee, then, using the equity contribution of the owner participant and
the proceeds from the sale of the equipment notes, uses that money to pay the
purchase price for the aircraft being financed.
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Transaction Structure for Owned Aircraft
The following diagram illustrates transactions in connection with the
purchase of equipment notes by the trustees to finance owned aircraft. We do not
anticipate using this financing structure, but if we did, separate transactions
similar to the transactions illustrated in the diagram will occur for each owned
aircraft financed with the proceeds of the offering of the certificates.
[Transaction Structure for Owned Aircraft Diagram]
(1) Because the sale of the certificates may occur prior to the financing of
each owned aircraft, the proceeds from the sale of certificates not
utilized on the closing date for the financing of aircraft are initially
held in escrow by the escrow agent and deposited with the depositary.
The depositary holds such funds as interest-bearing deposits. In
connection with the closing of each owned aircraft financing, amounts
are withdrawn from the deposit for the respective trust and used to
acquire equipment notes.
The diagram above shows how we would finance aircraft that we own through
the issuance of owned aircraft equipment notes. In such a financing, we would
enter into an indenture with the loan trustee providing for the mortgaging of
our aircraft and the issuance of equipment notes by us. As each aircraft is
financed, the Class G and Class C trusts withdraw amounts from the applicable
depositary necessary to purchase the applicable equipment notes and pass such
amounts through to the loan trustee who will in turn forward the proceeds to us
as payment for the equipment notes. We then purchase the owned aircraft using
those proceeds and proceeds from our working capital.
MANDATORY TERMS
The description of the agreements in this prospectus is based on the forms
of agreements contemplated by the note purchase agreement. The terms of the
agreements actually entered into may
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differ from the forms of the agreements and, consequently, may differ from the
description of the agreements in this prospectus.
However, under the note purchase agreement, the terms of these agreements
are required (a) except in the case of a Special Structure, to contain the
Mandatory Document Terms and (b) not to vary the Mandatory Economic Terms. In
addition, we must certify to the trustees that any such modifications (a) do not
materially and adversely affect the certificateholders or the policy provider
and (b) in the case of any Special Structure, do not expose the
certificateholders, the liquidity provider or the policy provider to any
material additional risks beyond those to which they would have been exposed
absent the Special Structure. The Policy Provider must approve any Special
Structure. We also must obtain written confirmation from each rating agency that
the use of modified agreements will not result in a withdrawal, suspension or
downgrading of the rating of any class of certificates. Further, under the note
purchase agreement, it is a condition precedent to the obligation of each
trustee to purchase the equipment notes related to the financing of an aircraft
that no Triggering Event has occurred. The trustees will have no right or
obligation to purchase equipment notes after the delivery period termination
date.
The term "Special Structure" refers to the structure for a financing other
than as contemplated in the note purchase agreement, which may require different
terms in the financing agreements.
The "Mandatory Economic Terms," as defined in the note purchase agreement,
require, among other things, compliance with the items below:
Requirements of the Mandatory Economic Terms
(1) the maximum principal amount of all the equipment notes issued with
respect to an aircraft cannot exceed the maximum principal amount of
equipment notes indicated for each aircraft as set forth in
"Description of the Aircraft and the Appraisals--The Appraisals"
under the column "Maximum Principal Amount of Equipment Notes";
(2) the average life of the equipment notes related to each aircraft may
not be less than 10.5 years nor more than 13.0 years in the case of
the Series G equipment notes and not to be less than 2.0 years nor
more than 3.5 years in the case of the Series C equipment notes, in
each case from September 21, 1999;
(3) as of the first regular distribution date following the delivery of
the last aircraft to be delivered, the average life cannot be more
than 11.5 years in the case of Class G certificates and 3.0 years in
the case of Class C certificates, in each case from September 21,
1999;
(4) the loan to aircraft value ratio with respect to each aircraft at the
time the related equipment notes are issued and on any regular
distribution date thereafter cannot exceed 57.0% in the case of the
Series G equipment notes and 62.0% in the case of the Series C
equipment notes, in each case computed on the basis of an assumed
value of that aircraft no greater than the value for the aircraft
under "Description of the Aircraft and the Appraisals--The
Appraisals" under the column "Appraised Value" and the depreciation
assumption defined in the third paragraph under "Description of the
Equipment Notes--Loan to Value Ratios of Equipment Notes";
(5) the final maturity date of the Series G equipment notes cannot extend
beyond January 2, 2019 and the Series C equipment notes cannot extend
beyond January 2, 2006;
(6) at the delivery period termination date, the aggregate principal
amount of all Series G equipment notes must be equal to the aggregate
face amount of the Class G certificates and the aggregate principal
amount of all Series C equipment notes cannot exceed, but may be less
than, the original aggregate face amount of the Class C certificates
(it being understood that the pool balance of the Class C
certificates will be reduced to the extent it exceeds the aggregate
principal amount of all Series C equipment notes);
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(7) the interest rate applicable to each series of equipment notes must
be equal to the rate applicable to the certificates issued by the
corresponding trust;
(8) the payment dates for the equipment notes and basic rent under the
leases must be January 2 and July 2;
(9) basic rent, stipulated loss values, early buy-out amount and
termination values under the leases must be sufficient to pay amounts
due with respect to the related equipment notes;
(10) the amounts payable under the all-risk aircraft hull insurance
maintained for each aircraft must be sufficient to pay the applicable
stipulated loss value, subject to certain rights of self-insurance;
and
(11) the following must be provided as set forth in the form of
participation agreements, lease and indentures:
(a) the past due rate in the indentures and the leases;
(b) the Make-Whole Premium payable under the indentures;
(c) the provisions relating to the redemption and purchase of equipment
notes in the indentures;
(d) the minimum liability insurance amount on aircraft in the leases;
(e) the interest rate payable with respect to stipulated loss value in
the leases; and
(f) the indemnification of the loan trustees, subordination agent,
liquidity provider, the policy provider, trustees and escrow agents
with respect to taxes and expenses.
The "Mandatory Document Terms" prohibit modifications in any material
adverse respect to specified provisions of the participation agreements, lease
and indentures contemplated by the note purchase agreement. Prohibited
modifications to the Mandatory Document Terms are as provided below.
Prohibited Modifications Under the Mandatory Document Terms
--------------------------------------------------------------------------
(1) In the case of the indentures, the following modifications are
prohibited:
(a) to the granting clause of the indentures so as (1) to deprive the
registered holders of the equipment notes of a security interest in
the aircraft, some of our rights under the purchase agreement with
the aircraft manufacturer and, in the case of a leased aircraft,
the lease or (2) to eliminate the obligations intended to be
secured by the indenture;
(b) to some provisions relating to the issuance, redemption, purchase,
payments, and ranking of the equipment notes (including the
obligation to pay a premium in some circumstances);
(c) to some provisions regarding indenture defaults, remedies relating
to indenture defaults and rights of the owner trustee and owner
participant in such circumstances;
(d) to some provisions relating to any replaced airframe or engines
with respect to an aircraft; and
(e) to the provision that New York law will govern the indentures.
(2) In the case of the leases, modifications are prohibited to certain of
our obligations, including:
(a) to pay basic rent, stipulated loss value, early buy-out amount and
termination value to the trustee of a leased aircraft;
(b) to record the leased aircraft indenture with the Federal Aviation
Administration and to maintain that indenture as a first-priority
perfected mortgage on the related aircraft;
(c) to furnish opinions with respect to a replacement airframe; and
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(d) to consent to the assignment of the lease by the owner trustee as
collateral under the leased aircraft indenture, as well as
modifications which would either alter the provision that New York
law will govern the lease or would deprive the loan trustee of
rights expressly granted to it under the leases.
(3) In the case of the participation agreements, the following
modifications are prohibited:
(a) to certain conditions to the obligations of the trustees to
purchase the equipment notes issued with respect to an aircraft
involving good title to that aircraft, obtaining a certificate of
airworthiness with respect to that aircraft, entitlement to the
benefits of Section 1110 of the Bankruptcy Code with respect to
that aircraft and filings of documents with the Federal Aviation
Administration;
(b) to the provisions restricting the ability of a registered holder of
equipment notes to transfer those notes;
(c) to some provisions so as to deprive the registered holders of
equipment notes of a first priority security interest in the
aircraft;
(d) to some provisions requiring the delivery of legal opinions; and
(e) to the provision that New York law will govern the participation
agreements.
In general, modifications are prohibited that materially and adversely
affect the interest of the registered holders of equipment notes, the
subordination agent, the liquidity provider, the policy provider or the loan
trustee in the definition of "Make-Whole Premium." Notwithstanding the
foregoing, any Mandatory Document Term may be modified to correct or supplement
any provision which may be defective or to cure any ambiguity or correct any
mistake, provided that such action does not materially adversely affect the
interests of the registered holders of equipment notes, the subordination agent,
the liquidity provider, the policy provider, the loan trustee or the
certificateholders.
POSSIBLE ISSUANCE OF CLASS D CERTIFICATES
We may elect to fund the sale of Series D equipment notes through the sale
of Class D certificates. If issued, Series D equipment notes will be funded from
sources other than this offering. We will not issue any Series D equipment notes
at any time prior to the completion of this offering. The note purchase
agreement provides that we will not issue any Series D equipment notes unless we
obtain written confirmation from Standard & Poor's Rating Services and Moody's
Investors Service, Inc. that the issuance of the Series D equipment notes will
not result in a withdrawal or downgrading of the rating of any class of
certificates. If the Class D certificates are issued, they will be subordinated
in right of payment to the Class G and Class C Certificates and the trustee with
respect to the certificates will become a party to the intercreditor agreement.
LIQUIDATION OF ORIGINAL TRUSTS
Each of the trusts established at the time of the original issuance of the
certificates will transfer and assign all of its assets and rights to a
newly-created successor trust. This transfer will occur on the earlier of (1)
the first business day after May 30, 2000 or, if later, the fifth business day
after the delivery period termination date or (2) the fifth business day after a
Triggering Event. The successor trusts will have substantially identical terms
as the original trusts except that the successor trusts will not have the right
to purchase new equipment notes and Delaware law will govern the original trusts
and New York law will govern the successor trusts. The trustee of each of the
original trusts will also act as trustee of the corresponding successor trust
and each new trustee will assume the obligations of the original trustee. The
purpose of each successor trust is the same as each original trust, namely to
hold the trust property that is used to make distributions from the trust. Each
of the certificates will represent the same interest in the successor trust as
it represented in the original trust immediately prior to their transfer and
assignment. Unless the context otherwise requires, all references in this
prospectus applicable to the original trusts will
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apply to the successor trusts after the transfer. The original trust will
continue until the transfer is effected. The original trusts may be treated as
partnerships for United States federal income tax purposes but the successor
trust will, in the opinion of tax counsel, be treated as grantor trusts. The
purpose of using both original and successor trusts in this transaction is
intended to limit the risk of partnership tax characterization to the original
trusts.
TERMINATION OF THE TRUSTS
The obligations of America West and the applicable trustee with respect to
a trust will terminate upon the distribution of all amounts required to be
distributed to the certificateholders of that trust and the disposition of all
property held in that trust. The applicable trustee will send to each
certificateholder of that trust notice of the termination of that trust, the
amount of the proposed final payment and the proposed date for the distribution
of the final payment for that trust. The final distribution to any
certificateholder of that trust will be made only upon surrender of the
certificateholder's certificates at the office or agency of the applicable
trustee specified in the notice of termination. (Section 11.01)
THE TRUSTEES
The trustee for each trust is Wilmington Trust Company.
With some exceptions, the trustees make no representations as to the
validity or sufficiency of the pass through trust agreements, the certificates,
the intercreditor agreement, the equipment notes, the deposit agreements, the
escrow agreements, the indentures, the participation agreements, the leases or
other related documents. (Sections 7.04 and 7.15) The trustee of any trust is
not liable for any action by it in good faith under the direction of the holders
of a majority in interest of the certificates of such trust. In general, the
trustees are under no obligation to exercise any of their rights or powers at
the request of any holders of certificates issued thereunder unless the trustees
are offered reasonable security and indemnity. (Section 7.03(e)) The trustees in
their individual or any other capacity may acquire and hold certificates issued
thereunder and, subject to certain conditions, may otherwise deal with America
West, with any owner trustee or loan trustee with the same rights they would
have if they were not the trustees. (Section 7.05)
Any trustee may resign at any time, in which case we will appoint a
successor trustee. If any trustee is no longer eligible to continue as trustee,
becomes incapable of acting as trustee or becomes insolvent, we may remove the
trustee. Additionally, the policy provider or any holder of the certificates of
such trust for at least six months may, on behalf of such holder and all others
similarly situated, petition any court of competent jurisdiction to remove such
trustee and the appointment of a successor trustee. The resignation or removal
of the trustee does not become effective until the successor trustee accepts the
appointment. (Sections 7.09 and 7.10) It is possible that a different trustee
could be appointed to act as the successor trustee for each trust. All
references in this prospectus to the trustee should be read to consider the
possibility that the trusts could have different successor trustees in the event
of a resignation or removal.
We will pay or cause to be paid the applicable trustee's fees and expenses.
(Section 7.07)
BOOK-ENTRY; DELIVERY AND FORM
The new certificates of each trust will be represented by one or more
permanent global certificates, in definitive, fully registered form without
interest coupons. The global certificates will be deposited with the trustee as
custodian for The Depository Trust Company, or DTC, and registered in the name
DTC or its nominee.
The Depository Trust Company
DTC has advised us that it is a limited purpose trust company organized
under the laws of the State of New York, a "banking organization" within the
meaning of the New York Banking Law, a member of
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the Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "Clearing Agency" registered under the provisions
of Section 17A of the Securities Exchange Act of 1934. DTC was created to hold
securities for its participants and facilitate the clearance and settlement of
securities transactions between participants through electronic book-entry
changes in accounts of its participants, thereby eliminating the need for
physical movement of certificates. DTC participants include securities brokers
and dealers, banks, trust companies and clearing corporations and certain other
organizations. Indirect access to the DTC system is available to other indirect
participants such as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a participant, either directly
or indirectly.
Neither America West nor the trustee has any responsibility for the
performance by DTC or its participants or indirect participants of their
respective obligations under the rules and procedures governing their
operations.
If DTC is at any time unwilling or unable to continue as a depositary for
the global certificates and a successor depositary is not appointed within 90
days, the trusts will issue certificates in definitive, fully registered form in
exchange for the global certificates.
Ownership of Global Certificates
Ownership of beneficial interests in global certificates is limited to DTC
participants or persons who hold interests through DTC participants. Ownership
of beneficial interests in the global certificates is shown on, and the transfer
of that ownership is effected only through, records maintained by DTC or its
nominee (with respect to interests of DTC participants) and the records of DTC
participants (with respect to interests of persons other than participants). The
laws of some states require that certain purchasers of securities take physical
delivery of such securities. These laws may limit the market for beneficial
interests in the global certificates.
So long as DTC or its nominee is the registered owner or holder of the
global certificates, DTC or its nominee, as the case may be, will be considered
the sole record owner or holder of the certificates represented by those global
certificates. No beneficial owners of an interest in the global certificates
will be able to transfer that interest except in accordance with DTC's
applicable procedures, in addition to procedures under the pass through trust
agreements and, if applicable, the Euroclear System or Cedel Bank Societe
Anonyme.
Payments of Principal and Interest on the Global Certificates
Payments of the principal of, premium, if any, and interest on the global
certificates will be made to DTC or its nominee, as the case may be, as the
registered owner thereof. Neither America West, the trustee, nor any paying
agent is responsible or liable for the records relating to or payments made on
account of beneficial ownership interests in the global certificates.
We expect that DTC or its nominee, upon receipt of any payment of
principal, premium, if any, or interest in respect of the global certificates,
will credit the accounts of DTC participants in amounts proportionate to their
respective beneficial ownership interest in the global certificates. We also
expect that payments by participants to owners of beneficial interests in the
global certificates will be governed by standing instructions and customary
practices. Those payments will be the responsibility of those participants.
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DESCRIPTION OF THE DEPOSIT AGREEMENTS
GENERAL
ABN AMRO Bank N.V., acting through its Chicago branch, will act as
depositary. The escrow agent for each trust has entered into a separate deposit
agreement pursuant to which the depositary has established separate accounts
into which the proceeds from the sale of outstanding certificates were
deposited. The escrow agent, at the request from the trustee of the trust, makes
withdrawals to purchase equipment notes. On each regular distribution date the
depositary will pay to the paying agent, for distribution to the
certificateholders of the applicable trust, an amount equal to interest accrued
on the deposits relating to such trust.
Except in respect of the aircraft financed on the date of issuance of the
outstanding certificates, upon each delivery of an aircraft during the delivery
period, the trustees for each trust will ask the applicable escrow agent to
withdraw deposits to enable the trustee to purchase equipment notes of the
series applicable to that trust. Accrued but unpaid interest on all withdrawn
deposits will be paid on the next regular distribution date. Any deposit that is
withdrawn but not used to purchase equipment notes will be re-deposited by each
trustee into an account relating to the applicable trust. The deposits relating
to each trust and interest paid on the deposits will not be subject to the
subordination provisions of the intercreditor agreement and will not be
available to pay any other amount on the certificates.
UNUSED DEPOSITS
The trustees are only obligated to purchase equipment notes issued with
respect to each aircraft if certain conditions are satisfied at the time of
delivery. Since the aircraft are scheduled for delivery from time to time during
the delivery period, we cannot assure you that all these conditions will be
satisfied at the time of delivery for each aircraft although, as at the date of
this prospectus, eight of the ten aircraft have been delivered and financed
using the proceeds. Moreover, since the aircraft will be newly or recently
manufactured, their delivery may be delayed. Depending on the circumstances of
the financing of each aircraft, the maximum aggregate principal amount of
equipment notes may not be issued.
Funds remaining as deposits at the delivery period termination date will be
withdrawn by the escrow agent and distributed, with accrued and unpaid interest
thereon to the certificateholders of the applicable trust after at least 15
days' prior written notice. The "delivery period termination date" refers to the
earlier of the end of the delivery period or the acquisition by the trusts of
the equipment notes for all aircraft. The distribution will include a premium
payable by America West equal to the Deposit Make-Whole Premium with respect to
the remaining deposits applicable to each trust. The Deposit Make-Whole Premium
for the remaining deposits applicable to the Class C trust will be payable only
to the extent the remaining deposits exceed $4 million, which we refer to as the
"Par Redemption Amount". The certificate guaranty insurance policy does not
cover the Deposit Make-Whole Premium. Since the maximum principal amount of
equipment notes may not be issued with respect to an aircraft and the Series C
equipment notes are more likely not to be issued in the maximum principal amount
as compared to the other equipment notes, it is more likely that a distribution
of unused deposits will be made with respect to the Class C certificates as
compared to the other certificates.
In addition, notwithstanding the Par Redemption Amount limitation, if any
aircraft is not delivered by the manufacturer on or prior to the delivery period
termination date due to any reason other than our fault or negligence and no
substitute aircraft is provided, no Deposit Make-Whole Premium will be paid with
respect to the unused deposits to be distributed as a result of such failure to
deliver in an amount (the "Non-Premium Amount") equal to the maximum principal
amount of equipment notes that could have been issued and acquired by the trust
with respect to that aircraft in accordance with the Mandatory Economic Terms
and the unused deposits will not be included in the calculation of the Par
Redemption Amount.
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"Deposit Make-Whole Premium" means, with respect to the distribution of
unused deposits to holders of any class of certificates, as of any date of
determination, an amount, if any, determined pursuant to the following formula
(any negative amount being deemed equal to zero):
Formula for Deposit Make-Whole Premium
(1) The present value of the excess of
(a) the scheduled payment of principal and interest to maturity of the
equipment notes, assuming the maximum principal amount thereof
minus any Non-Premium Amount applicable to such class of
certificates and, in the case of Class C certificates only, the Par
Redemption Amount, were issued, on each remaining regular
distribution date for such class under the Assumed Amortization
Schedule, over
(b) the scheduled payment of principal and interest to maturity of the
equipment notes actually acquired by the trustee for that class on
each regular distribution date, such present value computed by
discounting the 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 197 basis
points in the case of the Class G certificates and 275 basis points
in the case of the Class C certificates, over
(2) the amount of unused deposits to be distributed to the holders of
those certificates, minus any Non-Premium Amount applicable to that
class of certificates and, in the case of Class C certificates only,
of the Par Redemption Amount, plus accrued and unpaid interest on the
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 date
the certificates were issued).
DISTRIBUTION UPON OCCURRENCE OF TRIGGERING EVENT
If a Triggering Event occurs prior to the delivery period termination date,
the escrow agent for each trust will withdraw any funds then held as deposits
with respect to that trust and cause those deposits, with accrued and unpaid
interest thereon but without any premium, to be distributed to the
certificateholders of that trust by the Paying Agent after at least 20 days'
prior written notice. Accordingly, if a Triggering Event occurs prior to the
delivery period termination date, the trusts will not acquire equipment notes
issued with respect to aircraft delivered after the occurrence of the Triggering
Event.
DEPOSITARY
ABN AMRO Bank N.V. is a direct subsidiary of ABN AMRO Holding N.V., an
international multi-bank holding company. At December 31, 1998, ABN AMRO Holding
N.V. reported consolidated assets amounting to approximately $505 billion (based
on the exchange rate at December 31, 1998 of U.S. $1.00 to NLG 1.886). The
accounting principles applied in the preparation of the financial statements of
ABN AMRO Bank N.V. may not conform to U.S. generally accepted accounting
principles.
ABN AMRO Bank N.V. has long-term unsecured debt ratings of Aa2 from Moody's
Investors Service, Inc. and AA from Standard & Poor's Ratings Service and
short-term unsecured debt ratings of P-1 from Moody's and A-1+ from Standard &
Poor's.
ABN AMRO Bank N.V.'s Chicago branch was initially licensed by the
Commissioner of Banks and Real Estate for the State of Illinois on October 1,
1973. The Chicago branch is an unincorporated branch of ABN AMRO Bank N.V. and
is not a separate subsidiary. The branch is located at 135 South LaSalle Street,
Chicago, Illinois 60674-9135.
The depositary has not been involved in the preparation of, and does not
accept responsibility for, this prospectus.
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REPLACEMENT OF DEPOSITARY
If the depositary's long-term unsecured debt rating falls below BBB+ from
Standard & Poor's or Baa1 from Moody's then, within 45 days, we must replace the
depositary with a new depositary bank that has short-term unsecured debt ratings
of at least A-1 from Standard & Poor's and P-1 from Moody's and a long-term
unsecured debt rating of at least A from Standard & Poor's and A2 from Moody's.
DESCRIPTION OF THE ESCROW AGREEMENTS
Each escrow agent, each paying agent, each trustee and the initial
purchasers of the outstanding certificates have entered into a separate escrow
agreement for the benefit of the certificateholders of each trust as holders of
the escrow receipts affixed to the certificates. The cash proceeds of the
initial sale of the outstanding certificates of each trust were deposited on
behalf of the escrow agent with the depositary. The escrow agreement instructs
the escrow agent of each trust (1) to permit the trustee of the trust to cause
funds to be drawn from the deposits on or prior to the delivery period
termination date to enable the trustee to purchase equipment notes and (2) to
direct the depositary to pay interest on the deposits for distribution to the
holders of escrow receipts.
Each escrow agreement requires that the paying agent establish and
maintain, for the benefit of the related receiptholders, one or more
non-interest bearing accounts. The paying agent is required to deposit interest
on deposits relating to each trust and any unused deposits withdrawn by the
escrow agent in that account. All amounts so deposited will be distributed by
the paying agent on a regular distribution date or special distribution date, as
appropriate.
Each escrow receipt evidences a fractional undivided interest in amounts
from time to time deposited into the account established by the paying agent and
is limited in recourse to amounts deposited into that account. An escrow receipt
may not be assigned or transferred except in connection with the assignment or
transfer of the certificate to which it is affixed. Each escrow receipt will be
registered by the escrow agent in the same name and manner as the certificate to
which it is affixed.
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DESCRIPTION OF THE LIQUIDITY FACILITIES
GENERAL
Morgan Stanley Capital Services, Inc., the liquidity provider, has entered
into a separate revolving credit agreement, or liquidity facility, with the
subordination agent with respect to the certificates of each of the trusts.
Under the liquidity facility, the liquidity provider will, if necessary, make
one or more advances ("Interest Drawings") in an amount (the "Required Amount")
sufficient to pay interest in respect of the certificates of that trust on up to
three successive semi-annual regular distribution dates without regard to any
future payments of principal on the certificates. The amount of these advances
will be based on the interest rates shown on the cover page of this prospectus
for those certificates. The liquidity facility with respect to each trust will
not cover interest payable by the depository on the deposits relating to that
trust.
The liquidity facility for each trust is intended to enhance the likelihood
of timely receipt by the certificateholders of that trust of the interest
payable in respect of the certificates of that trust on up to three consecutive
semiannual regular distribution dates. If interest payment defaults occur which
exceed the amount covered by or available under the liquidity facility for any
trust, the certificateholders of that trust will bear their allocable share of
the deficiencies to the extent that there are no other sources of funds
(including, in the case of the Class G trust, funds from the certificate
guaranty insurance policy). Although Morgan Stanley Capital Services, Inc., or
MSCS, is the initial liquidity provider for each of the trusts, it may be
replaced by one or more other entities with respect to the trusts. Therefore,
the liquidity provider for each trust may differ. The obligations of MSCS to
make advances under the initial liquidity facilities are fully and
unconditionally guaranteed by Morgan Stanley Dean Witter & Co.
DRAWINGS
The initial amount available under the liquidity facilities for the Class G
trust and the Class C trust at July 2, 2000, the first regular distribution date
after the scheduled delivery period termination date will be $27,153,979 and
$2,187,035, respectively. This assumes that equipment notes in the maximum
principal amount with respect to all aircraft are acquired by the trusts and
that all interest and principal due on or prior to July 2, 2000 is paid.
The maximum amount available to be drawn under the liquidity facility with
respect to any trust on any regular distribution date to fund any shortfall of
interest in respect of certificates of that trust will not exceed an amount
equal to the then Required Amount of that liquidity facility less the aggregate
amount of each advance outstanding under that liquidity facility at that time
(the "Maximum Available Commitment").
The liquidity facility for any trust does not allow drawings to pay for
principal of or premium in respect of the certificates of that trust or any
interest in respect of the certificates of that trust in excess of the interest
rate on those certificates for that trust or more than three semiannual
installments of interest or principal of or interest or premium in respect of
the certificates of any other trust. (Liquidity Facilities, Section 2.02;
Intercreditor Agreement, Section 3.6)
"Required Amount" means, for any day and with respect to either trust, the
sum of the aggregate amount of interest, calculated at the interest rate
applicable to the certificates issued by that trust, that would be payable in
respect of the certificates on each of the three successive semiannual regular
distribution dates immediately following that day or, if that day is a regular
distribution date, on that day and the succeeding two regular distribution
dates, in each case calculated based on the pool balance for the certificates of
that trust on that day and without regard to expected future payments of
principal on the certificates. (Liquidity Facilities, Section 1.1) The pool
balance for purposes of the definition of Required Amount with respect to the
Class G liquidity facility will, 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 that 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
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on that Series G equipment note. In addition, the liquidity facility with
respect to each trust will not cover interest payable by the depositary on the
deposits relating to that trust.
"Performing Equipment Note" means an equipment note issued under 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 America West under Title 11 of the
United States Code, the Bankruptcy Code, the following items will not be taken
into consideration:
(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), unless during
this Section 1110 period the trustee in the proceeding or America
West refuses to assume or agree to perform its obligations under the
lease related to that equipment note (in the case of a leased
aircraft) or under the indenture related to that equipment note (in
the case of an owned aircraft); and
(ii) any payment default occurring after the date of the order of relief
in the proceeding, 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 that default or the expiration of the Section 1110
period. (Intercreditor Agreement, Section 1.1)
Each payment by the liquidity provider under each liquidity facility
reduces pro tanto the Maximum Available Commitment under that liquidity
facility, subject to reinstatement as described below.
With respect to any drawings under the liquidity facility for any trust,
upon reimbursement of the liquidity provider in full for the amount of those
drawings plus interest thereon, the Maximum Available Commitment under that
liquidity facility in respect of interest on the certificates of that trust will
be reinstated to an amount not to exceed the then Required Amount of that
liquidity facility. However, the liquidity facility will not be reinstated at
any time after (i) a Liquidity Event of Default has occurred and is continuing
and (ii) less than 65% of the then aggregate outstanding principal amount of all
equipment notes are Performing Equipment Notes. With respect to any other
drawings under that liquidity facility, amounts available to be drawn under the
facility are not subject to reinstatement. The Required Amount of the liquidity
facility for any trust will be automatically reduced from time to time to an
amount equal to the next three successive interest payments due on the
certificates of that trust (without regard to expected future payment of
principal of those certificates) at the interest rate for that trust. (Liquidity
Facilities, Section 2.04(a); Intercreditor Agreement Section 3.6(j))
Possible Replacement of the Liquidity Facility; Downgrade Drawing
The certificateholders are relying on the credit of the liquidity provider
to fund the drawings described above as and when required. In order to protect
the interests of the certificateholders following the deterioration of the
liquidity provider's credit, there are procedures to replace the liquidity
facility of the liquidity provider. A liquidity facility will be subject to
replacement by a replacement facility if at any time (1) the short-term
unsecured debt rating of any liquidity provider for any trust or, if applicable,
of any guarantor of the obligations of that liquidity provider, then issued by
either rating agency is lower than the Threshold Rating or (2) any guarantee of
a liquidity provider's obligations under the relevant liquidity facilities
ceases to be in full force and effect or becomes invalid or unenforceable or the
guarantor denies its liability under the liquidity facility.
If the liquidity facility is not replaced within ten days after notice of
the downgrading or any event relating to the guarantee or guarantor described in
clause (2) above occurs, the subordination agent will request a drawing under
the liquidity facility in an amount equal to the then Maximum Available
Commitment (the "Downgrade Drawing") and will hold the proceeds in a cash
collateral account for that trust as cash collateral to be used for the same
purposes and under the same circumstances as cash payments of drawings under the
liquidity facility would be used. (Liquidity Facilities, Section 2.02(c);
Intercreditor Agreement, Section 3.6(c)). The result of a Downgrade Drawing is,
effectively, that the liquidity provider is replaced by cash; therefore the
certificateholders of the related trust will no longer be
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bearing the credit risk of the liquidity provider to make available drawings as
and when required under its liquidity facility.
Definitions of Replacement Facility and Threshold Rating
A "replacement facility" for any liquidity facility will mean an
irrevocable revolving credit agreement 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 will permit the rating agencies to
confirm in writing their respective ratings then in effect for the certificates
(before the downgrading of such ratings, if any, as result of (i) the
downgrading of the liquidity provider or, if applicable, any guarantor of its
obligations or (ii) any guarantee of the liquidity provider's obligations
ceasing to be in full force and effect or becoming invalid or unenforceable or
such guarantor denying its liability thereunder, but, in each case, without
regard to the policy) and in the case of the Class G liquidity facility only, be
consented to by the policy provider, which consent may not be unreasonably
withheld or delayed, in a face amount (or in an aggregate face amount) equal to
the amount of interest distributable on the certificates of that trust (at the
interest rate for that trust, and without regard to expected future principal
payments) on the three regular distribution dates following the date of
replacement of that liquidity facility and issued by a person having unsecured
short-term debt ratings issued by both rating agencies which are equal to or
higher than the Threshold Rating. (Intercreditor Agreement, Section 1.1)
"Threshold Rating" means the short-term unsecured debt rating of P-1 by
Moody's Investor Service, Inc. and A-1 by Standard & Poor's Ratings Service for
either liquidity facility.
Expiration of Liquidity Provider's Obligations
The liquidity facility for each trust provides that the relevant liquidity
provider's obligations thereunder will expire on the earliest of the following:
(1) 364 days after the initial issuance date of the certificates;
(2) the date on which the subordination agent delivers to the liquidity
provider a certification that all of the certificates of that trust
have been paid in full;
(3) the date on which the subordination agent delivers to the liquidity
provider a certification that a replacement facility has been
substituted for that liquidity facility;
(4) the fifth business day following receipt by the subordination agent of
a notice of termination of a liquidity facility from that liquidity
provider (see "--Liquidity Events of Default"); or
(5) the date on which no amount is or may (by reason of reinstatement)
become available for drawing under that liquidity facility.
Each liquidity facility provides that its scheduled expiration date may be
extended for additional 364-day periods.
Replacement of any Liquidity Facility
The intercreditor agreement provides for the replacement of any liquidity
facility for any trust (other than a liquidity facility which expires no earlier
than 15 days later than the final legal distribution date for the related class)
in the event that that liquidity facility is not extended at least 25 days prior
to its then scheduled expiration date. In the event that liquidity facility is
not so extended or replaced by the 25th day prior to its then scheduled
expiration date, the subordination agent will request a non-extension drawing in
an amount equal to the then Maximum Available Commitment under the liquidity
facility (the "Non-Extension Drawing") and hold the proceeds in the cash
collateral account for that trust as cash collateral to be used for the same
purposes and under the same circumstances, and subject to the same conditions,
as cash payments of drawings under that liquidity facility would be used.
(Liquidity Facilities, Section 2.02(b))
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We may, at our option (with or without cause), arrange for a replacement
facility at any time to replace the liquidity facility for any trust (including
without limitation any replacement facility described in the following
sentence). In general, we may not replace the initial liquidity provider prior
to the fifth anniversary of the date the outstanding certificates were issued.
In addition, if any liquidity provider determines not to extend its liquidity
facility, then that liquidity provider may, at its option, arrange for a
replacement facility to replace that liquidity facility during the period no
earlier than 40 days and no later than 25 days prior to the then scheduled
expiration date of that liquidity facility. If any replacement facility is
provided at any time after a downgrade drawing or a Non-Extension Drawing under
any liquidity facility, the funds with respect to that liquidity facility on
deposit in the cash collateral account for that trust will be returned to the
liquidity provider being replaced. (Intercreditor Agreement, Section 3.6(e))
Final Drawing Upon Termination of any Liquidity Facility
The intercreditor agreement provides that, upon receipt by the
subordination agent of a notice of termination with respect to any liquidity
facility from the liquidity provider, the subordination agent will request a
final drawing (the "Final Drawing") under that liquidity facility in an amount
equal to the then Maximum Available Commitment under the liquidity facility and
will hold the proceeds in the cash collateral account for the related trust as
cash collateral to be used for the same purposes and under the same
circumstances as cash payments of drawings under that liquidity facility would
be used. (Liquidity Facilities, Section 2.02(d); Intercreditor Agreement,
Section 3.6(i))
Mechanics of Drawings
Drawings under any liquidity facility will be made by delivery by the
subordination agent of a certificate in the form required by that liquidity
facility. Upon receipt of that certificate, the liquidity provider is obligated
to make payment of the drawing requested thereby in immediately available funds.
Upon payment by any liquidity provider of the amount specified in any drawing
under any liquidity facility, the liquidity provider will be fully discharged of
its obligations under that liquidity facility with respect to the drawing and
will not thereafter be obligated to make any further payments under that
liquidity facility in respect of the drawing to the subordination agent or any
other person. (Liquidity Facility, Section 2.2(f))
REIMBURSEMENT OF DRAWINGS
Amounts drawn under any liquidity facility by reason of an Interest Drawing
or the Final Drawing will be immediately due and payable, together with interest
on the amount of that drawing, with respect to the period from the date of its
borrowing to (but excluding) the third business day following the applicable
liquidity provider's receipt of the notice of the Interest Drawing, at the Base
Rate plus 2.0% per annum, and thereafter, at LIBOR for the applicable interest
period plus 2.0% per annum. The subordination agent will be obligated to
reimburse amounts only if the subordination agent has funds available.
Definitions of LIBOR and Base Rate
"LIBOR" means, with respect to any interest period, the rate per annum
appearing on Page 3750 (British Bankers Association-LIBOR) of the Dow Jones
Markets Service (or any successor or substitute page of the service, or any
successor to or substitute for the service, providing rate quotations comparable
to those currently provided on such page applicable to deposits in dollars in
the London interbank market) at approximately 11:00 a.m. (London time) two
business days before the first day of that interest period, at the rate for
dollar deposits with a maturity comparable to that interest period. In the event
that the rate is not available for any reason, then LIBOR with respect to any
interest period will be the average rate per annum (rounded upwards if necessary
to the next 1/16 of 1%) 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 advance to which
such interest period is to apply and for a period of time comparable to that
interest period.
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"Base Rate" means a fluctuating interest rate per annum in effect from time
to time, which rate per annum will at all times be determined by the calculation
below:
Calculation of Base Rate
(1) 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 that day (or, if it is not a
business day, the next preceding business day) by the Federal Reserve
Bank of New York, or if the rate is not so published for any day that
is a business day, the average of the quotations for the day for such
transactions received by the liquidity provider from three Federal
funds brokers of recognized standing selected by it, plus
(2) one-quarter of one percent ( 1/4 of 1%).
Downgrade Drawing or Non-Extension Drawing
The amount drawn under the liquidity facility for any trust by reason of a
Downgrade Drawing or a Non-Extension Drawing will be treated as set forth below:
Treatment of Amount Drawn Under a Liquidity Facility
(1) the amount will be released on any distribution date to the relevant
liquidity provider to the extent that the amount exceeds the Required
Amount;
(2) any portion of the amount withdrawn from the cash collateral account
for those certificates to pay interest on the certificates will be
treated in the same way as Interest Drawings; and
(3) the balance of the amount will be invested.
The Downgrade Drawing or Non-Extension Drawing under any liquidity facility
(other than any portion applied to the payment of interest on the certificates)
will bear interest with respect to the period from the date of borrowing to (but
excluding) the third business day following the liquidity provider's receipt of
the notice of the Downgrade Drawing or Non-Extension Drawing, at the Base Rate
plus 0.35% per annum, and thereafter at LIBOR for the applicable interest period
plus 0.35% per annum. The subordination agent will be obligated to pay that
interest only if it has funds available. (Liquidity Facilities, Section 2.06)
LIQUIDITY EVENTS OF DEFAULT
Events of default under each liquidity facility (each, a "Liquidity Event
of Default") will consist of: (1) the acceleration of all the equipment notes
(provided, that during the delivery period the aggregate principal amount
thereof exceeds $100 million) and (2) certain bankruptcy or similar events
involving America West. (Liquidity Facilities, Section 1.01)
If (1) any Liquidity Event of Default under any liquidity facility has
occurred and is continuing and (2) less than 65% of the aggregate outstanding
principal amount of all equipment notes are Performing Equipment Notes, the
applicable liquidity provider may, in its discretion, give a notice of
termination of the related liquidity facility the effect of which will be as
follows:
Effect of Notice of Termination Due to Liquidity Event of Default
(1) that liquidity facility will expire on the fifth business day after
the date on which the termination notice is received by the
subordination agent;
(2) the subordination agent will promptly request, and the liquidity
provider to make, a Final Drawing under that liquidity facility in an
amount equal to the then Maximum Available Commitment under that
liquidity facility;
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(3) any drawing remaining unreimbursed as of the date of termination will
be automatically converted into a Final Drawing under that liquidity
facility and
(4) all amounts owing to the liquidity provider will automatically become
accelerated.
Notwithstanding the foregoing, the subordination agent will be obligated to pay
amounts owing to the liquidity provider only to the extent of available funds
after giving effect to the payments in accordance with the provisions under
"Description of the Intercreditor Agreement--Priority of Distributions."
(Liquidity Facilities, Section 6.01) Upon the circumstances described below
under "Description of the Intercreditor Agreement--Intercreditor
Rights--Controlling Party," a liquidity provider may become the Controlling
Party with respect to the exercise of remedies under the indentures.
(Intercreditor Agreement, Section 2.6(c))
LIQUIDITY PROVIDER
The initial liquidity provider for the Class G trust and the Class C trust
is Morgan Stanley Capital Services, Inc., or MSCS. MSCS, a subsidiary of Morgan
Stanley Dean Witter & Co., or MSDW, commenced operations in August 1985 and was
established to conduct, primarily as principal, an interest rate, currency and
equity derivatives products business. MSCS also engages in a variety of other
related transactions.
MSDW, the guarantor of MSCS's obligations under its liquidity facilities,
is a global financial services firm. MSDW has long-term unsecured debt ratings
of Aa3 from Moody's Investors Service, Inc. and A+ from Standard & Poor's
Ratings Services and short-term unsecured debt ratings of P-1 from Moody's and
A-1 from Standard & Poor's. MSDW files reports, proxy statements and other
information with the SEC pursuant to the information requirements of the
Securities Exchange Act of 1934. Such information can be inspected and copied at
the public reference facilities of the SEC, or electronically accessed through
the Internet, as described in this prospectus under "Available Information and
Reports to Certificateholders."
The description of MSCS and MSDW above has been provided by MSCS and MSDW.
Neither MSCS or MSDW, however, has been involved in the preparation of or
accepts responsibility for this prospectus. Morgan Stanley & Co. Incorporated, a
subsidiary of MSDW and an affiliate of MSCS, was an initial purchaser of the
outstanding certificates.
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DESCRIPTION OF THE POLICY AND
THE POLICY PROVIDER AGREEMENT
THE POLICY
Ambac Assurance Corporation, the policy provider, has issued its
certificate guarantee insurance policy in favor of the subordination agent for
the benefit of the Class G trustee and holders of the Class G certificates. The
intercreditor agreement directs the subordination agent to make a drawing under
the policy under the following five circumstances:
Interest Drawings
If on any regular distribution date (other than the final legal
distribution date) after giving effect to the subordination provisions of the
intercreditor agreement and any amounts received by the escrow agent in an
account for the paying agent of the Class G certificates 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 the
distribution date and any withdrawal of funds from the Class G cash collateral
account in respect of such interest, the subordination agent does not then have
sufficient funds available for the payment of all amounts due and owing in
respect of accrued interest on the Class G certificates at the interest rate for
Class G certificates, the subordination agent is to request a policy drawing
under the policy in an amount sufficient to enable the subordination agent to
pay the accrued interest on the Class G certificates.
Proceeds Deficiency Drawing
If on any special distribution date (other than an Election Distribution
Date) established by the subordination agent by reason of its receipt of a
special payment constituting the proceeds of any Series G equipment note or the
related Trust Indenture Estate or Collateral, as the case may be, after giving
effect to the subordination provisions of the intercreditor agreement and to the
application of 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
in the Class G cash collateral account in respect of such interest, 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 interest on
the amount of such reduction accrued at the interest rate for the period from
the immediately preceding regular distribution date to such special distribution
date, the subordination agent is to request a policy drawing under the policy in
an amount sufficient to enable the subordination agent to pay the amount of such
reduction plus such accrued interest.
No Proceeds Drawing
On the first business day (which shall be a special distribution date) that
is 24 months after the last date on which any payment was made on any Series G
equipment note as to which there has subsequently been a failure to pay
principal or that has subsequently been accelerated, if the subordination agent
has not received a special payment constituting proceeds from the disposition of
that equipment note or the related Trust Indenture Estate or Collateral, as the
case may be, the subordination agent is to request a policy drawing under the
policy in an amount equal to the then outstanding principal amount of that
equipment note plus accrued interest thereon at the interest rate for the Class
G certificates from the immediately preceding regular distribution date to that
special distribution date. The subordination agent will give prompt notice to
each trustee, the liquidity provider and the policy provider setting forth the
non-receipt of any such special payment and which notice is to be given not less
than 25 days prior to that special distribution date. After the payment by the
policy provider in full of the amount of principal and accrued interest for the
policy drawing, the subordination agent will have no right to make any further
policy drawing in respect of any subsequent sale or other disposition of the
defaulted Series G equipment note.
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Notwithstanding the foregoing, the policy provider has the right at the end
of any such 24-month period, so long as no Policy Provider Default has occurred
and is continuing, to elect (the "Policy Provider Election") instead (a) to pay
on that special distribution date an amount equal to any shortfall in the
scheduled principal and interest that came due on that equipment note (without
regard to the acceleration thereof) during that 24-month period (after giving
effect to the application of funds received from the Class G liquidity facility,
the Class G cash collateral account and any Policy Drawings, in each case,
attributable to such interest), (b) thereafter, on each regular distribution
date until the establishment of an Election Distribution Date, to permit
drawings under the policy for an amount equal to the scheduled principal and
interest that were to become due on that equipment note on the related payment
date (without regard to any acceleration thereof) and (c) (1) on any business
day (which shall be a special distribution date) elected by the policy provider
upon 20 days' notice to request the subordination agent, or (2) following either
the occurrence and continuation of a Policy Provider Default or the sale or
other disposition of that equipment note or its underlying collateral, on any
business day (which shall be a special distribution date) specified by the
subordination agent upon 20 days' notice (each such business day in the case of
clauses (1) and (2), an "Election Distribution Date"), the subordination agent
shall be required, in each case, to make a policy drawing for an amount equal to
the then outstanding principal balance of such equipment note and accrued
interest thereon at the interest rate for the Class G certificates from the
immediately preceding regular distribution date to the Election Distribution
Date (after giving effect to the application of funds, if any, received from the
Class G liquidity facility and the Class G cash collateral account attributable
to that interest) less any policy drawings previously paid by the policy
provider in respect of principal on that equipment note, without derogation of
the policy provider's continuing obligations for all previous Policy Drawings
that remain unpaid in respect of such equipment note. The intercreditor
agreement instructs the subordination agent to make each drawing under the
policy.
In addition, regardless of whether or not the policy provider makes a
Policy Provider Election, the policy provider will, at the end of that 24-month
period, amend (to the extent not previously amended) the policy to provide for
the payment to the liquidity provider of interest accruing on the outstanding
drawings under the Class G and Class C liquidity facilities from and after the
end of that 24-month period as and when that interest becomes due in accordance
with that liquidity facility.
Final Policy Drawing
If on the final legal distribution date of the Class G certificates after
giving effect to the subordination provisions of the intercreditor agreement and
to the application of 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
included in the final distributions and any withdrawal of funds in the Class G
cash collateral account in respect of interest included in the final
distributions, the subordination agent does not then have sufficient funds
available for the payment in full of the final distributions (calculated as at
such date but excluding any accrued and unpaid premium) on the Class G
certificates, the subordination agent is to request a policy drawing under the
policy in an 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 the Class G certificates.
Avoidance Drawing
If at any time the subordination agent has actual knowledge of the issuance
of any Order, the subordination agent is to give prompt notice to each trustee,
each liquidity provider and the policy provider of that order and prior to the
expiration of the policy, to request a policy drawing for the relevant
Preference Amount and to deliver to the policy provider a copy of the
documentation required by the policy with respect to that Order. To the extent
that any portion of the Preference Amount 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), the subordination agent will establish as
a special distribution date the date that is the earlier of the third business
day that immediately precedes the expiration of the policy and the
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business day that immediately follows the 25th day after that notice for
distribution of that portion of the proceeds of the policy drawing. With respect
to that special distribution date, the subordination agent is to request a
policy drawing for the relevant Preference Amount and to deliver to the policy
provider a copy of the documentation required by the policy with respect to that
Order.
GENERAL
All requests by the subordination agent for a policy drawing are to be made
by it no later than 1:00 p.m. (New York City time) on (or, in the case of any
Preference Amount, at least three days prior to) the applicable distribution
date and in the form required by the policy and delivered to the policy provider
in accordance with the policy. All proceeds of any policy drawing are to be
deposited by the subordination agent in the Policy Account and from there paid
to the Class G trustee for distribution to the holders of the Class G
certificates without regard to the subordination provisions of the intercreditor
agreement. In the case of any Preference Amounts, however, all or part of the
policy drawing will be paid directly to the bankruptcy receiver,
debtor-in-possession or trustee to the extent such amounts have not been paid by
the certificateholders. If any request for a policy drawing is rejected as not
meeting the requirements of the policy, the subordination agent is to resubmit
that request so as to meet those requirements.
The policy provides that if a request for a policy drawing is properly
submitted or resubmitted it will pay to the subordination agent for deposit in
the Policy Account the applicable payment under the policy no later than 4:00
p.m. on the later of the relevant distribution date and the date the request is
received by the policy provider (if the request is received by 1:00 p.m. on that
date) or the next Policy Business Day (if the request is received after that
time).
The policy provider will be subrogated to all of the rights of the holders
of the Series G equipment notes to the extent provided in the intercreditor
agreement and will not be subrogated to the Class G certificates. Once any
payment under the policy is paid to the subordination agent, the policy provider
will have no further obligation in respect of those payments. THE POLICY
PROVIDER WILL NOT BE REQUIRED TO MAKE ANY PAYMENT EXCEPT AT THE TIMES AND IN THE
AMOUNTS AND UNDER THE CIRCUMSTANCES EXPRESSLY SET FORTH IN THE POLICY.
The policy does not cover (1) shortfalls, if any, attributable to the
liability of the Class G trust, the Class G trustee or the subordination agent
for withholding taxes, if any (including interest and penalties in respect of
that liability), (2) any premium, prepayment penalty or other accelerated
payment, which at any time may become due on or with respect to any Class G
certificate, or (3) any failure of the subordination agent or the Class G
trustee to make any payment due to the holders of the Class G certificates from
funds received.
The policy provider's obligation under the policy will be discharged to the
extent that funds are received by the subordination agent for distribution to
the Class G trustee and the holders of Class G certificates, whether or not the
funds are properly distributed by the subordination agent or the Class G
trustee.
The policy is noncancellable. The policy expires and terminates without any
action on the part of the policy provider or any other person on the earlier of
(1) July 3, 2021 and (2) the date that is one year and one day following the
date on which the pool balance of the Class G certificates and all interest at
the interest rate for the Class G certificates has been paid in full, unless a
request for a policy drawing has been made prior thereto, in which case upon
payment by the policy provider of amounts due under the policy pursuant to such
request. No portion of the premium under the policy is refundable for any reason
including payment, or provision being made for payment.
The policy is issued under and pursuant to and will be construed under, the
laws of the State of New York, without giving effect to the conflict of laws
principles that might invoke the substantive laws of other jurisdictions.
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DEFINITIONS
"Order" means the order referred to in the definition of the term
"Preference Amount" below.
"Policy Business Day," for the purposes of this "Description of the Policy
and the Policy Provider Agreement," means any day that is not a Saturday, a
Sunday or other day on which banking institutions in New York City or in the
city in which the Corporate Trust Office of the subordination agent or the
office of the policy provider is located are authorized or obligated by law or
executive order to close.
"Preference Amount" means any payment of principal or interest at the
interest rate on the Series G equipment notes made to the trustee or the
subordination agent or (without duplication) any payment of the pool balance of
or interest at the interest rate on the Class G certificates or any payment of
the proceeds of any drawing under the Class G liquidity facility made to a
holder which has become recoverable or been recovered from the trustee, the
subordination agent or the holders of the Class G certificates (as the case may
be) as a result of such payment being determined or deemed a preferential
transfer pursuant to the United States Bankruptcy Code or otherwise rescinded or
requested to be returned in accordance with a final, nonappealable order of a
court of competent jurisdiction.
THE POLICY PROVIDER AGREEMENT
America West, the subordination agent and the policy provider have entered
into an insurance and indemnity agreement pursuant to which we agreed to
reimburse the policy provider for amounts paid pursuant to claims made under the
policy. Pursuant to the agreement, we agree to pay the policy provider a premium
for the policy based on the pool balance of the Class G certificates and a fee
in connection with any prepayment of the certificates (including by reason of an
acceleration of the underlying equipment notes, but excluding a prepayment
associated with an event of loss of an aircraft) and to reimburse the policy
provider for certain expenses.
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DESCRIPTION OF THE INTERCREDITOR AGREEMENT
INTERCREDITOR RIGHTS
Controlling Party
With respect to any indenture at any given time, the loan trustee will be
directed in taking, or refraining from taking, any action under that indenture
or with respect to the equipment notes issued under that indenture, subject to
some limitations, by the Controlling Party, including acceleration of the
equipment notes and foreclosing the lien on the aircraft securing the equipment
notes, in each case, in accordance with their terms. See "Description of the
Certificates--Indenture Defaults and Certain Rights Upon an Indenture Default"
and below at "--Voting of Equipment Notes" for a description of the rights of
the certificateholders of each trust to direct the respective trustees.
The Controlling Party will be:
- the policy provider until payment of final distributions to the holders
of the Class G certificates and no obligations owing to the policy
provider remain outstanding or, if a Policy Provider Default has
occurred and is continuing, the Class G trustee;
- upon payment of final distributions to the holders of the Class G
certificates and if either no obligations owing to the policy provider
remain outstanding or a Policy Provider Default has occurred and is
continuing, the Class C trustee.
Notwithstanding the foregoing, at any time after 18 months from the
earliest to occur of the events set forth below, the liquidity provider with the
highest outstanding amount of unreimbursed Liquidity Obligations (so long as the
liquidity provider has not defaulted in its obligation to make any advance under
any liquidity facility) will have the right to elect to become the Controlling
Party with respect to any indenture as follows:
Time at Which Liquidity Provider May Elect to Become Controlling Party
(1) the date on which the entire available amount under any liquidity
facility has been drawn (for any reason other than a Downgrade Drawing
or a Non-Extension Drawing) and remain unreimbursed;
(2) the date on which the entire amount of any Downgrade Drawing or
Non-Extension Drawing has been withdrawn from the relevant cash
collateral account to pay interest on the relevant class of
certificates and remain unreimbursed; or
(3) the date on which all equipment notes have been accelerated (provided,
that prior to the delivery period termination date the aggregate
outstanding principal amount thereof exceeds $100 million).
Notwithstanding the foregoing, the policy provider will remain the
Controlling Party so long as no Policy Provider Default has occurred and is
continuing and either of the following occur:
(1) the policy provider amends the policy to cover payments of all
drawings and interest on the policy owing to the liquidity provider
under the Class G and Class C liquidity facilities (determined without
regard to the availability of funds for the payment by the
subordination agent) and certain other conditions are met, including
the rating agencies confirming that they will not withdraw, suspend or
downgrade their ratings on any class of certificates; or
(2) the policy provider pays to the liquidity provider all outstanding
drawings and interest owing to the liquidity provider under the Class
G and Class C liquidity facilities including all interest accrued
thereon to such date.
For purposes of giving effect to the rights of the Controlling Party, the
trustees (other than the Controlling Party) will irrevocably agree, and the
certificateholders (other than the certificateholders represented by
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the Controlling Party) will be deemed to agree by virtue of their purchase of
certificates, that the subordination agent, as record holder of the equipment
notes, will exercise its voting rights in respect of the equipment notes as
directed by the Controlling Party. (Intercreditor Agreement, Section 2.6) For a
description of certain limitations on the Controlling Party's rights to exercise
remedies, see "Description of the Equipment Notes--Remedies" and to exercise
certain other voting rights, see below at "--Voting of Equipment Notes".
"Policy Provider Default" means the occurrence of any of the following
events:
(1) the policy provider fails to make a payment required under the policy
and this failure remains unremedied for two business days following the delivery
of written notice of the failure to the policy provider;
(2) the policy provider (a) 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, (b) makes
a general assignment for the benefit of its creditors or (c) 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
nonappealable; or
(3) a court of competent jurisdiction, the Wisconsin Department of
Insurance or another competent regulatory authority enters a final and
nonappealable order, judgment or decree (a) appointing a custodian, trustee,
agent or receiver for the policy provider or for all or any material portion of
its property or (b) 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).
"Final Distributions" means, with respect to the certificates of any trust
on any distribution date, will be calculated under the following formula:
Calculation of Distributions
(1) the aggregate amount of all accrued and unpaid interest on those
certificates (excluding interest, if any, payable on the deposits
relating to the trust), plus
(2) the pool balance of those certificates as of the immediately preceding
distribution date (less the amount of the deposits for that class of
certificates as of the preceding distribution date other than any
portion of the deposits 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 that trust which
has not been distributed to the certificateholders of that trust (other than the
premium or a portion thereof applied as the payment of interest on the
certificates of that trust on the reduction of the pool balance of that trust)
will be added to the amount of the Final Distributions.
Sale of Equipment Notes or Aircraft
Following the occurrence and during the continuation of an indenture
default, the Controlling Party will be entitled to accelerate, and, subject to
the provisions of the immediately following sentence, may direct the
subordination agent, as the registered holder of the equipment notes, to sell
all (but not less than all) of the equipment notes issued under that indenture
to any person. So long as any certificates are outstanding, during nine months
after the earlier of (1) the acceleration of the equipment notes under any
indenture and (2) our bankruptcy or insolvency, without the consent of each
trustee, no aircraft subject to the lien of the indenture relating to the
defaulted equipment notes, or the defaulted equipment notes, may be sold if the
net proceeds from the sale would be less than the Minimum Sale Price for the
aircraft or those equipment notes. In addition, with respect to any leased
aircraft, the amount and payment dates of rentals payable by us under the lease
for such leased aircraft may not be adjusted, if, as a result of the adjustment,
the discounted present value of all rentals would be less than 75% of the
discounted present
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value of the rentals payable by us under the lease before giving effect to the
adjustment, in each case, using the weighted average interest rate of the
equipment notes issued under that indenture as the discount rate. (Intercreditor
Agreement, Section 4.1(a))
"Minimum Sale Price" means, with respect to any aircraft or the equipment
notes issued in respect of that aircraft, at any time, the lesser of (1) 75% of
the appraised current market value of that aircraft and (2) the aggregate
outstanding principal amount of those equipment notes, plus accrued and unpaid
interest thereon.
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 an aircraft at the request of the Controlling
Party. (Intercreditor Agreement, Section 4.1(a)(iii))
PRIORITY OF DISTRIBUTIONS
So long as no Triggering Event has occurred, payments in respect of the
equipment notes and certain other payments received on any distribution date
will be promptly distributed by the subordination agent on that distribution
date in the following order of priority:
Priority of Distributions if No Triggering Event Has Occurred
(1) to pay all accrued and unpaid Liquidity Expenses to the liquidity
provider and all accrued and unpaid Policy Expenses to the policy
provider;
(2) to pay interest accrued on the Liquidity Obligations (as determined
after giving effect to certain payments by the policy provider to the
liquidity provider) to the liquidity provider and interest accrued on
certain Policy Provider Obligations (as provided in the definition
thereof) to the policy provider, proportionately;
(3) to pay or reimburse the liquidity provider for the Liquidity
Obligations (other than amounts payable pursuant to clauses (1) and
(2) above and as determined after giving effect to certain payments by
the policy provider to the liquidity provider) and/or, if applicable,
to replenish each cash collateral account up to the applicable
Required Amount;
(4) to pay Expected Distributions on the Class G certificates to the
holders of Class G certificates;
(5) to pay or reimburse the policy provider for any Policy Provider
Obligations (other than amounts payable pursuant to clauses (1) and
(2) above and any Excess Reimbursement Obligations);
(6) to pay Expected Distributions on the Class C certificates to the
holders of Class C certificates;
(7) to pay any Excess Reimbursement Obligations to the policy provider;
(8) if Class D certificates are issued, to pay "Expected Distributions"
(to be defined in a manner equivalent to the definition below for
other classes of certificates) on the Class D certificates to the
holders of Class D certificates; and
(9) to pay certain fees and expenses of the subordination agent and the
trustees.
(Intercreditor Agreement, Sections 2.4 and 3.2)
"Liquidity Expenses" means all amounts owing to the liquidity provider
under each liquidity facility or other agreements other than any interest
accrued on the liquidity facility or the amount of any drawing under a liquidity
facility.
"Policy Expenses" means all amounts (including amounts in respect of
expenses or indemnities) owing to the policy provider under the insurance
indemnity agreement or other agreements other than the amount of any Policy
Drawing and any interest accrued on any Policy Provider Obligation.
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"Liquidity Obligations" means the obligations to reimburse or to pay the
liquidity provider all principal, interest, fees and other amounts owing to it
under each liquidity facility or certain other agreements.
"Policy Drawing" means any payment of a claim under the policy.
"Policy Provider Obligations" means all reimbursement and other amounts,
including fees and indemnities, due to the policy provider under the insurance
indemnity agreement but does not include any interest on Policy Drawings except,
if the Class G liquidity provider has failed to honor any Interest Drawing,
interest on any Policy Drawing made to cover the shortfall attributable to that
failure by the Class G liquidity provider in an amount equal to the amount of
interest that would have accrued on the Interest Drawing if the Interest Drawing
had been made at the interest rate applicable to the Interest Drawing until the
Policy Drawing has been repaid in full, up to a maximum of three Policy
Drawings. For the avoidance of doubt, Policy Provider Obligations include
reimbursement of, and interest on, the Liquidity Obligations in respect of the
Class G and Class C liquidity facilities paid by the policy provider to the
liquidity provider.
"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 24 months of interest at the
interest rate applicable to that equipment note and (b) any interest on the
Liquidity Obligations in respect of the Class G and Class C liquidity facilities
paid by the policy provider to the liquidity provider from and after the end of
the 24-month period referred to under the caption "Description of the Policy and
the Policy Provider Agreement--The Policy--No Proceeds Drawing".
Definitions of Expected Distributions and Adjusted Expected Distributions
"Expected Distributions" means, with respect to the certificates of any
trust on any distribution date (the "Current Distribution Date"), the sum of (x)
accrued and unpaid interest on those certificates (excluding interest, if any,
payable with respect to the deposits relating to that trust) and (y) the
difference between (A) the pool balance of those 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 that trust) and (B) the pool balance of those certificates as of
the Current Distribution Date calculated on the basis that (i) the principal of
the equipment notes held in that trust has been paid when due (whether at stated
maturity, upon redemption, prepayment, purchase or acceleration or otherwise)
and these payments have been distributed to the holders of those certificates
and (ii) the principal of any equipment notes formerly held in that trust that
have been sold has been paid in full and these payments have been distributed to
the holders of those certificates, but without giving effect to any reduction in
the pool balance as a result of any distribution attributable to deposits
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 that trust). For purposes of calculating
Expected Distributions with respect to the certificates of any trust, any
premium paid on the equipment notes held in that trust which has not been
distributed to the certificateholders of that trust (other than a premium or a
portion thereof applied to the payment of interest on the certificates of that
trust or the reduction of the pool balance of that trust) will be added to the
amount of the Expected Distributions. For purposes of determining the priority
of distributions on account of the redemption, purchase or prepayment of all of
the equipment notes issued under an indenture, clause (x) of the definition of
Expected Distributions will be deemed to read as follows: "(x) accrued, due and
unpaid interest on those certificates together with (without duplication)
accrued and unpaid interest on a portion of the certificates equal to the
outstanding principal amount of the equipment notes held in 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 related to that trust."
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PRIORITY OF DISTRIBUTIONS IF A TRIGGERING EVENT HAS OCCURRED
Upon the occurrence of a Triggering Event and at all times thereafter, all
funds received by the subordination agent in respect of the equipment notes and
certain other payments will be promptly distributed by the subordination agent
in the following order of priority:
(1) to pay certain out-of-pocket costs and expenses actually incurred by
the subordination agent, the liquidity provider, the policy provider
or any trustee or to reimburse any certificateholder, the liquidity
provider or the policy provider in respect of payments made to the
subordination agent or any trustee in connection with the protection
or realization of the value of the equipment notes or any collateral
or any Trust Indenture Estate (the "Administration Expenses");
(2) to the liquidity provider to pay the Liquidity Expenses and to the
policy provider to pay the Policy Expenses;
(3) to the liquidity provider, to pay interest accrued on the Liquidity
Obligations (as determined after giving effect to certain payments by
the policy provider to the liquidity provider) and to the policy
provider to pay interest accrued on certain Policy Provider
Obligations (as provided in the definition thereof), proportionately;
(4) to the liquidity provider, to pay the outstanding amount of all
remaining Liquidity Obligations (as determined after giving effect to
certain payments by the policy provider to the liquidity provider)
and/or, if applicable, with respect to any particular liquidity
facility, unless (a) less than 65% of the aggregate outstanding
principal amount of all equipment notes are Performing Equipment
Notes and a Liquidity Event of Default has occurred and is continuing
under that liquidity facility or (b) a Final Drawing has occurred
under that liquidity facility, to replenish the cash collateral
account with respect to that liquidity facility up to the Required
Amount for the related class of certificates (less the amount of any
repayments of Interest Drawings under that liquidity facility while
subclause (a) is applicable);
(5) to pay certain fees, taxes, charges and other amounts payable to the
subordination agent, any trustee or any certificateholder;
(6) to pay Adjusted Expected Distributions on the Class G certificates to
the holders of Class G certificates;
(7) to the policy provider, to pay the Policy Provider Obligations (other
than amounts payable pursuant to clauses (1), (2) and (3) above and
any Excess Reimbursement Obligations);
(8) to pay Adjusted Expected Distributions on the Class C certificates to
the holders of Class C certificates;
(9) to pay any Excess Reimbursement Obligations to the policy provider;
and
(10) if Class D certificates are issued, to pay "Adjusted Expected
Distributions" (to be defined in a manner equivalent to the
definition below for other classes of certificates) on the Class D
certificates to the holders of Class D certificates.
(Intercreditor Agreement, Section 3.3)
The priority of distributions after a Triggering Event will have the effect
in certain circumstances of requiring the distribution to the holders of Class G
certificates of payments received in respect of the series of equipment notes
applicable to the Class C certificates and/or, if issued, the Class D
Certificates. If this should occur, the interest accruing on the equipment notes
would in the aggregate be less than the interest accruing on the remaining
certificates because those certificates include a relatively greater proportion
of Class or Classes with relatively higher interest rates. As a result of these
possible interest shortfalls, the holders of Class C certificates may not
receive the full amount due to them after a Triggering Event even if all
equipment notes are eventually paid in full.
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Payments in respect of the deposits relating to a trust will not be subject
to the subordination provisions of the Intercreditor Agreement.
Interest Drawings under the liquidity facility and withdrawals from the
cash collateral account, in each case in respect of interest on the certificates
of any trust, will be distributed to the trustee for that trust and drawings
under the policy will be distributed by the Class G trustee, notwithstanding the
priority of distributions set forth in the intercreditor agreement and otherwise
described in this prospectus. All amounts on deposit in the cash collateral
account for any trust that are in excess of the Required Amount will be paid to
the applicable liquidity provider in accordance with the provisions of the
intercreditor agreement.
"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 the certificates (excluding interest, if any, payable with respect
to the deposits relating to the trust) and (y) the greater of:
(A) the difference between (x) the pool balance of the 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 that trust) and (y) the pool balance of the
certificates as of the Current Distribution Date calculated on the basis
that (i) the principal of the Non-Performing Equipment Notes held in that
trust has been paid in full and the payments have been distributed to the
holders of the certificates, (ii) the principal of the Performing Equipment
Notes held in that trust has been paid when due (but without giving effect
to any acceleration of Performing Equipment Notes) and the payments have
been distributed to the holders of the certificates and (iii) the principal
of any equipment notes formerly held in that trust that have been sold has
been paid in full and such payment has been distributed to the holders of
the certificates, but without giving effect to any reduction in the pool
balance as a result of any distribution attributable to deposits 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 that trust); and
(B) the amount of the excess, if any, of (i) the pool balance of that 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 that trust), less the amount
of the deposits for that class of certificates as of the preceding
distribution date (or, if the Current Distribution Date is the first
distribution date, the original aggregate amount of the deposits for that
class of certificates) other than any portion of the deposits thereafter
used to acquire equipment notes pursuant to the note purchase agreement,
over (ii) the Aggregate LTV Collateral Amount for that class of
certificates for the Current Distribution Date;
provided that, until the date of the initial LTV Appraisals, clause (B) will not
apply.
For purposes of calculating Expected Distributions or Adjusted Expected
Distributions with respect to the certificates of any trust, any premium paid on
the equipment notes held in that trust that has not been distributed to the
certificateholders of that trust (other than such premium or a portion thereof
applied to the payment of interest on the certificates of that trust or the
reduction of the pool balance of that trust) will be added to the amount of
Expected Distributions or Adjusted Expected Distributions.
Other Definitions
"Aggregate LTV Collateral Amount" for any class of certificates for any
distribution date means the sum of the applicable LTV Collateral Amounts for
each aircraft, minus the pool balance for each class of certificates, if any,
senior to that class, after giving effect to any distribution of principal on
that distribution date with respect to the senior class or classes.
"LTV Collateral Amount" of any aircraft for any class of certificates
means, as of any distribution date, the lesser of (a) the LTV Ratio for that
class of certificates multiplied by the appraised current market value of such
aircraft (or with respect to any aircraft which has suffered an event of loss
under and
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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 that loan trustee (and/or on deposit in an account for special payments)
or payable to that loan trustee in respect thereof) and (b) the outstanding
principal amount of the equipment notes secured by that aircraft after giving
effect to any principal payments of the equipment notes on or before that
distribution date.
"LTV Ratio" means 57.0% for the Class G certificates and 62.0% for the
Class C certificates.
"Appraised Current Market Value" of any aircraft means the lower of the
average and the median of the most recent three LTV Appraisals of that aircraft.
After a Triggering Event occurs and any equipment note becomes a Non-Performing
Equipment Note, the subordination agent will obtain LTV Appraisals for the
aircraft as soon as practicable and additional LTV Appraisals on or prior to
each anniversary of the date of the initial LTV Appraisals. However, if the
Controlling Party reasonably objects to the appraised value of the aircraft
shown in the LTV Appraisals, the Controlling Party will have the right to obtain
or cause to be obtained substitute LTV Appraisals (including LTV Appraisals
based upon physical inspection of the aircraft).
"LTV Appraisal" means a fair market value appraisal (which may be a
"desktop" appraisal) performed by any appraiser or any other nationally
recognized aircraft 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.
"Non-Performing Equipment Note" means an equipment note that is not a
Performing Equipment Note.
VOTING OF EQUIPMENT NOTES
In the event that the subordination agent, as the registered holder of any
equipment note, receives a request for its consent to any amendment,
modification, consent or waiver under that equipment note or the related
indenture (or, if applicable, the lease, the participation agreement or other
related document), (i) if no indenture default has occurred and is continuing
with respect to that indenture, the subordination agent will request direction
from the trustee of the trust which holds each series of those equipment notes
and vote or consent in accordance with the directions of the trustee. So long as
the final distribution on the Class G certificates has not been made or any
Policy Provider Obligations remain outstanding and no Policy Provider Default
has occurred and is continuing, the subordination agent will 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 (ii) if any indenture
default has occurred and is continuing with respect to that indenture, the
subordination agent will exercise its voting rights as directed by the
Controlling Party, subject to certain limitations. However, no such amendment,
modification, consent or waiver will, without the consent of the liquidity
provider and the policy provider, reduce the amount of rent, supplemental rent
or stipulated loss values payable by us under any lease or reduce the amount of
principal or interest payable by us under any equipment note issued under any
owned aircraft indenture. (Intercreditor Agreement, Section 9.1(b))
ADDITION OF TRUSTEE FOR CLASS D CERTIFICATES
If the Class D certificates are issued, the Class D trustee will become a
party to the intercreditor agreement. (Intercreditor Agreement, Section 9.1(c))
THE SUBORDINATION AGENT
Wilmington Trust Company is the subordination agent under the intercreditor
agreement. We and our affiliates may from time to time enter into banking and
trustee relationships with the subordination agent and its affiliates. The
subordination agent's address is Rodney Square North, 1100 North Market Street,
Wilmington, Delaware, Attention: Corporate Trust Administration.
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The subordination agent may resign at any time, in which event a successor
subordination agent will be appointed as provided in the intercreditor
agreement. The Controlling Party may remove the subordination agent for cause as
provided in the intercreditor agreement. In these circumstances, a successor
subordination agent will be appointed. Any resignation or removal of the
subordination agent and appointment of a successor subordination agent does not
become effective until acceptance or the appointment and assumption of its
obligations by the successor subordination agent. (Intercreditor Agreement,
Section 8.1)
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DESCRIPTION OF THE AIRCRAFT AND THE APPRAISALS
THE AIRCRAFT
The aircraft being acquired with the proceeds from the sale of the
certificates consist of five Airbus A319-132 aircraft and five Airbus A320-232
aircraft. All ten aircraft will be manufactured by Airbus Industrie, G.I.E., a
consortium of European aerospace manufacturing companies and will be purchased
from AVSA S.A.R.L., an affiliate of Airbus that is Airbus' marketing arm and
with which we have our purchase agreement to acquire the aircraft. The aircraft
will be newly or recently delivered by the manufacturer at the time that the
equipment notes relating to a delivered aircraft are issued. The aircraft were
designed to comply with Stage 3 noise level standards, which are the most
restrictive regulatory standards currently in effect in the United States for
aircraft noise abatement. Once sold by the manufacturer, and regardless of the
form of financing utilized, the manufacturer will no longer have any interest in
the aircraft except for such warranty obligations as are contractual in its
purchase agreement with us.
The Airbus A319-100 series aircraft is a medium range aircraft with a
seating capacity of approximately 124 passengers. The engine type utilized on
America West's A319-132 aircraft is expected to be International Aero Engines
V2524-A5 engines.
The Airbus A320-200 series aircraft is a medium range aircraft with a
seating capacity of approximately 150 passengers. The engine type utilized on
America West's A320-232 aircraft is expected to be International Aero Engines
V2527-A5 engines.
THE APPRAISALS
The table below sets forth the appraised values and additional information
regarding the aircraft.
<TABLE>
<CAPTION>
MAXIMUM
PRINCIPAL APPRAISED VALUE
EXPECTED AMOUNT OF ---------------------------------------
AIRCRAFT REGISTRATION MANUFACTURER'S EQUIPMENT DELIVERY
TYPE NUMBER SERIAL NUMBER NOTES(1) MONTH(2) AVITAS AVSOLUTIONS MBA
- -------- ------------ -------------- ----------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
A319-132 N807AW 1064 $23,163,200 Aug. 1999 $35,200,000 $38,980,000 $37,900,000
A319-132 N808AW 1088 23,192,133 Sept. 1999 35,200,000 38,980,000 38,040,000
A319-132 N809AW 1111 23,299,600 Oct. 1999 35,300,000 39,250,000 38,190,000
A319-132 N810AW 1116 23,328,533 Nov. 1999 35,300,000 39,250,000 38,330,000
A319-132 N811AW 1178 23,626,133 Feb. 2000 36,000,000 39,560,000 38,760,000
A320-232 N654AW 1050 27,501,133 Aug. 1999 43,500,000 45,030,000 44,540,000
A320-232 N655AW 1075 27,538,333 Sept. 1999 43,500,000 45,030,000 44,720,000
A320-232 N656AW 1079 27,680,933 Oct. 1999 43,700,000 45,350,000 44,890,000
A320-232 N657AW 1083 27,680,933 Oct. 1999 43,700,000 45,350,000 44,890,000
A320-232 N658AW 1166 28,071,533 Feb. 2000 44,500,000 45,740,000 45,590,000
</TABLE>
- -------------------------
(1) The actual principal amount issued for an aircraft may be less depending on
the circumstances of the financing of that aircraft. The aggregate
principal amount of all of the equipment notes will not exceed the
aggregate face amount of the certificates.
(2) Reflects the scheduled delivery month under our purchase agreement with
AVSA S.A.R.L., an affiliate of Airbus Industries. The actual delivery date
for any aircraft may be subject to change.
The appraised values identified in the foregoing chart were determined by
the following three independent aircraft appraisal and consulting firms: AVITAS,
Inc., AvSolutions, Inc. and Morten Beyer and Agnew, Inc. Each appraiser was
asked to provide its opinion as to the appraised value of each aircraft
projected as of the scheduled delivery month of each aircraft. These opinions
were furnished as of June 10, 1999, July 6, 1999 and July 13, 1999,
respectively. As part of this process, all three appraisers performed "desk-top"
appraisals without any physical inspection of the aircraft. Each of these
appraisals is based on definitions promulgated by the Appraisal Program of the
International Society of Transport Aircraft Trading, a non-profit association of
management personnel from banks, leasing companies, airlines,
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manufacturers, brokers, and others who have a vested interest in the commercial
aviation industry and have established technical and ethical recognition as
expert appraisers. The appraisers delivered letters summarizing their respective
appraisals, copies of which are annexed to this prospectus as Appendix II.
Please read these letters for a complete discussion of the assumptions and
methodologies used in each of the appraisals. The methodologies of each
appraiser can be summarized as follows: (1) AVITAS, Inc. used a methodology that
relies on data pertaining to actual market transactions, various analytical
techniques including replacement cost analysis, income analysis and should-cost
analysis (a blend of income analysis and replacement cost analysis), a
proprietary forecasting model and extensive industry experience; (2)
AvSolutions, Inc. used a methodology that relies on cross-sectional data to
compare reported market values of aircraft in each of several general categories
and to determine the relationship between the value of each aircraft and its
characteristics, such as age, model designation, service configuration and
engine type; and (3) Morton Beyer & Agnew, Inc. used a methodology that relies
on the historical trend of values to project future values. The appraisers made
several assumptions to arrive at their valuations, including (1) the aircraft
are valued for their highest and best use; (2) the parties to the hypothetical
sale transaction are willing, able, prudent and knowledgeable and under no
unusual pressure for a prompt sale; and (3) the transaction would be negotiated
in an open and unrestricted market on an arm's-length basis, for cash or
equivalent consideration, and given an adequate amount of time for effective
exposure to prospective buyers.
An appraisal is only an estimate of value, is not indicative of the price
at which an aircraft may be purchased from the manufacturer and should not be
relied upon as a measure of realizable value. The proceeds realized upon a sale
of any aircraft may be less than the aircraft's appraised value. The value of
the aircraft if remedies under the applicable indenture are exercised will
depend on market and economic conditions, the availability of buyers, the
condition of the aircraft and other similar factors. Accordingly, we cannot
assure you that the proceeds realized on any exercise of remedies with respect
to the equipment notes and the aircraft pursuant to the applicable indenture
would be as appraised or sufficient to satisfy in full payments due on the
equipment notes issued under the indenture or the certificates.
The "Maximum Principal Amount of Equipment Notes" for each aircraft
specified in the above chart represents the maximum principal amount of
equipment notes that will be issued for that aircraft. That amount per aircraft
was determined using a number of criteria, including the following:
Criteria for Determining Maximum Principal Amount of Equipment Notes
(1) the Mandatory Economic Terms specify a maximum loan-to-value ratio for
each aircraft based on the appraised values;
(2) since we anticipated doing lease financings for each aircraft, we have
sought to have a leverage amount that optimizes the economics of the
lease financings; and
(3) Moody's Investors Service, Inc. and Standard & Poor's Ratings Service,
as a condition to the issuance of their ratings, require us to
maintain no more than a specified level of debt for the aircraft.
The actual level of the Maximum Principal Amount of Equipment Notes for
each aircraft was determined by us in association with our lease advisors to
satisfy the foregoing criteria. Such level for any aircraft relates to the
specified appraisal value for that aircraft only in the sense that by comparing
the two, one can determine the loan-to-value for each aircraft.
DELIVERIES OF AIRCRAFT
The aircraft are scheduled for delivery under our purchase agreement with
AVSA from August 1999 to February 2000. See the table under "--The Appraisals"
for the scheduled month of delivery of each aircraft. Under the purchase
agreement, delivery of an aircraft may be delayed due to "excusable delay,"
which is defined to include, among other things, acts of God, governmental acts
or failures to act, strikes
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or other labor troubles, inability to procure materials, or any other cause
beyond AVSA's control or not resulting from AVSA's fault or negligence.
As at the date of this prospectus, all of the aircraft have been financed,
except for the two aircraft scheduled for delivery in February 2000. All of
these aircraft were delivered to us in, or shortly after, the month scheduled
for delivery. Based on information available to us at the date of this
prospectus, we expect that the two aircraft scheduled for delivery in February
2000 will be delivered in that month.
The note purchase agreement provides that the delivery period for aircraft
will expire on May 30, 2000. This may be extended if the equipment notes
relating to all of the aircraft (or substitute aircraft in lieu thereof) have
not been purchased by the trustees on or prior to that date due to any reason
beyond our control and not occasioned by our fault or negligence, to the earlier
of (1) the purchase by the trustees of equipment notes relating to the last
aircraft (or a substitute aircraft in lieu thereof) and (2) August 31, 2000.
If delivery of any aircraft is delayed by more than 30 days after the month
scheduled for delivery, we have the right to replace that aircraft with a
substitute aircraft, subject to some conditions. If delivery of any aircraft is
delayed beyond the delivery period termination date and we do not exercise our
right to replace that aircraft with a substitute aircraft, there will be unused
deposits that will be distributed to certificateholders together with accrued
and unpaid interest thereon and, under some circumstances, a premium. See
"Description of the Deposit Agreements--Unused Deposits" for a more detailed
description of this scenario.
All eight of the aircraft financed as at the date of this prospectus were
utilized using a lease financing. It is our expectation that the remaining two
aircraft to be delivered will also be financed using a lease financing.
SUBSTITUTE AIRCRAFT
If the delivery date for any aircraft is delayed more than 30 days after
the month scheduled for delivery, we may identify for delivery a substitute
aircraft meeting the following conditions:
Conditions Required of a Substitute Aircraft
(1) a substitute aircraft must be an Airbus A319-100 or A320-200 aircraft
manufactured after September 21, 1999.
(2) one or more substitute aircraft of the same or different types may be
substituted for one or more aircraft of the same or different types so
long as after the substitution the maximum principal amount of
equipment notes of each series issued in respect of the substitute
aircraft under the Mandatory Economic Terms would not exceed the
maximum principal amount of the equipment notes of each series that
could have been issued under the Mandatory Economic Terms in respect
of the replaced aircraft; and
(3) we will be obligated to obtain written confirmation from each rating
agency that substituting an aircraft will not result in a withdrawal,
suspension or downgrading of the ratings of any class of certificates
(without regard to the policy).
A substitute aircraft would be identified by us among aircraft satisfying
the foregoing conditions, and we would consider aircraft delivered to other
airlines or operating lessors for the substitution, or, perhaps, any qualifying
aircraft in the hands of the manufacturer.
BRIDGE FINANCING
We may, pursuant to the note purchase agreement, initially take delivery of
an aircraft using bridge financing. This bridge financing would be utilized, for
example, if we have not finalized arrangements with an owner participant in
connection with a leveraged lease financing on a leased aircraft and we
determined that financing, rather than paying cash out of working capital, was
appropriate. Bridge financing would be
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available from any number of sources, but the most likely source would be our
relationship banks. Any bridge financing would be in the form of a short-term
mortgage financing. This bridge financing would be paid, and any lien on the
bridge-financed aircraft extinguished, within 90 days of delivery of that
aircraft and prior to the financing of that aircraft pursuant to the note
purchase agreement.
CONVERSION OPTION
We may, pursuant to the note purchase agreement, initially finance an
aircraft as an owned aircraft and, within four months of that financing, convert
the aircraft into a leased aircraft. This conversion option would be utilized
for example, if we have not finalized arrangements with an owner participant in
connection with a leveraged lease financing on a leased aircraft. If we were to
utilize the conversion option for a particular aircraft, we, as owner of the
aircraft, would sell the aircraft to an owner trust and that owner trust would
assume our obligations under the equipment notes that we had initially issued in
respect of that aircraft. We would then enter into a lease of the aircraft
conforming to the requirements set forth in this prospectus.
DESCRIPTION OF THE EQUIPMENT NOTES
GENERAL
The equipment notes will be issued in two series with respect to each
aircraft, Series G equipment notes and the Series C equipment notes. We may
elect to issue a third series of equipment notes with respect to an aircraft;
these Series D equipment notes would be funded from sources other than this
offering. The equipment notes with respect to each leased aircraft will be
issued under a separate leased aircraft indenture between State Street Bank and
Trust Company of Connecticut, N.A., as owner trustee of a trust for the benefit
of the owner participant who will be the beneficial owner of that aircraft and
Wilmington Trust Company, as the leased aircraft indenture trustee. The
equipment notes with respect to each owned aircraft will be issued under a
separate owned aircraft indenture between us and Wilmington Trust Company, as an
owned aircraft indenture trustee.
In the case of any leased aircraft, the related owner trustee will lease
the leased aircraft to us pursuant to a separate lease between the owner trustee
and us. Under each lease, we will be obligated to make or cause to be made
rental and other payments to the related leased aircraft trustee on behalf of
the related owner trustee, which rental and other payments will be at least
sufficient to pay in full when due all payments of principal and interest
required to be made on the equipment notes issued with respect to that leased
aircraft. The equipment notes issued with respect to the leased aircraft are
not, however, direct obligations of ours or guaranteed by us. Our rental
obligations under each lease and our obligations under the equipment notes
issued with respect to each owned aircraft will be general obligations of ours.
We will have the right to purchase an owner trustee's right, title and
interest in and to the related aircraft and to assume the related leased
aircraft equipment notes on a full recourse basis, subject to certain
conditions, which would reflect a financing contemplated by an owned aircraft
indenture. These conditions include: (1) the delivery by us of an assumption
agreement giving effect to such assumption; and (2) the receipt by the related
leased aircraft trustee of a legal opinion to the effect that no holder of the
certificates will be required to recognize gain or loss for U.S. federal income
tax purposes in connection with such assumption (or, if the opinion cannot be
given, we will provide in the assumption agreement an indemnification in favor
of the holders of the certificates in form and substance reasonably satisfactory
to the relevant leased aircraft trustee).
SUBORDINATION
Series C equipment notes issued in respect of any aircraft will be
subordinated in right of payment to Series G equipment notes issued in respect
of that aircraft and, if we elect to issue Series D equipment notes, they will
be subordinated in right of payment to the Series G equipment notes and the
Series C equipment notes issued with respect to that aircraft. On each equipment
note payment date, (1) payments
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of interest and principal due on Series G equipment notes issued in respect of
any aircraft will be made prior to payments of interest and principal due on
Series C equipment notes issued in respect of that aircraft; and (2) if we elect
to issue Series D equipment notes, payments of interest and principal due on the
Series C equipment notes will be made prior to payments of interest and
principal due on Series D equipment notes issued in respect of that aircraft.
PRINCIPAL AND INTEREST PAYMENTS
Subject to the provisions of the intercreditor agreement, interest paid on
the equipment notes held in each trust will be passed through to the
certificateholders of each trust on the dates and at the rate per annum set
forth on the cover page of this prospectus with respect to certificates issued
by the trust until the final expected regular distribution date for that trust.
Subject to the provisions of the intercreditor agreement, principal paid on the
equipment notes held in each trust will be passed through to the
certificateholders of the trust in scheduled amounts on the dates set forth in
this prospectus until the final expected regular distribution date for that
trust.
Interest will be payable on the unpaid principal amount of each equipment
note at the rate applicable to that equipment note on January 2 and July 2 in
each year, commencing on the first such date to occur after initial issuance of
the equipment note. Such interest will be computed on the basis of a 360-day
year of twelve 30-day months.
Scheduled principal payments on the equipment notes will be made on January
2 and July 2 in certain years, commencing on or after January 2, 2000. See
"Description of the Certificates--Pool Factors" for a discussion of the
scheduled payments of principal of the equipment notes and possible revisions to
the scheduled payments.
If any date scheduled for any payment of principal, premium (if any) or
interest with respect to the equipment notes is not a business day, such payment
will be made on the next succeeding business day without any additional
interest.
REDEMPTION
Event of Loss
If an Event of Loss occurs with respect to any aircraft and the aircraft is
not replaced by us under the related lease (in the case of a leased aircraft) or
under the related owned aircraft indenture (in the case of an owned aircraft),
the equipment notes issued with respect to that aircraft will be redeemed, in
whole, in each case at a price equal to the aggregate unpaid principal amount of
the equipment notes issued with respect to that aircraft, together with accrued
interest thereon to, but not including, the date of redemption, but without
premium, on a special distribution date. (Indentures, Section 2.10(a))
America West Optional Redemptions
If we exercise our right to terminate a lease because the related aircraft
has become obsolete or surplus to our needs, the equipment notes relating to
that aircraft will be redeemed, in whole, on a special distribution date at a
price equal to the aggregate unpaid principal amount of the equipment notes
issued with respect to that aircraft, together with accrued interest to, but not
including, the date of redemption, plus a Make-Whole Premium. (Leased Aircraft
Indentures, Section 2.10(b)).
All of the equipment notes issued with respect to a leased aircraft may be
redeemed prior to maturity as part of a refunding or refinancing thereof under
the applicable participation agreement, and all of the equipment notes issued
with respect to an owned aircraft may be redeemed prior to maturity at any time
at our option, in each case at a price equal to the aggregate unpaid principal
of the equipment notes issued with respect to that aircraft, together with
accrued interest to, but not including, the date of redemption, plus, in the
case of any series of equipment notes, a Make-Whole Premium. (Indentures,
Section 2.11) If notice of a redemption has been given in connection with a
refinancing of equipment notes with respect to
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a leased aircraft, the notice may be revoked not later than three days prior to
the proposed redemption date. (Leased Aircraft Indentures, Section 2.12)
In addition, under some leases all of the equipment notes issued with
respect to the leases may be redeemed prior to maturity with a Make-Whole
Premium on a special distribution date in connection with our exercise of
options or elections relating to the purchase of the aircraft subject to the
leases.
If, with respect to a leased aircraft, any of the events listed below
occur, then, in each case all, but not less than all, of the equipment notes
issued with respect to that leased aircraft may be purchased by the owner
trustee or owner participant on the applicable purchase date at a price equal to
the aggregate unpaid principal thereof, together with accrued and unpaid
interest to, but not including, the date of purchase, but without any premium
(provided that a Make-Whole Premium will be payable if the equipment notes are
to be purchased pursuant to clause (1) below when a Lease Event of Default has
occurred and continued for fewer than 180 days). (Leased Aircraft Indentures,
Section 2.13)
Events Triggering Right to Redemption
(1) One or more Lease Events of Default has occurred and is continuing.
(2) In the event of a bankruptcy proceeding involving us, (a) during the
period in which Section 1110 of the U.S. Bankruptcy Court applies, the
trustee in the proceeding or America West does not agree to perform
its obligations under the related lease or (b) at any time after
agreeing to perform the obligations, the trustee or America West
ceases to perform the obligations such that the stay period applicable
under the U.S. Bankruptcy Code comes to an end.
(3) The equipment notes with respect to that aircraft have been
accelerated or the leased aircraft trustee with respect to the related
equipment notes takes action or notifies the applicable owner trustee
that it intends to take action to foreclose the lien of the related
leased aircraft indenture or otherwise commence the exercise of any
significant remedy under that indenture or the related lease.
As owner of the owned aircraft we have no comparable right under the owned
aircraft indentures to purchase the equipment notes under these circumstances.
Certain Definitions
"Make-Whole Premium" means, with respect to any equipment note, an amount
(as determined by an independent investment banker of national standing selected
by us) equal to the excess, if any, determined under the following calculation:
Calculation of Make-Whole Premium
(1) the present value of the remaining scheduled payments of principal and
interest to maturity of that equipment note computed by discounting
the payments on a semiannual basis on each payment date (assuming a
360-day year of twelve 30-day months) using a discount rate equal to
the Treasury Yield, minus
(2) the outstanding principal amount of that equipment note plus accrued
interest to the date of determination.
For purposes of determining the Make-Whole Premium, "Treasury Yield" means,
at the date of determination with respect to any equipment note, the interest
rate (expressed as a decimal and, in the case of United States Treasury bills,
converted to a bond equivalent yield) determined to be the annual rate equal to
the semiannual yield to maturity for United States Treasury securities maturing
on the Average Life Date of that 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, (1) one maturing as close
as
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possible to, but earlier than, the Average Life Date of that equipment note and
(2) the other maturing as close as possible to, but later than, the Average Life
Date of that 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 that equipment note is reported
in the most recent H.15(519), the weekly average yield to maturity as published
in such H.15(519).
As used in the definition of Treasury Yield, "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 Premium is the third business day prior to the
applicable payment or redemption date and the "most recent H.15(519)" means the
H.15(519) published prior to the close of business on the third business day
prior to the applicable payment or redemption date.
"Average Life Date" for any equipment note will be the date which follows
the time of determination by a period equal to the Remaining Weighted Average
Life of that equipment note.
"Remaining Weighted Average Life" on a given date with respect to any
equipment note is the number of days equal to the quotient obtained under the
following calculation:
Calculation of Remaining Weighted Average Life
- ----------------------------------------------------
(1) divide the sum of each of the products obtained by multiplying
(a) the amount of each then remaining scheduled payment of principal of
that equipment note, by
(b) the number of days from and including that determination date to
but excluding the date on which the payment of principal is
scheduled to be made, by
(2) the then outstanding principal amount of that equipment note.
SECURITY
The equipment notes issued with respect to each leased aircraft will be
secured by all of the following items:
Security for Equipment Notes
- -------------------------------
(1) an assignment by the related owner trustee to the related loan trustee
of that owner trustee's rights, except for certain limited rights,
under the lease with respect to the related aircraft leased by us,
including the right to receive payments under the applicable lease;
(2) a mortgage to the related loan trustee of that aircraft, subject to
our rights under the lease; and
(3) an assignment to the related loan trustee of some of the owner
trustee's rights under the purchase agreement we entered into with the
related manufacturer.
Prior to an indenture default, the owner participant in respect of any
leased aircraft will have the right, to the exclusion of the related loan
trustee, to approve as satisfactory counsel furnishing legal opinions,
appraisers and accountants. Also, the owner participant will have the right, to
the exclusion of the related loan trustee, to approve the identity of permitted
sublessees (not otherwise permitted by the related lease), and to approve the
forms of certain documentation required for the substitution of aircraft
following an event of loss.
Unless and until the related loan trustee has foreclosed upon the lien of
the related indenture, the loan trustee may not exercise the balance of the
rights of the owner trustee under the related lease (such as the amendment or
modification of the lease) without the concurrence of the owner trustee.
However, in all instances, the right of the loan trustee to exercise remedies
under the related lease are rights exclusive to the loan trustee. The assignment
by the owner trustee to the loan trustee of its rights under the related
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lease will also exclude certain rights of the owner trustee and the related
owner participant to receive the following:
- indemnification by us for certain matters;
- insurance proceeds payable to the owner trustee in its individual
capacity or to the owner participant under public liability insurance
maintained by us under the lease or by the owner trustee or owner
participant;
- insurance proceeds payable to the owner trustee in its individual
capacity or to the owner participant under certain casualty insurance
maintained by the owner trustee or owner participant under the lease; and
- certain reimbursement payments made by us to the owner trustee. (Leased
Aircraft Indenture, Granting Clause and Section 5.02)
The equipment notes are not cross-collateralized, and, consequently, the
equipment notes issued in respect of any one aircraft will not be secured by any
of the other aircraft or replacement aircraft or the Leases related thereto.
The equipment notes issued with respect to each owned aircraft will be
secured by (1) a mortgage to the loan trustee of the aircraft and (2) an
assignment to the loan trustee of certain of our rights under our purchase
agreement with the related manufacturer.
Funds, if any, held from time to time by the loan trustee with respect to
any aircraft, including funds held as the result of an Event of Loss to that
aircraft or, in the case of a leased aircraft, termination of the lease, if any,
relating thereto, will be invested and reinvested by the loan trustee, at our
direction (except in the case of certain indenture defaults), in investments
described in the related indenture. (Indentures, Section 5.09)
LOAN TO VALUE RATIOS OF EQUIPMENT NOTES
The following tables show examples of loan to aircraft value ratios, or
LTVs, for the equipment notes issued in respect of aircraft as of the regular
distribution dates that occur after the scheduled date of original issuance of
those equipment notes, assuming that the equipment notes in the maximum
principal amount are issued in respect of each aircraft. We used these examples
to prepare the assumed amortization schedule, although the amortization schedule
for the equipment notes issued with respect to an aircraft may vary from the
assumed amortization schedule so long as it complies with the Mandatory Economic
Terms. This means that the tables below may not apply in the case of any
particular aircraft.
The LTV was obtained by dividing (1) the outstanding balance (assuming no
payment default) of the equipment notes determined immediately after giving
effect to the payments scheduled to be made on each such regular distribution
date by (2) the assumed value of the aircraft securing the equipment notes.
The following tables assume that the value of each aircraft depreciates by
approximately 3% of the initial appraised value per year for the first 15 years
after delivery of that aircraft and by approximately 4% of the initial appraised
value per year thereafter. Other rates or methods of depreciation would result
in materially different LTVs, and we cannot assure you (1) that the depreciation
rates and method assumed for the purposes of the tables are the ones most likely
to occur or (2) as to the actual future value of any aircraft. The tables should
not be considered a forecast or prediction of expected or likely LTVs, but
simply a mathematical calculation based on one set of assumptions.
<TABLE>
<CAPTION>
AIRBUS MODEL A319-132 AIRBUS MODEL A320-232
--------------------------------------- ---------------------------------------
EQUIPMENT NOTE ASSUMED LOAN TO EQUIPMENT NOTE ASSUMED LOAN TO
OUTSTANDING AIRCRAFT VALUE OUTSTANDING AIRCRAFT VALUE
DATE BALANCE VALUE RATIO BALANCE VALUE RATIO
- ---- -------------- ---------- ------- -------------- ---------- -------
(MILLIONS) (MILLIONS) (MILLIONS) (MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
July 2, 2000 $23.63 $38.11 62.0% $28.07 $45.28 62.0%
July 2, 2001 22.41 36.96 60.6 27.23 43.92 62.0
</TABLE>
89.
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<TABLE>
<CAPTION>
AIRBUS MODEL A319-132 AIRBUS MODEL A320-232
--------------------------------------- ---------------------------------------
EQUIPMENT NOTE ASSUMED LOAN TO EQUIPMENT NOTE ASSUMED LOAN TO
OUTSTANDING AIRCRAFT VALUE OUTSTANDING AIRCRAFT VALUE
DATE BALANCE VALUE RATIO BALANCE VALUE RATIO
- ---- -------------- ---------- ------- -------------- ---------- -------
(MILLIONS) (MILLIONS) (MILLIONS) (MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
July 2, 2002 21.75 35.82 60.7 26.04 42.56 61.2
July 2, 2003 21.00 34.68 60.6 24.70 41.20 60.0
July 2, 2004 19.88 33.53 59.3 23.25 39.84 58.4
July 2, 2005 18.67 32.39 57.7 21.94 38.49 57.0
July 2, 2006 17.81 31.25 57.0 21.16 37.13 57.0
July 2, 2007 16.77 30.10 55.7 19.92 35.77 55.7
July 2, 2008 16.00 28.96 55.3 19.02 34.41 55.3
July 2, 2009 15.24 27.82 54.8 18.11 33.05 54.8
July 2, 2010 14.48 26.67 54.3 17.21 31.69 54.3
July 2, 2011 13.34 25.53 52.2 15.85 30.34 52.2
July 2, 2012 12.57 24.39 51.6 14.94 28.98 51.6
July 2, 2013 11.43 23.25 49.2 13.58 27.62 49.2
July 2, 2014 10.29 22.10 46.5 12.22 26.26 46.6
July 2, 2015 8.76 20.96 41.8 10.41 24.90 41.8
July 2, 2016 7.24 19.43 37.3 8.42 23.09 36.4
July 2, 2017 5.06 17.91 28.3 6.20 21.28 29.1
July 2, 2018 2.64 16.39 16.1 3.23 19.47 16.6
July 2, 2019 0.00 0.00 NA 0.00 0.00 NA
</TABLE>
LIMITATION OF LIABILITY
The equipment notes issued with respect to the leased aircraft are not
direct obligations of, or guaranteed by, us, any owner participant or any owner
trustee in its individual capacity. None of the owner trustees, the owner
participants or the loan trustees, or any of their affiliates, will be
personally liable to any holder of an equipment note or, in the case of the
owner trustees and the owner participants, to the loan trustees for any amounts
payable under the equipment notes or, except as provided in each leased aircraft
indenture, for any liability under that indenture. All payments of principal of,
premium, if any, and interest on the equipment notes issued with respect to any
leased aircraft (other than payments made in connection with (x) an optional
redemption or purchase of equipment notes issued with respect to a leased
aircraft by the related owner trustee or the related owner participant or (y)
the election by an owner trustee to retain title to an aircraft subject to a
termination for obsolescence) will be made only from the assets subject to the
lien of the indenture with respect to that leased aircraft or the income and
proceeds received by the related loan trustee from those assets (including rent
payable by us under the lease with respect to that leased aircraft).
The equipment notes issued with respect to the owned aircraft will be our
direct obligations.
Except as otherwise provided in the indentures, no owner trustee or loan
trustee, in its individual capacity, will be answerable or accountable under the
indentures or under the equipment notes under any circumstances except for its
own willful misconduct or gross negligence. None of the owner participants will
have any duty or responsibility under any of the leased aircraft indentures or
the equipment notes to the loan trustees or to any holder of any equipment note.
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INDENTURE DEFAULTS, NOTICE AND WAIVER
A list of indenture defaults is set forth below:
Indenture Defaults
- -------------------
(1) in the case of a leased aircraft indenture, the occurrence of any
Lease Event of Default under the related lease;
(2) the failure by the related owner trustee (other than as a result of a
Lease Default or Lease Event of Default), in the case of a leased
aircraft indenture, or by us, in the case of an owned aircraft
indenture, to pay any interest or principal or premium, if any, when
due, under that indenture or under any equipment note issued under
that indenture that continues for more than ten business days, in the
case of principal, interest or Make-Whole Premium, and, in all other
cases, 30 days after the relevant owner trustee, owner participant or
America West, as the case may be, receives written demand from the
related loan trustee or holder of an equipment note;
(3) the failure by the related owner participant or the related owner
trustee (in its individual capacity), in the case of a leased aircraft
indenture, or by us, in the case of an owned aircraft indenture, to
discharge certain liens that continue after notice and specified cure
periods;
(4) any representation or warranty made by the related owner trustee,
owner participant or by us, as the case may be, in the related
agreements, or certain related documents furnished to the loan trustee
pursuant to those agreements being false or incorrect in any material
respect when made that continues to be material and adverse to the
interests of the loan trustee or registered holders of equipment notes
and remains unremedied after notice and specified cure periods;
(5) failure by us or the related owner trustee or owner participant to
perform or observe in any material respect any covenant or obligation
for the benefit of the loan trustee or holders of equipment notes
under the related indenture or certain related documents that
continues after notice and specified cure periods;
(6) the registration of the related aircraft ceasing to be effective as a
result of the owner participant (in the case of a leased aircraft) or
America West (in the case of an owned aircraft) not being a citizen of
the United States, as defined in Title 49 of the United States Code
relating to aviation (subject to a cure period);
(7) with respect to the owned aircraft, the lapse or cancellation of
insurance required under the indenture; and
(8) the occurrence of certain events of bankruptcy, reorganization or
insolvency of the related owner trustee or owner participant (in the
case of a leased aircraft) or America West (in the case of the owned
aircraft). (Leased Aircraft Indentures, Section 4.02; Owned Aircraft
Indentures, Section 5.01)
There will not be cross-default provisions in the indentures or in the leases
unless, in the case of a lease, we and the owner participant otherwise agree.
Consequently, events resulting in an indenture default under any particular
indenture may or may not result in an indenture default occurring under any
other indenture, and a Lease Event of Default under any particular lease may or
may not constitute a Lease Event of Default under any other lease.
Equity Cure Rights
If we fail to make any semiannual basic rental payment due under any lease,
within a specified period after that failure the applicable owner trustee may
furnish to the loan trustee the amount due on the equipment notes issued with
respect to the related leased aircraft, together with any interest on account of
the delayed payment. In that case, the loan trustee and the holders of
outstanding equipment notes issued under that indenture may not exercise any
remedies otherwise available under that indenture or lease as
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the result of the failure to make the rental payment, unless the related owner
trustee has previously cured three or more immediately preceding semiannual
basic rental payment defaults or, in total, six or more previous semiannual
basic rental payment defaults. The applicable owner trustee also may cure other
defaults by us in the performance of its obligations under any lease that can be
cured with the payment of money. (Leased Aircraft Indentures, Section 4.03)
The holders of a majority in principal amount of the outstanding equipment
notes issued with respect to any aircraft, by notice to the loan trustee, may on
behalf of all the holders waive any existing default and its consequences under
the indenture with respect to that aircraft, except a default in the payment of
the principal of, or premium or interest on any such equipment notes or a
default in respect of any covenant or provision of the indenture that cannot be
modified or amended without the consent of each holder of equipment notes.
(Leased Aircraft Indentures, Section 4.08; Owned Aircraft Indentures, Section
5.06)
REMEDIES
If an indenture default occurs and is continuing, the related loan trustee
or the holders of a majority in principal amount of the equipment notes
outstanding under the related indenture may, subject to the applicable owner
participant's or owner trustee's right to cure, declare the principal of all
equipment notes issued under the indenture immediately due and payable, together
with all accrued but unpaid interest. In the event of a reorganization
proceeding involving us that is instituted under Chapter 11 of the U.S.
Bankruptcy Code, if no other Lease Event of Default and no other indenture
default (other than the failure to pay the outstanding amount of the equipment
notes which by such declaration shall have become payable) exists at any time
after the consummation of the proceeding, such declaration will be automatically
rescinded without any further action on the part of any holder of equipment
notes. The holders of a majority in principal amount of equipment notes
outstanding under an indenture may rescind any declaration at any time before
the judgment or decree for the payment of the money so due is entered if (1)
there has been paid to the related loan trustee an amount sufficient to pay all
principal, interest, and premium, if any, on any the equipment notes, to the
extent the amounts have become due otherwise than by such declaration of
acceleration and (2) all other indenture defaults and events which with the
passing of time would become indenture defaults have been cured. (Leased
Aircraft Indentures, Section 4.04(b); Owned Aircraft Indentures, Section
5.02(b))
Each indenture provides that if an indenture default has occurred and is
continuing, the related loan trustee may exercise certain rights or remedies
available to it under the indenture or under applicable law, including, in the
case of a leased aircraft, if the corresponding lease has been declared in
default, one or more of the remedies under that lease with respect to the
aircraft subject to that lease. In the case of a leased aircraft, if an
indenture default arises solely by reason of one or more events or circumstances
which constitute a Lease Event of Default, the related loan trustee's right to
exercise remedies under an indenture is subject, with certain exceptions, to its
having proceeded to exercise one or more of the dispossessory remedies under the
lease with respect to the leased aircraft. The requirement to exercise one or
more of these remedies under the lease will not apply in circumstances where the
exercise has been involuntarily stayed or prohibited by applicable law or court
order for a continuous period in excess of 60 days or such other period as may
be specified in Section 1110(a)(1)(A) of the U.S. Bankruptcy Code (plus an
additional period, if any, resulting from (1) the trustee or
debtor-in-possession in the proceeding agreeing to perform its obligations under
that lease with the approval of the applicable court and its continuous
performance of that lease under Section 1110(a)(1)(A-B) of the U.S. Bankruptcy
Code or the loan trustee's consent to an extension of such period, (2) such loan
trustee's failure to give any requisite notice, or (3) our assumption of that
lease with the approval of the relevant court and its continuous performance of
the lease as so assumed). See "--The Leases and Certain Provisions of the Owned
Aircraft Indentures--Events of Default under the Leases". These remedies may be
exercised by the related loan trustee to the exclusion of the related owner
trustee, subject to certain conditions specified in the indenture, and to our
exclusion, subject to the terms of the lease. Any aircraft sold in the exercise
of such remedies will be free and clear of any rights of those parties,
including our rights under the lease with
92.
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respect to the aircraft. No exercise of any remedies by the related loan trustee
may affect our rights under any lease unless a Lease Event of Default has
occurred and is continuing. (Leased Aircraft Indentures, Section 4.04; Leases,
Section 15) The owned aircraft indentures will not contain these limitations on
the loan trustee's ability to exercise remedies upon an indenture default under
an owned aircraft indenture.
If the equipment notes issued in respect of one aircraft are in default,
the equipment notes issued in respect of the other aircraft may not be in
default, and, if not, no remedies will be exercisable under the applicable
indentures with respect to the other aircraft.
Section 1110 of the U.S. Bankruptcy Code
Section 1110 of the U.S. Bankruptcy Code provides that the right of
lessors, conditional vendors and holders of security interests with respect to
"equipment" (as defined in Section 1110 of the U.S. Bankruptcy Code) to take
possession of the equipment in compliance with the provisions of a lease,
conditional sale contract or security agreement, as the case may be, is not
affected by any of the following events:
Events That Do Not Affect Rights with Respect to Equipment
(1) the automatic stay provision of the U.S. Bankruptcy Code, which
enjoins repossessions by creditors for the duration of the
reorganization period;
(2) the provision of the U.S. Bankruptcy Code allowing the trustee in
reorganization to use property of the debtor during the reorganization
period;
(3) Section 1129 of the U.S. Bankruptcy Code, which governs the
confirmation of plans of reorganization in Chapter 11 cases; and
(4) any power of the bankruptcy court to enjoin a repossession.
Section 1110 provides, however, that the right to take possession of an aircraft
may not be exercised for 60 days following the date of commencement of the
reorganization proceedings and may not be exercised at all if, within the 60-day
period (or a longer period consented to by the lessor, conditional vendor or
holder of a security interest), the trustee in reorganization agrees to perform
the debtor's obligations that become due on or after that date and cures all
existing defaults (other than defaults resulting solely from the financial
condition, bankruptcy, insolvency or reorganization of the debtor).
"Equipment" is defined in Section 1110 of the U.S. Bankruptcy Code, in
part, as "an aircraft, aircraft engine, propeller, appliance, or spare part (as
defined in section 40102 of title 49 of the U.S. Code) that is subject to a
security interest granted by, leased to, or conditionally sold to a debtor that
is a citizen of the United States (as defined in section 40102 of title 49 of
the U.S. Code) holding an air carrier operating certificate issued by the
Secretary of Transportation pursuant to chapter 447 of title 49 of the U.S. Code
for aircraft capable of carrying 10 or more individuals or 6,000 pounds or more
of cargo."
Opinion of America West Counsel
It is a condition to the trustee's obligation to purchase equipment notes
with respect to each aircraft that our outside counsel, which is expected to be
Vedder, Price, Kaufman & Kammholz, provide its opinion to the trustees that (1)
if the aircraft is a leased aircraft, the owner trustee, as lessor under the
lease for that aircraft, and the loan trustee, as assignee of the owner
trustee's rights under the lease pursuant to the related indenture, will be
entitled to the benefits of Section 1110 of the U.S. Bankruptcy Code with
respect to the airframe and engines comprising the aircraft or (2) if the
aircraft is an owned aircraft, the owned aircraft trustee will be entitled to
the benefits of Section 1110 with respect to the airframe and engines comprising
that owned aircraft, in each case so long as we continue to be a "citizen of the
United States" holding an air carrier operating certificate issued by the
Secretary of Transportation. For a description of certain limitations on the
loan trustee's exercise of rights contained in the indentures, see "--Indenture
Defaults, Notice and Waiver".
93.
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The opinion of Vedder, Price, Kaufman & Kammholz will not address the
possible replacement of an aircraft after an Event of Loss in the future, the
consummation of which is conditioned upon the contemporaneous delivery of an
opinion of counsel to the effect that the related loan trustee will be entitled
to Section 1110 benefits with respect to the replacement unless there was,
subsequent to the delivery of the aircraft, a change in law or court
interpretation that results in Section 1110 benefits not being available. The
opinion of Vedder, Price, Kaufman & Kammholz will also not address the
availability of Section 1110 with respect to any possible sublessee of a leased
aircraft subleased by us or to any possible lessee of an owned aircraft if it is
leased by us.
During 1998, the U.S. District Court for the District of Colorado issued
two opinions arising from the bankruptcy proceedings of Western Pacific
Airlines, Inc. relating to Section 1110. The decisions held that, once an
airline debtor reaffirms its obligations and cures its defaults under an
aircraft lease within the prescribed period in accordance with Section 1110, the
lessor under that lease is not entitled to repossess the aircraft under Section
1110 if the airline subsequently defaults under that lease. The opinion of
Vedder, Price, Kaufman & Kammholz will state that, in the firm's opinion, the
District Court holding is erroneous because it is inconsistent with the
overriding purpose of Section 1110 to protect lessors of, and creditors served
by, qualifying aircraft against being stayed from exercising their rights while
defaults under their leases or financing agreements remain uncured. Certain
legislation amending the U.S. Bankruptcy Code, including Section 1110, is
currently under consideration by Congress. The amendments to Section 1110, if
enacted, would statutorily override the Western Pacific decisions. Appeals of
such decisions were dismissed without consideration of the substantive issues.
Reimbursement of Loan Trustee Expenses
If an indenture default under any indenture occurs and is continuing, any
sums held or received by the related loan trustee, subject to limited
exceptions, may be applied to reimburse the loan trustee for any tax, expense or
other loss incurred by it and to pay any other amounts due to the loan trustee
prior to any payments to holders of the equipment notes issued under that
indenture. (Indentures, Sections 3.03 and 3.04)
Bankruptcy or Like Proceedings of an Owner Participant
In the event of bankruptcy, insolvency, receivership or like proceedings
involving an owner participant, it is possible that, notwithstanding that the
applicable leased aircraft is owned by the related owner trustee in trust, the
leased aircraft and the related lease and equipment notes might become part of
the proceeding. In this event, payments under that lease or on such equipment
notes might be interrupted and the ability of the related loan trustee to
exercise its remedies under the related indenture might be restricted, although
the loan trustee would retain its status as a secured creditor in respect of the
related lease and the related leased aircraft.
MODIFICATION OF INDENTURES AND LEASES
Without the consent of holders of a majority in principal amount of the
equipment notes outstanding under any indenture, the provisions of the indenture
and any related lease, participation agreement or trust agreement may not be
amended or modified, except to the extent indicated below.
Subject to some limitations, some provisions of any leased aircraft
indenture, and of the lease, the participation agreement and the trust agreement
related thereto, may be amended or modified by the parties thereto without the
consent of any holders of the equipment notes outstanding under such indenture.
In the case of each lease, these provisions include, among others, provisions
relating to (1) the return to the related owner trustee of the related leased
aircraft at the end of the term of the applicable lease (except to the extent
that such amendment would affect the rights or exercise of remedies under the
applicable lease) and (2) the renewal of the applicable lease and the option to
purchase the related leased aircraft so long as the same would not adversely
affect the holders of any equipment notes. (Leased Aircraft Indentures, Section
9.01(a)) In addition, any indenture may be amended without the consent of
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the holders of equipment notes to, among other things, cure any defect or
inconsistency in such indenture or the equipment notes issued under that
indenture, provided that the change does not adversely affect the interests of
any holder. (Leased Aircraft Indentures, Section 9.01(c); Owned Aircraft
Indentures, Section 10.01)
Without the consent of the holder of each equipment note outstanding under
any indenture affected thereby, no amendment or modification of that indenture
may among other things have the effect noted below:
Amendments or Modifications of an Indenture Requiring Consent of Each
Holder of Equipment Notes
(1) reduce the principal amount of, or premium, if any, or interest
payable on, any equipment notes issued under the indenture or change
the date on which any principal or premium, if any, or interest is due
and payable;
(2) permit the creation of any security interest with respect to the
property subject to the lien of that indenture, except as provided in
that indenture, or deprive any holder of an equipment note issued
under that indenture of the benefit of the lien of the indenture upon
the property subject to that indenture; or
(3) reduce the percentage in principal amount of outstanding equipment
notes issued under that indenture necessary to modify or amend any
provision of that indenture or to waive compliance with that
indenture. (Leased Aircraft Indentures, Section 9.01 (b); Owned
Aircraft Indentures, Section 10.01(a))
INDEMNIFICATION
We are required to indemnify each loan trustee, each owner participant,
each owner trustee, each liquidity provider, the policy provider, the
subordination agent, the escrow agent and each trustee, but not the holders of
certificates, for certain losses, claims and other matters. We are required
under certain circumstances to indemnify each owner participant against the loss
of depreciation deductions and other benefits allowable for certain income tax
purposes with respect to the related leased aircraft. Each owner participant
will be required to indemnify the related loan trustee and the holders of the
equipment notes issued with respect to the leased aircraft in which that owner
participant has an interest for certain losses that may be suffered as a result
of the failure of such owner participant to discharge liens or claims on or
against the assets subject to the lien of the related indenture.
THE LEASES AND CERTAIN PROVISIONS OF THE OWNED AIRCRAFT INDENTURES
Each leased aircraft will be leased to us by the relevant owner trustee
under the relevant lease agreement. Each owned aircraft will be owned by us.
Lease Term Rentals and Payments
Each leased aircraft will be leased separately by the relevant owner
trustee to us for a term commencing on the date on which the aircraft is
acquired by the owner trustee and expiring on a date not earlier than the latest
maturity date of the relevant equipment notes, unless terminated prior to the
originally scheduled expiration date as permitted by the applicable lease. The
semiannual basic rent payment under each lease is payable by us on January 2 or
July 2 during the term of that lease, and will be assigned by the owner trustee
under the corresponding indenture to provide the funds necessary to make
scheduled payments of principal and interest due from the owner trustee on the
equipment notes issued under such indenture.
In certain cases, the semiannual basic rent payments under the leases may
be adjusted, but each lease provides that under no circumstances will scheduled
rent payments by us be less than the scheduled payments on the related equipment
notes. Any balance of each semiannual basic rent payment under each
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lease, after payment of amounts due on the equipment notes issued under the
indenture corresponding to the lease, will be paid over to the related owner
trustee. (Leases, Section 3; Leased Aircraft Indentures, Section 3.01)
Semiannual payments of interest on the equipment notes issued by us under
an owned aircraft indenture are payable each January 2 and July 2 commencing on
the first such date after issuance of the equipment notes. Semiannual payments
of principal under the equipment notes issued by us under an owned aircraft
indenture are payable on January 2 and July 2 in certain years commencing on or
after January 2, 2000. The amount of a semiannual payment of interest or
principal will be increased in an amount equal to any increase in the amount of
interest due on the equipment notes on the relevant payment date as a result of
any increase in the rate of interest on such equipment notes as required by the
terms of the registration rights agreement.
Net Lease; Maintenance
We are obligated under each lease, among other things and at our expense,
to keep each aircraft duly registered and insured, to pay all costs of operating
the aircraft and to maintain, service, repair and overhaul the aircraft so as to
keep it in as good an operating condition as when delivered to us, ordinary wear
and tear excepted, and without taking into consideration hours and cycles, and
in such condition as required to maintain the airworthiness certificate for the
aircraft in good standing at all times, subject to certain limited exceptions,
including temporary storage or maintenance periods and the grounding of similar
aircraft by the applicable aviation authority. (Leases, Sections 7.1, 8.1 and
Annexes C and D) The owned aircraft indenture imposes comparable registration,
insurance, maintenance, service and repair obligations on us with respect to the
owned aircraft. (Owned Aircraft Indentures, Section 4.02)
Possession, Sublease and Transfer
We may operate an aircraft or, subject to certain restrictions, we may
permit other persons to operate an aircraft. Normal interchange and pooling
agreements with respect to any engine are permitted. Subleases, in the case of
leased aircraft, and leases, in the case of owned aircraft, are also permitted
to U.S. air carriers and foreign air carriers that have their principal
executive office in countries that are listed in the applicable indenture,
subject to a reasonably satisfactory legal opinion that, among other things,
that country would recognize (in the case of the leased aircraft) owner
trustee's title to, and the loan trustee's security interest in respect of, the
applicable aircraft. In addition, a sublessee or lessee may not be subject to
insolvency or similar proceedings at the commencement of that sublease or lease.
(Leases, Section 7; Owned Aircraft Indentures, Section 4.02) Permitted foreign
air carriers are not limited to those based in a country that is a party to the
Convention on the International Recognition of Rights in Aircraft (Geneva 1948).
It is uncertain to what extent the relevant loan trustee's security interest
would be recognized if an aircraft were registered or located in a jurisdiction
not a party to the convention. Moreover, in the case of an Indenture Event of
Default, the ability of the related loan trustee to realize upon its security
interest in an aircraft could be adversely affected as a legal or practical
matter if the aircraft were registered or located outside the United States.
Registration
Subject to the next paragraph, we are required to keep each aircraft duly
registered with the Federal Aviation Administration, except (in the case of a
leased aircraft) if the relevant owner trustee or owner participant fails to
meet the applicable citizenship requirements, and to record each lease (in the
case of a leased aircraft, but subject to the citizenship requirements) and
indenture and certain other documents under Title 49 of the U.S. Code relating
to aviation. (Leases, Section 7; Owned Aircraft Indentures, Section 4.02(e)) The
recordation of the indenture and other documents with respect to each aircraft
is intended to give the relevant loan trustee a first priority perfected
security interest in the aircraft whenever it is located in the United States or
any of its territories and possessions. The Convention on the International
Recognition of Rights in Aircraft provides that the security interest will also
be recognized, with some limited exceptions, in those jurisdictions that have
ratified or adhere to the convention.
96.
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So long as no Lease Event of Default exists, we have the right to register
the leased aircraft subject to any lease in a country other than the United
States at our own expense in connection with a permitted sublease of the
aircraft to a permitted foreign air carrier, subject to some conditions in the
related participation agreement. These conditions include a requirement that the
lien of the applicable indenture continue as a first priority security interest
in the applicable aircraft. (Leases, Section 7.1.2; Participation Agreements,
Section 7.6.11) The owned aircraft indentures contain comparable provisions with
respect to registration of the owned aircraft outside of the United States in
connection with a permitted lease of the owned aircraft. (Owned Aircraft
Indentures, Section 4.02(e))
Liens
We are required to maintain each aircraft free of any liens, other than the
rights of the relevant loan trustee, the holders of the related equipment notes,
America West and, with respect to a leased aircraft, the owner participant and
owner trustee arising under the applicable indenture, the lease (in the case of
a leased aircraft) or the other operative documents related to the lease, and
other than limited liens permitted under the documents, including but not
limited to those listed below; provided that in the case of each of the liens
described above, the liens and proceedings do not involve any material risk of
the sale, forfeiture or loss of the aircraft or the interest of any participant
in the aircraft or impair the lien of the relevant indenture. (Leases, Section
6; Owned Aircraft Indentures, Section 4.01) The following liens may also be
permitted:
Additional Permitted Liens
(1) liens for taxes either not yet due or being contested in good faith by
appropriate proceedings;
(2) materialmen's, mechanics' and other similar liens arising in the
ordinary course of business and securing obligations that either are
not yet delinquent for more than 60 days or are being contested in
good faith by appropriate proceedings;
(3) judgment liens so long as such judgment is discharged or vacated
within 60 days or the execution of the judgment is stayed pending
appeal and discharged, vacated or reversed within 60 days after
expiration of such stay;
(4) insurers' salvage rights; and
(5) any other lien as to which we have provided a bond or other security
adequate in the reasonable opinion of the related owner trustee or
loan trustee, as the case may be.
Replacement of Parts; Alterations
We are obligated to replace all parts at our expense that may from time to
time be incorporated or installed in or attached to any aircraft and that may
become lost, damaged beyond repair, worn out, stolen, seized, confiscated or
rendered permanently unfit for use. We or any permitted sublessee have the
right, at our own expense, to make alterations, modifications and additions with
respect to each aircraft as we deem desirable in the proper conduct of our
business and to remove parts which we deem to be obsolete or no longer suitable
or appropriate for use, so long as the alteration, modification, addition or
removal does not impair the condition or airworthiness and does not materially
diminish the fair market value, utility, or remaining useful life of the related
aircraft, airframe or engine. (Leases, Section 8.1 and Annex C; Owned Aircraft
Indentures, Section 4.04(d))
Insurance
We are required to maintain, at our expense (or at the expense of a
permitted lessee, in the case of the owned aircraft, or a permitted sublessee,
in the case of a leased aircraft), all-risk aircraft hull insurance covering
each aircraft, at all times in an amount not less than the stipulated loss value
of that aircraft (which is required to be at least equal to the aggregate
outstanding principal amount of the equipment notes related to the aircraft,
together with accrued interest) or, in the case of an owned aircraft, the
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aggregate outstanding principal amount of the equipment notes relating to that
aircraft together with interest accrued. However, after giving effect to
self-insurance permitted as described below, the amount payable under the
insurance for any aircraft may be less than the amounts payable with respect to
the equipment notes issued with respect to that aircraft. In the event of a loss
involving insurance proceeds in excess of $5,000,000 per occurrence, if the
insurers make payment to other than the repairer of the loss, the proceeds up to
the stipulated loss value of the relevant aircraft will be payable to the
applicable loan trustee, for so long as the relevant indenture is in effect. In
the event of a loss involving insurance proceeds of up to $5,000,000 the
proceeds will be payable directly to us so long as an Indenture Event of Default
does not exist with respect to the owned aircraft indentures or (in the case of
a leased aircraft) the owner trustee has not notified the insurance underwriters
that a Lease Event of Default exists. So long as the loss does not constitute an
Event of Loss, insurance proceeds will be applied to repair or replace the
property. (Leases, Section 11 and Annex D; Owned Aircraft Indentures, Section
4.06)
In addition, we are obligated to maintain comprehensive airline liability
insurance at our expense (or at the expense of a permitted lessee, in the case
of an owned aircraft, or a permitted sublessee, in the case of a leased
aircraft), including, without limitation, passenger legal liability, bodily
injury liability, property damage liability and contractual liability (exclusive
of manufacturer's product liability insurance) insurance with respect to each
aircraft. Insurers of recognized responsibility must underwrite the liability
insurance. The amount of the liability insurance coverage per occurrence may not
be less than the amount of comprehensive airline liability insurance from time
to time applicable to aircraft owned or leased and operated by us of the same
type and operating on similar routes as the aircraft. (Leases, Section 11.1 and
Annex D; Owned Aircraft Indentures, Section 4.06)
We are also required to maintain war-risk, hijacking or allied perils
insurance if we (or any permitted sublessee or lessee) operate any aircraft or
any related airframe or engine in any area of recognized hostilities (unless
governmental indemnity is obtained in its place) or if we (or any permitted
sublessee or lessee) maintain the insurance with respect to other aircraft
operated by us (or any permitted sublessee or lessee) on the same routes on
which the aircraft is operated. (Leases, Section 7.1.5 and Annex D; Owned
Aircraft Indentures, Section 4.06)
We may self-insure under a program applicable to all aircraft in our fleet,
but the amount of the self-insurance in the aggregate may not exceed 50% of the
largest replacement value of any single aircraft in our fleet or 1.5% of the
average aggregate insurable value (during the preceding calendar year) of all
aircraft on which we carry insurance, whichever is less, unless an insurance
broker of national standing certifies that the standard among all other major
U.S. airlines is a higher level of self-insurance, in which case we may
self-insure the aircraft to such higher level. In addition, we may self-insure
to the extent of any applicable deductible per aircraft that does not exceed
industry standards for major U.S. airlines. (Leases, Section 11.1 and Annex D;
Owned Aircraft Indentures, Section 4.06(d))
In respect of each aircraft, we are required to name as additional insured
parties the relevant loan trustee and holders of the equipment notes and (in the
case of the leased aircraft) the relevant owner participant and owner trustee,
in its individual capacity and as owner of that aircraft, and in some cases
certain other parties under all liability, hull and property and war risk,
hijacking and allied perils insurance policies required with respect to the
aircraft. In addition, the insurance policies maintained under the leases and
the owned aircraft indentures will be required to provide that, in respect of
the interests of only additional insured persons, the insurance will not be
invalidated or impaired by any act or omission of ours or any other person and
to insure the respective interests of the additional insured persons, regardless
of any breach or violation of any representation, warranty, declaration, term or
condition contained in the policies by us, any permitted sublessee or any other
person. (Leases, Annex D; Owned Aircraft Indentures, Section 4.06)
Lease Termination
Unless a Lease Event of Default has occurred and is continuing, we may
terminate any lease on any payment date occurring on or after the fifth
anniversary of the date on which that lease commenced, if we
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make a good faith determination that the leased aircraft subject to that lease
is economically obsolete or surplus to our requirements. We are required to give
notice of our intention to exercise our right of termination described in this
paragraph at least 90 days prior to the proposed date of termination, which
notice may be withdrawn up to ten business days prior to the proposed date;
provided that we may give only five such termination notices. In this situation,
unless the owner trustee elects to retain title to that aircraft, we are
required to use commercially reasonable efforts to sell such aircraft as an
agent for the owner trustee, and the owner trustee will sell the aircraft on the
date of termination to the highest cash bidder. If the sale occurs, the
equipment notes related to the sale are required to be prepaid. If the net
proceeds to be received from the sale are less than the termination value for
that aircraft (which is expressed always to be sufficient to pay the aggregate
outstanding principal amount of the equipment notes related to the aircraft,
together with accrued interest), we are required to pay to the applicable owner
trustee an amount equal to the excess, if any, of the applicable termination
value for that aircraft over such net proceeds. Upon payment of termination
value for that aircraft and an amount equal to the Make-Whole Premium, if any,
payable on the date of payment, together with certain additional amounts, the
lien of the relevant indenture will be released, the relevant lease will
terminate, and our obligation to make scheduled rent payments under the related
lease will cease. (Leases, Section 9; Leased Aircraft Indentures, Sections
2.10(b) and 10.01)
The owner trustee under any lease has the option to retain title to the
leased aircraft subject to that lease if we have given a notice of termination
under that lease. The owner trustee will then pay to the applicable loan trustee
an amount sufficient to prepay the outstanding principal of and interest on the
equipment notes issued with respect to that aircraft (but we will be obligated
to pay the Make-Whole Premium in respect thereof), in which case the lien of the
relevant indenture will be released, the relevant lease will terminate and our
obligation to make scheduled rent payments under that lease will cease. (Leases,
Section 9; Leased Aircraft Indentures, Sections 2.10(b) and 10.01)
Events of Loss
If an Event of Loss occurs with respect to the airframe or the airframe and
engines of an aircraft, we must elect within 45 days after the occurrence either
to make payment with respect to that Event of Loss or to replace the airframe
and any engines. Not later than the first business day following the earliest of
(1) the 120th day following the date of occurrence of the Event of Loss, and (2)
the fourth business day following the receipt of the insurance proceeds in
respect of the Event of Loss, we must take either of the steps noted below:
Alternative Steps Required Upon an Event of Loss
(1) pay to the applicable owner trustee (in the case of a leased aircraft)
or to the owned aircraft trustee (in the case of an owned aircraft)
the stipulated loss value of the aircraft (in the case of a leased
aircraft) or the outstanding principal amount and accrued interest on
the equipment notes (in the case of an owned aircraft), together with
some additional amounts, but, in any case, without any Make-Whole
Premium;
(2) unless any Lease Event of Default or failure to pay basic rent under
the relevant lease (in the case of a leased aircraft), an Indenture
Event of Default or failure to pay principal or interest under the
owned aircraft indenture (in the case of an owned aircraft) or
bankruptcy defaults have occurred and are continuing, substitute an
airframe (or airframe and one or more engines, as the case may be) for
the airframe, or airframe and engine(s), that suffered the Event of
Loss. (Leases, Sections 10.1.1, 10.1.2 and 10.1.3; Leased Aircraft
Indentures, Section 2.10(a); Owned Aircraft Indentures, Sections 2.10
and 4.05(a))
If we elect to replace an airframe (or airframe and one or more engines, as
the case may be) that suffered the Event of Loss, we will, in the case of a
leased aircraft, convey to the related owner trustee title to an airframe (or
airframe and one or more engines, as the case may be), and the replacement
airframe or airframe and engines must be the same model as the airframe or
airframe and engines to be
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replaced or an improved model, with a value, utility and remaining useful life
(without regard to hours or cycles remaining until the next regular maintenance
check) at least equal to the airframe or airframe and engines to be replaced,
assuming that the airframe and engines had been maintained in accordance with
the related lease. We are also required to provide to the relevant loan trustee
and (in the case of a leased aircraft) the relevant owner trustee and owner
participant reasonably acceptable opinions of counsel to the effect, among other
things, that (1) specified documents have been duly filed under Title 49 of the
U.S. Code relating to aviation (or comparable applicable law of the relevant
jurisdiction of registration) and (2) the owner trustee and loan trustee (as
assignee of lessor's rights and interests under the lease), in the case of a
leased aircraft, or the owned aircraft trustee, in the case of an owned
aircraft, will be entitled to the benefits of Section 1110 of the U.S.
Bankruptcy Code with respect to any replacement airframe (unless, as a result of
a change in law or court interpretation, the benefits are not then available).
(Leases, Sections 10.1.3 and 10.3; Owned Aircraft Indentures, Section 4.05(c))
If we elect not to replace the airframe, or airframe and engine(s), then
upon payment of the outstanding principal amount of the equipment notes issued
with respect to that aircraft (in the case of an owned aircraft) or the
stipulated loss value for that aircraft (in the case of a leased aircraft),
together with all additional amounts then due and unpaid with respect to that
aircraft, which must be at least sufficient to pay in full as of the date of
payment thereof the aggregate unpaid principal amount under those equipment
notes together with accrued but unpaid interest thereon and all other amounts
due and owing in respect of those equipment notes, the lien of the indenture and
(in the case of a leased aircraft) the lease relating to that aircraft will
terminate with respect to that aircraft, our obligation to make the scheduled
rent payments (in the case of a leased aircraft) or interest and principal
payments (in the case of an owned aircraft) will cease and (in the case of a
leased aircraft) the related owner trustee will transfer all of its right, title
and interest in and to the related aircraft to us (or, if directed by us, the
aircraft insurers). The stipulated loss value and other payments made under the
leases or the owned aircraft indentures, as the case may be, by us will be
deposited with the applicable loan trustee. Amounts in excess of the amounts due
and owing under the equipment notes issued with respect to any aircraft will be
distributed by the loan trustee to the applicable owner trustee or to us, as the
case may be. (Leases, Section 10.1.2; Leased Aircraft Indentures, Sections 3.02
and 10.01; Owned Aircraft Indentures, Sections 2.10 and 4.05(a)(ii))
If an Event of Loss occurs with respect to an engine alone, we will be
required to replace the engine within 60 days after the occurrence of the Event
of Loss with another engine, free and clear of all liens (other than permitted
liens). The replacement engine will be the same make and model as the engine to
be replaced, or an improved model, suitable for installation and use on the
airframe, and having a value, utility and remaining useful life (without regard
to hours or cycles remaining until overhaul) at least equal to the engine to be
replaced, assuming that the replaced engine had been maintained in accordance
with the relevant lease or the owned aircraft indentures, as the case may be,
immediately prior to the occurrence of the Event of Loss. (Leases, Section 10.2;
Owned Aircraft Indentures, Section 4.05(a)(i)) We may, whether or not an Event
of Loss has occurred with respect to any engine, replace that engine with a
replacement engine satisfying the same conditions for a replacement engine
following an Event of Loss. (Leases, Section 10.2.3; Owned Aircraft Indentures,
4.04(e))
An "Event of Loss" with respect to an aircraft, airframe or any engine
means any of the events noted below:
Events of Loss With Respect to an Aircraft, Airframe or any Engine
(1) the destruction, damage beyond practical or economic repair or
rendition of that property permanently unfit for normal use;
(2) the actual or constructive total loss or any damage or requisition of
title or use of that property which results in an insurance settlement
on the basis of a total loss or a constructive or compromised total
loss;
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(3) any theft, hijacking or disappearance of that property for a period of
180 days or more or, if earlier, the first to occur of the last day of
the term of the related lease (if that property is subject to a lease)
or the date on which we have confirmed in writing that we cannot
recover that property;
(4) any seizure, condemnation, confiscation, taking or requisition of
title to that property by any governmental entity or purported
governmental entity (other than the country of registration of the
relevant aircraft) for a period exceeding 180 days (exceeding 90 days
in the case of a requisition of title) or, if earlier, at the end of
the term of the related lease (in the case of a leased aircraft);
(5) in the case of any leased aircraft, any seizure, condemnation,
confiscation, taking or requisition of use of that property by any
U.S. government entity that continues until the 30th day after the
last day of the term of the relevant lease (unless the owner trustee
has elected not to treat the event as an Event of Loss); and
(6) as a result of any law, rule, regulation, order or other action by the
Federal Aviation Administration or any governmental entity, the use of
that property in the normal course of our business of passenger air
transportation is prohibited for 180 days.
The event described in paragraph (6) above will be an Event of Loss unless
we, prior to the expiration of the 180-day period, have undertaken and will be
diligently carrying forward steps which are necessary or desirable to permit the
normal use of the property, but in any event if the use has been prohibited for
a period of two consecutive years; provided that no Event of Loss will be deemed
to have occurred if the prohibition has been applicable to our entire U.S. fleet
of similar property and we, prior to the expiration of the two-year period, have
conformed at least one unit of property in our fleet to the requirements of any
law, rule, regulation, order or other action and commenced regular commercial
use of the same and will be diligently carrying forward, in a manner which does
not discriminate against applicable property in so conforming the property,
steps which are necessary or desirable to permit the normal use of the property
by us, but in any event if the use has been prohibited for a period of three
years or, in the case of the leased aircraft, the use will be prohibited at the
expiration of the term of the relevant lease. (Leases, Annex A; Owned Aircraft
Indentures, Annex A)
Renewal and Purchase Options
With respect to any leased aircraft, we may elect to purchase that aircraft
and terminate the related lease prior to the end of the term of that lease (1)
on the lease payment date, if any, agreed by the owner participant for that
aircraft in connection with an early buy-out option or (2) under some
circumstances, on any lease payment date, if we would be required to make
indemnity payments with respect to these aircraft in excess of a certain
designated amount, which indemnity payments could be avoided through a purchase
by us of that aircraft (each, an "Early Purchase Option"). In connection with
the exercise of an Early Purchase Option, we are required with respect to the
equipment notes relating to the aircraft being purchased either (x) to pay to
the related owner trustee funds at least sufficient to pay any principal of and
interest and Make-Whole Premium, if any, on the equipment notes or (y) to assume
on a full recourse basis the obligations of the related owner trustee under the
equipment notes, the related indenture and the related participation agreement.
(Leases, Section 17.3; Leased Aircraft Indentures, Sections 2.10 and 2.15)
If we elect to purchase an aircraft and pay the amount described in clause
(x) above, then upon payment to the related owner trustee of the full purchase
price for that aircraft determined in accordance with the related lease and all
other amounts owing to the parties to the related participation agreement, the
owner trustee will transfer all of its right, title and interest in and to an
aircraft to us and the related lease and the lien of the related indenture will
terminate. If we elect to purchase the aircraft and assume the obligations of
the owner trustee described in clause (y) above, then the related operative
agreements will be amended to provide for the assumption of the obligations on a
full recourse basis by us, maintaining for the benefit of the holders of the
equipment notes the security interest in that aircraft
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created by the related indenture. In the event of an assumption, we will either
furnish an opinion to the loan trustee that the assumption does not result in a
taxable gain or loss for the certificateholders for U.S. federal tax purposes or
an indemnity for the benefit of the certificateholders in form and substance
reasonably satisfactory to loan trustee. (Leases, Section 17.3; Leased Aircraft
Indentures, Sections 2.10 and 2.15)
At the end of the term of each lease after final maturity of the related
equipment notes and subject to some conditions, we will have certain options to
renew the lease for additional limited periods. In addition, we may have the
right at the end of the term of each lease to purchase the aircraft subject to
the lease for an amount to be calculated in accordance with the terms of the
lease. (Leases, Section 17)
Events of Default under the Leases
Lease Events of Default under each lease include, among other things, the
items listed below:
Lease Events of Default
(1) our failure to make any payment of basic rent, stipulated loss value
or termination value under the lease within ten business days after it
becomes due, or failure by us to pay any other amount due under the
lease or under any other related operative document within 30 days
from and after the date of any written demand from the owner trustee;
(2) our failure to make any excluded payment (as defined in the leases)
within 30 days after written notice that the failure constitutes a
Lease Event of Default is given by the relevant owner participant to
us and the relevant loan trustee;
(3) our failure to carry and maintain insurance on and in respect of the
aircraft, airframe and engines, in accordance with the provisions of
that lease;
(4) our failure to perform or observe in any material respect any other
covenant or agreement to be performed or observed by us under that
lease or the related participation agreement or any other related
operative document (other than the related tax indemnity agreement
between us and the owner participant), and the failure continues
unremedied for a period of 30 days after written notice of the failure
by the applicable owner trustee or loan trustee unless the failure is
capable of being corrected and we are diligently proceeding to correct
the failure, in which case there will be no Lease Event of Default
unless and until the failure continues unremedied for a period of 180
days after receipt of the notice;
(5) any representation or warranty made by us in that lease or the related
participation agreement or in any other related operative document
(other than in the related tax indemnity agreement between us and the
related owner participant) proves to have been untrue or inaccurate in
any material respect at the time made, the representation or warranty
is material at the time in question and remains uncured (to the extent
of the adverse impact thereof) for more than 30 days after the date of
written notice to us; and
(6) the occurrence of voluntary events of bankruptcy, reorganization or
insolvency of America West or the occurrence of involuntary events of
bankruptcy, reorganization or insolvency which continue undismissed,
unvacated or unstayed for a period of 90 days. (Leases, Section 14)
Indenture Events of Default under the owned aircraft indentures are
discussed above under "--Indenture Defaults, Notice and Waiver".
Remedies Exercisable upon Events of Default under the Lease
If a Lease Event of Default has occurred and is continuing, the applicable
owner trustee may (or, so long as the indenture is in effect, the applicable
loan trustee may, subject to the terms of the indenture) exercise one or more of
the remedies provided in the lease with respect to the related aircraft. These
remedies include the right to repossess and use or operate that aircraft, to
rescind or terminate that lease,
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to sell or re-lease that aircraft free and clear of our rights, except as set
forth in that lease, and retain the proceeds, and to require us to pay, as
liquidated damages, any due and unpaid basic rent plus an amount, at the owner
trustee's (or, subject to the terms of the relevant leased aircraft indenture,
the loan trustee's) option, set forth below:
Alternative Amount of Payment Amount upon a Lease Event of Default
(1) the excess of the present value of all unpaid rent during the
remainder of the term of the related lease over the present value of
the fair market rental value of the aircraft for the remainder of the
term of the related lease; or
(2) the excess of the stipulated loss value of the aircraft subject to
that lease over the fair market sales value of that aircraft or, if
that aircraft has been sold, the net sales proceeds from the sale of
that aircraft. (Leases, Section 15; Leased Aircraft Indentures,
Section 4.04)
Remedies under the owned aircraft indentures are discussed above under
"--Remedies".
Transfer of Owner Participant Interests
Subject to some restrictions, each owner participant may transfer all or
any part of its interest in the related leased aircraft. (Participation
Agreements, Section 10.1.1)
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U.S. FEDERAL INCOME TAX CONSEQUENCES
EXCHANGE OF OUTSTANDING CERTIFICATES FOR NEW CERTIFICATES
The following summary describes the material U.S. federal income tax
consequences to certificateholders of the exchange of outstanding certificates
for new certificates. This summary is addressed to beneficial owners of
certificates that are citizens or residents of the United States, corporations,
partnerships or other entities created or organized in or under the laws of the
United States or any state therein, estates the income of which is subject to
U.S. federal income taxation regardless of its source, and trusts that meet the
following two tests: (a) a court in the United States is able to exercise
primary supervision over the administration of the trust and (b) one or more
U.S. persons have authority to control all substantial decisions of the trust
("U.S. Persons"), that will hold the certificates as capital assets.
The exchange of outstanding certificates for new certificates in the
exchange offer will not be a taxable event for U.S. federal income tax purposes.
The receipt of certificates in the exchange offer will be treated as a
continuation of the original investment in the certificates. As a result, a
holder whose outstanding certificate is accepted in the exchange offer will not
recognize gain or loss on the exchange. A tendering holder's tax basis in the
new certificates will be the same as the holder's tax basis in its outstanding
certificates. A tendering holder's holding period for the new certificates
received in the exchange offer will include its holding period for the
outstanding certificates surrendered.
THE FOREGOING SUMMARY OF THE MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES
OF AN EXCHANGE OF OUTSTANDING CERTIFICATES FOR NEW CERTIFICATES IS ADDRESSED TO
BENEFICIAL OWNERS OF CERTIFICATES WHO ARE U.S. PERSONS THAT WILL HOLD
CERTIFICATES AS CAPITAL ASSETS. IT IS NOT INTENDED TO BE INDIVIDUAL TAX ADVICE.
ACCORDINGLY, ALL HOLDERS OF OUTSTANDING CERTIFICATES ARE ADVISED TO CONSULT
THEIR OWN TAX ADVISORS REGARDING THE U.S. FEDERAL, STATE AND LOCAL TAX
CONSEQUENCES OF THE EXCHANGE OF OUTSTANDING CERTIFICATES FOR NEW CERTIFICATE AND
OF THE OWNERSHIP AND DISPOSITION OF NEW CERTIFICATES RECEIVED IN THE EXCHANGE
OFFER IN LIGHT OF THEIR OWN INDIVIDUAL AND PARTICULAR CIRCUMSTANCES.
ERISA CONSIDERATIONS
In general, employee benefit plans subject to Title I of the Employee
Retirement Income Security Act of 1974, or ERISA, or Section 4975 of the
Internal Revenue Code of 1986 or entities which may be deemed to hold the assets
of any ERISA plan will not be eligible to purchase the certificates, unless
certain conditions apply and subject to the circumstances applicable to those
ERISA plans.
A fiduciary of an employee benefit plan subject to ERISA should consider
fiduciary standards under ERISA in the context of the particular circumstances
of that plan before authorizing an investment in the certificates. The fiduciary
should determine whether the investment satisfies ERISA's diversification and
prudence requirements and whether the investment is in accordance with the
documents and instruments governing the plan. In addition, ERISA and the
Internal Revenue Code prohibit a wide range of transactions involving an
employee benefit plan subject to ERISA and/or Section 4975 of the Internal
Revenue Code and persons who have specified relationships to the ERISA Plan.
These are referred to as "parties in interest" within the meaning of ERISA and
"disqualified persons" within the meaning of the Internal Revenue Code. These
prohibited transactions may require "correction" and may cause an ERISA plan
fiduciary to incur liabilities and the parties in interest or disqualified
persons to be subject to excise taxes.
Each of the owner participants, the manufacturers of the aircraft, the
holders of the equipment notes, the initial purchasers of the outstanding
certificates, the escrow agent, the depositary, the liquidity provider, the
policy provider and America West may be a party in interest or a disqualified
person with respect to an ERISA plan purchasing the certificates. Therefore, the
purchase by an ERISA plan of the certificates may give rise to a direct or
indirect prohibited transaction. Any person who is, or who in acquiring the
certificates is or may be using the assets of, an ERISA plan may purchase the
certificates, if that person determines that a statutory or an administrative
exemption from the prohibited transaction rules discussed
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below or otherwise available is applicable to their purchase and holding of the
certificates (or a participation interest therein).
Some statutory or administrative exemptions from the prohibited transaction
rules under ERISA and the Internal Revenue Code may be available to an ERISA
plan which is purchasing the certificates. Included among these exemptions are:
PTCE 90-1, regarding investments by insurance company pooled separate accounts;
PTCE 91-38, regarding investments by bank collective investment funds; PTCE
84-14, regarding transactions effected by a qualified professional asset
manager; PTCE 95-60, regarding investments by insurance company general accounts
or PTCE 96-23, regarding investments by an in-house professional asset manager.
Certain of the exemptions, however, do not afford relief from the prohibited
transaction rules under Section 406(b) of ERISA and Section 4975 (c)(I)(E)-(F)
of the Internal Revenue Code. In addition, there can be no assurance that any of
these administrative exemptions will be available with respect to any particular
transaction involving the certificates.
The Department of Labor, or DOL, has issued individual administrative
exemptions to certain underwriters which are substantially the same as the
administrative exemption issued to Morgan Stanley & Co. Incorporated (Prohibited
Transaction Exemption 90-24 et al., Exemption Application NO. D-8019 et al, 55
Fed. Reg. 20,548 (1990). This underwriter exemption generally exempts from the
prohibited transaction rules the initial purchase, the holding and the
subsequent resale by an ERISA plan of certificates in certain pass through
trusts, the assets of which pass through trust consist of secured credit
instruments that bear interest or are purchased at a discount in transactions by
or between business entities (including qualified equipment trust certificates
secured by leases). The limited relief provided by the DOL in the underwriter
exemption is subject to several other conditions, including a requirement that
certificates acquired by an ERISA plan under the underwriter exemption have
received a rating at the time of acquisition by the ERISA plan that is in one of
the three highest rating categories from either Standard & Poor's or Moody's.
Under the underwriter exemption, an equipment trust certificate secured by a
lease will be considered qualified only under certain circumstances. The
underwriter exemption also requires that the acquisition of certificates by an
ERISA plan be on terms (including the price for the certificate) that are at
least as favorable to an ERISA plan as they would be in an arm's-length
transaction with an unrelated party, and that the rights and interests evidenced
by the certificates must not be subordinated to the rights and interests
evidenced by other certificates of the same trust estate.
With respect to the investment restrictions set forth in the underwriter
exemption, an investment in a certificate will evidence both an interest in the
respective original trust as well as an interest in the deposits held in escrow
by an escrow agent for the benefit of the certificateholder. Under the terms of
the escrow agreement, the proceeds from the offering of the certificates of each
class will be paid over by the initial purchasers of the outstanding
certificates to the depositary on behalf of the escrow agent (for the benefit of
such certificateholders as the holders of the escrow receipts) and will not
constitute property of the original trusts. Under the terms of each escrow
agreement, the escrow agent will be irrevocably instructed to enter into the
deposit agreements with the depositary and to effect withdrawals upon the
receipt of appropriate notice from the relevant trustee so as to enable the
trustee to purchase the identified equipment notes on the terms and conditions
set forth in the note purchase agreement. Interest on the deposits relating to
each trust will be paid to the certificateholders of that trust as holders of
escrow receipts through a paying agent appointed by the escrow agent. Pending
satisfaction of the conditions and withdrawal of these deposits, the escrow
agent's rights with respect to the deposits will remain plan assets subject to
the fiduciary responsibility and prohibited transaction provisions of ERISA and
the prohibited transaction rules.
The DOL has issued an amendment to the underwriter exemption, 62 FR 39,021
(July 21, 1997), which allows the assets of a pass through trust to include a
prefunding account under certain circumstances. The relief provided by this
amendment is subject to several conditions, including a requirement that the
prefunding period end no later than the earliest to occur of: (1) the date the
amount on deposit in the prefunding account is less than the minimum dollar
amount specified in the pooling and servicing agreement; (2) the date on which
an event of default occurs under the pooling and servicing agreement; or (3) the
date which is the later of three months or 90 days after the closing date. Such
105.
<PAGE> 107
restrictions on prefunding accounts may not be applicable in certain
circumstances where, although certain of the equipment securing equipment trust
certificates held by the trust have not been delivered on the date of the
issuance of such equipment trust certificates, such equipment trust certificates
otherwise constitute, at the time an ERISA plan acquires the pass through
certificates, secured credit instruments that bear interest. However, there can
be no assurance that the DOL would agree that the prefunding restrictions would
not apply in such a case. Moreover, even if such restrictions would not apply,
no monitoring or other measures will be taken to ensure that all of the
conditions of the underwriter exemption, as amended, will be satisfied.
It is clear that the underwriter exemption will not apply to subordinated
classes of certificates, such as the Class C certificates or the Class D
certificates. It also appears that the underwriter exemption will not apply to
the purchase by Class C certificateholders or Class D certificateholders of
Class G certificates in connection with the exercise of their rights upon the
occurrence and during the continuance of a Triggering Event. In addition, for
the reasons noted above, no assurance can be given that the underwriter
exemption will otherwise apply with respect to any particular transaction
involving the Class G certificates or the assets of the Class G trust.
If an ERISA plan acquires a certificate, the ERISA plan's assets may
include both the certificate acquired and an undivided interest in the
underlying assets of the trust, unless the actual investment by "benefit plan
investors" in the certificates is not "significant" within the meaning of the
DOL plan assets regulations. Consequently, the trust assets could be deemed to
be "plan assets" of such ERISA plan for purposes of the fiduciary responsibility
provisions of ERISA and the prohibited transaction rules. Any person who
exercises any authority or control with respect to the management or disposition
of the assets of an ERISA plan is considered to be a fiduciary of that ERISA
plan. The trustee could, therefore, become a fiduciary of ERISA plans that have
invested in the certificates and be subject to general fiduciary requirements of
ERISA in exercising its authority with respect to the management of the assets
of the trust. If the trustee becomes a fiduciary with respect to the ERISA plans
purchasing the certificates, there may be an improper delegation by such ERISA
plans of the responsibility to manage plan assets. In order to avoid such
prohibited transactions, each investing ERISA plan, by purchasing that
certificates, will be deemed to have directed the trust to invest in the assets
held in such trust. Any ERISA plan purchasing the certificates must ensure that
any statutory or administrative exemption from the prohibited transaction rules
on which the ERISA plan relies with respect to its purchase or holding of the
certificates also applies to the ERISA plan's indirect holding of the assets of
the trust.
Governmental plans and certain church plans (each as defined under ERISA)
are not subject to the prohibited transaction rules. These plans may, however,
be subject to federal, state or local laws or regulations which may affect their
investment in the certificates. Any fiduciary of a governmental or church plan
considering a purchase of the certificates must determine the need for, and the
availability, if necessary, of any exemptive relief under any such laws or
regulations.
The foregoing discussion is general in nature and is not intended to be all
inclusive. Any fiduciary of an ERISA plan, governmental plan or church plan
considering the purchase and holding of the certificates should consult with its
legal advisors regarding the consequences of such purchase and holding. By its
purchase and acceptance of a certificate, each certificateholder will be deemed
to have represented and warranted that either (i) no ERISA plan assets have been
used to purchase the certificate, or (ii) one or more prohibited transaction
statutory or administrative exemptions applies such that the use of such ERISA
plan assets to purchase and hold the certificate will not constitute a
non-exempt prohibited transaction.
EACH ERISA PLAN FIDUCIARY (AND EACH FIDUCIARY FOR A GOVERNMENTAL OR CHURCH
PLAN SUBJECT TO RULES SIMILAR TO THOSE IMPOSED ON ERISA PLANS UNDER ERISA)
SHOULD CONSULT WITH ITS LEGAL ADVISOR CONCERNING AN INVESTMENT IN ANY OF THE
CERTIFICATES.
106.
<PAGE> 108
PLAN OF DISTRIBUTION
Each broker-dealer that receives new certificates for its own account in
the exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of the new certificates. This prospectus, as it may
be amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of new certificates received in exchange for outstanding
certificates where the outstanding certificates were acquired as a result of
market-making activities or other trading activities. We have agreed that we
will make this prospectus, as amended or supplemented, available to any broker-
dealer for use in connection with any such resale. In addition, until that date
all broker-dealers effecting transactions in the new certificates may be
required to deliver a prospectus.
We will not receive any proceeds from any sale of new certificates by
broker-dealers. New certificates received by broker-dealers for their own
account in the exchange offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the new certificates or a combination of such methods
of resale, at market prices prevailing at the time of resale, at prices related
to such prevailing market prices or negotiated prices. Any such resale may be
made directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such new certificates. Any
broker-dealer that resells new certificates that were received by it for its own
account in the exchange offer and any broker or dealer that participates in a
distribution of such new certificates may be deemed to be an "underwriter"
within the meaning of the Securities Act of 1933. Any profit of any resale of
new certificates and any commissions or concessions received by any such persons
may be deemed to be underwriting compensation under the Securities Act of 1933.
The letter of transmittal states that by acknowledging that it will deliver and
by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act of 1933.
Starting on the date the exchange offer expires, we will promptly send
additional copies of this prospectus and any amendment or supplement to this
prospectus to any broker-dealer that requests such documents in the letter of
transmittal. We have agreed to pay all expenses incident to the exchange offer
other than commissions or concessions of any brokers or dealers, fees of counsel
to the holders and certain transfer taxes. We will indemnify the holders of the
new certificates (including any broker-dealers) against certain liabilities,
including liabilities under the Securities Act of 1933.
107.
<PAGE> 109
LEGAL MATTERS
The validity of the new certificates is being passed upon for America West
by Vedder, Price, Kaufman & Kammholz, special counsel for America West.
EXPERTS
The financial statements and financial statement schedule of America West
Airlines, Inc. as of December 31, 1998 and 1997, and for each of the years in
the three-year period ended December 31, 1998, have been incorporated by
reference herein and in the registration statement in reliance upon the report
of KPMG LLP, independent certified public accountants, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.
The references to AvSolutions, AVITAS and MBA, and to their respective
appraisal reports, dated as of July 6, 1999, June 10, 1999, and July 13, 1999,
respectively, are included in reliance upon the authority of each firm as an
expert with respect to the matters contained in its appraisal report.
108.
<PAGE> 110
APPENDIX I-INDEX OF TERMS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Adjusted Expected Distributions....... 79
Administration Expenses............... 78
Aggregate LTV Collateral Amount....... 79
Appraised Current Market Value........ 80
Average Life Date..................... 88
Base Rate............................. 68
Controlling Party..................... 18
Current Distribution Date............. 77
delivery period termination date...... 61
Deposit Make-Whole Premium............ 62
Downgrade Drawing..................... 65
Early Purchase Option................. 101
Election Distribution Date............ 71
Event of Loss......................... 100
Excess Reimbursement Obligations...... 77
Expected Distributions................ 77
Final Distributions................... 75
Final Drawing......................... 67
final legal distribution date......... 16
Indenture Default..................... 47
Interest Drawings..................... 15
Lease Event of Default................ 47
Liquidity Event of Default............ 68
Liquidity Expenses.................... 76
Liquidity Obligations................. 77
LTV Appraisal......................... 80
LTV Collateral Amount................. 79
LTV Ratio............................. 80
Make-Whole Premium.................... 87
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Mandatory Document Terms.............. 57
Mandatory Economic Terms.............. 56
Maximum Principal Amount of Equipment
Notes............................... 83
Maximum Available Commitment.......... 64
Minimum Sale Price.................... 76
Non-Extension Drawing................. 66
Non-Performing Equipment Note......... 80
Non-Premium Amount.................... 61
Order................................. 73
owner participant..................... 9
Par Redemption Amount................. 61
Performing Equipment Note............. 65
Policy Business Day................... 73
Policy Drawing........................ 77
Policy Expenses....................... 76
Policy Provider Default............... 75
Policy Provider Election.............. 71
Policy Provider Obligations........... 77
pool balance.......................... 45
pool factor........................... 45
Preference Amount..................... 73
PTC Event of Default.................. 50
Remaining Weighted Average Life....... 88
replacement facility.................. 66
Required Amount....................... 64
Special Structure..................... 56
Threshold Rating...................... 66
Triggering Event...................... 15
</TABLE>
A-I-1
<PAGE> 111
APPENDIX II--APPRAISAL LETTERS
A-II-1
<PAGE> 112
[AVITAS LETTERHEAD]
AMERICA WEST AIRLINES
JUNE 20, 1999
INTRODUCTION
AVITAS, Inc. has been retained by America West Airlines (the "Client") to
provide its opinion as to the Base Value for five Airbus A319-100 and five
A320-200 aircraft. The subject aircraft are identified and their values are set
forth in Figure 1 in this report.
The values presented in this report assume that this aircraft will be in
new, "flyaway" condition and fully certificated for commercial operations. We
have further assumed that the subject aircraft will be operated under the air
transport regulations of a major nation.
The values presented in this report do not take into consideration fleet
sales, attached leases, tax considerations or other factors that might be
considered in structuring the terms and conditions of a specific transaction.
These factors do not directly affect the value of the aircraft itself but can
affect the economics of the transaction. Therefore, the negotiated striking
price in an aircraft transaction may take into consideration factors such as the
present value of the future lease stream, the terms and conditions of the
specific lease agreement and the impact of tax considerations.
DEFINITIONS
AVITAS's value definitions conform to those of the International Society of
Transport Aircraft Trading ("ISTAT") adopted in January 1994, and are summarized
as follows:
- BASE VALUE is the appraiser's opinion of the underlying economic value of
an aircraft in an open, unrestricted, stable market environment with a
reasonable balance of supply and demand, and assumes full consideration
of its "highest and best use." An aircraft's Base Value is founded in the
historical trend of values and in the projection of value trends and
presumes an arm's-length, cash transaction between willing and
knowledgeable parties, acting prudently, with an absence of duress and
with a reasonable period of time for marketing. Base Value typically
assumes that an aircraft's physical condition is average for an aircraft
of its type and age, and its maintenance time status is at mid-life,
mid-time (or benefiting from an above-average maintenance status if it is
new or nearly new).
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<PAGE> 113
[AVITAS GRAPHIC]
AIRCRAFT VALUE
AVITAS's opinion as to the value of the subject aircraft is presented below
in millions of U.S. dollars.
The Base Value of a new aircraft is the modal price paid by an average
operator in a single unit or small lot sale. Actual transaction prices may be
either above or below that level due to a number of factors. For example, a
launch order or a large fleet order may result in discounts, whereas a single
unit sale to a small operator who needs a substantial amount of support may be
approaching the list price.
Furthermore, implicit in these values is AVITAS's assumption that the new
aircraft will remain with the original operator for at least two years. If a
newly delivered aircraft comes onto the market, the seller is at an immediate
disadvantage as he is likely to be in competition with the manufacturer who can
offer training and support.
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<PAGE> 114
FIGURE 1
<TABLE>
<CAPTION>
<C> <C> <C> <S> <C>
- ---------------------------------------------------------------------------------------------
AMERICA WEST AIRLINES
AIRCRAFT VALUES
(US$ MILLIONS)
- ---------------------------------------------------------------------------------------------
DELIVERY BASE
REG. NO. TYPE ENGINES DATE VALUE
- ---------------------------------------------------------------------------------------------
N807AW A319-100 V2524-A5 Aug-99 $35.2
- ---------------------------------------------------------------------------------------------
N808AW A319-100 V2524-A5 Sep-99 35.2
- ---------------------------------------------------------------------------------------------
N809AW A319-100 V2524-A5 Oct-99 35.3
- ---------------------------------------------------------------------------------------------
N810AW A319-100 V2524-A5 Nov-99 35.3
- ---------------------------------------------------------------------------------------------
N811AW A319-100 V2524-A5 Feb-00 36.0
- ---------------------------------------------------------------------------------------------
N654AW A320-200 V2527-A5 Aug-99 43.5
- ---------------------------------------------------------------------------------------------
N655AW A320-200 V2527-A5 Sep-99 43.5
- ---------------------------------------------------------------------------------------------
N656AW A320-200 V2527-A5 Oct-99 43.7
- ---------------------------------------------------------------------------------------------
N657AW A320-200 V2527-A5 Oct-99 43.7
- ---------------------------------------------------------------------------------------------
N658AW A320-200 V2527-A5 Feb-00 44.5
- ---------------------------------------------------------------------------------------------
</TABLE>
GENERAL MARKET OVERVIEW
INTRODUCTION
AVITAS believes that the aircraft market is poised to experience a downturn
in the market cycle. While these economic changes tend to precipitate a feeling
of panic in the industry, it is important to note that the cycle presents an
opportunity to invest soundly for those who have the proper resources and
confidence.
Orders are believed to have reached their peak in 1998. Lagging behind
slightly are deliveries, which in 1999 are scheduled to be over 1,200. Aircraft
deferrals notwithstanding, 1999 will represent the peak for deliveries in this
cycle. In comparison, approximately 933 aircraft were delivered in 1998 and 650
in 1997.
Competition between Airbus and Boeing has kept the cost of new aircraft at
a comfortable level and low inflation has been beneficial to the financing of
large deals. The changing structure of Airbus will continue to affect pricing by
bringing market competition to the foreground. U.S. airlines experienced their
best financial year ever in 1998 due to strong domestic demand and healthy
fares. They shared their wealth by ordering large numbers of narrowbodies.
Margin over market share appears to be the new strategy as carriers take
advantage of low fuel prices and restructure to lower their operating costs.
BACKGROUND--AIRBUS A319
The A319 program was launched in June 1993 and the first aircraft of the
type was certified in April 1996. The aircraft seats 124 passengers in a typical
two-class configuration or 154 in a maximum seating configuration. It has a
basic range of 2,000 nautical miles with a MTOW of 141,100 pounds and an
optional range of 3,500 nautical miles with a MTOW of 149,900 pounds. The A319
has a fuselage 12 feet shorter than that of the A320, accomplished by removing
two fuselage plugs.
The design of this new aircraft is focused on maintaining a high degree of
commonality with the A320 and the A321 so that an existing A319 operator could
easily transition to its larger versions, where almost all of the major systems
of the A319 are exactly the same.
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<PAGE> 115
The A319 is available with either CFM56-5A or IAE V2500-A5 engine and meets
the noise abatement requirements outlined in U.S. FAR Part 36, Stage 3, and ICAO
Annex 16, Chapter 3 regulations.
CURRENT MARKET--AIRBUS A319-100
CURRENT MARKET
AVITAS believes that A319 current market is firm, representative of the
narrowbody market as a whole. The aircraft type has a solid operator base and
backlog and the benefit of commonality with other Airbus products. Airbus has
during the last year captured some strategically important orders from formerly
Boeing loyal airlines and lessors. The A319 competes with the Boeing 737-300 and
- -700 aircraft, of which there are currently a combined 1,187 aircraft in service
and 292 on firm order.
HISTORIC MARKET DEVELOPMENT
The development of the A319, A320, and A321 characterizes the market
strategy of Airbus to build an entire family of aircraft capable of
accommodating a wide range of travel demands while maintaining a high degree of
commonality. Operators that have a mixed fleet of A319, A320s and A321s will a
have greater ability to match capacity to demand, reduce operating cost,
increase crew productivity and simplify ground handling. This is shown by the
fact that all but one current operator of A319 aircraft or with A319 aircraft on
order are present A320 customers.
AVAILABILITY
As of May 1999, AVITAS is not aware of any used aircraft available. This is
in line with expectations for such a new aircraft program.
CURRENT OPERATOR BASE AND BACKLOG
As of April there were 140 A319-100 aircraft in service and 404 on firm
order.
OUTLOOK AND FUTURE ASSET RISK ANALYSIS
It is AVITAS's opinion that expansion of the A319's operator base will
primarily come from existing A320 operators. Of minor concern is the trend
surfacing in recent orders whereby the orderholders have likely ordered the
aircraft with the flexibility to convert to A320 or A321 aircraft; however, the
strength of the A320 family of aircraft in the market has overall positive
implications for the A319. With a backlog of 404 firm orders among 17 airline
operators and four leasing companies and acceptance in the North American
market, the A319 values should remain firm for the foreseeable future.
BACKGROUND--AIRBUS A320 SERIES
The A320, a Stage 3 compliant short to medium range twin-engine jetliner,
was launched in 1984 with certification in 1988. The original was the A320-100,
of which there are only 18 in service among two airline operators. The -100
aircraft have no wing center tank which limits the range and payload.
The A320-200 was first flown and delivered in 1988 to Air France and
British Caledonian Airways. Its typical configuration includes a two-person
cockpit crew with capacity for 150 passengers but the aircraft can seat 164 in a
single-class arrangement. The A320 has a range of 3,000 nautical miles with 150
passengers. It is powered by CFM56-5A1/-5A3, V2500-A1/A5 and V2527-A5 engines,
with thrust ranging from 25,000 pounds to 26,500 pounds. The maximum takeoff
weight (MTOW) ranges from 162,000 pounds to 169,750 pounds. A technically
advanced aircraft, the A320 includes such design concepts as fly-by-wire flight
controls, centralized maintenance reporting system, side stick controllers in
the cockpit and the use of composite materials in the major elements of primary
structures including the horizontal and vertical stabilizers.
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<PAGE> 116
The A320 has a common type rating with the A319 and the A321, which means
that they can be operated as one aircraft type with cost saving advantages in
crew training and maintenance procedures.
CURRENT MARKET--AIRBUS A320-200
CURRENT MARKET
AVITAS is of the opinion that the current market for the Airbus A320 series
aircraft is firm. This is evidenced by a low level of availability and high
demand for the type, which AVITAS attributes to a strong Stage 3 narrowbody
aircraft market. Airbus has enjoyed a great deal of success in 1998 with the
A320 aircraft and has received several large and strategically important orders
from traditional Boeing customers. In addition, the Asian crisis has left this
family of aircraft largely unscathed, as only a handful A320 orders have been
canceled.
HISTORIC MARKET DEVELOPMENT
The A320 market was very soft during the early 1990s with an excess supply
of new aircraft being delivered into a depressed market. This was caused not
only by bankruptcies of several carriers with A320s on order, but also by the
speculative buying of A320s by leasing companies. Additionally, Airbus had to
take on Boeing, which already had an established market base for its 737
product. During 1994 and 1995, the market for the aircraft firmed substantially
and has since then remained stable.
AVAILABILITY
As of May 1999, AVITAS is aware of one A320-200s available for ACMI lease
from Interscaldes Management. Availability for A320 aircraft has been
consistently low for several months. In May 1998, there were 18 A320-200 on the
market.
OPERATOR BASE AND BACKLOG
As of April 1999, there were 710 aircraft in service and 351 on firm order.
The operator base is significant with 87 airlines, and major leasing companies
having 97 firm orders.
OUTLOOK AND FUTURE ASSET RISK ANALYSIS
AVITAS believes that the A320-200 will continue to be a significant
competitor in the 150-seat market well into the future with competition from
Boeing 737-400 and the 737-800. The A320 has more range than the 737-400 and
slightly higher seat capacity. The 737-800 has approximately the same range
(3,000 nautical miles) but 12 more seats than the A320 (exact number of seats
depends on seat configuration).
The A320-200 has a well-established population of aircraft currently in
service among a broad operator base. This coupled with the 351 aircraft on firm
order scheduled for delivery throughout the year 2006 indicates the future
market base for the type is due to expand significantly and residual values will
remain firm.
Pratt & Whitney is developing the PW 8000 engine for a new generation A320,
which may enter service in 2005. With the introduction of the PW 8000, the
engine manufacturer hopes to reduce maintenance costs, and lower fuel
consumption. This will improve an already technologically advanced aircraft.
COVENANTS
Unless otherwise noted, the values presented in this report assume an
arm's-length, free market transaction for cash between informed, willing and
able parties free of any duress to complete the transaction. If a distress sale
becomes necessary, a substantial discount may be required to quickly dispose of
the equipment.
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<PAGE> 117
AVITAS does not have, and does not intend to have, any financial or other
interest in the subject aircraft. Further, this report is prepared for the
exclusive use of the Client and shall not be provided to other parties without
the express consent of the Client.
This report represents the opinion of AVITAS and is intended to be advisory
only in nature. Therefore, AVITAS assumes no responsibility or legal liability
for any action taken, or not taken, by the Client or any other party, with
regard to this equipment. By accepting this report, all parties agree that
AVITAS shall bear no such responsibility or legal liability including liability
for special or consequential damage.
STATEMENT OF INDEPENDENCE
AVITAS hereby states that this valuation report has been independently
prepared and fairly represents AVITAS's opinion of the subject aircraft's value.
/s/ SUSANNA BLACKMAN
- ---------------------------------------------------------
Susanna Blackman
Manager--Appraisal Operations
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<PAGE> 118
APPENDIX A--AVITAS APPRAISAL METHODOLOGY
At AVITAS, we undertake formal periodic value reviews of the approximately
ten dozen aircraft types that we regularly track as well as value updates as
market events and movements require. The primary value opinions we develop are
Market Value, Base Value and Future Base Value. An aircraft's Market Value is
the price at which you could sell the aircraft under the market conditions
prevailing at the time in question and its Base Value is the theoretical value
of the aircraft assuming a balanced market in terms of supply and demand. In
reaching our value opinions, we use data on actual market transactions, various
analytical techniques, a proprietary forecasting model and our own extensive
industry experience. And while Market Value and Base Value embody different
value concepts, we are continually cross checking their relationships to
determine if our value opinions are reasonable given existing market conditions.
Our broad aviation industry backgrounds are critically important; they add
a diversity of viewpoints and a high degree of realism to our value opinions.
Our backgrounds include: aircraft design, performance analysis, traffic and
yield forecasting, fleet forecasting, aircraft finance, the negotiation of
aircraft loans, finance leases and operating leases, problem deal workouts,
repossessions, aircraft sales, jetliner manufacturing, maintenance and overhaul
activities, econometric modeling and forecasting, market research, and database
development.
- MARKET VALUE In determining Current Market Values, we use a blend of
techniques and tools. First, through various services and our extensive
personal contacts, we collect as much actual transaction data as
possible on aircraft sales, leases, financings and scrappings. Our
published values assume airframes, engines and landing gear to be
halfway through their various overhaul and/or life cycles. Because sales
of half-life aircraft rarely occur, and because sales can include spare
engines, parts, attached lease streams, tax considerations and other
factors, judgment and experience are important in adjusting actual
transaction data to represent clean, half-life Market Values. In
addition, because over the last several years there have been a large
number of aircraft leases, our experience and knowledge of the market is
used to make value inferences from lease rentals and terms.
As a supplement to transaction data, and in some cases in the absence of
actual market activity, we also use other methods to assist in framing Market
Value opinions. We use several analytical tools because we do not believe that
there is any one technique which always results in the "right" number.
Replacement cost analysis can simply be the cost of a new airplane of the same
model or it can be used where it is possible to reproduce an aircraft. It is
often helpful in framing the upper limit of an aircraft's value, particularly
for modified or upgraded aircraft. Examples would be a passenger aircraft such
as the 747-100 which can be converted into freighter configuration or a Stage 2
airplane which can be hushkitted to Stage 3 compliance. Value in use or income
analysis is another technique in which an aircraft's earning capacity over time
is determined and the present value of those earnings is calculated. Because
different operators have different costs, yields and hurdle rates of return,
this technique can yield a range of values. Therefore, the appraiser must use
his judgment to determine what value in that range represents a Market Value
representative of the overall marketplace. Another powerful tool which we use is
should-cost analysis, which is a blend of replacement cost and value in use
analysis. This technique is used when there is little or no market data on a
particular airplane type but there is on similar or competing types. By
analyzing the economic and operational profiles of competing aircraft, the
appraiser is able to impute what the aircraft in question should cost to
position it competitively.
Once we have formulated our own internal Market Value opinions, we present
them to a small, select group of outside aviation experts--individuals in the
fields of aircraft manufacturing, sales, remarketing, financing and forecasting
who we know well and regard very highly--for their review and frank comments. We
consider this "reality check," which often results in further value refinements,
to be a critical part of our value process in that it helps us combat "ivory
tower syndrome."
- BASE VALUE The determination of Base Value, an aircraft's balanced
market, long term value, is a highly subjective matter, one in which
even the most skilled appraisers may have widely
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<PAGE> 119
divergent views. We use three main tools in developing Base Values.
First, we use our own research, judgment and perceptions of each
aircraft type's long term competitive strengths and weaknesses vis-a-vis
both competing aircraft types and the marketplace as a whole. Second, we
utilize a transaction-based computer forecasting model developed by a
former AVITAS director and refined over the years. Based on thousands of
actual market transactions, the model sets forth a series of value
curves which describe the value behaviors of aircraft under different
circumstances. Third, we do a final reality check by comparing our
opinion of an aircraft's Base Value to our opinion of its Current Market
Value and current marketplace conditions.
We analyze each aircraft model to determine its historic, current and
projected competitive position with respect to similar aircraft types in terms
of mission capability (i.e., what are the aircraft's capabilities and to what
extent does the market require those capabilities), economic profile and market
penetration. As a result of weighing those factors, we assign a numerical
"strength" to each aircraft for each year of its economic life, where Strength
10 represents the strongest value performance and Strength 1 the weakest. The
model then takes those strength factors and translates them into the aircraft's
Base and Future Base Values based on its actual replacement cost (or theoretical
replacement cost if it is no longer in production). After Base Values have been
calculated, we compare them to our Current Market Value opinions as a
calibration check of the computer model. In the infrequent case where the
marketplace for that aircraft is in balance, Base Value and Current Market Value
should be the same. In most cases, though, we must subjectively compare Base
Value with Current Market Value to see if we believe the relationship is
reasonable. This may highlight where Base Value inputs require further
refinements. Because of the dynamics of the aircraft marketplace and our
continuing recalibration, Base Value opinions are not static.
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[AVSOLUTIONS LETTERHEAD]
July 6, 1999
Mr. Doug Parker
Executive Vice President
America West Airlines
4000 East Sky Harbor Boulevard
Phoenix, Arizona 85034
Dear Mr. Parker:
Aviation Solutions Inc. (AvSOLUTIONS) is pleased to provide this opinion on
the base value, as of July 1999, of five Airbus Industrie A319-100 aircraft and
five Airbus Industrie A320-200 aircraft (the aircraft). The Airbus A319-100
aircraft are powered by IAE V2524-A5 engines. The Airbus A320-200 aircraft are
powered by IAE V2527-A5 engines. The total of ten aircraft will be delivered new
to America West Airlines between the third quarter of 1999 and the first quarter
of 2000. A listing of the A319-100 and A320-200 aircraft is provided as
attachment 1 of this document.
Set forth below is a summary of the methodology, considerations and
assumptions utilized in this appraisal.
BASE VALUE
Base value is the appraiser's opinion of the underlying economic value of
an aircraft in an open, unrestricted, stable market environment with a
reasonable balance of supply and demand, and assumes full consideration of its
"highest and best use". An aircraft's base value is founded in the historical
trend of values and in the projection of future value trends and presumes an
arm's length, cash transaction between willing, able and knowledgeable parties,
acting prudently, with an absence of duress and with a reasonable period of time
available for marketing.
CURRENT FAIR MARKET VALUE
According to the International Society of Transport Aircraft Trading's
(ISTAT) definition of Fair Market Value (FMV), to which AvSOLUTIONS subscribes,
the quoted FMV is the appraiser's opinion of the most likely trading price that
may be generated for an aircraft under the market circumstances that are
perceived to exist at the time in question. The fair market value assumes that
the aircraft is valued for its highest and best use, that the parties to the
hypothetical sales transaction are willing, able, prudent and knowledgeable, and
under no unusual pressure for a prompt sale, and that the transaction would be
negotiated in an open and unrestricted market on an arm's length basis, for cash
equivalent consideration, and given an adequate amount of time for effective
market exposure to prospective buyers, which AvSOLUTIONS considers to be ten to
twenty months.
APPRAISAL METHODOLOGY
The method employed by AvSOLUTIONS to appraise the current and future
values of aircraft and the associated equipment addresses the factors that
influence the market value of an aircraft, such as its age, condition,
configuration, the population of similar aircraft, similar aircraft on the
market, operating costs, cost to acquire a new aircraft, and the state of demand
for transportation services.
To achieve this objective, cross-sectional data concerning the values of
aircraft in each of several general categories is collected and analyzed.
Cross-sectional data is then postulated and compared with reported market values
at a specified point in time. Such data reflect the effect of deterioration in
aircraft performance due to usage and exposure to the elements, as well as the
effect of obsolescence due to the evolutionary development and implementation of
new designs and materials.
<PAGE> 121
Page 2
America West Airlines
The product of the analysis identifies the relationship between the value
of each aircraft and its characteristics, such as age, model designation,
service configuration and engine type. Once the relationship is identified, one
can then postulate the effects of the difference between the economic
circumstances at the time when the cross-sectional data were collected and the
current situation. Therefore, if one can determine the current value of an
aircraft in one category, it is possible to estimate the current values of all
aircraft in that category.
The manufacturer and size of the aircraft usually determine the specific
category to which it is assigned. Segregating the world airplane fleet in this
manner accommodates the potential effects of different size and different design
philosophies.
The variability of the data used by AvSOLUTIONS to determine the current
and future market values implies that the actual value realized will fall within
a range of values. Therefore, if a contemplated value falls within the specified
confidence range, AvSOLUTIONS cannot reject the hypothesis that it is a
reasonable representation of the current market situation.
LIMITING CONDITIONS AND ASSUMPTIONS
In order to conduct this valuation, AvSOLUTIONS is solely relying on
information as supplied by America West Airlines and from data within
AvSOLUTIONS' own database. In determining the base value of the subject Airbus
A319-100 and Airbus A320-200 aircraft, the following assumptions have been
researched and determined:
1. AvSOLUTIONS has not inspected these aircraft or their maintenance
records; accordingly, AvSOLUTIONS cannot attest to their specific
location or condition.
2. The aircraft will be delivered new to America West Airlines between the
third quarter of 1999 and the first quarter of 2000.
3. The aircraft will be certified, maintained and operated under United
States Federal Aviation Regulation (FAR) part 121.
4. All mandatory inspections and Airworthiness Directives have been
complied with.
5. The aircraft have no damage history.
6. The aircraft are in good condition.
7. AvSOLUTIONS considers the economic useful life of these aircraft to be
at least 32 years.
Based upon the above methodology, considerations and assumptions, it is
AvSOLUTIONS' opinion that the base values of each aircraft are as listed in
attachment 1.
STATEMENT OF INDEPENDENCE
This appraisal report represents the opinion of AvSOLUTIONS, and is
intended to be advisory in nature. Therefore, AvSOLUTIONS assumes no
responsibility or legal liability for actions taken or not taken by the Client
or any other party with regard to the subject aircraft. By accepting this
report, the Client agrees that AvSOLUTIONS shall bear no responsibility or legal
liability regarding this report. Further, this report is prepared for the
exclusive use of the Client and shall not be provided to other parties without
the Client's express consent.
<PAGE> 122
Page 3
America West Airlines
AvSOLUTIONS hereby states that this valuation report has been independently
prepared and fairly represents the subject aircraft and AvSOLUTIONS' opinion of
their values. AvSOLUTIONS further states that it has no present or contemplated
future interest or association with the subject aircraft.
Signed,
/s/ BRYANT LYNCH
--------------------------------------
Bryant Lynch
Manager, Commercial Appraisals
<PAGE> 123
MORTEN BEYER & AGNEW
- --------------------------------------------------------------------------------
AVIATION CONSULTING FIRM
APPRAISAL OF
FIVE AIRBUS A319-132
AND
FIVE AIRBUS A320-231/-232 AIRCRAFT
PREPARED FOR:
AMERICA WEST AIRLINES
JULY 13, 1999
<TABLE>
<S> <C>
Washington, D.C. London
8180 Greensboro Drive Lahinch 62, Lashmere
Suite 1000 Copthorne
McLean, Virginia 22102 West Sussex
Phone +703 847 6598 Phone +44 1342 716248
Fax +703 847 1911 Fax +44 1342 718967
</TABLE>
<PAGE> 124
I. INTRODUCTION AND EXECUTIVE SUMMARY
Morten Beyer & Agnew (MBA) has been retained by America West Airlines to
determine the Base Values of five A319-132 and five Airbus A320-231/-232
passenger aircraft. The aircraft are further identified in Section II of this
report.
Based on the information set forth in this report, it is our opinion that
the aggregate Base Value of the aircraft in this portfolio is $415,850,000 with
their respective individual values noted in Section II.
MBA uses the definition of certain terms, such as Current Market Value and
Base Value, as promulgated by the Appraisal Program of International Society of
Transport Aircraft Trading (ISTAT), a non-profit association of management
personnel from banks, leasing companies, airlines, manufacturers, brokers, and
others who have a vested interest in the commercial aviation industry and
established a technical and ethical recognition as expert appraisers.
ISTAT defines Current Market Value (CMV) as the appraiser's opinion of the
most likely trading price that may be generated for an aircraft under market
conditions that are perceived to exist at the time in question. Market Value
(MV) assumes that the aircraft is valued for its highest, best use; that the
parties to the hypothetical sale transaction are willing, able, prudent and
knowledgeable and under no unusual pressure for a prompt sale; and that the
transaction would be negotiated in an open and unrestricted market on an
arm's-length basis, for cash or equivalent consideration, and given an adequate
amount of time for effective exposure to prospective buyers.
The ISTAT definition of Base Value (BV) states that market circumstances
are assumed to be in a reasonable state of equilibrium. Thus, BV pertains to an
idealized aircraft and market combination and will not necessarily reflect the
actual Current Market Value of the aircraft in question. BV is founded in the
historical trend of values and is generally used to analyze historical values or
to project future values.
II. AIRCRAFT & BASE VALUES
<TABLE>
<CAPTION>
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------
A319 & A320 AIRCRAFT
- ---------------------------------------------------------------------------------------
TAIL NUMBER DELIVERY DATE ENGINE TYPE BASE VALUES
- ---------------------------------------------------------------------------------------
807 (A319-132) August 1999 V2524-A5 $37,900,000
- ---------------------------------------------------------------------------------------
808 (A319-132) September 1999 V2524-A5 $38,040,000
- ---------------------------------------------------------------------------------------
809 (A319-132) October 1999 V2524-A5 $38,190,000
- ---------------------------------------------------------------------------------------
810 (A319-132) November 1999 V2524-A5 $38,330,000
- ---------------------------------------------------------------------------------------
811 (A319-132) February 2000 V2524-A5 $38,760,000
- ---------------------------------------------------------------------------------------
A319-132 TOTAL $191,370,000
- ---------------------------------------------------------------------------------------
654 (A320-231) August 1999 V2500-A1 $44,540,000
- ---------------------------------------------------------------------------------------
655 (A320-231) September 1999 V2500-A1 $44,720,000
- ---------------------------------------------------------------------------------------
656 (A320-232) October 1999 V2527-A5 $44,890,000
- ---------------------------------------------------------------------------------------
657 (A320-232) October 1999 V2527-A5 $44,890,000
- ---------------------------------------------------------------------------------------
658 (A320-232) February 2000 V2527-A5 $45,590,000
- ---------------------------------------------------------------------------------------
A320-232 TOTAL $224,630,000
- ---------------------------------------------------------------------------------------
GRAND TOTAL $415,850,000
- ---------------------------------------------------------------------------------------
</TABLE>
III. CURRENT MARKET CONDITIONS
A319--A320-200--A321-100/-200
The A320 was Airbus' first all new design since the launch of the original
A300 in 1971. The program was initiated in 1983 and logged almost 400 orders
prior to first delivery in 1988. The A320s are now
<PAGE> 125
offered with both the CFM-56 and the IAE V-2500 engine, with the CFM version
having a long head start. The A320 has achieved a wide market base on all
continents, with a total of 79 current operators to date.
The A321, a stretched version designed to directly challenge the 757-200
and bridge the gap between the A320 and A330/340, was launched in 1989. The
first deliveries were made to Lufthansa and Alitalia in early 1994. Seating in
the A321 was increased to 186 (and more in all-coach configurations) from a
nominal 150 in the A320 and the gross weight increased by 19,200 pounds.
The A319 is the opposite of the A321--that is, a truncated version of the
original aircraft. The program was officially launched with a modest
six-aircraft order by leasing giant ILFC in late 1992. Prospects were not
encouraging as more than one year went by before subsequent orders were placed.
However, Air Canada provided a major boost to Airbus with an order of 35 A319s
in April 1994 (35 now delivered). Ironically, the carrier had reportedly decided
against ordering new aircraft to replace its aging DC-9 fleet when Fokker
Aircraft convinced the carrier to re-examine the benefits of new airframes. ACA
Chairman Hollis Harris agreed, but Fokker lost the battle to its European
competitor.
The Northwest and Air Canada situations are significant due to the Airbus
family concept factor, (common type ratings and minimal differences training for
pilots of the A319 through A340 aircraft), which is the core of the
manufacturer's goal to develop entire fleets with major carriers. Air Canada,
which operates A320s already, chose this Airbus concept with both the A319 order
and an eight-plane A340 order as well. Northwest Airlines, which operates 65
A320s (and has 5 on order) ordered 50 A319s and switched their A340 order for 16
A330s for delivery beyond 2000. Other carriers, including Air France and
Lufthansa, operate at least three of these five types, but the European
influence may tilt decision-makers at airlines such as these. Airbus believes
its concept will give its new designs significant advantages over Boeing
aircraft, and the 1997 and 1998 order books indicate it is doing just that. MBA
believes the combination of extremely efficient designs and the inherent savings
in training and other costs make the Airbus family an attractive avenue for an
entire fleet refurbishment, as US Airways' commitment for 400-some aircraft
appears to justify.
United's 1994 order for 50 A320s, plus an option for 50 more was announced
as a 727 replacement, of which United still operates 52 and has 34 A320s on
order. It is obvious that other airlines will use their large orders to surplus
older aircraft as well. Alitalia, with 22 A321s in service and three on order,
is replacing its stable of MD-82s. As mentioned, Air Canada's commitments for
the A319 will eventually go to reduce the fleet count of DC-9s. Thus the advent
of the A320 family is hastening the retirement of older, far less efficient
jets. The A320s currently in service are operating at seat mile costs as low as
half of that for older aircraft. The combination of all the above factors leads
us to believe the A320 family will enjoy a long production run and in-service
useful life, with strong residual values.
The A320 also offers the advantage of being able to carry seven LD-3 cargo
containers--a feat not even the 767 can perform. The fuselage is approximately
10 inches wider than that of the 727/737/757 series, offering wider aisles and
roomier seats--a feature much appreciated by passengers. There are no cargo or
Combi models currently offered by Airbus, although such a configuration is
obviously possible
ECONOMICS
The A320/321 vies with the 757 for top honors as the most efficient
aircraft in service. Great fuel efficiency, new technology design and low
operating cost parameters all combine to give these aircraft among the lowest
seat mile costs of any being built or in service. The MBA Model indicates that
both will produce very satisfactory operating and net ratios well into the next
century. The A319 will not be quite as favorable, as is the case with most
truncated derivatives (747SP, L-1011-500). They will, however, provide enough
incentive for larger carriers (likely with Airbus aircraft already) to order and
place them at the bottom of the capacity scale in their fleets.
TOTAL NUMBER OF A319S ON MARKET, APRIL 1999: NONE
TOTAL NUMBER OF A320S ON MARKET, APRIL 1999: FIVE
2
<PAGE> 126
IV. A319 PROFILE
<TABLE>
<CAPTION>
<S> <C>
- -----------------------------------------------------------------------------
A319 FLEET STATISTICS
- -----------------------------------------------------------------------------
AS OF APRIL 1999
- -----------------------------------------------------------------------------
Number of Ordered Aircraft 570
- -----------------------------------------------------------------------------
Number of Delivered Aircraft 131
- -----------------------------------------------------------------------------
Number of Cancelled Aircraft 16
- -----------------------------------------------------------------------------
Backlog 423
- -----------------------------------------------------------------------------
Options 342
- -----------------------------------------------------------------------------
Delivered in the last 12 months 50
- -----------------------------------------------------------------------------
Number of Destroyed Aircraft 0
- -----------------------------------------------------------------------------
Number of Retired Aircraft 0
- -----------------------------------------------------------------------------
Number of Parked Aircraft 0
- -----------------------------------------------------------------------------
Number of Aircraft in Operation 131
- -----------------------------------------------------------------------------
Number of Operators 12
- -----------------------------------------------------------------------------
Number of Leased Aircraft 31
- -----------------------------------------------------------------------------
Number of Owned Aircraft 100
- -----------------------------------------------------------------------------
</TABLE>
NOTE: There were only three A319-132 aircraft delivered to America West Airlines
as of April 1999.
<TABLE>
<CAPTION>
<S> <C>
- -----------------------------------------------------------------------------
A319 ENGINE DISTRIBUTION
- -----------------------------------------------------------------------------
AS OF APRIL 1999
- -----------------------------------------------------------------------------
CFM56-5A 67 Aircraft
- -----------------------------------------------------------------------------
CFM56-5B 34 Aircraft
- -----------------------------------------------------------------------------
V2522-A5 26 Aircraft
- -----------------------------------------------------------------------------
V2524-A5 4 Aircraft
- -----------------------------------------------------------------------------
TOTAL 131 Aircraft
- -----------------------------------------------------------------------------
</TABLE>
3
<PAGE> 127
Geographic dispersion of the A319 operator base was as follows:
[GEOGRAPHIC DISPERSION OF A319 OPERATOR BASE GRAPHIC]
V. A320 PROFILE
<TABLE>
<CAPTION>
<S> <C>
- -----------------------------------------------------------------------------
A320 FLEET STATISTICS
- -----------------------------------------------------------------------------
AS OF APRIL 1999
- -----------------------------------------------------------------------------
Number of Ordered Aircraft 1,273
- -----------------------------------------------------------------------------
Number of Delivered Aircraft 716
- -----------------------------------------------------------------------------
Number of Cancelled Aircraft 98
- -----------------------------------------------------------------------------
Backlog 459
- -----------------------------------------------------------------------------
Options 166
- -----------------------------------------------------------------------------
Delivered in the last 12 months 80
- -----------------------------------------------------------------------------
Number of Destroyed Aircraft 6
- -----------------------------------------------------------------------------
Number of Retired Aircraft 0
- -----------------------------------------------------------------------------
Number of Parked Aircraft 5
- -----------------------------------------------------------------------------
Number of Aircraft in Operation 710
- -----------------------------------------------------------------------------
Number of Operators 79
- -----------------------------------------------------------------------------
Number of Leased Aircraft 366
- -----------------------------------------------------------------------------
Number of Owned Aircraft 344
- -----------------------------------------------------------------------------
</TABLE>
NOTE: There were 21 A320-231 and 12 A320-232 aircraft delivered to America West
Airlines as of April 1999.
4
<PAGE> 128
<TABLE>
<CAPTION>
<S> <C>
- -----------------------------------------------------------------------------
A320 ENGINE DISTRIBUTION
- -----------------------------------------------------------------------------
AS OF APRIL 1999
- -----------------------------------------------------------------------------
CFM56-5A 359 Aircraft
- -----------------------------------------------------------------------------
CFM56-5B 74 Aircraft
- -----------------------------------------------------------------------------
V2500-A1 142 Aircraft
- -----------------------------------------------------------------------------
V2527-A5 119 Aircraft
- -----------------------------------------------------------------------------
V2527E-A5 16 Aircraft
- -----------------------------------------------------------------------------
TOTAL 710 Aircraft
- -----------------------------------------------------------------------------
</TABLE>
Geographic dispersion of the A320 operator base was as follows:
[GEOGRAPHIC DISPERSION OF A320 OPERATOR BASE GRAPHIC]
VI. COVENANTS
This report has been prepared for the exclusive use of America West
Airlines and shall not be provided to other parties by MBA without the express
consent of America West Airlines.
MBA certifies that this report has been independently prepared and that it
fully and accurately reflects MBA's opinion as to the Base Value. MBA further
certifies that it does not have, and does not expect to have, any financial or
other interest in the subject or similar aircraft.
This report represents the opinion of MBA as to the Base Value of the
subject aircraft and is intended to be advisory only, in nature. Therefore, MBA
assumes no responsibility or legal liability for any actions taken, or not
taken, by America West Airlines or any other party with regard to the subject
5
<PAGE> 129
aircraft. By accepting this report, all parties agree that MBA shall bear no
such responsibility or legal liability.
PREPARED BY:
/s/ TEO OZDENER
--------------------------------------
TEO OZDENER, M.SC., P.ENG.
VICE PRESIDENT--TECHNICAL
REVIEWED BY:
/s/ MORTEN S. BEYER
--------------------------------------
MORTEN S. BEYER, APPRAISER FELLOW
CHAIRMAN & CEO
ISTAT CERTIFIED SENIOR APPRAISER
6
<PAGE> 130
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Company's Restated Certificate of Incorporation and Restated Bylaws
provide that the Company will indemnify each of its directors and officers to
the full extent permitted by the laws of the State of Delaware and may indemnify
certain other persons as authorized by the Delaware General Corporation Law (the
"GCL").
Section 145 of the GCL provides as follows:
"(a) A corporation shall have power to indemnify any person who was
or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
the corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be in
or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had reasonable cause to believe that
his conduct was unlawful.
(b) A corporation shall have power to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation
and except that no indemnification shall be made in respect of any claim,
issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (a) and (b) of
this section, or in defense of any claim, issue or matter therein, he shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification
of the director, officer, employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in
subsections (a) and (b). Such determination shall be made (1) by a majority
vote of the board of directors who are not parties to such action, suit or
proceeding, even though less than a quorum, or (2) if there are no such
directors,
II-1
<PAGE> 131
or if such directors so direct, by independent legal counsel in a written
opinion, or (3) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative, or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of
undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the corporation as authorized in this section. Such expenses
(including attorneys' fees) incurred by other employees and agents may be
so paid upon such terms and conditions, if any, as the board of directors
deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be
deemed exclusive of any other rights to which those seeking indemnification
or advancement of expenses may be entitled under any bylaw, agreement, vote
of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding
such office.
(g) A corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability
under this section.
(h) For purposes of this section, references to "the corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers,
and employees or agents, so that any person who is or was a director,
officer, employee or agent for such constituent corporation, or is or was
serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall stand in the same position under
this section with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.
(i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include
any excise taxes assessed on a person with respect to an employee benefit
plan; and references to "serving at the request of the corporation" shall
include any service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by, such
director, officer, employee, or agent with respect to an employee benefit
plan, its participants, or beneficiaries; and a person who acted in good
faith and in a manner he reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be deemed
to have acted in a manner "not opposed to the best interests of the
corporation" as referred to in this section.
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive
jurisdiction to hear and determine all actions for advancement of expenses
or indemnification brought under this section or under any bylaw,
agreement, vote of stockholders or disinterested directors, or otherwise.
The Court of Chancery may summarily determine a corporation's obligation to
advance expenses (including attorneys' fees).
(l) The Restated Certificate of Incorporation and Restated Bylaws
also limit the personal liability of directors to the Company and its
stockholders for monetary damages resulting from certain
II-2
<PAGE> 132
breaches of the directors' fiduciary duties. The Restated Certificate of
Incorporation of the Company provides as follows:
"A person who is or was a Director of the Corporation shall not be
personally liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a Director, except for liability
(i) for any breach of the Director's duty of loyalty to the corporation
or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the DGCL or (iv) for any transaction from
which the Director derived any improper personal benefit. If the DGCL is
amended to authorize corporate action further eliminating or limiting
the personal liability of Directors, then the liability of Directors of
the Corporation shall be eliminated or limited to the full extent
permitted by the DGCL, as so amended. The elimination and limitation of
liability provided herein shall continue after a Director has ceased to
occupy such position as to acts or omissions occurring during such
Director's term or terms of office, and no amendment or repeal of this
Section 12 shall apply to or have any effect on the liability or alleged
liability of any Director of the Corporation for or with respect to any
acts or omissions of such Director occurring prior to such amendment or
repeal."
The Company maintains directors' and officers' liability insurance.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ------- -----------
<C> <S>
3.1 Certificate of Incorporation
3.2 Bylaws
4.1* Form of 8.54% America West Airlines Pass Through Certificate
Series 1999-1C-O (included in Exhibit 4.3)
4.2* Form of 7.93% America West Airlines Pass Through Certificate
Series 1998-1G-O (included in Exhibit 4.5)
4.3* Pass Through Trust Agreement, dated as of September 21,
1999, between America West Airlines, Inc., and Wilmington
Trust Company, as Trustee, made with respect to the
formation of America West Airlines Pass Through Trust,
Series 1999-1C-O and the issuance of 8.54% Initial Pass
Through Certificates, Series 1999-1C-O and 8.54% Exchange
Pass Through Certificates, Series 1999-1C-O
4.4* Pass Through Trust Agreement, dated as of September 21,
1999, between America West Airlines, Inc., and Wilmington
Trust Company, as Trustee, made with respect to the
formation of America West Airlines Pass Through Trust,
Series 1999-1C-S and the issuance of 8.54% Initial Pass
Through Certificates, Series 1999-1C-S and 8.54% Exchange
Pass Through Certificates, Series 1999-1C-S
4.5* Pass Through Trust Agreement, dated as of September 21,
1999, between America West Airlines, Inc., and Wilmington
Trust Company, as Trustee, made with respect to the
formation of America West Airlines Pass Through Trust,
Series 1999-1G-O and the issuance of 7.93% Initial Pass
Through Certificates, Series 1999-1G-O and 7.93% Exchange
Pass Through Certificates, Series 1999-1G-O
4.6* Pass Through Trust Agreement, dated as of September 21,
1999, between America West Airlines, Inc., and Wilmington
Trust Company, as Trustee, made with respect to the
formation of America West Airlines Pass Through Trust,
Series 1999-1G-S and the issuance of 7.93% Initial Pass
Through Certificates, Series 1999-1G-S and 7.93% Exchange
Pass Through Certificates, Series 1999-1G-S
4.7* Revolving Credit Agreement, dated September 21, 1999,
between Wilmington Trust Company, as Subordination Agent, as
agent and trustee for the America West Airlines Pass Through
Trust 1999-1C, as Borrower; and Morgan Stanley Capital
Services, Inc., as Liquidity Provider
</TABLE>
II-3
<PAGE> 133
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ------- -----------
<C> <S>
4.8* Revolving Credit Agreement, dated September 21, 1999,
between Wilmington Trust Company, as Subordination Agent, as
agent and trustee for the America West Airlines Pass Through
Trust 1999-1G, as Borrower; and Morgan Stanley Capital
Services, Inc., as Liquidity Provider
4.9* Intercreditor Agreement, dated as of September 21, 1999,
among Wilmington Trust Company, as Trustee under the America
West Airlines Pass Through Trust 1999-1C and America West
Airlines Pass Through Trust 1999-1G and Morgan Stanley
Capital Services, Inc., as Class C Liquidity Provider and
Class G Liquidity Provider, Ambac Assurance Corporation, as
Policy Provider, and Wilmington Trust Company, as
Subordination Agent and Trustee
4.10* Exchange and Registration Rights Agreement, dated as of
September 21, 1999, among America West Airlines, Inc.;
Wilmington Trust Company, as Trustee under America West
Airlines Pass Through Trust, Series 1999-1C-O and America
West Airlines Pass Through Trust, Series 1999-1G-O; and
Morgan Stanley & Co. Incorporated, Donaldson, Lufkin &
Jenrette Securities Corporation, Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Salomon Smith Barney Inc.
4.11* Deposit Agreement (Class C), dated as of September 21, 1999,
between Wilmington Trust Company, as Escrow Agent under the
Escrow and Paying Agent Agreement, and ABN AMRO Bank N.V.,
Chicago Branch, as Depositary
4.12* Deposit Agreement (Class G), dated as of September 21, 1999,
between Wilmington Trust Company, as Escrow Agent under the
Escrow and Paying Agent Agreement, and ABN AMRO Bank N.V.,
Chicago Branch, as Depositary
4.13* Escrow and Paying Agent Agreement (Class C), dated as of
September 21, 1999, among Wilmington Trust Company, as
Escrow Agent; Morgan Stanley & Co. Incorporated, Donaldson,
Lufkin & Jenrette Securities Corporation, Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Salomon Smith Barney
Inc., as Initial Purchasers; Wilmington Trust Company, as
Pass Through Trustee for and on behalf of America West
Airlines Pass Through Trust 1999-1C-O; and Wilmington Trust
Company as Paying Agent
4.14* Escrow and Paying Agent Agreement (Class G), dated as of
September 21, 1999, among Wilmington Trust Company, as
Escrow Agent; Morgan Stanley & Co. Incorporated, Donaldson,
Lufkin & Jenrette Securities Corporation, Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Salomon Smith Barney
Inc., as Initial Purchasers; Wilmington Trust Company, as
Pass Through Trustee for and on behalf of America West
Airlines Pass Through Trust 1999-1G-O; and Wilmington Trust
Company as Paying Agent
4.15* Insurance and Indemnity Agreement, dated as of September 21,
1999, among America West Airlines, Inc., Ambac Assurance
Corporation as Policy Provider and Wilmington Trust Company
as Subordination Agent and Trustee under the Pass Through
Trust 1999-1G-O.
4.16* Note Purchase Agreement dated as of September 21, 1999,
among America West Airlines, Inc., Wilmington Trust Company
as Pass Through Trustee under each of the Pass Through Trust
Agreements, and Wilmington Trust Company, as Subordination
Agent, Escrow Agent and Paying Agent
5.1** Opinion of Vedder, Price, Kaufman & Kammholz as to the
legality of the New Certificates being registered hereby.
12.1* Computation of ratio of earnings to fixed charges
23.1** Consent of Vedder, Price, Kaufman & Kammholz (included in
Exhibit 5.1)
23.2 Consent of KPMG LLP
23.3* Consent of AVITAS, Inc.
23.4* Consent of AvSolutions
23.5* Consent of Morten Beyer & Agnew
</TABLE>
II-4
<PAGE> 134
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ------- -----------
<C> <S>
24.1* Power of Attorney (see signature page in Part II of
Registration Statement)
25.1 Statement of Eligibility of Wilmington Trust Company for the
1999-1C Pass Through Certificates, on Form T-1
25.2 Statement of Eligibility of Wilmington Trust Company for the
1999-1G Pass Through Certificates, on Form T-1
99.1* Form of Letter of Transmittal
99.2* Form of Notice of Guaranteed Delivery
99.3* Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees
99.4* Form of Letter to Clients
</TABLE>
- -------------------------
* Previously filed.
** To be filed by amendment.
ITEM 22. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii)
shall not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plans annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the
II-5
<PAGE> 135
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant, pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by any such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether or not
such indemnification is against public policy as expressed in the Securities Act
of 1933 and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-6
<PAGE> 136
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this Amendment No. 1 to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Tempe, State of Arizona, on the 28th day of January, 2000.
America West Airlines, Inc.
By: /s/ W. DOUGLAS PARKER
------------------------------------
W. Douglas Parker
Executive Vice President, Corporate
Group
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 to the Registration Statement has been signed by the
following persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ WILLIAM A. FRANKE* Chairman of the Board of January 28, 2000
- --------------------------------------------------- Directors and Director,
William A. Franke President and Chief Executive
Officer (Principal Executive
Officer)
/s/ W. DOUGLAS PARKER Executive Vice President, January 28, 2000
- --------------------------------------------------- Corporate Group (Principal
W. Douglas Parker Financial Officer) and
Director
/s/ MICHAEL R. CARREON* Vice President and Controller January 28, 2000
- --------------------------------------------------- (Principal Accounting Officer)
Michael R. Carreon
/s/ JOHN L. GOOLSBY* Director January 28, 2000
- ---------------------------------------------------
John L. Goolsby
/s/ WALTER T. KLENZ* Director January 28, 2000
- ---------------------------------------------------
Walter T. Klenz
/s/ MARIE L. KNOWLES* Director January 28, 2000
- ---------------------------------------------------
Marie L. Knowles
/s/ RICHARD C. KRAEMER* Director January 28, 2000
- ---------------------------------------------------
Richard C. Kraemer
/s/ ROBERT J. MILLER* Director January 28, 2000
- ---------------------------------------------------
Robert J. Miller
</TABLE>
<PAGE> 137
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ GILBERT D. MOOK* Director January 28, 2000
- ---------------------------------------------------
Gilbert D. Mook
/s/ DENISE M. O'LEARY* Director January 28, 2000
- ---------------------------------------------------
Denise M. O'Leary
/s/ RICHARD P. SCHIFTER* Director January 28, 2000
- ---------------------------------------------------
Richard P. Schifter
/s/ JEFFREY A. SHAW* Director January 28, 2000
- ---------------------------------------------------
Jeffrey A. Shaw
/s/ JOHN F. TIERNEY* Director January 28, 2000
- ---------------------------------------------------
John F. Tierney
*By: /s/ W. DOUGLAS PARKER
---------------------------------------------
W. Douglas Parker
Attorney-in-Fact
(Signing under the authority of a Power of
Attorney previously filed with the
Securities and Exchange Commission)
</TABLE>
<PAGE> 138
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ------- -----------
<S> <C>
3.1 Certificate of Incorporation
3.2 Bylaws
4.1* Form of 8.54% America West Airlines Pass Through Certificate
Series 1999-1C-O (included in Exhibit 4.3)
4.2* Form of 7.93% America West Airlines Pass Through Certificate
Series 1998-1G-O (included in Exhibit 4.5)
4.3* Pass Through Trust Agreement, dated as of September 21,
1999, between America West Airlines, Inc., and Wilmington
Trust Company, as Trustee, made with respect to the
formation of America West Airlines Pass Through Trust,
Series 1999-1C-O and the issuance of 8.54% Initial Pass
Through Certificates, Series 1999-1C-O and 8.54% Exchange
Pass Through Certificates, Series 1999-1C-O
4.4* Pass Through Trust Agreement, dated as of September 21,
1999, between America West Airlines, Inc., and Wilmington
Trust Company, as Trustee, made with respect to the
formation of America West Airlines Pass Through Trust,
Series 1999-1C-S and the issuance of 8.54% Initial Pass
Through Certificates, Series 1999-1C-S and 8.54% Exchange
Pass Through Certificates, Series 1999-1C-S
4.5* Pass Through Trust Agreement, dated as of September 21,
1999, between America West Airlines, Inc., and Wilmington
Trust Company, as Trustee, made with respect to the
formation of America West Airlines Pass Through Trust,
Series 1999-1G-O and the issuance of 7.93% Initial Pass
Through Certificates, Series 1999-1G-O and 7.93% Exchange
Pass Through Certificates, Series 1999-1G-O
4.6* Pass Through Trust Agreement, dated as of September 21,
1999, between America West Airlines, Inc., and Wilmington
Trust Company, as Trustee, made with respect to the
formation of America West Airlines Pass Through Trust,
Series 1999-1G-S and the issuance of 7.93% Initial Pass
Through Certificates, Series 1999-1G-S and 7.93% Exchange
Pass Through Certificates, Series 1999-1G-S
4.7* Revolving Credit Agreement, dated September 21, 1999,
between Wilmington Trust Company, as Subordination Agent, as
agent and trustee for the America West Airlines Pass Through
Trust 1999-1C, as Borrower; and Morgan Stanley Capital
Services, Inc., as Liquidity Provider
4.8* Revolving Credit Agreement, dated September 21, 1999,
between Wilmington Trust Company, as Subordination Agent, as
agent and trustee for the America West Airlines Pass Through
Trust 1999-1G, as Borrower; and Morgan Stanley Capital
Services, Inc., as Liquidity Provider
4.9* Intercreditor Agreement, dated as of September 21, 1999,
among Wilmington Trust Company, as Trustee under the America
West Airlines Pass Through Trust 1999-1C and America West
Airlines Pass Through Trust 1999-1G, and Morgan Stanley
Capital Services, Inc., as Class C Liquidity Provider and
Class G Liquidity Provider, Ambac Assurance Corporation, as
Policy Provider, and Wilmington Trust Company, as
Subordination Agent and Trustee
4.10* Exchange and Registration Rights Agreement, dated as of
September 21, 1999, among America West Airlines, Inc.;
Wilmington Trust Company, as Trustee under America West
Airlines Pass Through Trust, Series 1999-1C-O and America
West Airlines Pass Through Trust, Series 1999-1G-O; and
Morgan Stanley & Co. Incorporated, Donaldson, Lufkin &
Jenrette Securities Corporation, Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Salomon Smith Barney Inc.
4.11* Deposit Agreement (Class C), dated as of September 21, 1999,
between Wilmington Trust Company, as Escrow Agent under the
Escrow and Paying Agent Agreement, and ABN AMRO Bank N.V.,
Chicago Branch, as Depositary
</TABLE>
<PAGE> 139
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ------- -----------
<S> <C>
4.12* Deposit Agreement (Class G), dated as of September 21, 1999,
between Wilmington Trust Company, as Escrow Agent under the
Escrow and Paying Agent Agreement, and ABN AMRO Bank N.V.,
Chicago Branch, as Depositary
4.13* Escrow and Paying Agent Agreement (Class C), dated as of
September 21, 1999, among Wilmington Trust Company, as
Escrow Agent; Morgan Stanley & Co. Incorporated, Donaldson,
Lufkin & Jenrette Securities Corporation, Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Salomon Smith Barney
Inc., as Initial Purchasers; Wilmington Trust Company, as
Pass Through Trustee for and on behalf of America West
Airlines Pass Through Trust 1999-1C-O; and Wilmington Trust
Company as Paying Agent
4.14* Escrow and Paying Agent Agreement (Class G), dated as of
September 21, 1999, among Wilmington Trust Company, as
Escrow Agent; Morgan Stanley & Co. Incorporated, Donaldson,
Lufkin & Jenrette Securities Corporation, Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Salomon Smith Barney
Inc., as Initial Purchasers; Wilmington Trust Company, as
Pass Through Trustee for and on behalf of America West
Airlines Pass Through Trust 1999-1G-O; and Wilmington Trust
Company as Paying Agent
4.15* Insurance and Indemnity Agreement, dated as of September 21,
1999, among America West Airlines, Inc., Ambac Assurance
Corporation as Policy Provider and Wilmington Trust Company
as Subordination Agent and Trustee under the Pass Through
Trust 1999-1G-O.
4.16* Note Purchase Agreement dated as of September 21, 1999,
among America West Airlines, Inc., Wilmington Trust Company
as Pass Through Trustee under each of the Pass Through Trust
Agreements, and Wilmington Trust Company, as Subordination
Agent, Escrow Agent and Paying Agent
5.1** Opinion of Vedder, Price, Kaufman & Kammholz as to the
legality of the New Certificates being registered hereby.
12.1* Computation of ratio of earnings to fixed charges
23.1** Consent of Vedder, Price, Kaufman & Kammholz (included in
Exhibit 5.1)
23.2 Consent of KPMG LLP
23.3* Consent of AVITAS, Inc.
23.4* Consent of AvSolutions
23.5* Consent of Morten Beyer & Agnew
24.1* Power of Attorney (see signature page in Part II of
Registration Statement)
25.1 Statement of Eligibility of Wilmington Trust Company for the
1999-1C Pass Through Certificates, on Form T-1
25.2 Statement of Eligibility of Wilmington Trust Company for the
1999-1G Pass Through Certificates, on Form T-1
27.1 Financial Data Schedule
99.1* Form of Letter of Transmittal
99.2* Form of Notice of Guaranteed Delivery
99.3* Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees
99.4* Form of Letter to Clients
</TABLE>
- -------------------------
* Previously filed.
** To be filed by amendment.
<PAGE> 1
RESTATED CERTIFICATE OF INCORPORATION
OF
AMERICA WEST AIRLINES, INC.
AMERICA WEST AIRLINES, INC. (the "Corporation"), a corporation organized
and existing under and by virtue of the General Corporation Law of the State of
Delaware (the "DGCL") does hereby certify:
FIRST
NAME
The name of the Corporation is AMERICA WEST AIRLINES, INC.
SECOND
REGISTERED OFFICE AND REGISTERED AGENT
The location of the registered office of the Corporation in the State of
Delaware is at 1209 Orange Street, Wilmington, New Castle County, Delaware, and
the name of the registered agent is the Corporation Trust Company.
THIRD
PURPOSE
The nature of the business or purposes to be conducted or promoted are to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware (the "DGCL").
FOURTH
AUTHORIZED CAPITAL
The total number of shares of all classes of stock which this Corporation
shall have authority to issue is 1000 shares of Common Stock ("Common Stock")
with the par value of $0.01 per share.
4.1 Common Stock. Preemptive rights as provided for by Section 102(b)(3)
of the DGCL shall not be granted and are hereby expressly denied.
<PAGE> 2
4.1.1 Voting Rights.
4.1.1.1 Except as provided in Article Thirteenth, each registered holder
of Common Stock shall be entitled to one vote for each share of such stock held
by such holder. The right to cumulate votes for election of directors as
provided in Section 214 of the DGCL shall not be granted and is hereby expressly
denied.
4.1.1.2 In addition to any other vote required by law, except where
prohibited by applicable corporate law, any amendments to the Restated Bylaws of
the Corporation (the "Bylaws") shall be made in compliance therewith.
4.1.1.3 In addition to the automatic suspension of voting rights provided
under Article Thirteenth, any holder of Common Stock may suspend the voting
rights relating to any shares of Common Stock held by it by providing prior
written notice to the Corporation, which notice shall describe such shares in
reasonable detail and state whether or not the voting suspension is permanent or
temporary and, if temporary, the period thereof. Notwithstanding whether the
suspension is permanent or temporary, any stockholder that suspends its voting
rights under this Section 4.1.1.3 may rescind such suspension upon written
notice to the Corporation; provided that any notice reinstating voting rights
under this Section 4.1.1.3 shall not be effective with respect to any matter
unless such notice is sent prior to the record date for voting on such matter.
The suspension of voting rights hereunder shall not affect any other rights held
by the holders of such suspended Common Stock by virtue of their stock
ownership.
4.1.1.4 Any act or transaction by or involving the Corporation that
requires for its adoption under the DGCL or this Restated Certificate of
Incorporation the approval of the stockholders of the Corporation shall, in
accordance with Section 251(g) of the DGCL, require, in addition, the approval
of the stockholders of America West Holdings Corporation ("Holdings") (or any
successor by merger), by the same vote as is required by the DGCL and/or by this
Restated Certificate of Incorporation.
4.1.2 Dividends. The holders of Common Stock shall be entitled to receive,
when and if declared by the Board of Directors, out of the assets of the
Corporation which are by law available therefor, dividends payable either in
cash, in stock or otherwise.
4.1.3 Liquidation. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, after payment or
provision for payment of the debts and other liabilities of the Corporation, the
holders of shares of all Common Stock shall be entitled to share ratably in the
remaining net assets of the Corporation. Neither the merger or consolidation of
the Corporation, nor the sale, lease or conveyance of all or part of its assets,
shall be deemed to be a liquidation, dissolution or winding up of the
Corporation, either voluntarily or involuntarily, within the meaning of this
Section 4.1.3.
<PAGE> 3
FIFTH
NUMBER AND TERM OF DIRECTORS
The Board of Directors of the Corporation shall consist of up to 15
members, which number may be increased or decreased from time to time by
resolution duly adopted by such Board; provided, however, that at no time shall
there be fewer than nine or more than 15 members. No decrease in the number of
Directors shall have the effect of shortening the term of any incumbent
Director. Except as otherwise provided in that certain Stockholders' Agreement
for America West Airlines, Inc., dated as of August 25, 1994 for so long as it
remains in force and effect (the "Stockholders' Agreement"), any Director may be
removed by the stockholders of the Corporation with or without cause pursuant to
the Bylaws and applicable law.
Each Director shall be elected (a) in accordance with the Bylaws and shall
serve for a term of one year or until the death, resignation or removal of such
Director, and until a successor shall have been properly elected and shall
qualify, and (b) as provided in the Stockholders' Agreement.
Beginning at the first annual meeting of the stockholders on or after
August 25, 1997 (the "Third Annual Meeting"), the number of Directors shall be
divided into three classes, as nearly equal in number as may be, to serve in the
first instance until the first, second and third annual meetings of the
stockholders to be held after the Third Annual Meeting, respectively, and until
their successors shall have been properly elected and shall qualify; and
thereafter for three-year terms. In the case of any increase in the number of
Directors of the Corporation, the additional Directors shall be so classified
that all classes of Directors shall be increased equally as nearly as may be,
and the additional Directors shall be elected as provided herein by the
Directors or by the stockholders at an annual meeting. In case of any decrease
in the number of Directors of the Corporation, all classes of Directors shall be
decreased equally, as nearly as may be. Election of Directors shall be conducted
as provided in this Restated Certificate of Incorporation, in the Bylaws, or by
applicable law.
SIXTH
MANAGEMENT
The Corporation shall be managed by the Board of Directors, which shall
exercise all powers conferred under the laws of the State of Delaware. Pursuant
to a plan of reorganization confirmed by the United States Bankruptcy Court for
the District of Arizona, the Bylaws were adopted on August 10, 1994, but,
thereafter, the power to make, alter or repeal the Bylaws has been and shall be
vested in the Board of Directors, as may be limited by the Bylaws.
<PAGE> 4
SEVENTH
COMPROMISE OR ARRANGEMENT WITH CREDITORS
Whenever a compromise or arrangement is proposed between the Corporation
and its creditors or any class of them and/or between the Corporation and its
stockholders or any class of them, any court of equitable jurisdiction within
the State of Delaware, may, on the application in a summary way of the
Corporation or of any creditor or stockholder thereof or on the application of
any receiver or receivers appointed for the Corporation under the provisions of
Section 291 of the DGCL or on the application of trustees in dissolution or of
any receiver or receivers appointed for the Corporation under the provisions of
Section 279 of the DGCL order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of the Corporation, as the
case may be, to be summoned in such manner as the said court directs. If a
majority in number representing three-fourths in value of the creditors or class
of creditors, and/or of the stockholders or class of stockholders of the
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of the Corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the Court to which the application has been made, be
binding on all the creditors or class of creditors, and/or on all the
stockholders of the Corporation, as the case may be and also on the Corporation.
EIGHTH
VACANCIES ON THE BOARD OF DIRECTORS
Except as otherwise provided in the Stockholders' Agreement, in case any
vacancy shall occur on the Board of Directors because of death, resignation,
retirement, disqualification, removal, an increase in the authorized number of
Directors or any other cause, the Board of Directors shall have the sole and
exclusive authority to, in accordance with the Bylaws, elect a Director to fill
such vacancy.
NINTH
SPECIAL MEETINGS OF STOCKHOLDERS
Special meetings of the stockholders of the Corporation, for any purpose
or purposes, unless otherwise prescribed herein or by statute, may be called by
the Chairman of the Board and shall be called by the Secretary at the written
request, or by resolution adopted by the affirmative vote, of a majority of the
Board of Directors. Stockholders of the Corporation shall not be entitled to
request a special meeting of the stockholders.
<PAGE> 5
TENTH
ACTIONS OF STOCKHOLDERS; MEETINGS AND WRITTEN CONSENT
All action by holders of the Corporation's outstanding voting securities
shall be taken at an annual or special meeting of the stockholders following
notice as provided by law or in the Bylaws (or by written consent as provided
below). Stockholders of the Corporation shall have the power to act by means of
written consent only in the removal of directors in accordance with the
Stockholders' Agreement or any other voting agreement of even date therewith by
and between GPA Group plc and AmWest Partners, L.P., for so long as any such
agreement remains in force and effect.
ELEVENTH
NOMINATIONS FOR ELECTION OF DIRECTORS
Except as may be otherwise provided in the Stockholders' Agreement, no
person shall be elected to the Board of Directors of the Corporation at an
annual meeting of the stockholders, or at a special meeting called for that
purpose, unless a written nomination of such person to the Board of Directors
(i) by a stockholder of the Corporation shall be received by the Corporation in
accordance with the Bylaws or (ii) is made by or at the direction of the Board
of Directors.
TWELFTH
LIMITATION OF DIRECTOR LIABILITY;
INDEMNIFICATION OF DIRECTORS AND OFFICERS
12.1 Limitation of Liability. A person who is or was a Director of the
Corporation shall not be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the Director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the DGCL or (iv) for any transaction from which the Director
derived an improper personal benefit. If the DGCL is amended to authorize
corporate action further eliminating or limiting the personal liability of
directors, then the liability of the Directors of the Corporation shall be
eliminated or limited to the fullest extent permitted by the DGCL, as so
amended. The elimination and limitation of liability provided herein shall
continue after a Director has ceased to occupy such position as to acts or
omissions occurring during such Director's term or terms of office, and no
amendment or repeal of this Section 12.1 shall apply to or have any effect on
the liability or alleged liability of any Director of the Corporation for or
with respect to any acts or omissions of such Director occurring prior to such
amendment or repeal.
12.2 Indemnification. The Corporation shall indemnify, to the fullest
extent permitted by applicable law and pursuant to the Bylaws, each person who
is or was a Director or officer of the
<PAGE> 6
Corporation, and may indemnify each employee and agent of the Corporation and
all other persons whom the Corporation is authorized to indemnify under the
provisions of the DGCL.
THIRTEENTH
FOREIGN OWNERSHIP OF VOTING STOCK
At no time shall more than 25% of the voting interest of the Corporation
be owned or controlled by persons who are not "Citizens of the United States"
(as such term is defined in Title 49, United States Code, Section 40102), or as
the same may be from time to time amended) ("Non-Citizens"). In the event that
Non-Citizens shall own (beneficially or of record) or have voting control over
any shares of common stock of the Corporation, the voting rights of such persons
shall be subject to automatic suspension to the extent required to ensure that
the Corporation is in compliance with applicable provisions of law and
regulations relating to ownership or control of a U.S. carrier. The Bylaws shall
contain provisions to implement this Article Thirteenth, including, without
limitation, provisions restricting or prohibiting transfer of shares of voting
stock to Non-Citizens and provisions restricting or removing voting rights as to
shares of voting stock owned or controlled by Non-Citizens. Any determination as
to ownership, control or citizenship made by the Board of Directors shall be
conclusive and binding as between the Corporation and any stockholder for
purposes of this Article Thirteenth.
FOURTEENTH
BUSINESS COMBINATIONS WITH INTERESTED STOCKHOLDERS
The Corporation elects not to be governed by Section 203 of the General
Corporation Law of the State of Delaware, as the same may be amended from time
to time. This election shall be effective as of the earliest date permitted by
law.
FIFTEENTH
ARIZONA CORPORATE TAKEOVERS ACT
The Corporation elects not to be subject to Article 2, Chapter 6, Title 10
of the Arizona Revised Statutes, as the same may be amended from time to time.
This election shall be effective as of the earliest date permitted by law.
The Corporation elects not to be subject to Article 3, Chapter 6, Title 10
of the Arizona Revised Statutes, as the same shall be amended from time to time.
This election shall be effective as of the earliest date permitted by law.
<PAGE> 1
RESTATED
BYLAWS
OF
AMERICA WEST AIRLINES, INC.
AUGUST 25, 1994
LAST UPDATED JULY 23, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
1. OFFICES.................................................................. 1
1.01 Offices........................................................... 1
2. SEAL..................................................................... 1
2.01 Seal.............................................................. 1
3. MEETINGS OF STOCKHOLDERS................................................. 1
3.01 Place of Meetings................................................. 1
3.02 Annual Meetings................................................... 1
3.03 Special Meetings.................................................. 1
3.04 Action by Consent in Lieu of a Meeting............................ 1
3.05 Notice of Meetings................................................ 1
3.06 Stockholder Notices............................................... 2
3.07 Adjourned Meetings................................................ 2
3.08 Quorum and Adjournment............................................ 2
3.09 Majority Vote Required............................................ 2
3.10 Manner of Voting.................................................. 2
3.11 Proxies........................................................... 2
3.12 Presiding Officer and Secretary................................... 2
3.13 Disregard of Nomination or Proposal............................... 2
3.14 Inspections of Elections.......................................... 3
4. DIRECTORS................................................................ 3
4.01 Powers............................................................ 3
4.02 Number and Classification......................................... 3
4.03 Nominations....................................................... 3
4.04 Resignations...................................................... 3
4.05 Removal........................................................... 3
4.06 Vacancies......................................................... 3
4.07 Presiding Officer and Secretary................................... 4
4.08 Annual Meetings................................................... 4
4.09 Regular Meetings.................................................. 4
4.10 Special Meetings.................................................. 4
4.11 Quorum and Powers of a Majority................................... 4
4.12 Waiver of Notice.................................................. 4
4.13 Manner of Acting.................................................. 4
4.14 Compensation...................................................... 4
4.15 Committees........................................................ 4
4.16 Committee Procedure............................................... 5
4.17 Executive Committee............................................... 5
5. OFFICERS................................................................. 5
5.01 Number............................................................ 5
5.02 Election of Officers, Qualification and Term...................... 6
5.03 Removal........................................................... 6
5.04 Resignations...................................................... 6
5.05 Vacancies......................................................... 6
5.06 Salaries.......................................................... 6
5.07 The Chairman of the Board......................................... 6
5.08 The President..................................................... 6
5.09 The Vice Presidents............................................... 6
5.10 The Secretary and the Assistant Secretary......................... 6
5.11 The Treasurer and the Assistant Treasurer.......................... 6
5.12 Treasurer's Bond.................................................. 7
5.13 Chief Executive Officer........................................... 7
5.14 Chief Operating Officer........................................... 7
6. STOCK.................................................................... 7
6.01 Certificates...................................................... 7
6.02 Transfers......................................................... 7
6.03 Lost. Stolen or Destroyed Certificates............................ 7
6.04 Record Date....................................................... 7
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
6.05 Registered Stockholders........................................... 8
6.06 Additional Powers of the Board.................................... 8
7. LIMITATIONS OF OWNERSHIP BY NON-CITIZENS................................. 8
7.01 Definitions....................................................... 8
7.02. Policy............................................................ 9
7.03 Foreign Stock Record.............................................. 9
7.04 Suspension of Voting Rights....................................... 9
7.05 Beneficial Ownership Inquiry...................................... 9
8. MISCELLANEOUS............................................................ 10
8.01 Place and Inspection of Books..................................... 10
8.02 Indemnification of Directors, Officers, Employees and Agents...... 10
8.03 Dividends......................................................... 11
8.04 Execution of Deeds, Contracts and Other Agreements and Instruments 11
8.05 Checks............................................................ 11
8.06 Voting Shares in Other Corporations............................... 11
8.07 Fiscal Year....................................................... 12
8.08 Gender/Number..................................................... 12
8.09 Paragraph Titles.................................................. 12
8.10 Amendment......................................................... 12
8.11 Restated Certificate of Incorporation............................. 12
</TABLE>
<PAGE> 4
RESTATED
BYLAWS
OF
AMERICA WEST AIRLINES, INC.
(as effective on August 25, 1994)
1. OFFICES.
1.01 OFFICES. In addition to its registered office in the state of Delaware, the
Corporation shall have a general office at Maricopa County, Arizona, and such
other offices, either within or without the State of Delaware, at such locations
as the Board of Directors may from time to time determine or the business of the
Corporation may require.
2. SEAL.
2.01 SEAL. (a) The Corporation shall have a seal, which shall have inscribed
thereon its name and year of incorporation and the words, "Corporate Seal
Delaware."
(b) The seal shall be kept in safe custody by the Secretary of the
Corporation. It shall be affixed by the Chairman of the Board, the
President or any Vice President, the Secretary or any Assistant Secretary,
or the Treasurer to any corporate instrument or document requiring it, by
practice or by law, and when so affixed, it may be attested by the
signature of the officer so affixing it.
3. MEETINGS OF STOCKHOLDERS.
3.01 PLACE OF MEETINGS. All meetings of stockholders of the Corporation shall be
held at the general office of the Corporation in Maricopa County, State of
Arizona, unless otherwise specified in the notice calling any such meeting.
3.02 ANNUAL MEETINGS. (a) The annual meeting of stockholders for 1995 shall be
held at the Corporate offices on Tuesday, May 2, 1995, at 10:00 am. or at such
other time, date and place as shall be determined by the Board of Directors,
complying with Section 3.05(b) of these Restated Bylaws of the Corporation. All
subsequent annual meetings of stockholders, beginning with the annual meeting to
be held in 1996, shall be held on the first Tuesday of May, if not a legal
holiday, and if a legal holiday, then on the next business day following, or at
such other time, date and place as shall be determined by the Board of Directors
from time to time.
(b) At each annual meeting the stockholders shall, by plurality of
the votes cast, elect Directors and transact such other business as may
properly be brought before them.
(c) The Board of Directors may, in advance of any annual or special
meeting of the stockholders, adopt an agenda for such meeting, adherence
to which the Chairman of the Board may enforce.
3.03 SPECIAL MEETINGS. Special meetings of the stockholders of the Corporation,
for any purpose or purposes, unless otherwise prescribed herein or by statute,
may be called by the Chairman of the Board and shall be called by the Secretary
at the written request, or by resolution adopted by the affirmative vote, of a
majority of the Board of Directors. Such request shall state the purpose or
purposes of the proposed meeting. Stockholders of the Corporation shall not be
entitled to request a special meeting of the stockholders.
3.04 ACTION BY CONSENT IN LIEU OF A MEETING. Stockholders may act by consent in
lieu of a meeting in accordance with Delaware Law only in the removal of
directors in accordance with the Restated Certificate of Incorporation of the
Corporation.
3.05 NOTICE OF MEETINGS. (a) Notices of meetings of stockholders shall be in
writing and shall state the place (which may be within or without the state of
Delaware), date and hour of the meeting and in the case of a special meeting,
the purpose or purposes for which a meeting is called. No business other than
that specified in the notice thereof shall be transacted at any special meeting.
(b) Such notice shall either be delivered personally or mailed,
postage prepaid, to each stockholder entitled to vote at such meeting not
less than ten (10) nor more than sixty (60) days before the date of the
meeting. If mailed, the notice shall be directed to the stockholder at his
or her address as it appears on the records of the Corporation. Personal
delivery of any such notice to any officer of a
1.
<PAGE> 5
corporation or association or to any member of a partnership shall
constitute delivery of such notice to such corporation, association or
partnership.
(c) Notice of any meeting of stockholders need not be given to any
stockholder if waived by such stockholder in writing, whether before or
after such meeting is held, or if such stockholder shall sign the minutes
or attend the meeting.
3.06 STOCKHOLDER NOTICES. At any meeting of the stockholders, only such business
shall be conducted, and only such proposals shall be acted upon as shall have
been brought before the meeting (i) by or at the direction of the Board of
Directors or (ii) by any stockholder who complies with the notice procedures set
forth in this Section 3.06 (or for election of directors, with the notice
provisions set forth in Section 4.03).
(a) For a proposal to be properly brought before an annual meeting
by a stockholder, the stockholder must have given timely notice thereof in
writing to the Secretary. To be timely, a stockholder's notice must be
delivered to, or mailed and received at, the principal executive offices
of the Corporation not less than sixty (60) days nor more than ninety (90)
days prior to the scheduled annual meeting, regardless of any
postponements, deferrals or adjournments of that meeting to a later date;
provided, however, that if less than seventy (70) days' notice or prior
public disclosure of the date of the scheduled annual meeting is given or
made, notice by the stockholder to be timely must be so delivered or
received no later than the close of business on the tenth (10th) day
following the earlier of the day on which such notice of the date of the
scheduled annual meeting was mailed or the day on which such public
disclosure was made.
(b) A stockholder's notice to the Secretary shall in addition set
forth as to each matter the stockholder proposes to bring before the
meeting (i) a brief description of the proposal desired to be brought
before the meeting and the reasons for conducting such business at the
meeting, (ii) the name and address, as they appear on the Corporation's
books, of the stockholder proposing such business, (iii) the class and
number of shares which are beneficially owned by the stockholder on the
date of such stockholder notice and (iv) any material interest of the
stockholder in such proposal.
3.07 ADJOURNED MEETINGS. When a meeting is adjourned to another time or place,
unless otherwise provided by these Restated Bylaws, notice need not be given of
the adjourned meeting if the time and place thereof are announced at the meeting
at which the adjournment is taken. At the adjourned meeting the stockholders may
transact any business which might have been transacted at the original meeting.
If an adjournment is for more than thirty (30) days or if after an adjournment a
new record date is fixed for the adjourned meeting a notice of the adjourned
meeting shall be given to each stockholder entitled to vote at the meeting.
3.08 QUORUM AND ADJOURNMENT. Except as otherwise provided by law, by the
Restated Certificate of Incorporation of the Corporation or by these Restated
Bylaws, the presence, in person or by proxy, of the holders of a majority of the
aggregate voting power of the stock issued and outstanding, entitled to vote
thereat, and the voting rights of which are not suspended, shall be requisite
and shall constitute a quorum for the transaction of business at all meetings of
stockholders. If, however, such majority shall not be present or represented at
any meeting of stockholders, the stockholders present, although less than a
quorum, shall have the power to adjourn the meeting.
3.09 MAJORITY VOTE REQUIRED. When a quorum is present at any meeting of
stockholders, the affirmative vote of the majority of the aggregate voting power
of the shares present in person or represented by proxy at the meeting and
entitled to vote on the subject matter shall constitute the act of the
stockholders, unless by express provision of law, the Restated Certificate of
Incorporation or these Restated Bylaws a different vote is required, in which
case such express provision shall govern and control.
3.10 MANNER OF VOTING. At each meeting of stockholders, each stockholder having
the right to vote, and whose voting rights have not been suspended shall be
entitled to vote in person or by proxy. Proxies need not be filed with the
Secretary of the Corporation until the meeting is called to order, but shall be
filed before being voted. Each stockholder shall be entitled to vote each share
of stock having voting power registered in his name on the books of the
Corporation on the record date fixed, as provided in Section 6.04 of these
Restated Bylaws, for the determination of stockholders entitled to vote at such
meeting. All elections of directors shall be by written ballot.
3.11 PROXIES. (a) At any meeting of stockholders, any stockholder may be
represented and vote by proxy or proxies appointed by a written form of proxy.
In the event that any form of proxy shall designate two or more persons to act
as proxies, a majority of such persons present at the meeting or, if only one
shall be present, then that one shall have and may exercise all of the powers
conferred by the form of proxy upon all of the persons so designated unless the
form of proxy shall otherwise provide.
2.
<PAGE> 6
(b) The Board of Directors may, in advance of any annual or special
meeting of the stockholders, prescribe additional regulations concerning
the manner of execution and filing of proxies and the validation of the
same, which are intended to be voted at any such meeting.
3.12 PRESIDING OFFICER AND SECRETARY. At each meeting of stockholders, the
Chairman of the Board shall preside and the Secretary shall act as Secretary of
the meeting.
3.13 DISREGARD OF NOMINATION OR PROPOSAL. Except as otherwise provided by law,
the Restated Certificate of Incorporation or these Restated Bylaws, the person
presiding over any meeting of the stockholders shall have the power and duty to
determine whether a nomination or any other business proposed to be brought
before the meeting was made in accordance with the procedures set forth in this
Article 3 or Section 4.03 and, if any proposed nomination or business is not in
compliance with such provisions, to declare that such defective proposal or
nomination shall be disregarded.
3.14 INSPECTIONS OF ELECTIONS. The Board of Directors by resolution shall
appoint one or more inspectors of election (which may include individuals who
serve the Corporation in other capacities including, without limitation, as
officers, employees, agents or representatives of the Corporation) to act at any
meeting of the stockholders and make a written report thereof. Such appointments
shall be made in accordance with, and each inspector shall have the duties
prescribed by, Section 231 of the General Corporation Law of the State of
Delaware (the "DGCL").
4. DIRECTORS.
4.01 POWERS. The Board of Directors shall exercise all of the power of the
Corporation except such as are by law, or by the Restated Certificate of
Incorporation of this Corporation or by these Restated Bylaws conferred upon or
reserved to the stockholders of any class or classes.
4.02 NUMBER AND CLASSIFICATION. (a) The authorized number of directors of the
corporation shall be ten (10), until such number is changed by an amendment to
this Bylaw duly adopted by the Board of Directors or by proper action of the
Stockholders. Directors need not be stockholders unless so required by the
Restated Certificate of Incorporation. Each director shall hold office until the
election and qualification of his or her successor or until his or her
resignation, disqualification, removal or death.
(b) Subject to and at such time as provided in the Restated
Certificate of Incorporation, the number of Directors shall be divided
into three (3) classes, as nearly equal in number as may be, to serve
staggered three-year terms on the Board of Directors. In the case of any
increase in the number of Directors of the Corporation, the additional
Directors shall be so classified that all classes of Directors shall be
increased equally as nearly as may be, and the additional Directors shall
be elected as provided herein by the Directors or by the stockholders at
an annual meeting. In case of any decrease in the number of Directors of
the Corporation, all classes of Directors shall be decreased equally, as
nearly as may be. Election of Directors shall be conducted as provided in
the Restated Certificate of Incorporation, in these Bylaws, or by
applicable law.
(c) At all times the composition of the Board of Directors shall
comply in all respects with the U.S. citizenship requirements of the
Federal Aviation Act of 1958, as amended.
4.03 NOMINATIONS. Except as otherwise provided in the Stockholders' Agreement,
no person shall be elected to the Board of Directors of this Corporation at an
annual meeting of the stockholders, or at a special meeting called for that
purpose, unless a written nomination of such person to the Board of Directors
(i) by a stockholder of the Corporation who is entitled to vote at such meeting
shall be received by the Secretary of the corporation at least ninety (90) days
prior to such meeting or (ii) is made by or at the direction of the Board of
Directors.
4.04 RESIGNATIONS. Any Director may resign at any time by giving written notice
to the Board of Directors or the Secretary. Such resignation shall take effect
at the date of receipt of such notice or at any later time specified therein.
Acceptance of such resignation shall not be necessary to make it effective.
4.05 REMOVAL. Except as otherwise provided in the Stockholders' Agreement, at
any special meeting of the stockholders duly called as provided herein, any
Director may, by a vote of the holders of stock representing a majority of the
voting power of all the shares of stock issued and outstanding and entitled to
vote thereat, be removed from office with or without cause, and the successor of
the Director so removed may be elected at such meeting. Stockholders shall have
the right to act by written consent only in the removal of directors in
accordance
3.
<PAGE> 7
with the Stockholders' Agreement or any other voting agreement of even date with
the Restated Certificate of Incorporation by and between GPA Group plc and
AmWest Partners, L.P., for so long as any such agreement remains in force and
effect. In the absence of such an election, any vacancy may be filled as
provided in Section 4.06.
4.06 VACANCIES. (a) Except as otherwise provided in the Stockholders' Agreement,
in case any vacancy shall occur on the Board of Directors because of death,
resignation, retirement, disqualification, removal, an increase in the
authorized number of Directors or any other cause, the Board of Directors may,
at any meeting, by resolution adopted by the affirmative vote of a majority of
the Directors then in office, though less than a quorum, elect a Director to
fill such vacancy.
(b) If, as a result of a disaster or emergency (as determined in
good faith by the then remaining Directors), it becomes impossible to
ascertain whether or not vacancies exist on the Board of Directors, and a
person is or persons are elected by Directors, who in good faith believe
themselves to be a majority of the remaining Directors, to fill a vacancy
or vacancies that said remaining Directors in good faith believe exists,
then the acts of such person or persons who are so elected as Directors
shall be valid and binding upon the corporation and the stockholders,
although it may subsequently develop that at the time of the election (i)
there was in fact no vacancy or vacancies existing on the Board of
Directors or (ii) the Directors who so elected such person or persons did
not in fact constitute a majority of the remaining Directors.
4.07 PRESIDING OFFICER AND SECRETARY. At each meeting of the Board of Directors,
the Chairman of the Board shall preside, and the Secretary shall act as
secretary of the meeting.
4.08 ANNUAL MEETINGS. The Board of Directors shall meet each year immediately
following the annual meeting of stockholders, at the place where such meeting of
stockholders has been held, or at such other place as shall be fixed by the
person presiding over the meeting of the stockholders at which such Directors
are elected, for the purpose of organization, election of officers, and
consideration of such other business as the Board considers relevant to the
management of the Corporation.
4.09 REGULAR MEETINGS. Regular meetings of the Board of Directors shall be held
on such dates and at such times and places, within or without the state of
Delaware, as shall from time to time be determined by the Board of Directors,
provided that the Board of Directors shall hold at least four (4) regular
meetings in each year. In the absence of any such determination, such meetings
shall be held at such times and places, within or without the State of Delaware,
as shall be designated by the Chairman of the Board on not less than three (3)
calendar days' notice (specifying the time and place of the meeting and the
agenda therefor) to each Director, given verbally or in writing either
personally, by telephone, by facsimile transmission, by mail, by telegram or by
telex.
4.10 SPECIAL MEETINGS. Special meetings of the Board of Directors shall be held
at the call of the Chairman of the Board at such times and places, within or
without the State of Delaware, as he or she shall designate, on not less than
three (3) calendar days' notice (specifying the time and place of the meeting
and the agenda therefor) to each Director, given verbally or in writing either
personally, by telephone, by facsimile transmission, by mail, by telegram or by
telex. Special meetings shall be called by the Secretary on like notice at the
written request of a majority of the Directors.
4.11 QUORUM AND POWERS OF A MAJORITY. At all meetings of the Board of Directors
and of each committee thereof, a majority of the members shall be necessary and
sufficient to constitute a quorum for the transaction of business, and the act
of a majority of the members present at any meeting at which a quorum is present
shall be the act of the Board of Directors or such committee, unless by express
provision of law, of the Restated Certificate of Incorporation or these Restated
Bylaws, a different vote is required, in which case such express provision shall
govern and control. In the absence of a quorum, a majority of the members
present at any meeting may, without notice other than announcement at the
meeting, adjourn such meeting from time to time until a quorum is present.
4.12 WAIVER OF NOTICE. Notice of any meeting of the Board of Directors, or any
committee thereof, need not be given to any member if waived by him or her in
writing, whether before or after such meeting is held, or if he or she shall
sign the minutes or attend the meeting.
4.13 MANNER OF ACTING. (a) Members of the Board of Directors, or any committee
thereof, may participate in any meeting of the Board of Directors or such
committee by means of conference telephone or similar communications equipment
by means of which all persons participating therein can hear each other, and
participation in a meeting by such means shall constitute presence in person at
such meeting.
4.
<PAGE> 8
(b) Any action required or permitted to be taken at any meeting of
the Board of Directors or any committee thereof may be taken without a
meeting if all members of the Board of Directors or such committee, as the
case may be, consent thereto in writing, and the writing or writings are
filed with the minutes of proceedings of the Board of Directors or such
committee.
4.14 COMPENSATION. (a) The Board of Directors, by a resolution or resolutions
may fix, and from time to time change, the compensation of Directors.
(b) Each Director shall be entitled to reimbursement from the
Corporation for his or her reasonable expenses incurred in attending
meetings of the Board of Directors or any committee thereof.
(c) Nothing contained in these Restated Bylaws shall be construed to
preclude any Director from sending the Corporation in any other capacity
and from receiving compensation from the Corporation for services rendered
to it in such other capacity.
4.15 COMMITTEES. The Board of Directors may, by resolution or resolutions
adopted by the affirmative vote of a majority of the Board of Directors,
designate one or more committees, each committee to consist of two or more
Directors, which to the extent provided in said resolution or resolutions shall
have and may exercise the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation; that no such
committee shall have the power to (i) elect Directors, (ii) alter, amend, or
repeal these Bylaws or any resolution of the Board relating to such committee,
(iii) appoint any member of such committee, (iv) declare any dividend or make
any other distribution to the stockholders of the Corporation or (v) take any
other actions which may lawfully be taken only by the full Board of Directors.
Such committee or committees shall have such name or names as may be determined
from time to time by resolutions adopted by the Board of Directors.
4.16 COMMITTEE PROCEDURE. (a) Except as otherwise provided by these Restated
Bylaws, each committee shall adopt its own rules governing the time, place and
method of holding its meetings and the conduct of its proceedings and shall meet
as provided by such rules or by resolution of the Board of Directors. Unless
otherwise provided by these Restated Bylaws or any such rules or resolutions,
notice of the time and place of each meeting of a committee shall be given to
each member of such committee as provided in Section 4.10 of these Restated
Bylaws with respect to notices of special meetings of the Board of Directors.
(b) Each committee shall keep regular minutes of its proceedings and
report the same to the Board of Directors when required.
(c) Any member of any committee, other than a member thereof serving
ex-officio, may be removed from such committee either with or without
cause, at any time, by resolution adopted by the affirmative vote of a
majority of the Board of Directors at any meeting thereof. Any vacancy in
any committee shall be filled by the Board of Directors in the manner
prescribed by these Restated Bylaws for the original appointment of the
members of such committee.
4.17 EXECUTIVE COMMITTEE. There shall be established an Executive Committee
consisting of three (3) members. The Chairman of the Board shall be a member and
shall act as Chairman of the Executive Committee. In addition, the Board of
Directors shall elect from its members the remaining members of the Executive
Committee.
The Executive Committee shall, to the full extent of the DGCL, have and
may exercise in the intervals between meetings of the Board of Directors, all
the powers of the whole Board of Directors in its management of the affairs and
business of the Corporation, except the power or authority to:
(a) amend the Restated Certificate of Incorporation;
(b) adopt any agreement of merger or consolidation;
(c) recommend to stockholders the sale, lease or exchange of all or
substantially all of the Corporation's property and assets;
(d) recommend to stockholders a dissolution of the Corporation or a
revocation of a dissolution;
(e) amend these Bylaws;
5.
<PAGE> 9
(f) appoint or remove a member of any committee established by the
Board of Directors, fill vacancies on the Board of Directors, remove an
officer elected by the Board of Directors, or raise or lower any officer's
salary; or
(g) declare dividends or authorize the issuance of stock.
Meetings of the Executive Committee may be called at any time by the
Chairman of the Board and shall be held at the general office of the Corporation
or at such other place, within or without the State of Delaware, as the Chairman
of the Board may designate, on not less than one (1) day's notice to each member
of the Executive Committee, given verbally or in writing either personally, by
telephone, by facsimile transmission, by mail, by telegram or telex.
5. OFFICERS.
5.01 NUMBER. (a) The officers of the corporation shall include a Chief Executive
Officer, a President, one or more Vice Presidents (including one or more
Executive Vice Presidents and one or more Senior Vice Presidents if deemed
appropriate by the Board of Directors), a Secretary and a Treasurer. The Board
of Directors shall also elect a Chairman of the Board pursuant to Section 5.02.
The Board of Directors may also elect such other officers as the Board of
Directors may from time to time deem appropriate or necessary. Except for the
Chairman of the Board, none of the officers of the Corporation need be a
Director of the Corporation. Any two or more offices may be held by the same
person, but no officer shall execute, acknowledge, or verify any instrument in
more than one capacity.
(b) The Chairman of the Board shall be the Chief Executive Officer
unless the Board of Directors, by resolution adopted by the affirmative
vote of not less than a majority of the Directors then in office,
designates the President or some other person as Chief Executive Officer.
The President shall be the Chief Operating Officer. If at any time the
offices of the Chairman of the Board and Chief Executive Officer shall not
be filled, the President shall also be the Chief Executive Officer.
(c) The Board of Directors may delegate to the Chief Executive
Officer the power to appoint one or more employees of the corporation as
divisional or departmental vice presidents and fix the duties of such
appointees. However, no such divisional or departmental vice president
shall be considered as an officer of the Corporation, the officers of the
Corporation being limited to those officers elected by the Board of
Directors.
5.02 ELECTION OF OFFICERS, QUALIFICATION AND TERM. The officers of the
Corporation to be elected by the Board of Directors shall be elected annually at
the first meeting of the Board of Directors held after each annual meeting of
the stockholders. Each such officer shall hold office for one (1) year and until
a successor shall have been duly elected and shall qualify in his or her stead
unless the Board of Directors shall have provided by contract or otherwise in
any particular case, or until such officer shall have resigned and his or her
resignation shall have become effective, or until such officer shall have been
removed in the manner hereinafter provided. Notwithstanding anything in this
Section 5.02 to the contrary, the Chairman of the Board may be elected only by
the vote of a majority of the Directors then in office (who may include the
Director who is or is to be the Chairman of the Board).
5.03 REMOVAL. Except as otherwise expressly provided in a contract duly
authorized by the Board of Directors, any officer elected by the Board of
Directors may be removed, either with or without cause, at any time by
resolution adopted by the affirmative vote of a majority of the Board of
Directors at any meeting thereof; provided that the Chairman of the Board may be
removed by the vote of a majority of the Directors then in office (excluding the
Director who is the Chairman of the Board).
5.04 RESIGNATIONS. Any officer of the Corporation may resign at any time by
giving written notice to the Board of Directors or the Chairman of the Board.
Such resignation shall take effect at the date of the receipt of such notice or
at any later time specified therein and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
5.05 VACANCIES. A vacancy in any office because of death, resignation, removal,
disqualification or any other cause may be filled for the unexpired portion of
the term by election by the Board of Directors at any meeting thereof.
5.06 SALARIES. The salaries of all officers of the Corporation shall be fixed by
the Board of Directors from time to time, and no officer shall be prevented from
receiving such salary by reason of the fact that he is also a Director of the
Corporation.
6.
<PAGE> 10
5.07 THE CHAIRMAN OF THE BOARD. (a) The Chairman of the Board shall have the
powers and duties customarily and usually associated with the office of the
Chairman of the Board. The Chairman of the Board shall preside at meetings of
the stockholders and of the Board of Directors. In the event the Chairman of
Board's temporary absence or disability and the absence or disability of the
President, the Chairman of the Board shall have the power to designate any
Director to preside at any or all meetings of the stockholders and of the Board
of Directors.
(b) If at any time the office of President shall not be filled, or
in the event of the disability of the President, the Chairman of the Board
(if one shall be elected) shall have the duties and powers of the
President. The Chairman of the Board shall have such other powers and
perform such greater or lesser duties as may be delegated to him from time
to time by the Board of Directors.
5.08 THE PRESIDENT. In the event of the disability of the Chairman of the Board,
the President shall have the powers and duties of the Chairman of the Board. The
President shall serve as chief operating officer and shall have such other
powers and perform such other duties as may be delegated to him or her from time
to time by the Board of Directors or the Chairman of the Board.
5.09 THE VICE PRESIDENTS. Each Vice President shall have such powers and perform
such duties as may from time to time be assigned to him or her by the Board of
Directors, the Chairman of the Board or the President.
5.10 THE SECRETARY AND THE ASSISTANT SECRETARY. (a) The Secretary shall attend
meetings of the Board of Directors and meetings of the stockholders and record
all votes and minutes of all such proceedings in a book kept for such purpose
and shall perform like duties for the committees of Directors as provided for in
these Restated Bylaws when required. The Secretary shall give, or cause to be
given, notice of all meetings of stockholders and of the Board of Directors
(except in case of meetings called by the Chairman of the Board in accordance
with Sections 4.09 or 4.10). He or she shall have charge of the stock ledger
(unless responsibility for maintaining the stock ledger is delegated to a
transfer agent by the Board of Directors pursuant to Section 6.06) and such
other books and papers as the Board of Directors may direct. He or she shall
have all such further powers and duties as generally are incident to the
position of Secretary or as may from time to time be assigned to him or her by
the Board of Directors or the Chairman of the Board.
(b) Each Assistant Secretary shall have such powers and perform such
duties as may from time to time be assigned to him or her by the Board of
Directors, the Chairman of the Board or the Secretary. In case of the
absence or disability of the Secretary, the Assistant Secretary designated
by the Secretary (or, in the absence of such designation, the senior
Assistant Secretary) shall perform the duties and exercise the powers of
the Secretary.
5.11 THE TREASURER AND THE ASSISTANT TREASURER. (a) The Treasurer shall have
custody of the corporate funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the Corporation and
shall deposit moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. He or she may endorse all commercial documents requiring endorsements
for or on behalf of the Corporation and may sign all receipts and vouchers for
payments made to the Corporation.
(b) The Treasurer shall disburse funds of the Corporation as may
from time to time be ordered by the Board of Directors, taking proper
vouchers for such disbursements, and render to the Board of Directors, the
Chairman of the Board and President, whenever they may require it, an
account of all transactions undertaken by him or her as Treasurer and of
the financial condition of the Corporation.
(c) The Treasurer shall also maintain adequate records of all
assets, liabilities and transactions of the corporation and shall see that
adequate audits thereof are currently and regularly made. The Treasurer
shall have such other powers and perform such other duties that generally
are incident to the position of Treasurer or as may from time to time be
assigned to him or her by the Board of Directors, the Chairman of the
Board or the President.
(d) Each Assistant Treasurer shall have such powers and perform such
duties as may from time to time be assigned to him or her by the Board of
Directors, the Chairman of the Board, the President or the Treasurer. In
case of the absence or disability of the Treasurer, the Assistant
Treasurer designated by the Treasurer (or, in the absence of such
designation, the senior Assistant Treasurer) shall perform the duties and
exercise the powers of the Treasurer.
7.
<PAGE> 11
5.12 TREASURER'S BOND. If required by the Board of Directors, the Treasurer or
any Assistant Treasurer shall give the Corporation a bond in such form and with
such surety or sureties as are satisfactory to the Board of Directors for the
faithful performance of the duties of office and for the restoration to the
Corporation, in case of his or her death, resignation, retirement or removal
from office, of all books, papers, vouchers, money and other property of
whatever kind in his or her possession or under his or her control belonging to
the Corporation.
5.13 CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall have, subject to
the supervision, direction and control of the Board of Directors, the general
powers and duties of supervision, direction and management of the affairs and
business of the Corporation usually vested in the chief executive officer of a
Corporation, including, without limitation, all powers necessary to direct and
control the organizational and reporting relationships within the Corporation.
If at any time the office of Chairman of the Board shall not be filled, the
Chief Executive Officer shall have the powers and duties of the Chairman of the
Board.
5.14 CHIEF OPERATING OFFICER. The Chief Operating Officer shall, subject to the
supervision, direction and control of the Chief Executive Officer and the Board
of Directors, manage the day-to-day operations of the Corporation and, in
general, shall assist the Chief Executive Officer.
6. STOCK
6.01 CERTIFICATES. Certificates or shares of the stock of the Corporation shall
be issued under the seal of the Corporation, or facsimile thereof, and shall be
numbered and shall be entered in the books of the Corporation as they are
issued. Each certificate shall bear a serial number, shall exhibit the holder's
name and the number of shares evidenced thereby and shall be signed by the
Chairman of the Board or a Vice Chairman, if any, or the Chief Executive Officer
or the President or any Vice President and the Secretary or an Assistant
Secretary or the Treasurer or an Assistant Treasurer. Any or all of the
signatures on the certificate may be a facsimile. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by the Corporation
with the same effect as if such person or entity were such officer, transfer
agent or registrar at the date of issue.
6.02 TRANSFERS. Transfers of stock of the Corporation shall be made on the books
of the Corporation only upon surrender to the Corporation of a certificate for
the shares duly endorsed or accompanied by proper evidence of succession,
assignment or authority to transfer, provided such succession, assignment, or
transfer is not prohibited by the Restated Certificate of Incorporation, the
Bylaws, applicable law, or contract. Thereupon, the Corporation shall issue a
net certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.
6.03 LOST. STOLEN OR DESTROYED CERTIFICATES. Any person claiming a certificate
of stock to be lost, stolen or destroyed shall make an affidavit or an
affirmation of that fact, and shall give the Corporation a bond of indemnity in
satisfactory form and with one or more satisfactory sureties, whereupon a new
certificate may be issued of the same tenor and for the same number of shares as
the one alleged to be lost or destroyed.
6.04 RECORD DATE. (a) In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of the stockholders
or any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors shall fix, in advance, a record
date, which shall not be more than sixty (60) nor less than ten (10) days before
the date of such meeting, nor more than sixty (60) days prior to any other
action.
(b) If no record date is fixed by the Board of Directors, (i) the
record date for determining stockholders entitled to notice of or to vote
at a meeting of stockholders shall be at the close of business on the day
next preceding the date on which notice is given, or, if notice is waived
by all stockholders entitled to vote at the meeting, at the close of
business on the day next preceding the day on which the meeting was held
and (ii) the record date for determining stockholders for any other
purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.
(c) A determination of stockholders of record entitled to notice of
or to vote at a meeting of stockholders shall apply to any adjournment of
the meeting, provided that the Board of Directors may fix a new record
date for the adjourned meeting.
8.
<PAGE> 12
6.05 REGISTERED STOCKHOLDERS. The Corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of shares as
the person entitled to exercise the rights referred to in Section 6.04 and shall
not be bound to recognize any equitable or other claim to or interest in any
such shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise expressly provided by the
laws of the State of Delaware.
6.06 ADDITIONAL POWERS OF THE BOARD. (a) In addition to those powers set forth
in Section 4.01, the Board of Directors shall have power and authority to make
all such rules and regulations as it shall deem expedient concerning the issue,
transfer and registration of certificates for shares of stock of the
Corporation.
(b) The Board of Directors may appoint and remove transfer agents
and registrars of transfers, and may require all stock certificates to
bear the signature of and such transfer agent and/or any such registrar of
transfers.
(c) The Board of Directors shall have power and authority to create
and issue (whether or not in connection with the issue and sale of any
stock or other securities of the Corporation) warrants, rights or options
entitling the holders thereof to purchase from the Corporation any shares
of any class or classes or any other securities of the Corporation for
such consideration and to such persons, firms or corporations as the Board
of Directors, in its sole discretion, may determine, setting aside from
the authorized but unissued stock of the Corporation the requisite number
of shares for issuance upon the exercise of such warrants, rights or
options. Such warrants, rights or options shall be evidenced by such
instrument or instruments as shall be approved by the Board of Directors.
The terms upon which, the time or times (which may be limited or unlimited
in duration) at or within which, and the price or prices at which any such
shares or other securities may be purchased from the Corporation upon the
exercise of any such warrant, right or option shall be such as shall be
fixed and stated in a resolution or resolutions of the Board of Directors
providing for the creation and issue of such warrants, rights or options.
7. LIMITATIONS OF OWNERSHIP BY NON-CITIZENS.
7.01 DEFINITIONS. (a) "Act" shall mean the Federal Aviation Act of 1958, as
amended (Title 49 United States Code) or as the same may be from time to time
amended.
(b) "Beneficial Ownership," "Beneficially Owned" or "Owned
Beneficially" refers to beneficial ownership as defined in Rule
13d-3 (without regard to the 60-day provision in paragraph
(d)(l)(i) thereof under the Securities Exchange Act of 1934, as
amended.
(c) "Foreign Stock Record" shall have the meaning set forth Section
7.03.
(d) "Non-Citizen" shall mean any person or entity who is not a
"Citizen of the United States" as defined in Section 101 of the
Act, including any agent, trustee or representative of a
Non-Citizen.
(e) "Own or Control" or "Owned or Controlled" shall mean (i)
ownership of record, (ii) beneficial ownership or (iii) the power
to direct, by agreement, agency or in any other manner, the voting
of Stock. Any determination by the Board of Directors as to whether
Stock is Owned or Controlled by a Non-Citizen shall be final.
(f) "Permitted Percentage" shall mean twenty five percent (25%) of
the voting power of the Stock.
(g) "Stock" shall mean the outstanding capital stock of the
corporation entitled to vote; provided, however, that for the
purpose of determining the voting power of Stock that shall at any
time constitute the Permitted Percentage, the voting Power of Stock
outstanding shall not be adjusted downward solely because shares of
Stock may not be entitled to vote by reason of any provision of
this Article 7.
7.02. POLICY. It is the policy of the Corporation that, consistent with the
requirements of Section 101 of the Act, Non-Citizens shall not Own or Control
more than the Permitted Percentage and, if Non-Citizens nonetheless at any time
Own or Control more than the Permitted Percentage, the voting rights of the
Stock in excess of the Permitted Percentage shall be automatically suspended in
accordance with Sections 7.03 and 7.04 below.
9.
<PAGE> 13
7.03 FOREIGN STOCK RECORD. The Corporation or any transfer agent designated by
it shall maintain a separate stock record (the "Foreign Stock Record") in which
shall be registered Stock known to the corporation to be Owned or Controlled by
Non-Citizens. The Foreign Stock Record shall include (i) the name and
nationality of each such Non-Citizen, (ii) the number of shares of Stock Owned
or controlled by such Non-Citizen and (iii) the date of registration of such
shares in the Foreign Stock Record. In no event shall shares in excess of the
Permitted Percentage be entered on the Foreign Stock Record. In the event that
the Corporation shall determine that stock registered on the Foreign Stock
Record exceeds the Permitted Percentage, sufficient shares shall be removed from
the Foreign Stock Record so that the number of shares entered therein does not
exceed the Permitted Percentage. Stock shall be removed from the Foreign Stock
Record in reverse chronological order based upon the date of registration
therein.
7.04 SUSPENSION OF VOTING RIGHTS. If at any time the number of shares of Stock
known to the Corporation to be Owned or Controlled by Non-Citizens exceeds the
Permitted Percentage, the voting rights of Stock Owned or Controlled by
Non-Citizens and not registered on the Foreign Stock Record at the time of any
vote or action of the stockholders of the Corporation shall, without further
action by the Corporation, be suspended. Such suspension of voting rights shall
automatically terminate upon the earlier of the (i) transfer of such shares to a
person or entity who is not a Non-Citizen, or (ii) registration of such shares
on the Foreign Stock Record, subject to the final sentence of Section 7.03.
7.05 BENEFICIAL OWNERSHIP INQUIRY. (a) The Corporation may by notice in writing
(which may be included in the form of proxy or ballot distributed to
stockholders in connection with the annual meeting or any special meeting of the
stockholders of the Corporation, or otherwise) require a person that is a holder
of record of Stock or that the Corporation knows to have, or has reasonable
cause to believe has, Beneficial Ownership of Stock to certify in such manner as
the Corporation shall deem appropriate (including by way of execution of any
form of proxy or ballot of such person) that, to the knowledge of such person:
(i) all Stock as to which such person has record ownership or
Beneficial Ownership is owned and controlled only by Citizens of
the United States; or
(ii) the number and class or series of Stock owned of record
or Beneficially Owned by such person that is owned or controlled by
Non-Citizens is as set forth in such certificate.
(b) With respect to any Stock identified in response to clause
(a)(ii) above, the Corporation may require such person to provide such
further information as the Corporation may reasonably require in order to
implement the provisions of this Article 7.
(c) For purposes of applying the provisions of this Article 7 with
respect to any Stock, in the event of the failure of any person to
provide the certificate or other information to which the Corporation is
entitled pursuant to this Section 7.05, the Corporation shall presume
that the Stock in question in owned or controlled by Non-Citizens.
10.
<PAGE> 14
8.0 MISCELLANEOUS.
8.01 PLACE AND INSPECTION OF BOOKS. (a) The books of the Corporation other than
such books as are required by law to be kept within the State of Delaware shall
be kept in the State of Arizona or at such place or places either within or
without the State of Delaware as the Board of Directors may from time to time
determine.
(b) At least ten (10) days before each meeting of stockholders, the
officer in charge of the stock ledger of the Corporation shall prepare a
complete list of the stockholders entitled to vote at the meeting,
arranged in alphabetical order and showing the address of each stockholder
and the number of shares registered in the name of each stockholder. Such
list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at
least ten (10) days prior to the meeting, either at a place within the
city where the meeting is to be held, which place shall be specified in
the notice of the meeting, or, if not specified, at the place where the
meeting is to be held. The list shall also be produced and kept at the
time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present.
(c) The Board of Directors shall determine from time to time whether
and, allocated, when and under what conditions and regulations the
accounts and books of the Corporation (except such as may be by law
specifically open to inspection or as otherwise provided by these Restated
Bylaws) or any of them shall be open to the inspection of the stockholders
and the stockholders' rights in respect thereof.
8.02 INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS. (a) The
Corporation shall indemnify any person who was or is a company or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the Corporation) by reason of the fact that such
person is or was a Director or officer of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee, agent or
fiduciary of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, against expenses, including attorneys' fees,
judgments, fines and amounts paid or owed in settlement actually and reasonably
paid or incurred by him or her or rendered or levied against him or her in
connection with such action, suit or proceeding if he or she acted in good faith
and in a manner lie or she reasonably believed to be in or not opposed to the
best interests of the Corporation; and with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent
shall not, in itself, create a presumption that the person did not act in good
faith and in a manner which he or she reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his or her
conduct was unlawful.
(b) The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure
a judgment in its favor by reason of the fact that such person is or was a
Director or officer of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee, agent or
fiduciary of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, against expenses, including
attorneys' fees, actually and reasonably paid or incurred by him or her in
connection with the defense or settlement of such action or suit if he or
she acted in good faith and in a manner he or she reasonably believed to
be in or not opposed to the best interests of the Corporation; provided
however, that no indemnification shall be made in respect to any claim,
issue or matter as to which such person shall have been adjudged to be
liable to the Corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but
in view of all circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the court shall
deem proper.
(c) The Corporation shall, at the discretion of the Board of
Directors, indemnify all employees and agents of the Corporation (other
than Directors and officers) to the extent that Directors and officers
shall be indemnified pursuant to subsections (a) and (b).
(d) To the extent that a person who may be entitled to
indemnification by the Corporation under this section is or has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in subsections (a) and (b), or in defense of any
claim, issue or matter therein, he or she shall be indemnified against
expenses, including attorney's fees, actually and reasonably paid or
incurred by him or her in connection therewith.
11.
<PAGE> 15
(e) Any indemnification under subsections (a), (b), or (c) shall be
made by the Corporation only as authorized in the specific case upon a
determination that indemnification of the Director, officer, employee or
agent is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in subsection (a) or (b). Such
determination shall be made (i) by the Board of Directors by a majority
vote of a quorum consisting of Directors who were not parties to such
action, suit or proceeding, (ii) if such a quorum is not obtainable or,
even if obtainable, a quorum of disinterested Directors so directs, by
independent legal counsel in a written opinion, (iii) by the stockholders,
or (iv) in any case in which applicable law makes court approval a
prerequisite to indemnification, by the court in which such action, suit
or proceeding was brought or another court of competent jurisdiction.
(f) Expenses, including attorneys' fees, incurred by an officer or
Director in defending a civil, criminal, administrative, or investigative
action, suit or proceeding shall be paid by the Corporation in advance of
the final disposition of such action, suit or proceeding upon receipt of
an undertaking by or on behalf of the Director or officer to repay such
amount if it shall ultimately be determined that he or she is not entitled
to be indemnified by the Corporation as authorized in this section. Such
expenses, including attorneys' fees, incurred by other employees and
agents shall be so paid upon terms and conditions, if any, as the Board of
Directors deems appropriate.
(g) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be
deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any
bylaw, agreement, vote of the stockholders or disinterested directors or
otherwise, both as to action in an official capacity and as to action in
another capacity while holding such office.
(h) The provisions of this section shall continue as to a person who
has ceased to be a Director, officer, employee or agent and shall inure to
the benefit of the estate, executors, administrators, spouse, heirs,
legatees or devisees of a person entitled to indemnification hereunder and
the term "person," there used in the section shall include the estate,
executors, administrators, spouse, heirs, legatees or devisees of such
person.
(i) For the purposes of this Section 8.02, (i) "employee benefit
plan" and "fiduciary" shall be deemed to include, but not be limited to,
the meanings set forth, respectively, in Sections 3(3) and 21(A) of the
Employee Retirement Income Security Act of 1974, as amended, and
references to the judgments, fines and amounts paid or owed in settlement
or rendered or levied shall be deemed to encompass and include excise
taxes required to be paid pursuant to a applicable law in respect of any
transaction involving an employee benefit plan, (ii) references to the
Corporation shall be deemed to include any predecessor corporation and any
constituent corporation absorbed in a merger, consolidation or other
reorganization of or by the Corporation which, if its separate existence
had continued, would have had power and authority to Indemnify its
directors, officers, employees, agents or fiduciaries so that any person
who was a director, officer, employee, agent or fiduciary of such
predecessor or constituent corporation, or served at the request of such
predecessor or constituent corporation as a director, officer, employee,
agent or fiduciary of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise, shall stand in the same
position under the provisions of this Section 8.02 with respect to the
Corporation as such person would have with respect to such predecessor or
constituent corporation if its separate existence had continued, and (iii)
all other terms shall be deemed to have the meanings for such terms as set
forth in Section 145 of the DGCL.
8.03 DIVIDENDS. (a) Dividends may be declared at the discretion of the
Board of Directors at any meeting thereof.
(b) Dividends may be paid to stockholders in cash or, when the
Directors shall so determine, in stock. A Director shall be fully
protected in relying in good faith upon the books of account of the
Corporation or statements prepared by any of its officers as to the value
and amount of the assets, liabilities or net profits of the Corporation,
or any other facts pertinent to the existence and amount of surplus or
other funds from which dividends might properly be declared.
(c) Before payment of any dividend or any distribution of profits,
there may be set aside out of the said surplus of the Corporation such
sum or sums as the Board of Directors from time to time, in its
discretion thinks proper as a reserve fund to meet contingencies, or for
equalizing dividends, or for such other purpose as the Board of Directors
shall think conducive to the interests of the Corporation and the Board
of Directors may abolish any such reserve in the manner in which it was
created.
12.
<PAGE> 16
8.04 EXECUTION OF DEEDS, CONTRACTS AND OTHER AGREEMENTS AND INSTRUMENTS. Subject
to the specific directions of the Board of Directors, all deeds, mortgages and
bonds entered into by the Corporation all other written contracts and agreements
to which the Corporation shall be a party shall be executed in its name by the
Chairman of the Board, the President, or a Vice President, or such other person
or persons as may be authorized by any such officer.
8.05 CHECKS. All checks, drafts, acceptances, notes and other orders, demands or
instruments in respect to the payment of money may be signed or endorsed on
behalf of the Corporation by such officer or officers or by such agent or agents
as the Board of Directors may from time to time designate.
8.06 VOTING SHARES IN OTHER CORPORATIONS. The Chairman of the Board of the
Corporation (or any other Director designated by a majority of the Board of
Directors) may vote any and all shares held by the Corporation in any other
corporation.
8.07 FISCAL YEAR. The fiscal year of the Corporation shall correspond with
the calendar year.
8.08 GENDER/NUMBER. As used in these Restated Bylaws, the masculine, feminine or
neuter gender, and the singular or plural number, shall each include the others
whenever the context so indicates.
8.09 PARAGRAPH TITLES. The titles of the paragraphs have been inserted as a
matter of reference only and shall not control or affect the meaning or
construction of any of the terms and provisions hereof.
8.10 AMENDMENT. These Restated Bylaws may be altered, amended or repealed by the
affirmative vote of the holders of a majority of the voting power of the stock
issued and outstanding and entitled to vote at any meeting of stockholders or by
resolution adopted by the affirmative vote of not less than a majority of the
Directors in office at any annual or regular meeting of the Board of Directors
or at any special meeting of the Board of Directors if notice of the proposed
alteration, amendment or repeal be contained in the notice of such special
meeting.
8.11 RESTATED CERTIFICATE OF INCORPORATION. Notwithstanding anything to the
contrary contained herein, if any provision contained in these Restated Bylaws
is inconsistent with or conflicts with a provision of the Restated Certificate
of the Corporation, such provision of these Restated Bylaws shall be superseded
by the inconsistent provision in the Restated Certificate of Incorporation to
the extent necessary to give effect to such provision in the Restated
Certificate of Incorporation.
13.
<PAGE> 1
EXHIBIT 23.2
[KPMG Letterhead]
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
America West Airlines, Inc.:
We consent to the use of our reports incorporated herein by reference and to
the references to our firm under the headings "Selected Financial Data" and
"Experts" in the prospectus.
/s/ KPMG LLP
Phoenix, Arizona
January 28, 2000
<PAGE> 1
Exhibit 25.1
Registration No.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) _______________
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
AMERICA WEST AIRLINES,INC.
(Exact name of obligor as specified in its charter)
Delaware 86-0418245
(State of incorporation) (I.R.S. employer identification no.)
4000 E. Sky Harbor Boulevard
Phoenix, Arizona 85034-3899
(Address of principal executive offices) (Zip Code)
Pass Through Certificates, Series 1999-1C
(Title of the indenture securities)
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the
obligor is not an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which
includes the certificate of authority of Wilmington
Trust Company to commence business and the authorization
of Wilmington Trust Company to exercise corporate trust
powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b)
of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, Wilmington Trust Company, a corporation organized and existing under
the laws of Delaware, has duly caused this Statement of Eligibility to be
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signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of Wilmington and State of Delaware on the 20th day of December, 1999.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Rosemary Pantano By: /s/ John M. Beeson, Jr.
---------------------- ----------------------------
Assistant Secretary Name: John M. Beeson, Jr.
Title: Vice President
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EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
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AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
WILMINGTON TRUST COMPANY, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate the
Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name
of which company was changed to "WILMINGTON TRUST COMPANY" by an amendment filed
in the Office of the Secretary of State on March 18, A.D. 1903, and the Charter
or Act of Incorporation of which company has been from time to time amended and
changed by merger agreements pursuant to the corporation law for state banks and
trust companies of the State of Delaware, does hereby alter and amend its
Charter or Act of Incorporation so that the same as so altered and amended shall
in its entirety read as follows:
FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.
SECOND: - The location of its principal office in the State of
Delaware is at Rodney Square North, in the City of Wilmington, County
of New Castle; the name of its resident agent is WILMINGTON TRUST
COMPANY whose address is Rodney Square North, in said City. In
addition to such principal office, the said corporation maintains and
operates branch offices in the City of Newark, New Castle County,
Delaware, the Town of Newport, New Castle County, Delaware, at
Claymont, New Castle County, Delaware, at Greenville, New Castle
County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate branch
offices at Ninth and Shipley Streets, 418 Delaware Avenue, 2120 Market
Street, and 3605 Market Street, all in the City of Wilmington, New
Castle County, Delaware, and such other branch offices or places of
business as may be authorized from time to time by the agency or
agencies of the government of the State of Delaware empowered to
confer such authority.
THIRD: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this Corporation
are to do any or all of the things herein mentioned as fully and to
the same extent as natural persons might or could do and in any part
of the world, viz.:
(1) To sue and be sued, complain and defend in any Court of law
or equity and to make and use a common seal, and alter the seal
at pleasure, to hold, purchase, convey, mortgage or otherwise
deal in real and personal estate and property, and to appoint
such officers and agents as the business of the Corporation
shall
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require, to make by-laws not inconsistent with the Constitution
or laws of the United States or of this State, to discount
bills, notes or other evidences of debt, to receive deposits of
money, or securities for money, to buy gold and silver bullion
and foreign coins, to buy and sell bills of exchange, and
generally to use, exercise and enjoy all the powers, rights,
privileges and franchises incident to a corporation which are
proper or necessary for the transaction of the business of the
Corporation hereby created.
(2) To insure titles to real and personal property, or any
estate or interests therein, and to guarantee the holder of such
property, real or personal, against any claim or claims, adverse
to his interest therein, and to prepare and give certificates of
title for any lands or premises in the State of Delaware, or
elsewhere.
(3) To act as factor, agent, broker or attorney in the receipt,
collection, custody, investment and management of funds, and the
purchase, sale, management and disposal of property of all
descriptions, and to prepare and execute all papers which may be
necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every
description, and to carry on the business of conveyancing in all
its branches.
(5) To receive upon deposit for safekeeping money, jewelry,
plate, deeds, bonds and any and all other personal property of
every sort and kind, from executors, administrators, guardians,
public officers, courts, receivers, assignees, trustees, and
from all fiduciaries, and from all other persons and
individuals, and from all corporations whether state, municipal,
corporate or private, and to rent boxes, safes, vaults and other
receptacles for such property.
(6) To act as agent or otherwise for the purpose of registering,
issuing, certificating, countersigning, transferring or
underwriting the stock, bonds or other obligations of any
corporation, association, state or municipality, and may receive
and manage any sinking fund therefor on such terms as may be
agreed upon between the two parties, and in like manner may act
as Treasurer of any corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage, bond or
other instrument issued by any state, municipality, body
politic, corporation, association or person, either alone or in
conjunction with any other person or persons, corporation or
corporations.
(8) To guarantee the validity, performance or effect of any
contract or
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agreement, and the fidelity of persons holding places of
responsibility or trust; to become surety for any person, or
persons, for the faithful performance of any trust, office,
duty, contract or agreement, either by itself or in conjunction
with any other person, or persons, corporation, or corporations,
or in like manner become surety upon any bond, recognizance,
obligation, judgment, suit, order, or decree to be entered in
any court of record within the State of Delaware or elsewhere,
or which may now or hereafter be required by any law, judge,
officer or court in the State of Delaware or elsewhere.
(9) To act by any and every method of appointment as trustee,
trustee in bankruptcy, receiver, assignee, assignee in
bankruptcy, executor, administrator, guardian, bailee, or in any
other trust capacity in the receiving, holding, managing, and
disposing of any and all estates and property, real, personal or
mixed, and to be appointed as such trustee, trustee in
bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian or bailee by any persons,
corporations, court, officer, or authority, in the State of
Delaware or elsewhere; and whenever this Corporation is so
appointed by any person, corporation, court, officer or
authority such trustee, trustee in bankruptcy, receiver,
assignee, assignee in bankruptcy, executor, administrator,
guardian, bailee, or in any other trust capacity, it shall not
be required to give bond with surety, but its capital stock
shall be taken and held as security for the performance of the
duties devolving upon it by such appointment.
(10) And for its care, management and trouble, and the exercise
of any of its powers hereby given, or for the performance of any
of the duties which it may undertake or be called upon to
perform, or for the assumption of any responsibility the said
Corporation may be entitled to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other securities,
obligations, contracts and evidences of indebtedness, of any
private, public or municipal corporation within and without the
State of Delaware, or of the Government of the United States, or
of any state, territory, colony, or possession thereof, or of
any foreign government or country; to receive, collect, receipt
for, and dispose of interest, dividends and income upon and from
any of the bonds, mortgages, debentures, notes, shares of
capital stock, securities, obligations, contracts, evidences of
indebtedness and other property held and owned by it, and to
exercise in respect of all such bonds, mortgages, debentures,
notes, shares of capital stock, securities, obligations,
contracts, evidences of indebtedness and other property, any and
all the rights, powers and privileges of individual owners
thereof, including the right to vote thereon; to invest and deal
in and with any of the moneys of the Corporation upon such
securities and in such manner as it may think fit and proper,
and from
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time to time to vary or realize such investments; to issue bonds
and secure the same by pledges or deeds of trust or mortgages of
or upon the whole or any part of the property held or owned by
the Corporation, and to sell and pledge such bonds, as and when
the Board of Directors shall determine, and in the promotion of
its said corporate business of investment and to the extent
authorized by law, to lease, purchase, hold, sell, assign,
transfer, pledge, mortgage and convey real and personal property
of any name and nature and any estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers conferred
by the laws of the State of Delaware, it is hereby expressly provided
that the said Corporation shall also have the following powers:
(1) To do any or all of the things herein set forth, to the same
extent as natural persons might or could do, and in any part of
the world.
(2) To acquire the good will, rights, property and franchises
and to undertake the whole or any part of the assets and
liabilities of any person, firm, association or corporation, and
to pay for the same in cash, stock of this Corporation, bonds or
otherwise; to hold or in any manner to dispose of the whole or
any part of the property so purchased; to conduct in any lawful
manner the whole or any part of any business so acquired, and to
exercise all the powers necessary or convenient in and about the
conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien, and
to lease, sell, exchange, transfer, or in any manner whatever
dispose of property, real, personal or mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts of
every kind with any person, firm, association or corporation,
and, without limit as to amount, to draw, make, accept, endorse,
discount, execute and issue promissory notes, drafts, bills of
exchange, warrants, bonds, debentures, and other negotiable or
transferable instruments.
(5) To have one or more offices, to carry on all or any of its
operations and businesses, without restriction to the same
extent as natural persons might or could do, to purchase or
otherwise acquire, to hold, own, to mortgage, sell, convey or
otherwise dispose of, real and personal property, of every class
and description, in any State, District, Territory or Colony of
the United States, and in any foreign country or place.
(6) It is the intention that the objects, purposes and powers
specified and clauses contained in this paragraph shall (except
where otherwise expressed in said paragraph) be nowise limited
or restricted by reference to or inference from the
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terms of any other clause of this or any other paragraph in this
charter, but that the objects, purposes and powers specified in
each of the clauses of this paragraph shall be regarded as
independent objects, purposes and powers.
FOURTH: - (a) The total number of shares of all classes of stock which
the Corporation shall have authority to issue is forty-one million
(41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par value
$10.00 per share (hereinafter referred to as "Preferred Stock");
and
(2) Forty million (40,000,000) shares of Common Stock, par value
$1.00 per share (hereinafter referred to as "Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in one
or more series as may from time to time be determined by the Board of
Directors each of said series to be distinctly designated. All shares
of any one series of Preferred Stock shall be alike in every
particular, except that there may be different dates from which
dividends, if any, thereon shall be cumulative, if made cumulative.
The voting powers and the preferences and relative, participating,
optional and other special rights of each such series, and the
qualifications, limitations or restrictions thereof, if any, may
differ from those of any and all other series at any time outstanding;
and, subject to the provisions of subparagraph 1 of Paragraph (c) of
this Article FOURTH, the Board of Directors of the Corporation is
hereby expressly granted authority to fix by resolution or resolutions
adopted prior to the issuance of any shares of a particular series of
Preferred Stock, the voting powers and the designations, preferences
and relative, optional and other special rights, and the
qualifications, limitations and restrictions of such series,
including, but without limiting the generality of the foregoing, the
following:
(1) The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series, which number
may be increased (except where otherwise provided by the Board
of Directors) or decreased (but not below the number of shares
thereof then outstanding) from time to time by like action of
the Board of Directors;
(2) The rate and times at which, and the terms and conditions on
which, dividends, if any, on Preferred Stock of such series
shall be paid, the extent of the preference or relation, if any,
of such dividends to the dividends payable on any other class or
classes, or series of the same or other class of stock and
whether such dividends shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of such
series to convert the same into or exchange the same for, shares
of any other class or classes or of any series of the same or
any other class or classes of stock of the Corporation
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and the terms and conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series shall be
subject to redemption, and the redemption price or prices and
the time or times at which, and the terms and conditions on
which, Preferred Stock of such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of
such series upon the voluntary or involuntary liquidation,
merger, consolidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Preferred Stock of such
series; and
(7) The voting powers, if any, of the holders of such series of
Preferred Stock which may, without limiting the generality of
the foregoing include the right, voting as a series or by itself
or together with other series of Preferred Stock or all series
of Preferred Stock as a class, to elect one or more directors of
the Corporation if there shall have been a default in the
payment of dividends on any one or more series of Preferred
Stock or under such circumstances and on such conditions as the
Board of Directors may determine.
(c) (1) After the requirements with respect to preferential dividends
on the Preferred Stock (fixed in accordance with the provisions of
section (b) of this Article FOURTH), if any, shall have been met and
after the Corporation shall have complied with all the requirements,
if any, with respect to the setting aside of sums as sinking funds or
redemption or purchase accounts (fixed in accordance with the
provisions of section (b) of this Article FOURTH), and subject further
to any conditions which may be fixed in accordance with the provisions
of section (b) of this Article FOURTH, then and not otherwise the
holders of Common Stock shall be entitled to receive such dividends as
may be declared from time to time by the Board of Directors.
(2) After distribution in full of the preferential amount, if
any, (fixed in accordance with the provisions of section (b) of
this Article FOURTH), to be distributed to the holders of
Preferred Stock in the event of voluntary or involuntary
liquidation, distribution or sale of assets, dissolution or
winding-up, of the Corporation, the holders of the Common Stock
shall be entitled to receive all of the remaining assets of the
Corporation, tangible and intangible, of whatever kind available
for distribution to stockholders ratably in proportion to the
number of shares of Common Stock held by them respectively.
(3) Except as may otherwise be required by law or by the
provisions of such resolution or resolutions as may be adopted
by the Board of Directors pursuant to section (b) of this
Article FOURTH, each holder of Common Stock shall have one
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vote in respect of each share of Common Stock held on all
matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock or
of options, warrants or other rights to purchase shares of any class
or series of stock or of other securities of the Corporation shall
have any preemptive right to purchase or subscribe for any unissued
stock of any class or series or any additional shares of any class or
series to be issued by reason of any increase of the authorized
capital stock of the Corporation of any class or series, or bonds,
certificates of indebtedness, debentures or other securities
convertible into or exchangeable for stock of the Corporation of any
class or series, or carrying any right to purchase stock of any class
or series, but any such unissued stock, additional authorized issue of
shares of any class or series of stock or securities convertible into
or exchangeable for stock, or carrying any right to purchase stock,
may be issued and disposed of pursuant to resolution of the Board of
Directors to such persons, firms, corporations or associations,
whether such holders or others, and upon such terms as may be deemed
advisable by the Board of Directors in the exercise of its sole
discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and
rights of each other series of Preferred Stock shall, in each case, be
as fixed from time to time by the Board of Directors in the resolution
or resolutions adopted pursuant to authority granted in section (b) of
this Article FOURTH and the consent, by class or series vote or
otherwise, of the holders of such of the series of Preferred Stock as
are from time to time outstanding shall not be required for the
issuance by the Board of Directors of any other series of Preferred
Stock whether or not the powers, preferences and rights of such other
series shall be fixed by the Board of Directors as senior to, or on a
parity with, the powers, preferences and rights of such outstanding
series, or any of them; provided, however, that the Board of Directors
may provide in the resolution or resolutions as to any series of
Preferred Stock adopted pursuant to section (b) of this Article FOURTH
that the consent of the holders of a majority (or such greater
proportion as shall be therein fixed) of the outstanding shares of
such series voting thereon shall be required for the issuance of any
or all other series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series of
Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and for
such consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the
Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of
Directors.
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(h) The authorized amount of shares of Common Stock and of Preferred
Stock may, without a class or series vote, be increased or decreased
from time to time by the affirmative vote of the holders of a majority
of the stock of the Corporation entitled to vote thereon.
FIFTH: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of directors
constituting the entire Board shall be not less than five nor more
than twenty-five as fixed from time to time by vote of a majority of
the whole Board, provided, however, that the number of directors shall
not be reduced so as to shorten the term of any director at the time
in office, and provided further, that the number of directors
constituting the whole Board shall be twenty-four until otherwise
fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of one
class expiring each year. At the annual meeting of stockholders in
1982, directors of the first class shall be elected to hold office for
a term expiring at the next succeeding annual meeting, directors of
the second class shall be elected to hold office for a term expiring
at the second succeeding annual meeting and directors of the third
class shall be elected to hold office for a term expiring at the third
succeeding annual meeting. Any vacancies in the Board of Directors for
any reason, and any newly created directorships resulting from any
increase in the directors, may be filled by the Board of Directors,
acting by a majority of the directors then in office, although less
than a quorum, and any directors so chosen shall hold office until the
next annual election of directors. At such election, the stockholders
shall elect a successor to such director to hold office until the next
election of the class for which such director shall have been chosen
and until his successor shall be elected and qualified. No decrease in
the number of directors shall shorten the term of any incumbent
director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding
the fact that some lesser percentage may be specified by law, this
Charter or Act of Incorporation or the By-Laws of the Corporation),
any director or the entire Board of Directors of the Corporation may
be removed at any time without cause, but only by the affirmative vote
of the holders of two-thirds or more of the outstanding shares of
capital stock of the Corporation entitled to vote generally in the
election of directors (considered for this purpose as one class) cast
at a meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the Board
of Directors or by any stockholder entitled to vote for the election
of directors. Such nominations shall be made by notice in writing,
delivered or mailed by first class United States mail, postage
prepaid, to the Secretary of the Corporation not less than 14 days nor
more
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than 50 days prior to any meeting of the stockholders called for the
election of directors; provided, however, that if less than 21 days'
notice of the meeting is given to stockholders, such written notice
shall be delivered or mailed, as prescribed, to the Secretary of the
Corporation not later than the close of the seventh day following the
day on which notice of the meeting was mailed to stockholders. Notice
of nominations which are proposed by the Board of Directors shall be
given by the Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name,
age, business address and, if known, residence address of each nominee
proposed in such notice, (ii) the principal occupation or employment
of such nominee and (iii) the number of shares of stock of the
Corporation which are beneficially owned by each such nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine
and declare to the meeting that a nomination was not made in
accordance with the foregoing procedure, and if he should so
determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any annual
or special meeting of stockholders of the Corporation may be taken
without a meeting, and the power of stockholders to consent in
writing, without a meeting, to the taking of any action is
specifically denied.
SIXTH: - The Directors shall choose such officers, agents and servants
as may be provided in the By-Laws as they may from time to time find
necessary or proper.
SEVENTH: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon corporations
organized under the Act entitled "An Act Providing a General
Corporation Law", approved March 10, 1899, as from time to time
amended.
EIGHTH: - This Act shall be deemed and taken to be a private Act.
NINTH: - This Corporation is to have perpetual existence.
TENTH: - The Board of Directors, by resolution passed by a majority of
the whole Board, may designate any of their number to constitute an
Executive Committee, which Committee, to the extent provided in said
resolution, or in the By-Laws of the Company, shall have and may
exercise all of the powers of the Board of Directors in the management
of the business and affairs of the Corporation, and shall have power
to authorize the seal of the Corporation to be affixed to all papers
which may require it.
ELEVENTH: - The private property of the stockholders shall not be
liable for the payment
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of corporate debts to any extent whatever.
TWELFTH: - The Corporation may transact business in any part of the
world.
THIRTEENTH: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation by
a vote of the majority of the entire Board. The stockholders may make,
alter or repeal any By-Law whether or not adopted by them, provided
however, that any such additional By-Laws, alterations or repeal may
be adopted only by the affirmative vote of the holders of two-thirds
or more of the outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors (considered
for this purpose as one class).
FOURTEENTH: - Meetings of the Directors may be held outside of the
State of Delaware at such places as may be from time to time
designated by the Board, and the Directors may keep the books of the
Company outside of the State of Delaware at such places as may be from
time to time designated by them.
FIFTEENTH: - (a) (1) In addition to any affirmative vote required by
law, and except as otherwise expressly provided in sections (b) and
(c) of this Article FIFTEENTH:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any
Interested Stockholder (as hereinafter defined) or (ii) any
other corporation (whether or not itself an Interested
Stockholder), which, after such merger or consolidation, would
be an Affiliate (as hereinafter defined) of an Interested
Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of related
transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
Corporation or any Subsidiary having an aggregate fair market
value of $1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or any
Subsidiary to any Interested Stockholder or any Affiliate of any
Interested Stockholder in exchange for cash, securities or other
property (or a combination thereof) having an aggregate fair
market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation, or
(E) any reclassification of securities (including any reverse
stock split), or recapitalization of the
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Corporation, or any merger or consolidation of the Corporation
with any of its Subsidiaries or any similar transaction (whether
or not with or into or otherwise involving an Interested
Stockholder) which has the effect, directly or indirectly, of
increasing the proportionate share of the outstanding shares of
any class of equity or convertible securities of the Corporation
or any Subsidiary which is directly or indirectly owned by any
Interested Stockholder, or any Affiliate of any Interested
Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this Article
FIFTEENTH shall mean any transaction which is referred to in any
one or more of clauses (A) through (E) of paragraph 1 of the
section (a).
(b) The provisions of section (a) of this Article FIFTEENTH
shall not be applicable to any particular business combination
and such business combination shall require only such
affirmative vote as is required by law and any other provisions
of the Charter or Act of Incorporation or By-Laws if such
business combination has been approved by a majority of the
whole Board.
(c) For the purposes of this Article FIFTEENTH:
(1) A "person" shall mean any individual, firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any Subsidiary)
who or which as of the record date for the determination of
stockholders entitled to notice of and to vote on such business
combination, or immediately prior to the consummation of any such
transaction:
(A) is the beneficial owner, directly or indirectly, of more
than 10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time within
two years prior thereto was the beneficial owner, directly or
indirectly, of not less than 10% of the then outstanding voting
Shares, or
(C) is an assignee of or has otherwise succeeded in any share of
capital stock of the Corporation which were at any time within
two years prior thereto
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beneficially owned by any Interested Stockholder, and such
assignment or succession shall have occurred in the course of a
transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and Associates
(as hereafter defined) beneficially own, directly or indirectly,
or
(B) which such person or any of its Affiliates or Associates has
(i) the right to acquire (whether such right is exercisable
immediately or only after the passage of time), pursuant to any
agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or
otherwise, or (ii) the right to vote pursuant to any agreement,
arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly, by any
other person with which such first mentioned person or any of
its Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any
other Voting Shares which may be issuable pursuant to any agreement,
or upon exercise of conversion rights, warrants or options or
otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings
given those terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as in effect on December
31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security (as defined in Rule 3a11-1 of the General
Rules and Regulations under the Securities Exchange Act of 1934, as in
effect on December 31, 1981) is owned, directly or indirectly, by the
Corporation; provided, however, that for the purposes of the
definition of Investment Stockholder set forth in paragraph (2) of
this section (c), the term "Subsidiary" shall mean only a corporation
of which a majority of each class of equity security is owned,
directly or indirectly, by the Corporation.
(d) majority of the directors shall have the power and duty to
determine for the purposes of this Article FIFTEENTH on the
basis of information known to them, (1) the number of Voting
Shares beneficially owned by any person (2) whether a person is
an Affiliate or Associate of another, (3) whether a person has
an
12
<PAGE> 17
agreement, arrangement or understanding with another as to the
matters referred to in paragraph (3) of section (c), or (4)
whether the assets subject to any business combination or the
consideration received for the issuance or transfer of
securities by the Corporation, or any Subsidiary has an
aggregate fair market value of $1,000,000 or more.
(e) Nothing contained in this Article FIFTEENTH shall be
construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
SIXTEENTH: Notwithstanding any other provision of this Charter or Act
of Incorporation or the By-Laws of the Corporation (and in addition to
any other vote that may be required by law, this Charter or Act of
Incorporation by the By-Laws), the affirmative vote of the holders of
at least two-thirds of the outstanding shares of the capital stock of
the Corporation entitled to vote generally in the election of
directors (considered for this purpose as one class) shall be required
to amend, alter or repeal any provision of Articles FIFTH, THIRTEENTH,
FIFTEENTH or SIXTEENTH of this Charter or Act of Incorporation.
SEVENTEENTH: (a) a Director of this Corporation shall not be liable to
the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except to the extent such exemption from
liability or limitation thereof is not permitted under the Delaware
General Corporation Laws as the same exists or may hereafter be
amended.
(b) Any repeal or modification of the foregoing paragraph shall
not adversely affect any right or protection of a Director of
the Corporation existing hereunder with respect to any act or
omission occurring prior to the time of such repeal or
modification."
13
<PAGE> 18
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON JANUARY 16, 1997
<PAGE> 19
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or at
such other date, time, or place as may be designated by resolution by the Board
of Directors.
Section 2. Special meetings of all stockholders may be called at any
time by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given
by mailing to each stockholder at least ten (10) days before said meeting, at
his last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each share of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors
shall be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72)
years shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for
three years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed
and conducted by the Board of Directors.
Section 5. The Board of Directors shall meet at the principal office
of the Company or elsewhere in its discretion at such times to be determined by
a majority of its members, or at the
1
<PAGE> 20
call of the Chairman of the Board of Directors or the President.
Section 6. Special meetings of the Board of Directors may be called at
any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of
any special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal, inability
to act, or disqualification of any director, the Board of Directors, although
less than a quorum, shall have the right to elect the successor who shall hold
office for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect from
its own members a Chairman of the Board of Directors and a President who may be
the same person. The Board of Directors shall also elect at such meeting a
Secretary and a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as it may deem
advisable. The Board of Directors may also elect at such meeting one or more
Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or divisions of the Company as it may deem
advisable.
ARTICLE III
COMMITTEES
Section 1. Executive Committee
(A) The Executive Committee shall be composed of not more than nine
members
2
<PAGE> 21
who shall be selected by the Board of Directors from its own members and who
shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the Board
of Directors when it is not in session to transact all business for and in
behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal office of
the Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Executive
Committee or at the call of the Chairman of the Board of Directors. The majority
of its members shall be necessary to constitute a quorum for the transaction of
business. Special meetings of the Executive Committee may be held at any time
when a quorum is present.
(D) Minutes of each meeting of the Executive Committee shall be kept
and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.
(F) In the event of a state of disaster of sufficient severity to
prevent the conduct and management of the affairs and business of the Company by
its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at such
time, of a minimum of two members of such Executive Committee, any three
available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the foregoing provisions of this Section. This By-Law shall be subject to
implementation by Resolutions of the Board of Directors presently existing or
hereafter passed from time to time for that purpose, and any provisions of these
By-Laws (other than this Section) and any resolutions which are contrary to the
provisions of this Section or to the provisions of any such implementary
Resolutions shall be suspended during such a disaster period until it shall be
determined by any interim Executive
3
<PAGE> 22
Committee acting under this section that it shall be to the advantage of the
Company to resume the conduct and management of its affairs and business under
all of the other provisions of these By-Laws.
4
<PAGE> 23
Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more than thirteen
members who shall be selected by the Board of Directors, a majority of whom
shall be members of the Board of Directors and who shall hold office during the
pleasure of the Board.
(B) The Trust Committee shall have general supervision over the
Trust Department and the investment of trust funds, in all matters, however,
being subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal office of the
Company or elsewhere in its discretion at such times to be determined by a
majority of its members or at the call of its chairman. A majority of its
members shall be necessary to constitute a quorum for the transaction of
business.
(D) Minutes of each meeting of the Trust Committee shall be kept and
promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint Committees
and/or designate officers or employees of the Company to whom supervision over
the investment of trust funds may be delegated when the Trust Committee is not
in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five members who shall
be selected by the Board of Directors from its own members, none of whom shall
be an officer of the Company, and shall hold office at the pleasure of the
Board.
(B) The Audit Committee shall have general supervision over the
Audit Division in all matters however subject to the approval of the Board of
Directors; it shall consider all matters brought to its attention by the officer
in charge of the Audit Division, review all reports of examination of the
Company made by any governmental agency or such independent auditor employed for
that purpose, and make such recommendations to the Board of Directors with
respect thereto or with respect to any other matters pertaining to auditing the
Company as it shall deem desirable.
5
<PAGE> 24
(C) The Audit Committee shall meet whenever and wherever the
majority of its members shall deem it to be proper for the transaction of its
business, and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not more than
five (5) members who shall be selected by the Board of Directors from its own
members who are not officers of the Company and who shall hold office during the
pleasure of the Board.
(B) The Compensation Committee shall in general advise upon all
matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called at any time
by the Chairman of the Compensation Committee, the Chairman of the Board of
Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be elected by the
Board of Directors as an associate director, to serve during the pleasure of the
Board.
(B) An associate director shall be entitled to attend all directors
meetings and participate in the discussion of all matters brought to the Board,
with the exception that he would have no right to vote. An associate director
will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any
Committee created under Article III of the By-Laws of this Company, the member
or members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the place
6
<PAGE> 25
of any such absent or disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of the
Board of Directors shall preside at all meetings of the Board of Directors at
which the Chairman of the Board shall not be present and shall have such further
authority and powers and shall perform such duties as the Board of Directors or
the Chairman of the Board may from time to time confer and direct.
Section 3. The President shall have the powers and duties pertaining
to the office of the President conferred or imposed upon him by statute or
assigned to him by the Board of Directors. In the absence of the Chairman of the
Board the President shall have the powers and duties of the Chairman of the
Board.
Section 4. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and such
other powers and duties as may from time to time be assigned to them by the
Board of Directors, the Executive Committee, the Chairman of the Board or the
President and by the officer in charge of the department or division to which
they are assigned.
Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings and
to recording the same in the minute books of the Company. In addition to the
other notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
7
<PAGE> 26
Section 7. The Treasurer shall have general supervision over all
assets and liabilities of the Company. He shall be custodian of and responsible
for all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller officers
however denominated, who may perform the duties of the Controller and such
duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank to
all Vice Presidents with such functional titles as shall be determined from time
to time by the Board of Directors, who shall ex officio hold the office
Assistant Secretary of this Company and who may perform such duties as may be
prescribed by the officer in charge of the department or division to whom they
are assigned.
Section 11. The powers and duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of the
Company and a transfer book shall be kept in which all transfers of stock shall
be recorded.
8
<PAGE> 27
Section 2. Certificates of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of Directors
and countersigned by the Secretary or Treasurer or an Assistant Secretary, and
the seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of stock
shall be issued only upon giving such security as may be satisfactory to the
Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to fix
in advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent.
9
<PAGE> 28
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the following
form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver and
the Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as though
expressly authorized by the Board of Directors and/or the Executive Committee.
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other
than salaried officers of the Company, shall be paid such reasonable honoraria
or fees for attending meetings of the Board of Directors as the Board of
Directors may from time to time determine. Directors and associate directors who
serve as members of committees, other than salaried employees of the Company,
shall be paid such reasonable honoraria or fees for services as members of
10
<PAGE> 29
committees as the Board of Directors shall from time to time determine and
directors and associate directors may be employed by the Company for such
special services as the Board of Directors may from time to time determine and
shall be paid for such special services so performed reasonable compensation as
may be determined by the Board of Directors.
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless, to
the fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in defending any
proceeding in advance of its final disposition, provided, however, that the
payment of expenses incurred by a Director or officer in his capacity as a
Director or officer in advance of the final disposition of the proceeding shall
be made only upon receipt of an undertaking by the Director or officer to repay
all amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of expenses, under
this Article X is not paid in full within ninety days after a written claim
therefor has been received by the Corporation the claimant may file suit to
recover the unpaid amount of such claim and, if successful in whole or in part,
shall be entitled to be paid the expense of prosecuting such claim. In any such
action the Corporation shall have the burden of proving that the claimant was
not entitled to the requested indemnification of payment of expenses under
applicable law.
(D) The rights conferred on any person by this Article X shall not
be exclusive of any other rights which such person may have or hereafter acquire
under any statute, provision of the Charter or Act of Incorporation, these
By-Laws, agreement, vote of stockholders or disinterested Directors or
otherwise.
11
<PAGE> 30
(E) Any repeal or modification of the foregoing provisions of this
Article X shall not adversely affect any right or protection hereunder of any
person in respect of any act or omission occurring prior to the time of such
repeal or modification.
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in whole
or in part, and any new By-Law or By-Laws adopted at any regular or special
meeting of the Board of Directors by a vote of the majority of all the members
of the Board of Directors then in office.
12
<PAGE> 31
EXHIBIT C
SECTION 321(b) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of examinations
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: December 20, 1999 By: /s/ John M. Beeson, Jr.
----------------- -----------------------
Name: John M. Beeson, Jr.
Title: Vice President
<PAGE> 32
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings banks with
state publication requirements. It has not been approved by any state banking
authorities. Refer to your appropriate state banking authorities for your state
publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- ----------------------------------------------------------- ------------------
Name of Bank City
in the State of DELAWARE , at the close of business on September 30, 1999.
----------
ASSETS
<TABLE>
<CAPTION>
Thousands of dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins .... 182,666
Interest-bearing balances .............................. 0
Held-to-maturity securities .............................. 34,128
Available-for-sale securities ............................ 1,644,067
Federal funds sold and securities purchased under
agreements to resell ................................... 259,962
Loans and lease financing receivables:
Loans and leases, net of unearned income ............... 4,251,934
LESS: Allowance for loan and lease losses ............. 71,014
LESS: Allocated transfer risk reserve ................. 0
Loans and leases, net of unearned income, allowance,
and reserve .......................................... 4,180,920
Assets held in trading accounts .......................... 0
Premises and fixed assets (including capitalized
leases) ................................................ 138,196
Other real estate owned .................................. 976
Investments in unconsolidated subsidiaries and
associated companies ................................... 1,452
Customers' liability to this bank on acceptances
outstanding ............................................ 0
Intangible assets ........................................ 5,092
</TABLE>
<PAGE> 33
<TABLE>
<S> <C>
Other assets ............................................. 142,444
Total assets ............................................. 6,589,903
</TABLE>
CONTINUED ON NEXT PAGE
2
<PAGE> 34
LIABILITIES
<TABLE>
<S> <C>
Deposits:
In domestic offices ...................................... 4,886,770
Noninterest-bearing .................................... 1,084,581
Interest-bearing ....................................... 3,802,189
Federal funds purchased and Securities sold under
agreements to repurchase ............................... 387,343
Demand notes issued to the U.S. Treasury ................. 69,491
Trading liabilities (from Schedule RC-D) ................. 0
Other borrowed money: .................................... ///////
With original maturity of one year or less ............. 655,000
With original maturity of more than one year ........... 43,000
Bank's liability on acceptances executed and outstanding.. 0
Subordinated notes and debentures ........................ 0
Other liabilities (from Schedule RC-G) ................... 84,722
Total liabilities ........................................ 6,126,326
EQUITY CAPITAL
Perpetual preferred stock and related surplus ............ 0
Common Stock ............................................. 500
Surplus (exclude all surplus related to preferred stock) . 62,118
Undivided profits and capital reserves ................... 417,321
Net unrealized holding gains (losses) on
available-for-sale securities .......................... (16,362)
Total equity capital ..................................... 463,577
Total liabilities, limited-life preferred stock, and
equity capital ......................................... 6,589,903
</TABLE>
3
<PAGE> 1
EXHIBIT 25.2
Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) _____________
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
AMERICA WEST AIRLINES,INC.
(Exact name of obligor as specified in its charter)
Delaware 86-0418245
(State of incorporation) (I.R.S. employer identification no.)
4000 E. Sky Harbor Boulevard
Phoenix, Arizona 85034-3899
(Address of principal executive offices) (Zip Code)
Pass Through Certificates, Series 1999-1G
(Title of the indenture securities)
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the
obligor is not an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which
includes the certificate of authority of Wilmington Trust
Company to commence business and the authorization of
Wilmington Trust Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b)
of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, Wilmington Trust Company, a corporation organized and existing under
the laws of Delaware, has duly caused this Statement of Eligibility to be
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<PAGE> 3
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of Wilmington and State of Delaware on the 20th day of December, 1999.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/Rosemary Pantano By: /s/John M. Beeson, Jr.
------------------------ --------------------------------
Assistant Secretary Name: John M. Beeson, Jr.
Title: Vice President
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EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
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AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
WILMINGTON TRUST COMPANY, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate the
Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name
of which company was changed to "WILMINGTON TRUST COMPANY" by an amendment filed
in the Office of the Secretary of State on March 18, A.D. 1903, and the Charter
or Act of Incorporation of which company has been from time to time amended and
changed by merger agreements pursuant to the corporation law for state banks and
trust companies of the State of Delaware, does hereby alter and amend its
Charter or Act of Incorporation so that the same as so altered and amended shall
in its entirety read as follows:
FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.
SECOND: - The location of its principal office in the State of
Delaware is at Rodney Square North, in the City of Wilmington,
County of New Castle; the name of its resident agent is WILMINGTON
TRUST COMPANY whose address is Rodney Square North, in said City. In
addition to such principal office, the said corporation maintains
and operates branch offices in the City of Newark, New Castle
County, Delaware, the Town of Newport, New Castle County, Delaware,
at Claymont, New Castle County, Delaware, at Greenville, New Castle
County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate
branch offices at Ninth and Shipley Streets, 418 Delaware Avenue,
2120 Market Street, and 3605 Market Street, all in the City of
Wilmington, New Castle County, Delaware, and such other branch
offices or places of business as may be authorized from time to time
by the agency or agencies of the government of the State of Delaware
empowered to confer such authority.
THIRD: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this
Corporation are to do any or all of the things herein mentioned as
fully and to the same extent as natural persons might or could do
and in any part of the world, viz.:
(1) To sue and be sued, complain and defend in any Court of
law or equity and to make and use a common seal, and alter
the seal at pleasure, to hold, purchase, convey, mortgage or
otherwise deal in real and personal estate and property, and
to appoint such officers and agents as the business of the
Corporation shall
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require, to make by-laws not inconsistent with the
Constitution or laws of the United States or of this State,
to discount bills, notes or other evidences of debt, to
receive deposits of money, or securities for money, to buy
gold and silver bullion and foreign coins, to buy and sell
bills of exchange, and generally to use, exercise and enjoy
all the powers, rights, privileges and franchises incident
to a corporation which are proper or necessary for the
transaction of the business of the Corporation hereby
created.
(2) To insure titles to real and personal property, or any
estate or interests therein, and to guarantee the holder of
such property, real or personal, against any claim or
claims, adverse to his interest therein, and to prepare and
give certificates of title for any lands or premises in the
State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and management of
funds, and the purchase, sale, management and disposal of
property of all descriptions, and to prepare and execute all
papers which may be necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds,
leases, conveyances, mortgages, bonds and legal papers of
every description, and to carry on the business of
conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry,
plate, deeds, bonds and any and all other personal property
of every sort and kind, from executors, administrators,
guardians, public officers, courts, receivers, assignees,
trustees, and from all fiduciaries, and from all other
persons and individuals, and from all corporations whether
state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of
registering, issuing, certificating, countersigning,
transferring or underwriting the stock, bonds or other
obligations of any corporation, association, state or
municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the two
parties, and in like manner may act as Treasurer of any
corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage,
bond or other instrument issued by any state, municipality,
body politic, corporation, association or person, either
alone or in conjunction with any other person or persons,
corporation or corporations.
(8) To guarantee the validity, performance or effect of any
contract or
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agreement, and the fidelity of persons holding places of
responsibility or trust; to become surety for any person,
or persons, for the faithful performance of any trust,
office, duty, contract or agreement, either by itself or in
conjunction with any other person, or persons, corporation,
or corporations, or in like manner become surety upon any
bond, recognizance, obligation, judgment, suit, order, or
decree to be entered in any court of record within the
State of Delaware or elsewhere, or which may now or
hereafter be required by any law, judge, officer or court
in the State of Delaware or elsewhere.
(9) To act by any and every method of appointment as
trustee, trustee in bankruptcy, receiver, assignee, assignee
in bankruptcy, executor, administrator, guardian, bailee, or
in any other trust capacity in the receiving, holding,
managing, and disposing of any and all estates and property,
real, personal or mixed, and to be appointed as such
trustee, trustee in bankruptcy, receiver, assignee, assignee
in bankruptcy, executor, administrator, guardian or bailee
by any persons, corporations, court, officer, or authority,
in the State of Delaware or elsewhere; and whenever this
Corporation is so appointed by any person, corporation,
court, officer or authority such trustee, trustee in
bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other
trust capacity, it shall not be required to give bond with
surety, but its capital stock shall be taken and held as
security for the performance of the duties devolving upon it
by such appointment.
(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the
performance of any of the duties which it may undertake or
be called upon to perform, or for the assumption of any
responsibility the said Corporation may be entitled to
receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other securities,
obligations, contracts and evidences of indebtedness, of
any private, public or municipal corporation within and
without the State of Delaware, or of the Government of the
United States, or of any state, territory, colony, or
possession thereof, or of any foreign government or
country; to receive, collect, receipt for, and dispose of
interest, dividends and income upon and from any of the
bonds, mortgages, debentures, notes, shares of capital
stock, securities, obligations, contracts, evidences of
indebtedness and other property held and owned by it, and
to exercise in respect of all such bonds, mortgages,
debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and other
property, any and all the rights, powers and privileges of
individual owners thereof, including the right to vote
thereon; to invest and deal in and with any of the moneys
of the Corporation upon such securities and in such manner
as it may think fit and proper, and from
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time to time to vary or realize such investments; to issue
bonds and secure the same by pledges or deeds of trust or
mortgages of or upon the whole or any part of the property
held or owned by the Corporation, and to sell and pledge
such bonds, as and when the Board of Directors shall
determine, and in the promotion of its said corporate
business of investment and to the extent authorized by law,
to lease, purchase, hold, sell, assign, transfer, pledge,
mortgage and convey real and personal property of any name
and nature and any estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers
conferred by the laws of the State of Delaware, it is hereby
expressly provided that the said Corporation shall also have the
following powers:
(1) To do any or all of the things herein set forth, to the
same extent as natural persons might or could do, and in any
part of the world.
(2) To acquire the good will, rights, property and
franchises and to undertake the whole or any part of the
assets and liabilities of any person, firm, association or
corporation, and to pay for the same in cash, stock of this
Corporation, bonds or otherwise; to hold or in any manner to
dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any
part of any business so acquired, and to exercise all the
powers necessary or convenient in and about the conduct and
management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien,
and to lease, sell, exchange, transfer, or in any manner
whatever dispose of property, real, personal or mixed,
wherever situated.
(4) To enter into, make, perform and carry out contracts of
every kind with any person, firm, association or
corporation, and, without limit as to amount, to draw, make,
accept, endorse, discount, execute and issue promissory
notes, drafts, bills of exchange, warrants, bonds,
debentures, and other negotiable or transferable
instruments.
(5) To have one or more offices, to carry on all or any of
its operations and businesses, without restriction to the
same extent as natural persons might or could do, to
purchase or otherwise acquire, to hold, own, to mortgage,
sell, convey or otherwise dispose of, real and personal
property, of every class and description, in any State,
District, Territory or Colony of the United States, and in
any foreign country or place.
(6) It is the intention that the objects, purposes and
powers specified and clauses contained in this paragraph
shall (except where otherwise expressed in said paragraph)
be nowise limited or restricted by reference to or inference
from the
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terms of any other clause of this or any other paragraph in
this charter, but that the objects, purposes and powers
specified in each of the clauses of this paragraph shall be
regarded as independent objects, purposes and powers.
FOURTH: - (a) The total number of shares of all classes of stock
which the Corporation shall have authority to issue is forty-one
million (41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par
value $10.00 per share (hereinafter referred to as
"Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par
value $1.00 per share (hereinafter referred to as "Common
Stock").
(b) Shares of Preferred Stock may be issued from time to time in one
or more series as may from time to time be determined by the Board
of Directors each of said series to be distinctly designated. All
shares of any one series of Preferred Stock shall be alike in every
particular, except that there may be different dates from which
dividends, if any, thereon shall be cumulative, if made cumulative.
The voting powers and the preferences and relative, participating,
optional and other special rights of each such series, and the
qualifications, limitations or restrictions thereof, if any, may
differ from those of any and all other series at any time
outstanding; and, subject to the provisions of subparagraph 1 of
Paragraph (c) of this Article FOURTH, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by
resolution or resolutions adopted prior to the issuance of any
shares of a particular series of Preferred Stock, the voting powers
and the designations, preferences and relative, optional and other
special rights, and the qualifications, limitations and restrictions
of such series, including, but without limiting the generality of
the foregoing, the following:
(1) The distinctive designation of, and the number of shares
of Preferred Stock which shall constitute such series, which
number may be increased (except where otherwise provided by
the Board of Directors) or decreased (but not below the
number of shares thereof then outstanding) from time to time
by like action of the Board of Directors;
(2) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred Stock
of such series shall be paid, the extent of the preference
or relation, if any, of such dividends to the dividends
payable on any other class or classes, or series of the same
or other class of stock and whether such dividends shall be
cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of
such series to convert the same into or exchange the same
for, shares of any other class or classes or of any series
of the same or any other class or classes of stock of the
Corporation
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and the terms and conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series shall be
subject to redemption, and the redemption price or prices
and the time or times at which, and the terms and conditions
on which, Preferred Stock of such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of
such series upon the voluntary or involuntary liquidation,
merger, consolidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Preferred Stock of
such series; and
(7) The voting powers, if any, of the holders of such series
of Preferred Stock which may, without limiting the
generality of the foregoing include the right, voting as a
series or by itself or together with other series of
Preferred Stock or all series of Preferred Stock as a class,
to elect one or more directors of the Corporation if there
shall have been a default in the payment of dividends on any
one or more series of Preferred Stock or under such
circumstances and on such conditions as the Board of
Directors may determine.
(c) (1) After the requirements with respect to preferential
dividends on the Preferred Stock (fixed in accordance with the
provisions of section (b) of this Article FOURTH), if any, shall
have been met and after the Corporation shall have complied with all
the requirements, if any, with respect to the setting aside of sums
as sinking funds or redemption or purchase accounts (fixed in
accordance with the provisions of section (b) of this Article
FOURTH), and subject further to any conditions which may be fixed in
accordance with the provisions of section (b) of this Article
FOURTH, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to
time by the Board of Directors.
(2) After distribution in full of the preferential amount,
if any, (fixed in accordance with the provisions of section
(b) of this Article FOURTH), to be distributed to the
holders of Preferred Stock in the event of voluntary or
involuntary liquidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation, the holders
of the Common Stock shall be entitled to receive all of the
remaining assets of the Corporation, tangible and
intangible, of whatever kind available for distribution to
stockholders ratably in proportion to the number of shares
of Common Stock held by them respectively.
(3) Except as may otherwise be required by law or by the
provisions of such resolution or resolutions as may be
adopted by the Board of Directors pursuant to section (b) of
this Article FOURTH, each holder of Common Stock shall have
one
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vote in respect of each share of Common Stock held on all
matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock
or of options, warrants or other rights to purchase shares of any
class or series of stock or of other securities of the Corporation
shall have any preemptive right to purchase or subscribe for any
unissued stock of any class or series or any additional shares of
any class or series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or series,
or bonds, certificates of indebtedness, debentures or other
securities convertible into or exchangeable for stock of the
Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued stock,
additional authorized issue of shares of any class or series of
stock or securities convertible into or exchangeable for stock, or
carrying any right to purchase stock, may be issued and disposed of
pursuant to resolution of the Board of Directors to such persons,
firms, corporations or associations, whether such holders or others,
and upon such terms as may be deemed advisable by the Board of
Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and
rights of each other series of Preferred Stock shall, in each case,
be as fixed from time to time by the Board of Directors in the
resolution or resolutions adopted pursuant to authority granted in
section (b) of this Article FOURTH and the consent, by class or
series vote or otherwise, of the holders of such of the series of
Preferred Stock as are from time to time outstanding shall not be
required for the issuance by the Board of Directors of any other
series of Preferred Stock whether or not the powers, preferences and
rights of such other series shall be fixed by the Board of Directors
as senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided,
however, that the Board of Directors may provide in the resolution
or resolutions as to any series of Preferred Stock adopted pursuant
to section (b) of this Article FOURTH that the consent of the
holders of a majority (or such greater proportion as shall be
therein fixed) of the outstanding shares of such series voting
thereon shall be required for the issuance of any or all other
series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series
of Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the
Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of
Directors.
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(h) The authorized amount of shares of Common Stock and of Preferred
Stock may, without a class or series vote, be increased or decreased
from time to time by the affirmative vote of the holders of a
majority of the stock of the Corporation entitled to vote thereon.
FIFTH: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of
directors constituting the entire Board shall be not less than five
nor more than twenty-five as fixed from time to time by vote of a
majority of the whole Board, provided, however, that the number of
directors shall not be reduced so as to shorten the term of any
director at the time in office, and provided further, that the
number of directors constituting the whole Board shall be
twenty-four until otherwise fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of one
class expiring each year. At the annual meeting of stockholders in
1982, directors of the first class shall be elected to hold office
for a term expiring at the next succeeding annual meeting, directors
of the second class shall be elected to hold office for a term
expiring at the second succeeding annual meeting and directors of
the third class shall be elected to hold office for a term expiring
at the third succeeding annual meeting. Any vacancies in the Board
of Directors for any reason, and any newly created directorships
resulting from any increase in the directors, may be filled by the
Board of Directors, acting by a majority of the directors then in
office, although less than a quorum, and any directors so chosen
shall hold office until the next annual election of directors. At
such election, the stockholders shall elect a successor to such
director to hold office until the next election of the class for
which such director shall have been chosen and until his successor
shall be elected and qualified. No decrease in the number of
directors shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding
the fact that some lesser percentage may be specified by law, this
Charter or Act of Incorporation or the ByLaws of the Corporation),
any director or the entire Board of Directors of the Corporation may
be removed at any time without cause, but only by the affirmative
vote of the holders of two-thirds or more of the outstanding shares
of capital stock of the Corporation entitled to vote generally in
the election of directors (considered for this purpose as one class)
cast at a meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the
Board of Directors or by any stockholder entitled to vote for the
election of directors. Such nominations shall be made by notice in
writing, delivered or mailed by first class United States mail,
postage prepaid, to the Secretary of the Corporation not less than
14 days nor more
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than 50 days prior to any meeting of the stockholders called for the
election of directors; provided, however, that if less than 21 days'
notice of the meeting is given to stockholders, such written notice
shall be delivered or mailed, as prescribed, to the Secretary of the
Corporation not later than the close of the seventh day following
the day on which notice of the meeting was mailed to stockholders.
Notice of nominations which are proposed by the Board of Directors
shall be given by the Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name,
age, business address and, if known, residence address of each
nominee proposed in such notice, (ii) the principal occupation or
employment of such nominee and (iii) the number of shares of stock
of the Corporation which are beneficially owned by each such
nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine
and declare to the meeting that a nomination was not made in
accordance with the foregoing procedure, and if he should so
determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any
annual or special meeting of stockholders of the Corporation may be
taken without a meeting, and the power of stockholders to consent in
writing, without a meeting, to the taking of any action is
specifically denied.
SIXTH: - The Directors shall choose such officers, agents and
servants as may be provided in the By-Laws as they may from time to
time find necessary or proper.
SEVENTH: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon corporations
organized under the Act entitled "An Act Providing a General
Corporation Law", approved March 10, 1899, as from time to time
amended.
EIGHTH: - This Act shall be deemed and taken to be a private Act.
NINTH: - This Corporation is to have perpetual existence.
TENTH: - The Board of Directors, by resolution passed by a majority
of the whole Board, may designate any of their number to constitute
an Executive Committee, which Committee, to the extent provided in
said resolution, or in the By-Laws of the Company, shall have and
may exercise all of the powers of the Board of Directors in the
management of the business and affairs of the Corporation, and shall
have power to authorize the seal of the Corporation to be affixed to
all papers which may require it.
ELEVENTH: - The private property of the stockholders shall not be
liable for the payment
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of corporate debts to any extent whatever.
TWELFTH: - The Corporation may transact business in any part of the
world.
THIRTEENTH: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation
by a vote of the majority of the entire Board. The stockholders may
make, alter or repeal any By-Law whether or not adopted by them,
provided however, that any such additional By-Laws, alterations or
repeal may be adopted only by the affirmative vote of the holders of
two-thirds or more of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class).
FOURTEENTH: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time to time
designated by the Board, and the Directors may keep the books of the
Company outside of the State of Delaware at such places as may be
from time to time designated by them.
FIFTEENTH: - (a)(1) In addition to any affirmative vote required by
law, and except as otherwise expressly provided in sections (b) and
(c) of this Article FIFTEENTH:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any
Interested Stockholder (as hereinafter defined) or (ii) any
other corporation (whether or not itself an Interested
Stockholder), which, after such merger or consolidation,
would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of related
transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
Corporation or any Subsidiary having an aggregate fair
market value of $1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or any
Subsidiary to any Interested Stockholder or any Affiliate of
any Interested Stockholder in exchange for cash, securities
or other property (or a combination thereof) having an
aggregate fair market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation
or dissolution of the Corporation, or
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
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Corporation with any of its Subsidiaries or any similar
transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect,
directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary
which is directly or indirectly owned by any Interested
Stockholder, or any Affiliate of any Interested Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this Article
FIFTEENTH shall mean any transaction which is referred to in
any one or more of clauses (A) through (E) of paragraph 1 of
the section (a).
(b) The provisions of section (a) of this Article FIFTEENTH
shall not be applicable to any particular business
combination and such business combination shall require only
such affirmative vote as is required by law and any other
provisions of the Charter or Act of Incorporation or By-Laws
if such business combination has been approved by a majority
of the whole Board.
(c) For the purposes of this Article FIFTEENTH:
(1) A "person" shall mean any individual, firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any
Subsidiary) who or which as of the record date for the determination
of stockholders entitled to notice of and to vote on such business
combination, or immediately prior to the consummation of any such
transaction:
(A) is the beneficial owner, directly or indirectly, of more
than 10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial owner,
directly or indirectly, of not less than 10% of the then
outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any
share of capital stock of the Corporation which were at any
time within two years prior thereto
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beneficially owned by any Interested Stockholder, and such
assignment or succession shall have occurred in the course
of a transaction or series of transactions not involving a
public offering within the meaning of the Securities Act of
1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and
Associates (as hereafter defined) beneficially own, directly
or indirectly, or
(B) which such person or any of its Affiliates or Associates
has (i) the right to acquire (whether such right is
exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (ii) the right to vote
pursuant to any agreement, arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly, by
any other person with which such first mentioned person or
any of its Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of capital stock
of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any
other Voting Shares which may be issuable pursuant to any agreement,
or upon exercise of conversion rights, warrants or options or
otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings
given those terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as in effect on December
31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of
any class of equity security (as defined in Rule 3a11-1 of the
General Rules and Regulations under the Securities Exchange Act of
1934, as in effect on December 31, 1981) is owned, directly or
indirectly, by the Corporation; provided, however, that for the
purposes of the definition of Investment Stockholder set forth in
paragraph (2) of this section (c), the term "Subsidiary" shall mean
only a corporation of which a majority of each class of equity
security is owned, directly or indirectly, by the Corporation.
(d) majority of the directors shall have the power and duty
to determine for the purposes of this Article FIFTEENTH on
the basis of information known to them, (1) the number of
Voting Shares beneficially owned by any person (2) whether a
person is an Affiliate or Associate of another, (3) whether
a person has an
12
<PAGE> 17
agreement, arrangement or understanding with another as to
the matters referred to in paragraph (3) of section (c), or
(4) whether the assets subject to any business combination
or the consideration received for the issuance or transfer
of securities by the Corporation, or any Subsidiary has an
aggregate fair market value of $1,000,000 or more.
(e) Nothing contained in this Article FIFTEENTH shall be
construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
SIXTEENTH: Notwithstanding any other provision of this Charter or
Act of Incorporation or the By-Laws of the Corporation (and in
addition to any other vote that may be required by law, this Charter
or Act of Incorporation by the By-Laws), the affirmative vote of the
holders of at least two-thirds of the outstanding shares of the
capital stock of the Corporation entitled to vote generally in the
election of directors (considered for this purpose as one class)
shall be required to amend, alter or repeal any provision of
Articles FIFTH, THIRTEENTH, FIFTEENTH or SIXTEENTH of this Charter
or Act of Incorporation.
SEVENTEENTH: (a) a Director of this Corporation shall not be liable
to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a Director, except to the extent such
exemption from liability or limitation thereof is not permitted
under the Delaware General Corporation Laws as the same exists or
may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph
shall not adversely affect any right or protection of a
Director of the Corporation existing hereunder with respect
to any act or omission occurring prior to the time of such
repeal or modification."
13
<PAGE> 18
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON JANUARY 16, 1997
<PAGE> 19
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or at
such other date, time, or place as may be designated by resolution by the Board
of Directors.
Section 2. Special meetings of all stockholders may be called at any
time by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given
by mailing to each stockholder at least ten (10) days before said meeting, at
his last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each share of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors
shall be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72)
years shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for
three years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed
and conducted by the Board of Directors.
Section 5. The Board of Directors shall meet at the principal office
of the Company or elsewhere in its discretion at such times to be determined by
a majority of its members, or at the
<PAGE> 20
call of the Chairman of the Board of Directors or the President.
Section 6. Special meetings of the Board of Directors may be called
at any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall
be necessary to constitute a quorum for the transaction of business at any
meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of
any special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board of Directors,
although less than a quorum, shall have the right to elect the successor who
shall hold office for the remainder of the full term of the class of directors
in which the vacancy occurred, and until such director's successor shall have
been duly elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect from
its own members a Chairman of the Board of Directors and a President who may be
the same person. The Board of Directors shall also elect at such meeting a
Secretary and a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as it may deem
advisable. The Board of Directors may also elect at such meeting one or more
Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or divisions of the Company as it may deem
advisable.
ARTICLE III
COMMITTEES
Section 1. Executive Committee
(A) The Executive Committee shall be composed of not more than
nine members
2
<PAGE> 21
who shall be selected by the Board of Directors from its own members and who
shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the Board
of Directors when it is not in session to transact all business for and in
behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal office of
the Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Executive
Committee or at the call of the Chairman of the Board of Directors. The majority
of its members shall be necessary to constitute a quorum for the transaction of
business. Special meetings of the Executive Committee may be held at any time
when a quorum is present.
(D) Minutes of each meeting of the Executive Committee shall be
kept and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.
(F) In the event of a state of disaster of sufficient severity to
prevent the conduct and management of the affairs and business of the Company by
its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at such
time, of a minimum of two members of such Executive Committee, any three
available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the foregoing provisions of this Section. This By-Law shall be subject to
implementation by Resolutions of the Board of Directors presently existing or
hereafter passed from time to time for that purpose, and any provisions of these
By-Laws (other than this Section) and any resolutions which are contrary to the
provisions of this Section or to the provisions of any such implementary
Resolutions shall be suspended during such a disaster period until it shall be
determined by any interim Executive
3
<PAGE> 22
Committee acting under this section that it shall be to the advantage of the
Company to resume the conduct and management of its affairs and business under
all of the other provisions of these By-Laws.
4
<PAGE> 23
Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more than
thirteen members who shall be selected by the Board of Directors, a majority of
whom shall be members of the Board of Directors and who shall hold office during
the pleasure of the Board.
(B) The Trust Committee shall have general supervision over the
Trust Department and the investment of trust funds, in all matters, however,
being subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal office of the
Company or elsewhere in its discretion at such times to be determined by a
majority of its members or at the call of its chairman. A majority of its
members shall be necessary to constitute a quorum for the transaction of
business.
(D) Minutes of each meeting of the Trust Committee shall be kept
and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint Committees
and/or designate officers or employees of the Company to whom supervision over
the investment of trust funds may be delegated when the Trust Committee is not
in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five members who
shall be selected by the Board of Directors from its own members, none of whom
shall be an officer of the Company, and shall hold office at the pleasure of the
Board.
(B) The Audit Committee shall have general supervision over the
Audit Division in all matters however subject to the approval of the Board of
Directors; it shall consider all matters brought to its attention by the officer
in charge of the Audit Division, review all reports of examination of the
Company made by any governmental agency or such independent auditor employed for
that purpose, and make such recommendations to the Board of Directors with
respect thereto or with respect to any other matters pertaining to auditing the
Company as it shall deem desirable.
<PAGE> 24
(C) The Audit Committee shall meet whenever and wherever the
majority of its members shall deem it to be proper for the transaction of its
business, and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not more than
five (5) members who shall be selected by the Board of Directors from its own
members who are not officers of the Company and who shall hold office during the
pleasure of the Board.
(B) The Compensation Committee shall in general advise upon all
matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called at any
time by the Chairman of the Compensation Committee, the Chairman of the Board of
Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be elected by the
Board of Directors as an associate director, to serve during the pleasure of the
Board.
(B) An associate director shall be entitled to attend all
directors meetings and participate in the discussion of all matters brought to
the Board, with the exception that he would have no right to vote. An associate
director will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any
Committee created under Article III of the By-Laws of this Company, the member
or members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the place
6
<PAGE> 25
of any such absent or disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at
all meetings of the Board and shall have such further authority and powers and
shall perform such duties as the Board of Directors may from time to time confer
and direct. He shall also exercise such powers and perform such duties as may
from time to time be agreed upon between himself and the President of the
Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of the
Board of Directors shall preside at all meetings of the Board of Directors at
which the Chairman of the Board shall not be present and shall have such further
authority and powers and shall perform such duties as the Board of Directors or
the Chairman of the Board may from time to time confer and direct.
Section 3. The President shall have the powers and duties pertaining
to the office of the President conferred or imposed upon him by statute or
assigned to him by the Board of Directors. In the absence of the Chairman of the
Board the President shall have the powers and duties of the Chairman of the
Board.
Section 4. The Chairman of the Board of Directors or the President
as designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and such
other powers and duties as may from time to time be assigned to them by the
Board of Directors, the Executive Committee, the Chairman of the Board or the
President and by the officer in charge of the department or division to which
they are assigned.
Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings and
to recording the same in the minute books of the Company. In addition to the
other notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
7
<PAGE> 26
Section 7. The Treasurer shall have general supervision over all
assets and liabilities of the Company. He shall be custodian of and responsible
for all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller
officers however denominated, who may perform the duties of the Controller and
such duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of the Auditor and
such duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank
to all Vice Presidents with such functional titles as shall be determined from
time to time by the Board of Directors, who shall ex officio hold the office
Assistant Secretary of this Company and who may perform such duties as may be
prescribed by the officer in charge of the department or division to whom they
are assigned.
Section 11. The powers and duties of all other officers of the
Company shall be those usually pertaining to their respective offices, subject
to the direction of the Board of Directors, the Executive Committee, Chairman of
the Board of Directors or the President and the officer in charge of the
department or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of
the Company and a transfer book shall be kept in which all transfers of stock
shall be recorded.
8
<PAGE> 27
Section 2. Certificates of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of Directors
and countersigned by the Secretary or Treasurer or an Assistant Secretary, and
the seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of stock
shall be issued only upon giving such security as may be satisfactory to the
Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to
fix in advance a record date for the determination of the stockholders entitled
to notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent.
9
<PAGE> 28
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the
following form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar
year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver and
the Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as though
expressly authorized by the Board of Directors and/or the Executive Committee.
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other
than salaried officers of the Company, shall be paid such reasonable honoraria
or fees for attending meetings of the Board of Directors as the Board of
Directors may from time to time determine. Directors and associate directors who
serve as members of committees, other than salaried employees of the Company,
shall be paid such reasonable honoraria or fees for services as members of
10
<PAGE> 29
committees as the Board of Directors shall from time to time determine and
directors and associate directors may be employed by the Company for such
special services as the Board of Directors may from time to time determine and
shall be paid for such special services so performed reasonable compensation
as may be determined by the Board of Directors.
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless, to
the fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in defending
any proceeding in advance of its final disposition, provided, however, that the
payment of expenses incurred by a Director or officer in his capacity as a
Director or officer in advance of the final disposition of the proceeding shall
be made only upon receipt of an undertaking by the Director or officer to repay
all amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of expenses, under
this Article X is not paid in full within ninety days after a written claim
therefor has been received by the Corporation the claimant may file suit to
recover the unpaid amount of such claim and, if successful in whole or in part,
shall be entitled to be paid the expense of prosecuting such claim. In any such
action the Corporation shall have the burden of proving that the claimant was
not entitled to the requested indemnification of payment of expenses under
applicable law.
(D) The rights conferred on any person by this Article X shall not
be exclusive of any other rights which such person may have or hereafter acquire
under any statute, provision of the Charter or Act of Incorporation, these
By-Laws, agreement, vote of stockholders or disinterested Directors or
otherwise.
11
<PAGE> 30
(E) Any repeal or modification of the foregoing provisions of this
Article X shall not adversely affect any right or protection hereunder of any
person in respect of any act or omission occurring prior to the time of such
repeal or modification.
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in
whole or in part, and any new By-Law or By-Laws adopted at any regular or
special meeting of the Board of Directors by a vote of the majority of all the
members of the Board of Directors then in office.
12
<PAGE> 31
EXHIBIT C
SECTION 321(b) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of examinations
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: December 20, 1999 By: /s/ John M. Beeson, Jr.
----------------- -----------------------
Name: John M. Beeson, Jr.
Title: Vice President
<PAGE> 32
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings banks with
state publication requirements. It has not been approved by any state banking
authorities. Refer to your appropriate state banking authorities for your state
publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- ---------------------------------------------------------- -----------------
Name of Bank City
in the State of DELAWARE , at the close of business on September 30, 1999.
------------
<TABLE>
<CAPTION>
ASSETS
Thousands of dollars
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins............................................ 182,666
Interest-bearing balances...................................................................... 0
Held-to-maturity securities................................................................................ 34,128
Available-for-sale securities.............................................................................. 1,644,067
Federal funds sold and securities purchased under agreements to resell..................................... 259,962
Loans and lease financing receivables:
Loans and leases, net of unearned income ........................... 4,251,934
LESS: Allowance for loan and lease losses ......................... 71,014
LESS: Allocated transfer risk reserve ............................. 0
Loans and leases, net of unearned income, allowance, and reserve.............................. 4,180,920
Assets held in trading accounts........................................................................... 0
Premises and fixed assets (including capitalized leases).................................................. 138,196
Other real estate owned................................................................................... 976
Investments in unconsolidated subsidiaries and associated companies....................................... 1,452
Customers' liability to this bank on acceptances outstanding.............................................. 0
Intangible assets......................................................................................... 5,092
</TABLE>
<PAGE> 33
<TABLE>
<S> <C>
Other assets.............................................................................................. 142,444
Total assets.............................................................................................. 6,589,903
</TABLE>
CONTINUED ON NEXT PAGE
2
<PAGE> 34
<TABLE>
<S> <C> <C>
LIABILITIES
Deposits:
In domestic offices..................................................................................... 4,886,770
Noninterest-bearing .............................................. 1,084,581
Interest-bearing ................................................. 3,802,189
Federal funds purchased and Securities sold under agreements to repurchase.............................. 387,343
Demand notes issued to the U.S. Treasury................................................................ 69,491
Trading liabilities (from Schedule RC-D)................................................................ 0
Other borrowed money:................................................................................... ///////
With original maturity of one year or less.................................................. 655,000
With original maturity of more than one year................................................ 43,000
Bank's liability on acceptances executed and outstanding................................................ 0
Subordinated notes and debentures....................................................................... 0
Other liabilities (from Schedule RC-G).................................................................. 84,722
Total liabilities....................................................................................... 6,126,326
EQUITY CAPITAL
Perpetual preferred stock and related surplus........................................................... 0
Common Stock............................................................................................ 500
Surplus (exclude all surplus related to preferred stock)................................................ 62,118
Undivided profits and capital reserves.................................................................. 417,321
Net unrealized holding gains (losses) on available-for-sale securities.................................. (16,362)
Total equity capital.................................................................................... 463,577
Total liabilities, limited-life preferred stock, and equity capital..................................... 6,589,903
</TABLE>
3
