Registration No. 333-[ ]
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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US AIRWAYS, INC.
Delaware 4512 53 - 0218143
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation or Industrial Code Identification
organization) Number) Number)
2345 Crystal Drive
Arlington, Virginia 22227
(703) 872-7000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
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Terry L. Hall
Senior Vice President-Finance and Chief Financial Officer
US Airways, Inc.
2345 Crystal Drive
Arlington, Virginia 22227
(703) 872-7000
(Name, address, including zip code, and
telephone number, including area code,
of agent for service)
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Approximate date of commencement of proposed sale to the public:
From time to time after this Registration Statement becomes effective.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
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Title of Each Class Proposed Maximum Proposed Amount of
of Securities to Amount to be Offering Price Maximum Aggregate Registration
be Registered Registered (1) Per Unit (1) Offering Price (2) Fee (3)
===================================================================================================
<S> <C> <C> <C> <C>
Pass Through Certificates $ $ $1,000,000,000 $295,000
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(1) Omitted pursuant to Rule 457(o).
(2) Estimated solely for purposes of determining the registration fee pursuant to Rule 457(o) under
the Securities Act of 1933, as amended.
(3) Pursuant to Rule 457(o), the registration fee has been calculated on the basis of the maximum
aggregate offering price of the securities listed.
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The Registrant hereby amends this Registration Statement on such date or dates as may be
necessary to delay its effective date until the Registrant will file a further amendment which
specifically states that this Registration Statement will thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until the Registration Statement will become
effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
</TABLE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS WILL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR WILL THERE BE ANY SALE OF THESE
SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE
WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES
LAWS OF ANY SUCH JURISDICTION.
PROSPECTUS
SUBJECT TO COMPLETION - DATED SEPTEMBER 28, 1998
$1,000,000,000
US AIRWAYS, INC.
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PASS THROUGH CERTIFICATES
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Up to $1,000,000,000 aggregate public offering price of Pass Through
Certificates (the "Certificates") (or its equivalent (based on the applicable
exchange rate at the time of sale) in one or more foreign currencies or
currency units) may be offered for sale from time to time pursuant to this
Prospectus and related Prospectus Supplements (as defined below).
Certificates may be issued in one or more series in amounts, at prices and on
terms to be determined at the time of the offering. In respect of each
offering of Certificates, a separate US Airways Pass Through Trust for each
series of Certificates being offered (each, a "Trust") will be formed
pursuant to one or more Pass Through Trust Agreements (each, a "Basic
Agreement") and one or more supplements thereto (each, a "Trust Supplement")
relating to such Trust to be entered into between US Airways, Inc.
("US Airways" or the "Company") and the trustee named therein (the
"Trustee"), as trustee under each Trust. Unless otherwise specified, the
Trustee will be State Street Bank and Trust Company. Each Certificate in a
series will represent a fractional undivided interest in the related Trust
and will have no rights, benefits or interests in respect of any other Trust.
The property of the Trusts will consist of (a) equipment notes issued on a
nonrecourse basis by one or more owner trustees pursuant to separate
leveraged lease transactions (the "Leased Aircraft Notes") to finance or
refinance a portion of the equipment cost of aircraft, including engines
(each, a "Leased Aircraft" and, collectively, the "Leased Aircraft"), which
have been or will be leased to US Airways pursuant to a separate lease
agreement (each such lease agreement, a "Lease") for each Leased Aircraft,
(b) equipment notes issued with recourse to US Airways (the "Owned Aircraft
Notes" and, together with any Leased Aircraft Notes, the "Equipment Notes")
or (c) a combination of Leased Aircraft Notes and Owned Aircraft Notes to
finance or refinance all or a portion of the equipment cost of, or to
purchase all or a portion of the outstanding debt with respect to, aircraft,
including engines (each, an "Owned Aircraft" and, collectively, the "Owned
Aircraft", together with Leased Aircraft, the "Aircraft"), which have been or
will be purchased and owned by US Airways. To the extent that the proceeds
of any offering of Certificates are not used to purchase Equipment Notes on
the date of issuance of such Certificates, such proceeds will be held for the
benefit of the holders of such Certificates.
The specific terms of the particular Certificates in respect of which
this Prospectus is being delivered will be set forth in a supplement to this
Prospectus (the "Prospectus Supplement") which will be delivered together
with this Prospectus, including, where applicable, the specific designation,
form, aggregate principal amount, interest rate, final distribution date,
ranking in respect of priority of payment, initial public offering price and
distribution dates relating to such Certificates, the currency in which such
Certificates will be payable, the Trust or Trusts relating to such
Certificates, the Equipment Notes to be purchased by such Trust or Trusts,
the Aircraft relating to such Equipment Notes, the leveraged lease
transactions or financing arrangements, as the case may be, relating to such
Equipment Notes and other special terms relating to such Certificates and the
net proceeds from the offering of such Certificates. The Certificates will
be issued in registered form only and may, if so specified in the applicable
Prospectus Supplement, be issued in accordance with a book-entry system.
With respect to one or more Aircraft, Equipment Notes may be issued,
each of which may have a different interest rate, final maturity date and
ranking in respect of priority of payment. For each series of Certificates,
the Trustee will purchase one or more Equipment Notes issued with respect to
one or more Aircraft such that all of the Equipment Notes held in the related
Trust will have identical ranking and identical interest rates (in each case
equal to the rate applicable to the Certificates issued by such Trust), and
such that the latest maturity date for such Equipment Notes will occur on or
before the final distribution date for such Certificates. Interest paid on
the Equipment Notes held in each Trust will be passed through to the holders
of the Certificates relating to such Trust on the dates and at the rate per
annum set forth in the Prospectus Supplement relating to such Certificates
until the final distribution date for such Trust, subject to the effect of
any cross-subordination provisions described in the Prospectus Supplement for
a series of Certificates. Principal paid on the Equipment Notes held in each
Trust will be passed through to the holders of the Certificates relating to
such Trust in scheduled amounts on the dates set forth in the Prospectus
Supplement relating to such Certificates until the final distribution date
for such Trust, subject to the effect of any cross-subordination provisions
described in the Prospectus Supplement for a series of Certificates. The
Owned Aircraft Notes issued with respect to any Owned Aircraft will be
secured by a security interest in such Aircraft and will be direct
obligations of US Airways. The Leased Aircraft Notes issued with respect to
each Leased Aircraft, except during the Pre-Funding Period (as defined
herein), if any, will be secured by a security interest in the Leased
Aircraft and by a security interest in the Lease relating thereto, including
the right to receive rentals payable by US Airways in respect of such Leased
Aircraft. Although neither the Certificates nor the Leased Aircraft Notes
will be direct obligations of, or guaranteed by, US Airways, the amounts
unconditionally payable by US Airways for lease of Leased Aircraft will be
sufficient to pay in full when due all payments required to be made on the
corresponding Leased Aircraft Notes, except as described under "Description
of Equipment Notes-General" relating to any Pre-Funding Period with respect
to such Leased Aircraft.
If specified in the applicable Prospectus Supplement, during any Pre-
Funding Period, the related Leased Aircraft Notes will be secured either by a
collateral account
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funded by the net proceeds of the sale of such Leased Aircraft Notes to the
Trustee and, if specified in the applicable Prospectus Supplement, by other
security (which may include a letter of credit) or by a depositary
arrangement. Funds in such collateral account, together with any such other
security or amounts payable under a depositary arrangement will be available
to pay any principal due and interest accrued on such Leased Aircraft Notes
during such Pre-Funding Period, as well as to fund any mandatory prepayment
of such Leased Aircraft Notes during such Pre-Funding Period.
The Certificates may be sold to or through underwriters, through dealers
or agents or directly to purchasers. See "Plan of Distribution." The
Prospectus Supplement will set forth the names of any underwriters, dealers
or agents involved in the sale of the Certificates in respect of which this
Prospectus is being delivered, the proposed amounts, if any, to be purchased
by underwriters and the compensation, if any, of such underwriters or agents.
See "Plan of Distribution" for information concerning secondary trading of
the Certificates.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF CERTIFICATES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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The date of this Prospectus is ___________, 1998.
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3
TABLE OF CONTENTS
Page
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Available Information 5
Incorporation of Certain Documents by Reference 5
The Company 6
Use of Proceeds 7
Ratio of Earnings to Fixed Charges 8
General Outline of Trust Structure 8
Description of the Certificates 9
Description of the Equipment Notes 26
Certain United States Federal Income Tax Consequences 36
ERISA Considerations 40
Plan of Distribution 40
Legal Opinions 42
Experts 43
Other Information 43
4
AVAILABLE INFORMATION
US Airways has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (together with all
amendments, exhibits and schedules, the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to
the Certificates offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission,
and to which reference is hereby made. Statements made in this Prospectus as
to the contents of any contract, agreement or other document referred to are
not necessarily complete. With respect to each such contract, agreement or
other document filed as an exhibit to the Registration Statement, reference
is made to the exhibit for a more complete description of the matter
involved.
US Airways is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files periodic reports and other information with the
Commission. Such reports and other information, as well as the Registration
Statement may be inspected at the public reference facilities maintained by
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, Room 1024,
and at the regional offices of the Commission located at Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661 and at 7 World Trade
Center, 13th Floor, New York, New York 10048. Copies of such materials may
be obtained from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. Such material may
also be accessed electronically by means of the Commission's Internet web
site (http://www.sec.gov), which contains reports, proxy and information
statements and other information regarding registrants that file
electronically with the Commission. In addition, reports, proxy statements
and other information concerning US Airways may be inspected and copied at
the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York,
New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No. 1-8442) are
hereby incorporated by reference in this Prospectus: (i) US Airways' Annual
Report on Form 10-K for the year ended December 31, 1997, filed on March 19,
1998, (ii) US Airways' Quarterly Reports on Form 10-Q for the quarterly
periods ended March 31, 1998, filed on May 11, 1998, and June 30, 1998, filed
on August 6, 1998, and (iii) US Airways' Current Reports on Form 8-K filed on
January 22, February 4, April 22, June 4, July 2, July 22, and September 4,
1998.
All documents filed by US Airways pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination
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of the offering of the Certificates offered hereby will be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from
the respective dates of filing of such documents. Any statement contained in
a document incorporated or deemed to be incorporated herein by reference, or
contained in this Prospectus, will be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein or contained in the Prospectus Supplement
with respect to the Certificates modifies or supersedes such statement. Any
such statement so modified or superseded will not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
US Airways will provide without charge to any person to whom a copy of
this Prospectus has been delivered, upon written or oral request, a copy of
any or all of the foregoing documents incorporated herein by reference (other
than exhibits to such documents). Requests should be directed to US Airways,
Inc., 2345 Crystal Drive, Arlington, Virginia 22227, Attn: Secretary,
telephone (703) 872-7000.
THE COMPANY
US Airways, the principal wholly-owned subsidiary of US Airways Group,
Inc., operates the fifth largest domestic air carrier (as ranked by revenue
passenger miles (RPMs) flown) and is engaged primarily in the business of
transporting passengers, property and mail. As of July 31, 1998, US Airways
operated 369 jet aircraft and provided regularly scheduled service through
104 airports in 38 states in the continental United States, Canada, Mexico,
Netherlands, France, Germany, Italy, Spain and the Caribbean.
Enplaning almost 59 million passengers in 1997, US Airways has principal
hubs at the major airports in Charlotte, Philadelphia and Pittsburgh. US
Airways also has substantial operations at Baltimore/Washington International
Airport (BWI), Boston's Logan International Airport, New York's LaGuardia
Airport (LaGuardia) and Washington D.C.'s Ronald Reagan Washington National
Airport (National). US Airways is the leading airline from the Northeast
United States to Florida and currently has approximately 84% of its
departures and approximately 56% of its capacity (available seat miles or
ASMs) deployed in the eastern United States.
US Airways is a Delaware corporation and its executive offices are
located at 2345 Crystal Drive, Arlington, Virginia 22227 and its telephone
number is (703) 872-7000.
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USE OF PROCEEDS
Except as set forth in a Prospectus Supplement for a specific offering
of Certificates, the Certificates will be issued in order to facilitate
either (a) the financing or refinancing of the debt portion and, in certain
cases, the refinancing of some of the equity portion of one or more separate
leveraged lease transactions entered into by US Airways, as lessee, with
respect to the Leased Aircraft as described in the applicable Prospectus
Supplement, (b) the financing or refinancing of the aggregate principal
amount of debt to be issued, or the purchase of the aggregate principal
amount of the debt previously issued, by US Airways in respect of the Owned
Aircraft as described in the applicable Prospectus Supplement or (c) a
combination of the foregoing. Except as set forth in a Prospectus Supplement
for a specific offering of Certificates, the proceeds from the sale of the
Certificates will be used by the Trustee on behalf of the applicable Trust or
Trusts to purchase either (a) Leased Aircraft Notes issued by the respective
Owner Trustee or Owner Trustees to finance or refinance (as specified in the
applicable Prospectus Supplement) the related Leased Aircraft, (b) Owned
Aircraft Notes issued by US Airways to finance or refinance (as specified in
the applicable Prospectus Supplement) the related Owned Aircraft or (c) a
combination of Leased Aircraft Notes and Owned Aircraft Notes. To the extent
that the proceeds of any offering of Certificates are not used to purchase
Equipment Notes on the date of issuance of such Certificates, such proceeds
will be held for the benefit of the holders of such Certificates. If any
such proceeds are not subsequently utilized to purchase Equipment Notes by
the relevant date specified in the applicable Prospectus Supplement, such
proceeds will be returned to the holders of such Certificates. See
"Description of Certificates--Delayed Purchase of Equipment Notes."
Except as set forth in a Prospectus Supplement for a specific offering
of Certificates, if, for any Leased Aircraft, under the circumstances
discussed below in "Description of Equipment Notes -- Delayed Lease
Commencement" the proceeds from the sale of the related Leased Aircraft Notes
to the applicable Trusts are not applied by the Owner Trustee to pay the
purchase price for such Leased Aircraft on the date of the purchase of such
Leased Aircraft Notes by such Trusts, such proceeds, after deducting certain
expenses of the Certificate offering, will be deposited by the Owner Trustee
into a collateral account or into a deposit account pursuant to a depositary
arrangement. Such collateral account, together with the other security, if
any, pledged under the related Indenture (see "Description of the Equipment
Notes -- Security"), or such depositary arrangement, will secure such Leased
Aircraft Notes during the related Pre-Funding Period and will be available to
make scheduled payments of principal, if any, and interest accrued on such
Leased Aircraft Notes during the Pre-Funding Period. If the Lease related to
such Leased Aircraft does not commence by the relevant date specified in the
applicable Prospectus Supplement or an event of loss occurs with respect to
such Leased Aircraft during the Pre-Funding Period, funds in such collateral
account, together with such other security or amounts payable under a
depositary arrangement will be available to prepay such Leased Aircraft Notes
as described in such Prospectus Supplement or will be applied to finance the
aggregate principal amount of the debt to be issued by US Airways in
connection with the acquisition of such Aircraft by US Airways so that such
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Aircraft becomes an Owned Aircraft. See "Description of the Equipment
Notes -- Delayed Lease Commencement" and "--Mandatory Prepayment During the
Pre-Funding Period."
The Leased Aircraft Notes will be issued under separate trust indentures
(the "Leased Aircraft Indentures") between a bank, trust company or other
institution specified in the related Prospectus Supplement, as trustee
thereunder (in such capacity, herein referred to as the "Loan Trustee"), and
an institution specified in the related Prospectus Supplement acting, not in
its individual capacity, but solely as owner trustee (an "Owner Trustee") of
a separate trust for the benefit of one or more institutional investors
(each, an "Owner Participant"). With respect to each Leased Aircraft, the
related Owner Participant will have provided or will provide from sources
other than the Leased Aircraft Notes a portion of the equipment cost of the
related Leased Aircraft. No Owner Participant, however, will be personally
liable for any amount payable under the related Leased Aircraft Indenture or
the Leased Aircraft Notes issued thereunder. Each Leased Aircraft will have
been or will be leased by the related Owner Trustee to US Airways pursuant to
a separate Lease. The Owned Aircraft Notes will be issued under separate
trust indentures (the "Owned Aircraft Indentures" and, together with any
Leased Aircraft Indentures, the "Indentures") between the applicable Loan
Trustee and US Airways.
RATIO OF EARNINGS TO FIXED CHARGES
For the years ended December 31, 1993 and 1994, earnings were not
sufficient to cover fixed charges. Additional earnings of $385 million and
$721 million, respectively, would have been required to achieve ratios of
earnings to fixed charges of 1.0. The ratio of earnings to fixed charges for
the years ended December 31, 1995, 1996 and 1997 was 1.1, 1.3 and 2.2,
respectively. The ratio of earnings to fixed charges for the six months
ended June 30, 1998 was 2.7. For purposes of calculating this ratio,
earnings consist of pre-tax income, fixed charges, capitalized interest and
amortization of previously capitalized interest. Fixed charges consist of
interest expense, amortization of debt issue expense and the portion of
rental expense representative of interest expense.
GENERAL OUTLINE OF TRUST STRUCTURE
In respect of each offering of Certificates, one or more Trusts will be
formed, and the related Certificates issued, pursuant to separate Trust
Supplements to be entered into between the Trustee and US Airways in
accordance with the terms of the Basic Agreement. Concurrently with the
execution and delivery of each Trust Supplement, the Trustee, on behalf of
the Trust formed thereby, will enter into one or more purchase or refunding
agreements (each such agreement being herein referred to as a "Note Purchase
Agreement") pursuant to which it will agree to purchase one or more Equipment
Notes relating to one or more of the Aircraft described in the applicable
Prospectus Supplement. Pursuant to the applicable Note Purchase Agreement
or Note Purchase Agreements, the
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Trustee, on behalf of each Trust, will purchase one or more Equipment Notes
such that all of the Equipment Notes that constitute the property of such
Trust will have identical interest rates (in each case equal to the rate
applicable to the Certificates issued by such Trust) and identical priority
of payment relative to each of the other Equipment Notes issued under the
Related Indentures (as defined below). The maturity dates of the Equipment
Notes acquired by each Trust will occur on or before the final distribution
date applicable to the Certificates that will be issued by such Trust. The
Trustee will distribute the amount of payments of principal, premium, if any,
and interest received by it as holder of the Equipment Notes to the
registered holders of Certificates of the Trust (the "Certificateholders") in
which such Equipment Notes are held, subject to the effect of any cross-
subordination provisions described in the Prospectus Supplement for a series
of Certificates. To the extent that the proceeds of any offering of
Certificates are not used to purchase Equipment Notes on the date of issuance
of such Certificates, such proceeds will be held for the benefit of the
holders of such Certificates. If any such proceeds are not subsequently
utilized to purchase Equipment Notes by the relevant date specified in the
applicable Prospectus Supplement, such proceeds will be returned to the
holders of such Certificates. See "Description of the Certificates" and
"Description of the Equipment Notes."
DESCRIPTION OF THE CERTIFICATES
In connection with each offering of Certificates, one or more separate
Trusts will be formed and one or more series of Certificates will be issued
pursuant to the Basic Agreement and one or more separate Trust Supplements to
be entered into between US Airways and the Trustee. The statements made
under this caption are summaries and reference is made to the detailed
provisions of the Basic Agreement, the form of which has been filed as an
exhibit to the Registration Statement of which this Prospectus is a part.
The summaries relate to the Basic Agreement and each of the Trust
Supplements, the Trusts to be formed thereby and the Certificates to be
issued by each Trust except to the extent, if any, described in the
applicable Prospectus Supplement. The Prospectus Supplement that accompanies
this Prospectus contains a glossary of the material terms used with respect
to the specific series of Certificates being offered thereby. The Trust
Supplement relating to each series of Certificates and the forms of the
related Note Purchase Agreement, Indenture, Lease, Trust Agreement,
participation agreement, intercreditor agreement and liquidity facility
arrangement, as applicable, will be filed as exhibits to a post-effective
amendment to the Registration Statement of which this Prospectus is a part, a
Current Report on Form 8-K, a Quarterly Report on Form 10-Q or an Annual
Report on Form 10-K, as applicable, filed by US Airways with the Commission.
The Certificates offered pursuant to this Prospectus will be limited to
$1,000,000,000 aggregate public offering price (or its equivalent (based on
the applicable exchange rate at the time of sale) in one or more foreign
currencies or currency units).
9
To the extent that any provision in any prospectus supplement is
inconsistent with any provision in this summary, the provision of such
prospectus supplement will control.
General
Each Certificate will represent a fractional undivided interest in the
Trust created by the Trust Supplement pursuant to which such Certificate was
issued and all payments and distributions will be made only from the related
Trust Property (as defined below). The property of each Trust (the "Trust
Property") will include (i) the Equipment Notes held in such Trust and all
monies at any time paid thereon and all monies due and to become due
thereunder, subject to the effect of any cross-subordination provisions
described in the Prospectus Supplement for a series of Certificates, (ii)
funds from time to time deposited with the Trustee in accounts relating to
such Trust and (iii) if so specified in the Prospectus Supplement related to
a series of Certificates, rights under intercreditor agreements relating to
cross-subordination arrangements and monies receivable under a liquidity
facility. Each Certificate will represent a pro rata share of the
outstanding principal amount of the Equipment Notes held in the related Trust
and, unless otherwise specified in the applicable Prospectus Supplement, will
be issued in minimum denominations of $1,000 or any integral multiple thereof
except that one Certificate of each series may be issued in a different
denomination. The Certificates do not represent an interest in or obligation
of US Airways, the Trustee, any of the Loan Trustees or Owner Trustees in
their individual capacities, any Owner Participant, or any affiliate of any
thereof. Each Certificateholder by its acceptance of a Certificate agrees to
look solely to the income and proceeds from the Trust Property as provided in
the Basic Agreement and the applicable Trust Supplement.
The Equipment Notes issued under an Indenture may be held in more than
one Trust and one Trust may hold Equipment Notes issued under more than one
Indenture (each Indenture the Equipment Notes of which are held in a Trust, a
"Related Indenture"). Unless otherwise provided in a Prospectus Supplement,
only Equipment Notes having the same priority of payment (the Equipment Notes
of any such priority, a "Class") may be held in the same Trust.
Interest will be passed through to Certificateholders of each Trust at
the rate per annum payable on the Equipment Notes held in such Trust, as set
forth for such Trust on the cover page of the applicable Prospectus
Supplement, subject to the effect of any cross-subordination provisions
described in the Prospectus Supplement for a series of Certificates.
Reference is made to the Prospectus Supplement that accompanies this
Prospectus for a description of the specific series of Certificates being
offered thereby, including: (1) the specific designation and title of such
Certificates; (2) the Regular Distribution Dates (as defined below) and
Special Distribution Dates (as defined below) applicable to such
10
Certificates; (3) the currency or currencies (including currency units) in
which such Certificates may be denominated; (4) the specific form of such
Certificates, including whether or not such Certificates are to be issued in
accordance with a book-entry system; (5) a description of the Equipment Notes
to be purchased by such Trust, including (a) the period or periods within
which, the price or prices at which, and the terms and conditions upon which
such Equipment Notes may or must be redeemed or defeased in whole or in part,
by US Airways or, with respect to Leased Aircraft Notes, the Owner Trustee,
(b) the payment priority of such Equipment Notes in relation to any other
Equipment Notes issued with respect to the related Aircraft, (c) any
additional security or liquidity enhancements therefor and (d) any
intercreditor or other rights or limitations between or among the holders of
Equipment Notes of different priorities issued with respect to the same
Aircraft; (6) a description of the related Aircraft; (7) a description of the
related Note Purchase Agreement and Related Indentures, including a
description of the events of default under the Related Indentures, the
remedies exercisable upon the occurrence of such events of default and any
limitations on the exercise of such remedies with respect to such Equipment
Notes; (8) if such Certificates relate to Leased Aircraft, a description of
the related Leases, Trust Agreements and participation agreements, including
(a) the names of the related Owner Trustees, (b) a description of the events
of default under the related Leases, the remedies exercisable upon the
occurrence of such events of default and any limitations on the exercise of
such remedies with respect to such Leased Aircraft Notes, and (c) the rights
of the related Owner Trustee, if any, and/or Owner Participant, if any, to
cure failures of US Airways to pay rent under the related Lease; (9) the
extent, if any, to which the provisions of the operative documents applicable
to such Equipment Notes may be amended by the parties thereto without the
consent of the holders of, or only upon the consent of the holders of a
specified percentage of aggregate principal amount of, such Equipment Notes;
(10) cross-default or cross-collateralization provisions in the Related
Indentures, if any; (11) subordination provisions among the holders of
Certificates, including any cross-subordination provisions among the holders
of Certificates in separate Trusts; and (12) any arrangements for the
investment or other use of proceeds of the Certificates prior to the purchase
of the Equipment Notes; and (13) any other special terms pertaining to such
Certificates.
If any Certificates are denominated in one or more foreign currencies or
currency units, the restrictions, certain United States federal income tax
considerations, specific terms and other information with respect to such
Certificates and such foreign currency or currency units will be set forth in
the applicable Prospectus Supplement.
Book-Entry Registration
General
If specified in the applicable Prospectus Supplement, the Certificates
will be subject to the provisions described below and under the caption "--
Definitive Certifi-
11
cates." Upon issuance, each series of Certificates will be represented by
one or more fully registered global certificates. Unless otherwise provided
in a Prospectus Supplement, each global certificate will be deposited with,
or on behalf of, The Depository Trust Company ("DTC") and registered in the
name of Cede & Co. ("Cede"), the nominee of DTC. No person acquiring an
interest in such Certificates ("Certificate Owner") will be entitled to
receive a certificate representing such person's interest in such
Certificates, except as set forth below under "--Definitive Certificates."
Unless and until Definitive Certificates are issued under the limited
circumstances described herein, all references to actions by
Certificateholders will refer to actions taken by DTC upon instructions from
DTC Participants (as defined below), and all references herein to
distributions, notices, reports and statements to Certificateholders will
refer, as the case may be, to distributions, notices, reports and statements
to DTC or Cede, as the registered holder of such Certificates, or to DTC
Participants for distribution to Certificate Owners in accordance with DTC
procedures.
DTC has advised US Airways that DTC is a limited purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and "clearing agency" registered pursuant to section
17A of the Exchange Act. DTC was created to hold securities for its
participants ("DTC Participants") and to facilitate the clearance and
settlement of securities transactions between DTC Participants through
electronic book-entry changes in the accounts of DTC Participants, thereby
eliminating the need for physical transfer of certificates. DTC Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. DTC is owned by a number of
DTC Participants and by the New York State Exchange, Inc., the American Stock
Exchange, Inc., and the National Association of Securities Dealers, Inc.
Indirect access to the DTC system also is available to others such as banks,
brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a DTC Participant either directly or indirectly
("Indirect Participants").
Certificate Owners that are not DTC Participants or Indirect
Participants but desire to purchase, sell or otherwise transfer ownership of,
or other interests in, the Certificates may do so only through DTC
Participants and Indirect Participants. In addition, Certificate Owners will
receive all distributions of principal and interest from the Trustee through
DTC Participants or Indirect Participants, as the case may be. Under a book-
entry format, Certificate Owners may experience some delay in their receipt
of payments because such payments will be forwarded by the Trustee to Cede,
as nominee for DTC. US Airways expects DTC to forward such payments in same-
day funds to DTC Participants who are credited with ownership of the
Certificates in amounts proportionate to the principal amount of each such
DTC Participant's respective holdings of beneficial interests in the
Certificates, as shown on the records of DTC or its nominee. US Airways also
expects that DTC Participants will thereafter forward payments to Indirect
Partici-
12
pants or Certificate Owners, as the case may be, in accordance with standing
instructions and customary industry practices. The forwarding of such
distributions to the Certificate Owners will be the responsibility of such
DTC Participants. Unless and until the Definitive Certificates are issued
under the limited circumstances described herein, the only
"Certificateholder" will be Cede, as nominee of DTC. Certificate Owners will
not be recognized by the Trustee as Certificateholders, as such term is used
in the Basic Agreement, and Certificate Owners will be permitted to exercise
the rights of Certificateholders only indirectly through DTC and DTC
Participants.
Under the rules, regulations and procedures creating and affecting DTC
and its operations (the "Rules"), DTC is required to make book-entry
transfers of the Certificates among DTC Participants on whose behalf it acts
with respect to the Certificates and to receive and transmit distributions of
principal, premium, if any, and interest with respect to the Certificates.
DTC Participants and Indirect Participants with which Certificate Owners have
accounts with respect to the Certificates similarly are required to make
book-entry transfers and receive and transmit such payments on behalf of
their respective customers. Accordingly, although Certificate Owners will
not possess the Certificates, the Rules provide a mechanism by which
Certificate Owners will receive payments and will be able to transfer their
interests. Conveyance of notices and other communications by DTC to DTC
Participants and by DTC Participants to Indirect Participants and to
Certificate Holders will be governed by arrangements among them, subject to
any statutory or regulatory requirements as may be in effect from time to
time. The Rules applicable to DTC and DTC Participants are on file with the
Commission.
Because DTC can only act on behalf of DTC Participants, who in turn act
on behalf of Indirect Participants, the ability of a Certificate Owner to
pledge the Certificates to persons or entities that do not participate in the
DTC system, or to otherwise act with respect to such Certificates, may be
limited due to the lack of a physical certificate for such Certificates.
DTC has advised US Airways that it will take any action permitted to be
taken by a Certificateholder under the Basic Agreement only at the direction
of one or more DTC Participants to whose accounts with DTC the Certificates
are credited. Additionally, DTC has advised US Airways that in the event any
action requires approval by Certificateholders of a certain percentage of
beneficial interest in each Trust, DTC will take such action only at the
direction of and on behalf of DTC Participants whose holdings include
undivided interests that satisfy any such percentage. DTC may take
conflicting actions with respect to other undivided interests to the extent
that such actions are taken on behalf of DTC Participants whose holdings
include such undivided interests.
Neither US Airways nor the Trustee will have any liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in the Certificates held by Cede, as nominee for DTC, for
maintaining, supervising or reviewing
13
any records relating to such beneficial ownership interests or for the
performance by DTC, any DTC Participant or any Indirect Participant of their
respective obligations under the rules and procedures governing their
obligations.
The applicable Prospectus Supplement will specify any additional book-
entry registration procedures applicable to Certificates denominated in a
currency other than United States dollars.
The information contained in this Prospectus concerning DTC and its book
entry system has been obtained from sources US Airways believes to be
reliable, but US Airways takes no responsibility for the accuracy thereof.
Same-Day Settlement and Payment
As long as the Certificates are registered in the name of DTC or its
nominee, all payments made by US Airways to the Loan Trustee under any Lease
or any Owned Aircraft Indenture will be in immediately available funds. Such
payments, including the final distribution of principal with respect to the
Certificates of any Trust, will be passed through to DTC in immediately
available funds.
Any Certificates registered in the name of DTC or its nominee, will
trade in DTC's Same-Day Funds Settlement System until maturity, and secondary
market trading activity in the Certificates will therefore be required by DTC
to settle in immediately available funds. No assurance can be given as to
the effect, if any, of settlement in same-day funds on trading activity in
the Certificates.
Definitive Certificates
Certificates will be issued in certificated form ("Definitive
Certificates") to Certificate Owners or their nominees, rather than to DTC or
its nominee, only if (i) US Airways advises the Trustee in writing that DTC
is no longer willing or able to discharge properly its responsibilities as
depository with respect to such Certificates and US Airways is unable to
locate a qualified successor, (ii) US Airways, at its option, elects to
terminate the book-entry system through DTC or (iii) after the occurrence of
certain events of default or other events specified in the related Prospectus
Supplement, Certificate Owners with fractional undivided interests
aggregating not less than a majority in interest in such Trust advise the
Trustee, US Airways and DTC through DTC Participants in writing that the
continuation of a book-entry system through DTC (or a successor thereto) is
no longer in the Certificate Owners' best interest. Upon the occurrence of
any event described in the immediately preceding sentence, the Trustee will
be required to notify all Certificate Owners through DTC Participants of the
availability of Definitive Certificates. Upon surrender by DTC of the
certificates representing the Certificates and
14
receipt of instructions for re-registration, the Trustee will reissue the
Certificates as Definitive Certificates to Certificate Owners.
Distributions of principal, premium, if any, and interest with respect
to Certificates will thereafter be made by the Trustee directly in accordance
with the procedures set forth in the Basic Agreement and the applicable Trust
Supplements, to holders in whose names the Definitive Certificates were
registered at the close of business on the applicable record date. Such
distributions will be made by check mailed to the address of such holder as
it appears on the register maintained by the Trustee. The final payment on
any Certificate, however, will be made only upon presentation and surrender
of such Certificate at the office or agency specified in the notice of final
distribution to Certificateholders.
Definitive Certificates will be freely transferable and exchangeable at
the office of the Trustee upon compliance with the requirements set forth in
the Basic Agreement and the applicable Trust Supplements. No service charge
will be imposed for any registration of transfer or exchange, but payment of
a sum sufficient to cover any tax or other governmental charge will be
required.
Payments and Distributions
US Airways will make scheduled payments of principal of, and interest
on, the unpaid amount of the Owned Aircraft Notes to the Loan Trustee under
the related Indenture, and the Loan Trustee will distribute such principal
and interest payments to the Trustee for each Trust that holds such Owned
Aircraft Notes. Upon commencement of the Lease for any Leased Aircraft, US
Airways will make scheduled rental payments for each Leased Aircraft under
the related Lease. After any Pre-Funding Period for a Leased Aircraft, these
scheduled rental payments will be assigned under the applicable Indenture by
the related Owner Trustee to the Loan Trustee to provide the funds necessary
to make the corresponding payments of principal and interest due from the
Owner Trustee on the Leased Aircraft Notes issued by such Owner Trustee.
Until US Airways has entered into a Lease in connection with a Leased
Aircraft, US Airways will not be obligated to make any scheduled rental
payments and, during any Pre-Funding Period for such Leased Aircraft, the
related Leased Aircraft Notes will not be secured by such Leased Aircraft or
the related Lease, including any rental payments under such Lease. In
general, during the Pre-Funding Period, if any, for such Leased Aircraft,
however, the related collateral account, together with any other security
pledged under the related Indenture or otherwise provided to the Loan Trustee
or amounts payable under a depositary arrangement will be available to
provide funds necessary to make the corresponding scheduled payments of
principal, if any, and interest accrued on the related Leased Aircraft Notes
during such Pre-Funding Period, and to pay the portion, if any, of principal
and interest due on the first payment date after the Pre-Funding Period to
the
15
extent exceeding the amount of rent payable by US Airways on such payment
date. See "Description of the Equipment Notes -- Delayed Lease
Commencement."
Following any Pre-Funding Period, after the Loan Trustee has made such
principal and interest payments to the Trustee for each of the Trusts on the
Leased Aircraft Notes held in such Trust, the Loan Trustee will, except under
certain circumstances, pay the remaining balance, if any, to the Owner
Trustee for the benefit of the related Owner Participant. The Trustee for
each such Trust will distribute to the Certificateholders of such Trust
payments received on the Equipment Notes held in such Trust as described
below. Unless otherwise specified in a Prospectus Supplement, during any
Pre-Funding Period for a Leased Aircraft, the Loan Trustee will not make any
payments to the Owner Trustee for the benefit of the related Owner
Participant.
Subject to the effect of any cross-subordination provisions set forth in
the Prospectus Supplement for a series of Certificates, payments of
principal, premium, if any, and interest with respect to the Equipment Notes
held in each Trust will be distributed by the Trustee, upon receipt, to
Certificateholders of such Trust on the dates and in the currency specified
in the applicable Prospectus Supplement, except in certain cases when some or
all of such Equipment Notes are in default as described in the applicable
Prospectus Supplement. Payments of principal of, and interest on, the unpaid
principal amount of the Equipment Notes held in each Trust will be scheduled
to be received by the Trustee on the dates specified in the applicable
Prospectus Supplement (such scheduled payments of interest and principal on
the Equipment Notes to the Trustee are herein referred to as "Scheduled
Payments", and the dates specified in the applicable Prospectus Supplement
for distribution of Scheduled Payments to the Trustee are herein referred to
as "Regular Distribution Dates"). See "Description of the Equipment Notes--
General." Subject to the effect of any cross-subordination provisions set
forth in the Prospectus Supplement for a series of Certificates, each
Certificateholder of each Trust will be entitled to receive a pro rata share
of any distribution in respect of Scheduled Payments of principal and
interest made on the Equipment Notes held in the Trust.
Payments of principal, premium, if any, and interest received by the
Trustee on account of the early redemption, if any, of the Equipment Notes
relating to one or more Aircraft held in a Trust, and payments, other than
Scheduled Payments received on a Regular Distribution Date or within five
days thereafter, received by the Trustee following default in respect of
Equipment Notes held in a Trust relating to one or more Aircraft ("Special
Payments") will be distributed on the date determined as described in the
applicable Prospectus Supplement (a "Special Distribution Date") except that,
if specified in the applicable Prospectus Supplement, payments received by
the Trustee following default in respect of the Equipment Notes on a Regular
Distribution Date as a result of a drawing under any liquidity facility, as
described in the applicable Prospectus Supplement (each, a "Liquidity
Facility"), provided for the benefit of the specified Certificateholders will
be distributed on such Regular Distribution Date to such
16
Certificateholders. The Trustee will mail notice to the Certificateholders
of record of the applicable Trust stating any such anticipated Special
Distribution Date.
Pool Factors
Unless otherwise described in the applicable Prospectus Supplement, the
"Pool Balance" for each Trust or for the Certificates issued by any Trust
indicates, as of any date, the original aggregate face amount of the
Certificates of such Trust less the aggregate amount of all payments made in
respect of the Certificates of such Trust other than payments made in respect
of interest or premium thereon or reimbursement of any costs and expenses in
connection therewith. The Pool Balance for each Trust as of any Regular
Distribution Date or Special Distribution Date will be computed after giving
effect to the payment of principal, if any, on the Equipment Notes or other
Trust Property held in such Trust and the distribution thereof to be made on
that date.
Unless otherwise described in the applicable Prospectus Supplement, the
"Pool Factor" for each Trust as of any Regular Distribution Date or Special
Distribution Date is the quotient (rounded to the seventh decimal place)
computed by dividing (i) the Pool Balance by (ii) the aggregate original face
amount of the Certificates of such Trust. The Pool Factor for each Trust as
of any Regular Distribution Date or Special Distribution Date will be
computed after giving effect to the payment of principal, if any, on the
Equipment Notes or other Trust Property held in such Trust and distribution
thereof to be made on that date. The Pool Factor for each Trust will
initially be 1.0000000; thereafter, the Pool Factor for each Trust will
decline as described herein to reflect reductions in the Pool Balance of such
Trust. The amount of a Certificateholder's pro rata share of the Pool
Balance of a Trust can be determined by multiplying the original denomination
of the holder's Certificate of such Trust by the Pool Factor for such Trust
as of the applicable Regular Distribution Date or Special Distribution Date.
The Pool Factor and the Pool Balance for each Trust will be mailed to
Certificateholders of such Trust on each Regular Distribution Date and
Special Distribution Date.
Unless there has been an early redemption, a purchase of an issue of
Equipment Notes by the related Owner Trustee after an Indenture Default (as
defined below), a default in the payment of principal in respect of one or
more issues of the Equipment Notes held in a Trust or certain actions have
been taken following a default thereon, as described in the applicable
Prospectus Supplement, the Pool Factor for the Trusts will decline in
proportion to the scheduled repayments of principal on the Equipment Notes
held in such Trust as described in the applicable Prospectus Supplement. In
the event of such redemption, purchase or default, the Pool Factor and the
Pool Balance of each Trust so affected will be recomputed after giving effect
thereto and notice thereof will be mailed to the Certificateholders of such
Trust. Each Trust will have a separate Pool Factor.
17
Reports to Certificateholders
On each Regular Distribution Date and Special Distribution Date, the
Trustee will include with each distribution of a Scheduled Payment or Special
Payment to Certificateholders of the related Trust a statement, giving effect
to such distribution to be made on such Regular Distribution Date or Special
Distribution Date, setting forth the following information (per $1,000
aggregate principal amount of Certificate for such Trust, as to (i) and (ii)
below):
(i) the amount of such distribution allocable to principal and the
amount allocable to premium, if any;
(ii) the amount of such distribution allocable to interest; and
(iii) the Pool Balance and the Pool Factor for such Trust.
As long as the Certificates are registered in the name of DTC or its
nominee, on the record date prior to each Regular Distribution Date and
Special Distribution Date, the Trustee will request from DTC a securities
position listing setting forth the names of all DTC Participants reflected on
DTC's books as holding interests in the Certificates on such record date. On
each Regular Distribution Date and Special Distribution Date, the applicable
Trustee will mail to each such DTC Participant the statement described above
and will make available additional copies as requested by such DTC
Participant for forwarding to Certificate Owners.
In addition, after the end of each calendar year, the Trustee will
prepare for each Certificateholder of each Trust at any time during the
preceding calendar year a report containing the sum of the amounts determined
pursuant to clauses (i) and (ii) above with respect to the Trust for such
calendar year or, in the event such person was a Certificateholder during
only a portion of such calendar year, for the applicable portion of such
calendar year, and such other items as are readily available to the Trustee
and which a Certificateholder will reasonably request as necessary for the
purpose of such Certificateholder's preparation of its federal income tax
returns. Such report and such other items will be prepared on the basis of
information supplied to the Trustee by the DTC Participants and will be
delivered by the Trustee to such DTC Participants to be available for
forwarding by such DTC Participants to Certificate Owners in the manner
described above.
At such time, if any, as the Certificates are issued in the form of
Definitive Certificates, the Trustee will prepare and deliver the information
described above to each Certificateholder of record of each Trust as the name
and period of ownership of such Certificateholder appears on the records of
the registrar of the Certificates.
18
Voting of Equipment Notes
Subject to the effect of any cross-subordination provisions set forth in
the related Prospectus Supplement, the Trustee, as holder of the Equipment
Notes held in each Trust, has the right to vote and give consents and waivers
with respect to such Equipment Notes under the Related Indentures. The Basic
Agreement and related Trust Supplement set forth (i) the circumstances in
which the Trustee may direct any action or cast any vote as the holder of the
Equipment Notes held in the applicable Trust at its own discretion, (ii) the
circumstances in which the Trustee will seek instructions from the
Certificateholders of such Trust and (iii) the percentage of
Certificateholders required to direct the Trustee to take any such action.
If specified in the related Prospectus Supplement, the right of a Trustee to
vote and give consents and waivers with respect to the Equipment Notes held
in the related Trust may, in the circumstances set forth in an intercreditor
agreement to be executed by such Trustee, be exercisable by another person
specified in such Prospectus Supplement.
Events of Default and Certain Rights upon an Event of Default
The Prospectus Supplement will specify the events of default under the
Basic Agreement (an "Event of Default") and the Related Indentures (an
"Indenture Default"). The Indenture Defaults in the case of Leased Aircraft
Indentures will include events of default under the related Leases (a "Lease
Event of Default"). With respect to any Equipment Notes which are supported
by a Liquidity Facility, the Indenture Defaults or Events of Default may
include events of default under such Liquidity Facility. Unless otherwise
provided in a Prospectus Supplement, all of the Equipment Notes issued under
the same Indenture will relate to a specific Aircraft and there will be no
cross-collateralization or cross-default provisions in the Indentures, and
events resulting in an Indenture Default under any particular Indenture will
not necessarily result in an Indenture Default occurring under any other
Indenture. If an Indenture Default occurs in fewer than all of the
Indentures, notwithstanding the treatment of Equipment Notes issued under any
Indenture under which an Indenture Default has occurred, payments of
principal and interest on the Equipment Notes issued pursuant to Indentures
with respect to which an Indenture Default has not occurred will continue to
be made as originally scheduled. As described below under "--Cross-
Subordination Issues", a Prospectus Supplement may provide the terms of any
cross-subordination provisions among Certificateholders of separate Trusts.
If such provisions are so provided, payments made pursuant to a Related
Indenture under which an Indenture Default has not occurred may be
distributed first to the holders of the Certificates issued under the Trust
which holds the most senior Equipment Notes issued under all Related
Indentures.
The ability of the applicable Owner Trustee or Owner Participant under a
Leased Aircraft Indenture to cure Indenture Defaults, including an Indenture
Default that results from the occurrence of a Lease Event of Default under
the related Lease, will be de-
19
scribed in the Prospectus Supplement. Unless otherwise provided in a
Prospectus Supplement, with respect to any Certificates or Equipment Notes
entitled to the benefits of a Liquidity Facility, a drawing under any such
Liquidity Facility for the purpose of making a payment of interest as a
result of the failure by US Airways to have made a corresponding payment will
not cure an Indenture Default related to such failure by US Airways.
The Prospectus Supplement related to a series of Certificates will
describe the circumstances under which the Trustee of the related Trust may
vote some or all of the Equipment Notes held in such Trust. Such Prospectus
Supplement also will set forth the percentage of Certificateholders of such
Trust entitled to direct the Trustee to take any action with respect to such
Equipment Notes. If the Equipment Notes outstanding under an Indenture are
held by more than one Trust, then the ability of the Certificateholders
issued with respect to any one Trust to cause the Loan Trustee with respect
to any Equipment Notes held in such Trust to accelerate the Equipment Notes
under the applicable Indenture or to direct the exercise of remedies by the
Loan Trustee under the applicable Indenture will depend, in part, upon the
proportion of the aggregate principal amount of the Equipment Notes
outstanding under such Indenture and held in such Trust to the aggregate
principal amount of all Equipment Notes outstanding under such Indenture. In
addition, if cross-subordination provisions are applicable to any series of
Certificates, then the ability of the Certificateholders of any one Trust
holding Equipment Notes issued under an Indenture to cause the Loan Trustee
with respect to any Equipment Notes held in such Trust to accelerate the
Equipment Notes under such Indenture or to direct the exercise of remedies by
the Loan Trustee under such Indenture will depend, in part, upon the Class of
Equipment Notes held in such Trust. 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 from the Equipment Notes held in the
other Trusts and therefore the Certificateholders of each Trust may have
divergent or conflicting interests from those of the Certificateholders of
the other Trusts holding Equipment Notes issued under the same Indenture. In
addition, as long as the same institution acts as Trustee of each Trust, in
the absence of instructions from the Certificateholders of any such Trust,
the Trustee for such Trust could for the same reason be faced with a
potential conflict of interest upon an Indenture Default. In such event, the
Trustee has indicated that it would resign as Trustee of one or all such
Trusts, and a successor trustee would be appointed in accordance with the
terms of the Basic Agreement.
The Prospectus Supplement for a series of Certificates will specify
whether and under what circumstances the Trustee may or will sell for cash to
any person all or part of the Equipment Notes held in the related Trust. Any
proceeds received by the Trustee upon any such sale will be deposited in an
account established by the Trustee for the benefit of the Certificateholders
of such Trust for the deposit of such Special Payments (the "Special Payments
Account") and will be distributed to the Certificateholders of such Trust on
a Special Distribution Date. The market for Equipment Notes in default may
be
20
very limited, and there can be no assurance that they could be sold for a
reasonable price. Furthermore, as long as the same institution acts as
Trustee of multiple Trusts, it may be faced with a conflict in deciding from
which Trust to sell Equipment Notes to available buyers. If the Trustee
sells any such Equipment Notes with respect to which an Indenture Default
exists for less than their outstanding principal amount, the
Certificateholders of such Trust will receive a smaller amount of principal
distributions than anticipated and will not have any claim for the shortfall
against US Airways, any Owner Trustee, Owner Participant or the Trustee.
Furthermore, neither the Trustee nor the Certificateholders of such Trust
could take any action with respect to any remaining Equipment Notes held in
such Trust so long as no Indenture Defaults exist with respect thereto.
Any amount, other than Scheduled Payments received on a Regular
Distribution Date, distributed to the Trustee of any Trust by the Loan
Trustee under any Indenture on account of the Equipment Notes held in such
Trust following an Indenture Default under such Indenture will be deposited
in the Special Payments Account for such Trust and will be distributed to the
Certificateholders of such Trust on a Special Distribution Date. In
addition, if a Prospectus Supplement provides that the applicable Owner
Trustee may, under circumstances specified therein, redeem or purchase the
outstanding Equipment Notes issued under the applicable Indenture, the price
paid by such Owner Trustee to the Trustee of any Trust for the Equipment
Notes issued under such Indenture and held in such Trust will be deposited in
the Special Payments Account for such Trust and will be distributed to the
Certificateholders of such Trust on a Special Distribution Date.
Any funds representing payments received with respect to any Equipment
Notes in default held in a Trust, or the proceeds from the sale by the
Trustee of any such Equipment Notes, held by the Trustee in the Special
Payments Account for such Trust will, to the extent practicable, be invested
and reinvested by the Trustee in Permitted Investments pending the
distribution of such funds on a Special Distribution Date. "Permitted
Investments" will be specified in the related Prospectus Supplement.
The Basic Agreement provides that the Trustee of each Trust will, within
90 days after the occurrence of a default in respect of such Trust, give to
the Certificateholders of such Trust notice, transmitted by mail, of all
uncured or unwaived defaults with respect to such Trust known to it, provided
that, except in the case of default in the payment of principal, premium, if
any, or interest on any of the Equipment Notes held in such Trust, the
Trustee will be protected in withholding such notice if it in good faith
determines that the withholding of such notice is in the interests of such
Certificateholders. The term "default" as used in this paragraph only means
the occurrence of an Indenture Default with respect to Equipment Notes held
in a Trust as described above, except that in determining whether any such
Indenture Default has occurred, any grace period or notice in connection
therewith will be disregarded.
21
The Basic Agreement contains a provision entitling the Trustee of each
Trust, subject to the duty of the Trustee during a default to act with the
required standard of care, to be offered reasonable security or indemnity by
the Certificateholders of such Trust before proceeding to exercise any right
or power under the Basic Agreement at the request of such Certificateholders.
The Prospectus Supplement for a series of Certificates will specify the
percentage of Certificateholders entitled to waive, or to instruct the
Trustee to waive, any past Event of Default with respect to such Trust and
its consequences. The Prospectus Supplement for a series of Certificates
also will specify the percentage of Certificateholders (and whether of such
Trust or of any other Trust holding Equipment Notes issued under Related
Indentures) entitled to waive, or to instruct the Trustee or the Loan Trustee
to waive, any past Indenture Default under any Related Indenture and thereby
annul any direction given with respect thereto.
Merger, Consolidation and Transfer of Assets
US Airways will be prohibited from consolidating with or merging into
any other corporation or transferring substantially all of its assets as an
entirety to any other corporation unless (i) the surviving, successor or
transferee corporation (a) is validly existing under the laws of the United
States or any state thereof, (b) is a "citizen of the United States" (as
defined in Title 49 of the United States Code relating to aviation (the
"Transportation Code")) holding an air carrier operating certificate issued
by the Secretary of Transportation pursuant to Chapter 447 of Title 49,
United States Code, if, and so long as, such status is a condition of
entitlement to the benefits of Section 1110 of the Bankruptcy Code, and (c)
expressly assumes all of the obligations of US Airways contained in the Basic
Agreement and any Trust Supplement, the Note Purchase Agreements, any Owned
Aircraft Indentures and, with respect to the Leased Aircraft, the applicable
participation agreements and Leases, and any other operative documents; and
(ii) US Airways has delivered a certificate and an opinion or opinions of
counsel indicating that such transaction, in effect, complies with such
conditions.
Modifications of the Basic Agreement
The Basic Agreement contains provisions permitting US Airways and the
Trustee of each Trust to enter into a supplemental trust agreement, without
the consent of the holders of any of the Certificates of such Trust,
including among other things (i) to provide for the formation of such Trust
and the issuance of a series of Certificates, (ii) to evidence the succession
of another corporation to US Airways and the assumption by such corporation
of US Airways' obligations under the Basic Agreement and the applicable Trust
Supplement, (iii) to add to the covenants of US Airways for the benefit of
holders of such Certificates, or to surrender any right or power in the Basic
Agreement conferred upon US Airways, (iv) to cure any ambiguity or correct or
supplement any
22
defective or inconsistent provision of the Basic Agreement or the applicable
Trust Supplement or to make any other provisions with respect to matters or
questions arising thereunder, provided such action will not materially
adversely affect the interests of the holders of such Certificates, or to
cure any ambiguity or correct any mistake or (without limitation of the
foregoing), to give effect or provide for replacement liquidity facilities,
if applicable to such Certificates, (v) to comply with any requirement of the
Commission, any applicable law, rules or regulations of any exchange or
quotation system on which any Certificates may be listed or of any regulatory
body, (vi) to modify, eliminate or add to the provisions of the Basic
Agreement to the extent as will be necessary to continue the qualification of
the Basic Agreement (including any supplemental agreement) under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act") and to add to
the Basic Agreement such other provisions as may be expressly permitted by
the Trust Indenture Act, (vii) to provide for a successor Trustee or to add
to or change any provision of the Basic Agreement as necessary to facilitate
the administration of the Trusts thereunder by more than one Trustee, (viii)
to provide certain information to the Trustee as required in the Basic
Agreement and (ix) to make any other amendments or modifications to the Basic
Agreement, provided such amendments or modifications will only apply to
Certificates issued thereafter; provided, in the case of clauses (i) through
(ix) above, that no such supplemental trust agreement will adversely affect
the status of any Trust as a grantor trust for United States federal income
tax purposes.
The Basic Agreement also contains provisions permitting US Airways and
the Trustee of each Trust, with the consent of the Certificateholders of such
Trust evidencing fractional undivided interests aggregating not less than a
majority in interest of such Trust, and, with respect to any Leased Aircraft,
with the consent of the applicable Owner Trustee (such consent not to be
unreasonably withheld), to execute supplemental trust agreements adding any
provisions to or changing or eliminating any of the provisions of the Basic
Agreement, to the extent relating to such Trust, and the applicable Trust
Supplement, or modifying the rights of the Certificateholders, except that no
such supplemental trust agreement may, without the consent of each
Certificateholder so affected thereby, (a) reduce in any manner the amount
of, or delay the timing of, any receipt by the Trustee of payments on the
Equipment Notes held in such Trust or distributions in respect of any
Certificate related to such 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 such Certificates, or impair the
right of any Certificateholder of such Trust to institute suit for the
enforcement of any such payment when due, (b) permit the disposition of any
Equipment Note held in such Trust, except as provided in the Basic Agreement
or the applicable Trust Supplement, or otherwise deprive any
Certificateholder of the benefit of the ownership of the applicable Equipment
Notes, (c) reduce the percentage of the aggregate fractional undivided
interests of the Trust provided for in the Basic Agreement or the applicable
Trust Supplement, the consent of the holders of which is required for any
such supplemental trust agreement or for any waiver provided for in the Basic
Agreement or such Trust Supplement, (d)
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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, (e)
alter the priority of distributions specified in any applicable intercreditor
agreement in a manner materially adverse to the interests of the
Certificateholders of such Trust or (f) adversely affect the status of any
Trust as a grantor trust for United States federal income tax purposes.
Modification of Indenture and Related Agreements
The Prospectus Supplement will specify the Trustee's obligations in the
event that the Trustee, as the holder of any Equipment Notes held in a Trust,
receives a request for its consent to any amendment, modification or waiver
under the Indenture or other documents relating to such Equipment Notes
(including any Lease with respect to Leased Aircraft Notes) or any Liquidity
Facility.
Cross-Subordination Issues
The Equipment Notes issued under an Indenture may be held in more than
one Trust and one Trust may hold Equipment Notes issued under more than one
Related Indenture. Unless otherwise provided in a Prospectus Supplement,
only Equipment Notes of the same Class may be held in the same Trust. In
such event, payments made on account of a subordinate class of Certificates
issued under a Prospectus Supplement may, under circumstances described in
such Prospectus Supplement, be subordinated to the prior payment of all
amounts owing to Certificateholders of a Trust which holds senior Equipment
Notes issued under any Related Indentures. The Prospectus Supplement related
to an issuance of Certificates will describe any such "cross-subordination"
provisions and any related terms, including the percentage of
Certificateholders under any Trust which are permitted to (i) grant waivers
of defaults under any Related Indenture, (ii) consent to the amendment or
modification of any Related Indenture or (iii) direct the exercise of
remedial actions under any Related Indenture.
Termination of the Trusts
The obligations of US Airways and the Trustee with respect to a Trust
will terminate upon the distribution to Certificateholders of such Trust of
all amounts required to be distributed to them pursuant to the Basic
Agreement and the applicable Trust Supplement and the disposition of all
property held in such Trust. The Trustee will send to each Certificateholder
of record of such Trust notice of the termination of such Trust, the amount
of the proposed final payment and the proposed date for the distribution of
such final payment for such Trust. The final distribution to any
Certificateholder of such Trust will be made only upon surrender of such
Certificateholder's Certificates at the office or agency of the Trustee
specified in such notice of termination.
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Delayed Purchase of Equipment Notes
In the event that, on the issuance date of any Certificates, all of the
proceeds from the sale of such Certificates are not used to purchase the
Equipment Notes contemplated to be held in the related Trust, such Equipment
Notes may be purchased by the Trustee at any time on or prior to the date
specified in the applicable Prospectus Supplement. In such event, the
proceeds from the sale of such Certificates not used to purchase Equipment
Notes will be held under an arrangement described in the applicable
Prospectus Supplement pending the purchase of the Equipment Notes not so
purchased. The arrangements with respect to the payment of interest on funds
so held will be described in the applicable Prospectus Supplement. If any
such proceeds are not subsequently utilized to purchase Equipment Notes by
the relevant date specified in the applicable Prospectus Supplement, such
proceeds will be returned to the holders of such Certificates.
Liquidity Facility
The related Prospectus Supplement may provide that one or more payments
of interest on the Certificates of one or more series will be supported by a
Liquidity Facility issued by an institution identified in the related
Prospectus Supplement. The provider of such Liquidity Facility may have a
claim senior to the Certificateholders' as specified in the related
Prospectus Supplement.
The Trustee
Unless otherwise provided in the Prospectus Supplement for any series of
Certificates, the Trustee for each series of Certificates will be State
Street Bank and Trust Company. With certain exceptions, the Trustee makes no
representations as to the validity or sufficiency of the Basic Agreement, the
Trust Supplements, the Certificates, the Equipment Notes, the Indentures, the
Leases or other related documents. The Trustee will not be liable with
respect to any series of Certificates for any action taken or omitted to be
taken by it in good faith in accordance with the direction of the holders of
a majority in face amount of outstanding Certificates of such series issued
under the Basic Agreement. Subject to such provisions, such Trustee will be
under no obligation to exercise any of its rights or powers under the Basic
Agreement at the request of any holders of Certificates issued thereunder
unless they will have offered to the Trustee indemnity satisfactory to it.
The Basic Agreement provides that the Trustee in its individual or any other
capacity may acquire and hold Certificates issued thereunder and, subject to
certain conditions, may otherwise deal with US Airways and, with respect to
the Leased Aircraft, with any Owner Trustee with the same rights it would
have if it were not the Trustee.
The Trustee may resign with respect to any or all of the Trusts at any
time, in which event US Airways will be obligated to appoint a successor
trustee. If the Trustee ceases to be eligible to continue as Trustee with
respect to a Trust or becomes incapable
25
of acting as Trustee or becomes insolvent, US Airways may remove such
Trustee, or any Certificateholder of such Trust for at least six months may,
on behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of such Trustee and the appointment of
a successor trustee. Any resignation or removal of the Trustee with respect
to a Trust and appointment of a successor trustee for such Trust does not
become effective until acceptance of the appointment by the successor
trustee. Pursuant to such resignation and successor trustee provisions, it
is possible that a different trustee could be appointed to act as the
successor trustee with respect to each Trust. All references in this
Prospectus to the Trustee should be read to take into account the possibility
that the Trusts could have different successor trustees in the event of such
a resignation or removal.
The Basic Agreement provides that US Airways will pay the Trustee's fees
and expenses and indemnify the Trustee against certain liabilities.
DESCRIPTION OF THE EQUIPMENT NOTES
The statements made under this caption are summaries and reference is
made to the entire Prospectus and detailed information appearing in the
applicable Prospectus Supplement. Where no distinction is made between the
Leased Aircraft Notes and the Owned Aircraft Notes or between their
respective Indentures, such statements refer to any Equipment Notes and any
Indenture.
To the extent that any provision in any prospectus supplement is
inconsistent with any provision in this summary, the provision of such
prospectus supplement will control.
General
For each Owned Aircraft, the related Owned Aircraft Notes will be issued
as direct obligations by US Airways and will be authenticated under the
applicable Indenture by the Loan Trustee. All of the Owned Aircraft Notes
issued under the same Indenture will relate to a specific Owned Aircraft and
will not be secured by any other Aircraft. The Owned Aircraft relating to
each Indenture will be specified in the applicable Prospectus Supplement. US
Airways will be directly obligated under each Owned Aircraft Indenture to
make payments of principal of, premium, if any, and interest on the related
Owned Aircraft Notes.
For each Leased Aircraft, the related Leased Aircraft Notes will be
issued as nonrecourse obligations by the Owner Trustee, in each case acting
for a separate Owner Trust for the benefit of an Owner Participant, and will
be authenticated under the applicable Indenture by the Loan Trustee. All of
the Leased Aircraft Notes issued under the same Indenture will relate to and,
after any related Pre-Funding Period, as discussed below under "Delayed Lease
Commencement," will be secured by a specific Leased
26
Aircraft and will not be secured by any other Aircraft. In each case, the
Owner Trustee will lease the related Leased Aircraft to US Airways pursuant
to a separate Lease between such Owner Trustee and US Airways. See "Delayed
Lease Commencement" below for a discussion of the circumstances under which
the Lease for an Aircraft may commence after the date of issuance of the
related Leased Aircraft Certificates.
The Leased Aircraft subject to each Lease and the Leased Aircraft Notes
issued under the related Indenture will be specified in the applicable
Prospectus Supplement. Upon the commencement of the Lease for any Leased
Aircraft, US Airways will be obligated to make rental payments under such
Lease that will be sufficient to pay the principal of and accrued interest on
the related Leased Aircraft Notes when and as due and payable except that,
with respect to a Delayed Lease Aircraft, on the first scheduled payment date
after the related Pre-Funding Period, any difference between the rental
payment due on such date by US Airways and the scheduled payment of
principal, if any, and interest then due on such Leased Aircraft Notes will
be payable from the related collateral account and any other security pledged
under the related Indenture or otherwise available to the Loan Trustee or
from amounts payable under a depositary arrangement. See "Delayed Lease
Commencement" below. The Leased Aircraft Notes will not, however, be
obligations of, or guaranteed by, US Airways. The obligations to pay rent
and to cause other payments to be made under each Lease will be general
obligations of US Airways.
Until US Airways has entered into a Lease in connection with a Leased
Aircraft, US Airways will not be obligated to make any scheduled rental
payments and, during any Pre-Funding Period for such Leased Aircraft, the
related Leased Aircraft Notes will not be secured by such Leased Aircraft or
the related Lease, including any rental payments under such Lease. During
any Pre-Funding Period for such Leased Aircraft, however, the related
collateral account, together with any other security pledged under the
related Indenture or otherwise available to the Loan Trustee or amounts
payable under a depositary arrangement will be available to provide funds
necessary to make the corresponding scheduled payments of principal, if any,
and interest accrued on the related Leased Aircraft Notes during such Pre-
Funding Period, including the portion, if any, of principal and interest due
on the first payment date after the Pre-Funding Period to the extent
exceeding the amount of rent payable by US Airways pursuant to the related
Lease. See "Delayed Lease Commencement" below.
Principal and Interest Payments
Interest received by the Trustee on the Equipment Notes held in each
Trust will be passed through to the Certificateholders of such Trust on the
dates and at the rate per annum set forth in the applicable Prospectus
Supplement until the final distribution for such Trust. Principal payments
received by the Trustee on the Equipment Notes held in
27
each Trust will be passed through to the Certificateholders of such Trust in
scheduled amounts on the dates set forth in the applicable Prospectus
Supplement until the final distribution date for such Trust.
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 unless otherwise provided in the applicable Prospectus
Supplement.
Redemption
The applicable Prospectus Supplement will describe the circumstances,
whether voluntary or involuntary, under which the Equipment Notes may be
redeemed or purchased prior to the stated maturity date thereof, in whole or
in part, the premium, if any, applicable upon certain redemptions or
purchases and other terms applying to the redemptions or purchases of such
Equipment Notes.
Security
Except during any relevant Pre-Funding Period, the Leased Aircraft Notes
will be secured by (i) an assignment by the related Owner Trustee to the
related Loan Trustee of such Owner Trustee's rights (except for certain
rights, including those described below) under the Lease or Leases with
respect to the related Aircraft, including the right to receive payments of
rent thereunder, and (ii) a mortgage granted to such Loan Trustee in such
Aircraft, subject to the rights of US Airways under such Lease or Leases.
Under the terms of each Lease, US Airways' obligations in respect of each
Leased Aircraft will be those of a lessee under a "net lease." Accordingly,
US Airways will be obligated, among other things and at its expense, to cause
each Leased Aircraft to be duly registered, to pay all costs of operating
such Aircraft and to maintain, service, repair and overhaul (or cause to be
maintained, serviced, repaired and overhauled) such Aircraft. With respect
to the Leased Aircraft, the assignment by the related Owner Trustee to the
related Loan Trustee of its rights under the related Lease will exclude,
among other things, rights of such Owner Trustee and the related Owner
Participant relating to indemnification by US Airways for certain matters,
insurance proceeds payable to such Owner Trustee in its individual capacity
and to such Owner Participant under liability insurance maintained by US
Airways pursuant to such Lease or by such Owner Trustee or such Owner
Participant, insurance proceeds payable to such Owner Trustee in its
individual capacity or to such Owner Participant under certain casualty
insurance maintained by such Owner Trustee or such Owner Participant pursuant
to such Lease and any rights of such Owner Participant or such Owner Trustee
to enforce payment of the foregoing amounts and their respective rights to
the proceeds of the foregoing.
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The Owned Aircraft Notes will be secured by a mortgage granted to the
related Loan Trustee of all of US Airways' right, title and interest in and
to such Owned Aircraft. Under the terms of each Owned Aircraft Indenture,
US Airways will be obligated, among other things and at its expense, to cause
each Owned Aircraft to be duly registered, to pay all costs of operating such
Aircraft and to maintain, service, repair and overhaul (or cause to be
maintained, serviced, repaired and overhauled) such Aircraft.
The Prospectus Supplement will describe the required insurance coverage
with respect to the Aircraft.
US Airways will be required, except under certain circumstances, to keep
each Aircraft registered under the Transportation Code, and to record the
Indenture and the Lease, if applicable, among other documents, with respect
to each Aircraft under the Transportation Code. Such recordation of the
Indenture, the Lease, if applicable, and other documents with respect to each
Aircraft will give the related Loan Trustee a perfected security interest in
the related 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 (the "Convention") provides that such
security will also be recognized, with certain limited exceptions, in those
jurisdictions that have ratified or adhere to the Convention. US Airways
will have the right, subject to certain conditions, at its own expense to
register each Aircraft in countries other than the United States. Each
Aircraft may also be operated by US Airways or under lease, sublease or
interchange arrangements in countries that are not parties to the Convention.
The extent to which the related Loan Trustee's security interest would be
recognized in an Aircraft located in a country that is not a party to the
Convention, and the extent to which such security interest would be
recognized in a jurisdiction adhering to the Convention if the Aircraft is
registered in a jurisdiction not a party to the Convention, is uncertain.
Moreover, in the case of an Indenture 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 such Aircraft were
registered or located outside the United States.
Unless otherwise specified in the applicable Prospectus Supplement, the
Equipment Notes will not be cross-collateralized and consequently the
Equipment Notes issued in respect of any one Aircraft will not be secured by
any other Aircraft or, in the case of Leased Aircraft Notes, the Lease
related to any other Aircraft. Unless and until an Indenture Default with
respect to a Leased Aircraft has occurred and is continuing, the related Loan
Trustee may exercise only limited rights of the related Owner Trustee under
the related Lease.
Funds, if any, held from time to time by the Loan Trustee with respect
to any Aircraft, prior to the distribution thereof, will be invested and
reinvested by such Loan Trustee. Such investment and reinvestment will be at
the direction of US Airways (except, with respect to a Leased Aircraft, in
the case of a Lease Event of Default under
29
the applicable Lease or, with respect to an Owned Aircraft, in the case of an
Indenture Default under the applicable Indenture), in certain investments
described in the applicable Indenture. The net amount of any loss resulting
from any such investments will be paid by US Airways.
Section 1110 of the U.S. Bankruptcy Code provides in relevant part that,
unless certain events occur after the commencement of the Chapter 11 case,
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 such equipment in compliance with the
provisions of a lease, conditional sale contract or security agreement, as
the case may be, is not affected by (a) the automatic stay provision of the
U.S. Bankruptcy Code, which provision enjoins repossessions by creditors for
the duration of the reorganization period, (b) the provision of the U.S.
Bankruptcy Code allowing the trustee in reorganization to use property of the
debtor during the reorganization period, (c) Section 1129 of the U.S.
Bankruptcy Code (which governs the confirmation of plans of reorganization in
Chapter 11 cases) or (d) any power of the bankruptcy court to enjoin a
repossession. Specifically, Section 1110 provides in relevant part that the
right of a lessor, conditional vendor or holder of a security interest to
take possession of an aircraft in the event of an event of default may not be
exercised for 60 days following the date of commencement of the
reorganization proceedings (unless specifically permitted by the bankruptcy
court) and may not be exercised at all if, within such 60-day period (or such
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 such 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 of more of cargo (subject to certain limitations in the case of
equipment first placed in service on or prior to October 22, 1994).
In connection with any issuance of Certificates under this Prospectus
and the applicable Prospectus Supplement, it is a condition to the Trustee's
obligation to purchase Equipment Notes with respect to each Aircraft that
outside counsel to US Airways provide its opinion to such Trustee that (i) if
such Aircraft is a Leased Aircraft, the Owner Trustee, as lessor under the
Lease for such Aircraft, and the Loan Trustee, as assignee of such Owner
Trustee's rights under such Lease pursuant to the applicable Indenture, will
be entitled to the benefits of Section 1110 of the U.S. Bankruptcy Code with
respect to the airframe and engines comprising such Aircraft or (ii) if such
Aircraft is an Owned
30
Aircraft, the Loan Trustee will be entitled to the benefits of Section 1110
with respect to the airframe and engines comprising such Owned Aircraft, in
each case as long as US Airways continues to be 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. Such
opinion will not address the possible replacement of an Aircraft after an
Event of Loss (as defined in the applicable Indenture) in the future.
Delayed Lease Commencement
If the applicable Prospectus Supplement provides that a Pre-Funding
Period will apply to a Leased Aircraft and that a Trust may purchase Leased
Aircraft Notes prior to the commencement of the related Lease, then until
commencement of a Lease with respect to such Leased Aircraft and the Loan
Trustee's release of funds from the related collateral account or until
payment by the provider of the depositary arrangement of the debt portion of
the purchase price for such Leased Aircraft, such Leased Aircraft is referred
to as a "Delayed Lease Aircraft" and the period prior to commencement of such
Lease and the Loan Trustee's release of such funds is referred to as the
"Pre-Funding Period."
Unless otherwise specified in a Prospectus Supplement, in the case of
Leased Aircraft Notes relating to a Delayed Lease Aircraft, the proceeds from
sale of such Leased Aircraft Notes to the applicable Trusts, after deducting
certain expenses of the offering of the related Certificates, will be
deposited by the Owner Trustee on the date of such sale, in a collateral
account established pursuant to the applicable Indenture or pursuant to a
collateral agreement. Such collateral account will secure payment of the
related Leased Aircraft Notes pending delivery of the related Aircraft. In
addition, if the Prospectus Supplement so provides, US Airways will be
required to provide to the Loan Trustee additional collateral (in addition to
such collateral account) for such Leased Aircraft Notes during the related
Pre-Funding Period. Alternatively, US Airways may establish a depositary
arrangement pursuant to which the proceeds from the sale of such Leased
Aircraft will be deposited in a deposit account with a third party (having a
short-term senior unsecured credit rating at least equal to the highest
rating applicable to the Certificates), who agrees to pay amounts
corresponding to amounts payable on the Leased Aircraft Notes in respect of
the related Pre-Funding Period and the debt portion of the purchase price of
the related Aircraft upon delivery thereof. Funds in any collateral account
will be invested pursuant to the related collateral agreement or Indenture in
U.S. government obligations or such other obligations as further described in
the applicable Prospectus Supplement. Earnings on such investments will be
retained in the collateral account pending distribution as contemplated
below.
Unless otherwise specified in a Prospectus Supplement, the Leased
Aircraft Notes relating to a Delayed Lease Aircraft will be issued in an
amount such that the net proceeds thereof, together with expected earnings on
the
31
investments in any collateral account and any additional collateral or
together with a depositary arrangement, will be sufficient (i) to make
scheduled payments of principal, if any, and interest accrued on such Leased
Aircraft Notes during the related scheduled Pre-Funding Period specified in
such Prospectus Supplement and (ii) to finance a portion of the purchase
price of such Delayed Lease Aircraft, as specified in such Prospectus
Supplement. Subject to any mandatory prepayment contemplated below, on each
date during any scheduled Pre-Funding Period for the scheduled payments of
principal, if any, and interest on the related Leased Aircraft Notes, the
Loan Trustee shall withdraw from the collateral account the amount necessary
to make the scheduled payment then due or, in the case of a depositary
arrangement, shall withdraw such amount from the deposit account.
Mandatory Prepayments During The Pre-Funding Period
Unless otherwise specified in a Prospectus Supplement, to the extent
that the Lease related to a Delayed Lease Aircraft has not commenced on or
prior to the relevant date specified in the applicable Prospectus Supplement
as the last date of the related permitted Pre-Funding Period either (i) the
collateral account and, to the extent necessary, any additional collateral
will be drawn upon or, in the case of a depositary arrangement, the deposit
account will be drawn upon and the related Leased Aircraft Notes will be
prepaid at a prepayment price equal to the aggregate principal amount of such
Leased Aircraft Notes, together with accrued but unpaid interest thereon to
the date designated for such prepayment specified in such Prospectus
Supplement or (ii) US Airways will assume the Leased Aircraft Notes on a full
recourse basis.
With respect to any Delayed Lease Aircraft, the applicable Prospectus
Supplement also will set forth (i) any mandatory prepayment of the related
Leased Aircraft Notes, and the prepayment price therefor, upon the occurrence
of any event of loss with respect to such Delayed Lease Aircraft during such
Pre-Funding Period and (ii) any option US Airways may have to convert the
leveraged lease financing for a Delayed Lease Aircraft into the type of
financing available for Owned Aircraft.
Ranking of Equipment Notes
Some of the Equipment Notes related to one or more Aircraft, as
described in the related Prospectus Supplement, may be subordinated and
junior in right of payment to other Equipment Notes related to the same
Aircraft. The terms of such subordination, if any, will be described in the
related Prospectus Supplement.
Payments and Limitation of Liability
Each Leased Aircraft will be leased by the related Owner Trustee to
US Airways for a term commencing on the delivery date thereof to such Owner
Trustee and expiring on a date not earlier than the latest maturity date of
the related Leased Aircraft Notes,
32
unless previously terminated as permitted by the terms of the related Lease.
The basic rent and certain other payments under each such Lease will be
payable by US Airways and will be assigned by the related Owner Trustee under
the applicable Indenture to the related Loan Trustee to provide the funds
necessary to pay principal of, premium, if any, and interest due from such
Owner Trustee on the Leased Aircraft Notes issued under such Indenture. In
certain cases, the basic rent payments under a Lease may be adjusted, but
each Lease will provide that under no circumstances will rent payments by US
Airways be less than the scheduled payments on the related Leased Aircraft
Notes. The balance of any basic rent payment under each Lease, after payment
of amounts due on the Leased Aircraft Notes issued under the Indenture
corresponding to such Lease, will be paid over to the applicable Owner
Trustee. US Airways' obligation to pay rent and to cause other payments to
be made under each Lease will be general obligations of US Airways.
With respect to the Leased Aircraft Notes, except in certain
circumstances involving US Airways' purchase of a Leased Aircraft and the
assumption of the Leased Aircraft Notes related thereto, the Leased Aircraft
Notes will not be obligations of, or guaranteed by, US Airways. With respect
to the Leased Aircraft Notes, none of the Owner Trustees, the Owner
Participants or the Loan Trustees will be personally liable to any holder of
such Leased Aircraft Notes for amounts payable under such Leased Aircraft
Notes, or, except as provided in the Indentures relating thereto in the case
of the Owner Trustees and the Loan Trustees, for any liability under such
Indentures. Except in the circumstances referred to above, all amounts
payable under any Leased Aircraft Notes (other than payments made in
connection with an optional redemption or purchase by the related Owner
Trustee or the related Owner Participant) will be made only from (i) the
assets subject to the lien of the applicable Indenture with respect to such
Aircraft or the income and proceeds received by the related Loan Trustee
therefrom (including rent payable by US Airways under the related Lease) or
(ii) if so provided in the related Prospectus Supplement, the applicable
Liquidity Facility.
With respect to the Leased Aircraft Notes, except as otherwise provided
in the applicable Indenture, no Owner Trustee will be personally liable for
any amount payable or for any statements, representations, warranties,
agreements or obligations under any such Indenture or under such Leased
Aircraft Notes except for its own willful misconduct or gross negligence.
None of the Owner Participants will have any duty or responsibility under the
Leased Aircraft Indentures or under such Leased Aircraft Notes to the related
Loan Trustee or to any holder of any such Leased Aircraft Note.
US Airways' obligations under each Owned Aircraft Indenture and under
the Owned Aircraft Notes will be general obligations of US Airways.
33
Defeasance of the Indentures and the Equipment Notes in Certain Circumstances
Unless otherwise specified in the applicable Prospectus Supplement, the
applicable Indenture provides that the obligations of the related Loan
Trustee and, with respect to any Leased Aircraft Notes, the related Owner
Trustee or, with respect to any Owned Aircraft Notes, US Airways under the
applicable Indenture will be deemed to have been discharged and paid in full
(except for certain obligations, including the obligations to register the
transfer or exchange of Equipment Notes, to replace stolen, lost, destroyed
or mutilated Equipment Notes and to maintain paying agencies and hold money
for payment in trust) on the 91st day after the date of irrevocable deposit
with the related Loan Trustee of money or certain obligations of the United
States or any agency or instrumentality thereof the payment of which is
backed by the full faith and credit of the United States which, through the
payment of principal and interest in respect thereof in accordance with their
terms, will provide money in an aggregate amount sufficient to pay when due
(including as a consequence of redemption in respect of which notice is given
on or prior to the date of such deposit) principal of, premium, if any, and
interest on all Equipment Notes issued thereunder in accordance with the
terms of such Indenture. Such discharge may occur only if, among other
things, there has been published by the Internal Revenue Service a ruling to
the effect that holders of such Equipment Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such deposit,
defeasance and discharge and will be subject to federal income tax on the
same amount and in the same manner and at the same time as would have been
the case if such deposit, defeasance and discharge had not occurred.
Upon such defeasance, or upon payment in full of the principal of,
premium, if any, and interest on all Equipment Notes issued under any
Indenture on the maturity date therefor or deposit with the applicable Loan
Trustee of money sufficient therefor no earlier than one year prior to the
date of such maturity, the holders of such Equipment Notes will have no
beneficial interest in or other rights with respect to the related Aircraft
or other assets subject to the lien of such Indenture and such lien will
terminate.
Assumption of Obligations by US Airways
Unless otherwise specified in the applicable Prospectus Supplement with
respect to Leased Aircraft, upon the exercise by US Airways of any purchase
options it may have under the related Lease prior to the end of the term of
such Lease, US Airways may assume on a full recourse basis all of the
obligations of the Owner Trustee (other than its obligations in its
individual capacity) under the Indenture with respect to such Aircraft,
including the obligations to make payments in respect of the related Leased
Aircraft Notes. In such event, certain relevant provisions of the related
Lease, including (among others) provisions relating to maintenance,
possession and use of the related Aircraft, liens, insurance and events of
default will be incorporated into such Indenture, and the Leased Aircraft
Notes issued under such Indenture will not be redeemed and will
34
continue to be secured by such Aircraft. Such assumption may occur only if,
among other things, US Airways has provided an opinion of counsel to the
effect that holders of such Equipment Notes will not recognize income, gain
or loss for federal income tax purposes as a result of such assumption and
will be subject to federal income tax on the same amount and in the same
manner and at the same time as would have been the case if such assumption
had not occurred.
Liquidity Facility
The related Prospectus Supplement may provide that one or more payments
of interest on the related Equipment Notes of one or more series or
distributions made by the Trustee of the related Trust will be supported by a
Liquidity Facility issued by an institution identified in the related
Prospectus Supplement. Unless otherwise provided in the related Prospectus
Supplement, the provider of the Liquidity Facility will have a senior claim
upon the assets securing the Equipment Notes.
Intercreditor Issues
Equipment Notes may be issued in different Classes, which means that the
Equipment Notes may have different payment priorities even though they are
issued by the same borrower and relate to the same Aircraft. In such event,
the related Prospectus Supplement will describe the priority of distributions
among such Equipment Notes (and any Liquidity Facilities therefor), the
ability of any Class to exercise and/or enforce any or all remedies with
respect to the related Aircraft (and, if the Equipment Notes are Leased
Aircraft Notes, the Lease related thereto) and certain other intercreditor
terms and provisions.
Owner Participant; Revisions to Agreements
If specified in the applicable Prospectus Supplement, at the time Pass
Through Certificates are issued, US Airways may still be seeking Owner
Participants with respect to the trusts relating to certain of the Aircraft.
US Airways will hold the beneficial interest under the Trust Agreement
relating to each such Aircraft until the date upon which a prospective Owner
Participant commits to participate in the purchase price of such Aircraft
(which date may be up to 90 days after the scheduled delivery date of the
Aircraft). US Airways will transfer to such Owner Participant on such date
US Airways' beneficial interest under the Trust Agreement. Such prospective
Owner Participants may request revisions to the Participation Agreement,
Lease, Trust Agreement and Indenture so that the terms of such agreements
applicable to these Aircraft may differ from the description of such
agreements contained in the applicable Prospectus Supplement.
Notwithstanding the foregoing, the terms of such agreements will be
required to (i) contain certain mandatory document terms and (ii) not vary
certain mandatory
35
economic terms. In addition, US Airways will be obligated (i) to certify to
the Pass Through Trustee that any such modifications will not materially and
adversely affect the Certificateholders and (ii) if the documents are
modified in any material respect, to obtain written confirmation from each
Rating Agency that the use of modified versions of such agreements will not
result in a withdrawal, suspension or downgrading of the rating of any Class
of Pass Through Certificates.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
General
Unless otherwise indicated in the applicable Prospectus Supplement, the
following summary describes the principal U.S. federal income tax
consequences to Certificateholders of the purchase, ownership and disposition
of the Certificates offered hereby and in the opinion of Skadden, Arps,
Slate, Meagher & Flom LLP, special tax counsel to US Airways ("Tax Counsel"),
is accurate in all material respects with respect to the matters discussed
herein. Except as otherwise specified, the summary is addressed to the
initial beneficial owners of Certificates ("U.S. Certificateholders") 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, or estates, the income of which is subject to U.S.
federal income taxation regardless of its source, or trusts if a court within
the U.S. is able to exercise primary jurisdiction over the administration of
the trust and one or more U.S. persons have the authority to control all
substantial decisions of the trust ("U.S. Persons") that will hold the
Certificates as capital assets. This summary does not address the tax
treatment of U.S. Certificateholders that may be subject to special tax
rules, such as banks, insurance companies, dealers in securities or
commodities, tax-exempt entities, holders that will hold Certificates as part
of a straddle or holders that have a "functional currency" other than the
U.S. Dollar, nor does it address the tax treatment of U.S. Certificateholders
that do not acquire Certificates at the initial offering price as part of the
initial offering thereof. This summary does not purport to be a
comprehensive description of all of the tax considerations that may be
relevant to a decision to purchase Certificates. This summary does not
describe any tax consequences arising under the laws of any state, locality
or taxing jurisdiction other than the United States.
The summary is based upon the tax laws and practice of the United States
as in effect on the date of this Prospectus, as well as judicial and
administrative interpretations thereof (in final or proposed form) available
on or before such date. All of the foregoing are subject to change, which
change could apply retroactively. Prospective investors should note that no
rulings have been sought from the Internal Revenue Service (the "IRS") with
respect to the federal income tax consequences, discussed below, and no
assurances can be given that the IRS will not take contrary positions. The
Trusts are not indemnified for any federal income taxes that may be imposed
upon them, and the
36
imposition of any such taxes on a Trust could result in a reduction in the
amounts available for distribution to the Certificateholders of such Trust.
Prospective investors should consult their own tax advisors with respect to
the federal, state, local and foreign tax consequences to them of the
purchase, ownership and disposition of the Certificates.
Tax Treatment of the Trusts and Certificateholders
Each Trust will not itself be subject to U.S. federal income taxation.
Each U.S. Certificateholder will be required to report on its federal income
tax return its pro rata share of the entire income from the Equipment Notes
and any other property held in the related Trust, in accordance with the U.S.
Certificateholder's method of accounting. Accordingly, each U.S.
Certificateholder's share of interest paid on the Equipment Notes will be
taxable as ordinary income, as it is paid or accrued, and a U.S.
Certificateholder's share of premium, if any, paid on redemption of an
Equipment Note will be treated as capital gain. In the event that a Trust is
supported by a Liquidity Facility, any amounts received by the Trust under
the Liquidity Facility with respect to unpaid interest will be treated for
U.S. federal income tax purposes as having the same characteristics as the
payments they replace.
Each U.S. Certificateholder will be entitled to deduct, consistent with
its method of accounting, its pro rata share of fees and expenses paid or
incurred by the corresponding Trust as provided in Section 162 or 212 of the
Internal Revenue Code of 1986, as amended (the "Code"). Certain fees and
expenses, including fees paid to the Trustee and the provider of the
Liquidity Facility (if applicable), will be borne by parties other than the
Certificateholders. It is possible that such fees and expenses will be
treated as constructively received by the Trust, in which event a U.S.
Certificateholder will be required to include in income and will be entitled
to deduct its pro rata share of such fees and expenses. If a U.S.
Certificateholder is an individual, estate or trust, the deduction for such
holder's share of such fees or expenses will be allowed only to the extent
that all of such holder's miscellaneous itemized deductions, including such
holder's share of such fees and expenses, exceed 2% of such holder's adjusted
gross income. In addition, in the case of U.S. Certificateholders who are
individuals, certain otherwise allowable itemized deductions will be subject
generally to additional limitations on itemized deductions under applicable
provisions of the Code.
Effect of Subordination of Subordinated Certificateholders
In the event that any Trust (such Trust being a "Subordinated Trust" and
the related Certificates being "Subordinated Certificates") is subordinated
in right of payment to any other Trust and the Subordinated Trust receives
less than the full amount of the receipts of interest, principal or premium
paid with respect to the Equipment Notes held by it (any shortfall in such
receipts being the "Shortfall Amounts") because of the subordination of such
Trust, the corresponding owners of beneficial interests in the
37
Subordinated Certificates (the "Subordinated Certificateholders") would
probably be treated for federal income tax purposes as if they had (1)
received as distributions their full share of such receipts, (2) paid over to
the relevant preferred class of Certificateholders an amount equal to their
share of such Shortfall Amount, and (3) retained the right to reimbursement
of such amounts to the extent of future amounts payable to such Subordinated
Certificateholders with respect to such Shortfall Amount.
Under this analysis, (1) Subordinated Certificateholders incurring a
Shortfall Amount would be required to include as current income any interest
or other income of the corresponding Subordinated Trust that was a component
of the Shortfall Amount, even though such amount was in fact paid to the
relevant preferred class of Certificateholders, (2) a loss would only be
allowed to such Subordinated Certificateholders when their right to receive
reimbursement of such Shortfall Amount becomes worthless (i.e., when it
becomes clear that funds will not be available from any source to reimburse
such loss), and (3) reimbursement of such Shortfall Amount prior to such a
claim of worthlessness would not be taxable income to Subordinated
Certificateholders because such amount was previously included in income.
These results should not significantly affect the inclusion of income for
Subordinated Certificateholders on the accrual method of accounting, but
could accelerate inclusion of income to Subordinated Certificateholders on
the cash method of accounting by, in effect, placing them on the accrual
method.
Original Issue Discount
The Equipment Notes may be issued with original issue discount ("OID").
The Prospectus Supplement will state whether any Equipment Notes to be held
by the related Trust will be issued with OID. Generally, a holder of a debt
instrument issued with OID that is not de minimis must include such OID in
income for federal income tax purposes as it accrues, in advance of the
receipt of the cash attributable to such income, under a method that takes
into account the compounding of interest.
Sale or Other Disposition of the Certificates
Upon the sale, exchange or other disposition of a Certificate, a U.S.
Certificateholder generally will recognize capital gain or loss equal to the
difference between the amount realized on the disposition (other than any
amount attributable to accrued interest which will be taxable as ordinary
income) and the U.S. Certificateholder's adjusted tax basis in the related
Equipment Notes and any other property held by the corresponding Trust. Any
gain or loss will be long-term capital gain or loss to the extent
attributable to property held by the Trust for more than one year. In the
case of individuals, estates, and trusts, the maximum U.S. federal income tax
rate on long-term capital gains generally is 20%.
38
Foreign Certificateholders
Under present U.S. federal income tax law, assuming certain
certification requirements are satisfied (which include identification of the
beneficial owner of a Certificate), and subject to the discussion of backup
withholding below:
(a) payments of interest (including any OID) on a Certificate to,
or on behalf of, any beneficial owner of a Certificate that is not a U.S.
Person (a "Non-U.S. Certificateholder") will not be subject to U.S. federal
income tax or withholding tax provided that (1) such Non-U.S.
Certificateholder does not actually or constructively own 10% or more of the
total combined voting power of all classes of stock of an Owner Participant
or US Airways, (2) such Non-U.S. Certificateholder is not (i) a bank
receiving interest pursuant to a loan agreement entered into in the ordinary
course of its trade or business, or (ii) a controlled foreign corporation for
U.S. tax purposes that is related to an Owner Participant or US Airways, and
(3) such interest payments are not effectively connected with the conduct of
a U.S. trade or business of such Non-U.S. Certificateholder; and
(b) a Non-U.S. Certificateholder will not be subject to U.S.
federal income tax on any capital gain realized on the sale, exchange,
retirement or other disposition of a Certificate, unless (1) such Non-U.S.
Certificateholder is an individual who is present in the United States for
183 days or more during the taxable year of the sale, exchange, retirement or
other disposition and certain other requirements are met or (2) such gain is
effectively connected with the conduct of a U.S. trade or business of such
Non-U.S. Certificateholder.
The certification referred to above may be made on an IRS Form W-8 or
substantially similar substitute form.
Information Reporting and Backup Withholding
In general, information reporting requirements will apply to certain
payments within the United States of principal, interest, OID and premium on
the Certificates, and to payments of the proceeds of certain sales of
Certificates made to U.S. Certificateholders other than certain exempt
recipients (such as corporations). A 31% "backup withholding" tax may apply
to such payments if the holder fails or has failed to provide an accurate
taxpayer identification number or otherwise establish an exemption or fails
to report in full interest income. With respect to Non-U.S.
Certificateholders, payments made on a Certificate and proceeds from the sale
of a Certificate owned by a Non-U.S. Certificateholder will generally not be
subject to such information reporting
39
requirements or backup withholding tax if such Non-U.S. Certificateholder
provides the applicable statement as to its non-U.S. status or otherwise
establishes an exemption.
Backup withholding is not an additional tax. Any amounts withheld under
the backup withholding rules will be allowed as a refund or credit against
such holder's U.S. federal income tax liability, if any, provided the
required information is furnished to the IRS.
The Treasury Department recently issued final Treasury Regulations (the
"Final Regulations") governing backup withholding and information reporting
requirements. The Final Regulations do not significantly alter the
substantive withholding and information reporting requirements discussed
herein; they unify current certification procedures and forms and clarify
reliance standards. The Final Regulations will generally become effective
for payments made after December 31, 1999.
ERISA CONSIDERATIONS
Unless otherwise indicated in the applicable Prospectus Supplement, the
Certificates may, subject to certain legal restrictions, be purchased and
held by an employee benefit plan (a "Plan") subject to Title I of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or an
individual retirement account or an employee benefit plan subject to section
4975 of the Code. A fiduciary of a Plan must determine that the purchase and
holding of a Certificate is consistent with its fiduciary duties under ERISA
and does not result in a non-exempt prohibited transaction as defined in
section 406 of ERISA or section 4975 of the Code. Employee benefit plans
which are governmental plans (as defined in section 3(32) of ERISA) and
certain church plans (as defined in section 3(33) of ERISA) are not subject
to Title I of ERISA or section 4975 of the Code. The Certificates may,
subject to certain legal restrictions, be purchased and held by such plans.
PLAN OF DISTRIBUTION
Certificates may be sold to one or more underwriters for public offering
and sale by them or to investors or other persons directly or through one or
more dealers or agents. Any such underwriter, dealer or agent involved in
the offer and sale of the Certificates will be named in an applicable
Prospectus Supplement.
The Certificates may be sold at a fixed price or prices, which may be
changed, or from time to time at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices. Dealer trading may take place in certain of the Certificates,
including Certificates not listed on any securities exchange. US Airways
does not intend to apply for listing of the Certificates on a national
securities exchange. US Airways also may, from time to time, authorize
underwriters acting as
40
US Airways' agents to offer and sell the Certificates upon the terms and
conditions as will be set forth in any Prospectus Supplement. In connection
with the sale of Certificates, underwriters may be deemed to have received
compensation from US Airways in the form of underwriting discounts or
commissions and may also receive commissions from purchasers of Certificates
for whom they may act as agent. Underwriters may sell Certificates to or
through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters and/or
commissions (which may be changed from time to time) from the purchasers for
whom they may act as agent.
If a dealer is used directly by US Airways in the sale of Certificates
in respect of which this Prospectus is delivered, such Certificates will be
sold to the dealer, as principal. The dealer may then resell such
Certificates to the public at varying prices to be determined by such dealer
at the time of resale. Any such dealer and the terms of any such sale will
be set forth in the Prospectus Supplement relating thereto.
Certificates may be offered and sold through agents designated by
US Airways from time to time. Any such agent involved in the offer or sale
of the Certificates in respect of which this Prospectus is delivered will be
named in, and any commissions payable by US Airways to such agent will be set
forth in, the applicable Prospectus Supplement. Unless otherwise indicated
in the applicable Prospectus Supplement, any such agent will be acting on a
best efforts basis for the period of its appointment.
Offers to purchase Certificates may be solicited directly by US Airways
and sales thereof may be made by US Airways directly to institutional
investors or others who may be deemed to be underwriters within the meaning
of the Securities Act with respect to any resale thereof. The terms of any
such sales will be described in the Prospectus Supplement relating thereto.
Except as set forth in the applicable Prospectus Supplement, no director,
officer or employee of US Airways will solicit or receive a commission in
connection with direct sales by US Airways of the Certificates, although such
persons may respond to inquiries by potential purchasers and perform
ministerial and clerical work in connection with any such direct sales.
Any underwriting compensation paid by US Airways to underwriters,
dealers or agents in connection with the offering of Certificates, and any
discounts, concessions or commissions allowed by underwriters to
participating dealers, will be set forth in an applicable Prospectus
Supplement. Underwriters, dealers and agents participating in the
distribution of the Certificates may be deemed to be underwriters, and any
discounts and commissions received by them and any profit realized by them on
resale of the Certificates may be deemed to be underwriting discounts and
commissions under the Securities Act. Underwriters, dealers and agents may
be entitled, under agreements with US Airways, to indemnification against and
contribution toward certain civil liabilities,
41
including liabilities under the Securities Act, and to reimbursement by US
Airways for certain expenses.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, US Airways and its subsidiaries in the ordinary course
of business.
If so indicated in an applicable Prospectus Supplement and subject to
existing market conditions, US Airways will authorize dealers acting as US
Airways' agents to solicit offers by certain institutions to purchase
Certificates at the public offering price set forth in such Prospectus
Supplement pursuant to Delayed Delivery Contracts ("Contracts") providing for
payment and delivery on the date or dates stated in such Prospectus
Supplement. Each Contract will be for an amount not less than, and the
aggregate principal amount of Certificates sold pursuant to Contracts will
not be less nor more than, the respective amounts stated in such Prospectus
Supplement. Institutions with whom Contracts, when authorized, may be made
include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and other
institutions, but will in all cases be subject to the approval of US Airways.
Contracts will not be subject to any conditions except the purchase by an
institution of the Certificates covered by its Contracts will not at the time
of delivery be prohibited under the laws of any jurisdiction in the United
States to which such institution is subject. A commission indicated in the
applicable Prospectus Supplement will be granted to underwriters and agents
soliciting purchases of Certificates pursuant to Contracts accepted by US
Airways. Agents and underwriters will have no responsibility in respect of
the delivery or performance of Contracts.
If an underwriter or underwriters are utilized in the sale of any
Certificates, the applicable Prospectus Supplement will contain a statement
as to the intention, if any, of such underwriters at the date of such
Prospectus Supplement to make a market in the Certificates. No assurances
can be given that there will be a market for the Certificates.
The place and time of delivery for the Certificates in respect of which
this Prospectus is delivered will be set forth in the applicable Prospectus
Supplement.
LEGAL OPINIONS
Unless otherwise indicated in the applicable Prospectus Supplement, the
validity of the Certificates will be passed upon for US Airways by Skadden,
Arps, Slate, Meagher & Flom (Illinois) and its affiliates. Unless otherwise
indicated in the applicable Prospectus Supplement, Skadden, Arps, Slate,
Meagher & Flom (Illinois) and its affiliates will rely on the opinion of
counsel for the Trustee as to certain matters relating to the authorization,
execution and delivery of such Certificates by, and the valid and binding
effect thereof on, such Trustee.
42
EXPERTS
The consolidated financial statements of US Airways, Inc. and its
subsidiary as of December 31, 1997 and 1996, and for each of the years in the
three-year period ended December 31, 1997 which are included in US Airways'
Annual Report on Form 10-K for the year ended December 31, 1997, have been
incorporated by reference herein and in the registration statement in
reliance upon the report of KPMG Peat Marwick LLP, independent certified
public accountants, incorporated by reference herein, and upon the authority
of said firm as experts in accounting and auditing.
OTHER INFORMATION
Effects of Year 2000
The Company is currently operating computer software applications and
systems to support important business applications, including reservations,
accounting and flight operations systems, that will not properly process
dates on or after January 1, 2000 (commonly referred to as the "Year 2000"
problem). In order to address this situation, the Company has implemented a
plan that addresses the Company's information technology and non-information
technology systems. The Company has two teams of full-time staff in place.
One team is coordinating the conversion of the Company's information
technology to systems managed by The Sabre Group ("TSG"), including the Year
2000 compliance for those systems, as further described below. A second
team, headed by the Company's Chief Information Officer, is coordinating Year
2000 compliance efforts for non-information technology systems. This team
has engaged the consulting arm of a big five public accounting firm to assist
them in their efforts. This team is determining the level of the Company's
Year 2000 compliance, and implementing such remedial measures as are
necessary.
TSG Year 2000 Project
The Company has a long-term information technology relationship with TSG
pursuant to which it is converting many of its information technology systems
to those operated by TSG. TSG has reported that a majority of its primary
"host" systems (including systems for reservations, flight operations, and
cargo) are already Year 2000 compliant. The conversion to TSG systems is
being implemented only after the applicable TSG system is already Year 2000
compliant. The Company is working to establish Year 2000 testing procedures
between its systems and TSG's systems. The balance of TSG's systems to which
the Company will be converting are scheduled to be Year 2000 compliant no
later than August 1, 1999. TSG is also remediating all non-Year 2000
compliant systems that are covered by the Company's relationship with TSG,
but that are not being converted to a TSG system. These remediation efforts
are scheduled to be completed by August 1, 1999.
43
TSG has also informed the Company that it is in the process of
communicating with TSG's own third party vendors concerning the Year 2000
compliance of their products and services.
Company Year 2000 Project
The Company operates computer software and systems that are not Year
2000 compliant, and that are not covered by the TSG relationship. This
includes both information technology and non-information technology systems
(such as fax machines, miscellaneous airport devices, and aircraft avionics).
The Company has completed an inventory of items with possible Year 2000
problems. The Company has categorized these systems as either "vital,"
"critical," "important" or "discretionary," and has begun to implement a
program to assess, remediate and test these systems based on this
prioritization. The Company plans to complete the assessment of all non-
discretionary systems by November 30, 1998. The Company plans to complete
the remediation of all non-discretionary systems by June 30, 1999. The
Company is also working with the Federal Aviation Administration ("FAA") to
ensure full compliance with any FAA Year 2000 requirements.
The Company has also commenced airport and facility reviews. This
entails reviewing the Year 2000 compliance of the systems in those locations
over which the Company has little or no control, such as certain flight
information displays, elevators, security and other miscellaneous airport
devices. The Company plans to complete these reviews by November 30, 1998.
The Company is also participating in Year 2000 review efforts being
coordinated on an industry-wide basis by the Airline Transport Association
and the International Air Transport Association.
The Company has identified and prioritized its supplier base, and is
commencing formal contact with these vendors to determine their Year 2000
status, and any possible impact on the Company. The Company will track these
responses and evaluate its long term relationship with these vendors based on
the responses it receives.
Contingency Plans
Although TSG has notified the Company that it believes that its Year
2000 compliance program is on schedule, there can be no assurance that the
compliance program will be completed on a timely basis. Similarly, there can
be no assurance that the Company's own computer software and systems, those
of its suppliers, the airports at which the Company operates, or the air
traffic control system managed by the FAA will be made Year 2000 compliant in
a timely manner. Any such failures could have a material adverse effect on
the business, financial position and results of operations of the Company.
44
The Company is establishing contingency plans in the event that any non-
discretionary system is not Year 2000 compliant by the date required. These
plans will entail reverting to an older and/or manual system until the
applicable system can be remediated. In the event that the Company is
required to implement a contingency plan, it believes that the result may be
significant delays in operations and flight cancellations. In the event that
such delays and flight cancellations occur, it is possible, depending on the
extent of the delays and cancellations, that there could be a material
adverse impact on the Company's results of operations and financial position.
Aggregate expenses incurred by the Company to become Year 2000
compliant, apart from expenses related to the TSG relationship, have amounted
to approximately $2.1 million. The Company expects to spend an additional $8
million, apart from the TSG relationship, in order to become fully Year 2000
compliant. These numbers are also exclusive of any replacement equipment
that may become necessary and have not yet been identified. With respect to
the cost of TSG's Year 2000 compliance program, the Company cannot completely
quantify the costs for Year 2000 compliance on its information technology
systems because such costs have been incorporated into the costs of the
broader conversion plan to TSG systems. However, the Company anticipates
incurring $24 million in expenses for TSG services which are related solely
to Year 2000 compliance efforts on the systems, unrelated to the broader
conversion plan. The Company expects to pay TSG $18 million for these
services in 1998 and another $6 million in 1999. Overall, the Company
believes that the cost of becoming Year 2000 compliant is not expected to
have a material adverse effect on the business, financial position or results
of operations of the Company.
45
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated expenses in connection with this offering, other than
underwriting discounts and commissions, are:
Securities and Exchange Commission registration filing fee $ 295,000
Printing and engraving expenses 400,000*
Trustee fees and expenses 40,000*
Accounting fees and expenses 150,000*
Rating Agency fees 500,000*
Legal fees and expenses 500,000*
---------
Total $1,885,000*
=========
* Estimates.
Item 15. Indemnification of Directors and Officers.
The Company's Restated Certificate of Incorporation and By-laws provide
that the Company will indemnify its directors, officers and employees, and
will have the power to indemnify its other agents, to the full extent
permitted by the General Corporation Law of the State of Delaware (the
"GCL"), as amended from time to time (but, in the case of any such amendment,
only to the extent that such amendment permits the Company to provide broader
indemnification rights than such law permitted the Company to provide on June
29, 1989). As of the date of the Prospectus, Section 145 of the GCL, forming
a part of this Registration Statement, provides as follows:
"(a) A corporation will 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 the person 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 the person in connection with such
action, suit or proceeding if the person acted in good faith and in a manner
the person 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 the person's conduct was unlawful. The
termination
II-I
of any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, will not, of itself,
create a presumption that the person did not act in good faith and in a
manner which the person 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 the person's conduct was
unlawful.
(b) A corporation will 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 the person 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 the person in connection with the defense or settlement of such action or
suit if the person acted in good faith and in a manner the person reasonably
believed to be in or not opposed to the best interests of the corporation and
except that no indemnification will be made in respect of any claim, issue or
matter as to which such person will 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 will 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 will deem proper.
(c) To the extent that a present or former director or officer 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, such person
will be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) will be made by the corporation only as
authorized in the specific case upon a determination that indemnification of
the present or former director, officer, employee or agent is proper in the
circumstances because the person has met the applicable standard of conduct
set forth in subsections (a) and (b) of this section. Such determination
will be made, with respect to a person who is a director or officer at the
time of such determination, (1) by a majority vote of the directors who are
not parties to such action, suit or proceeding, even though less than a
quorum, or (2) by a committee or such directors designated by majority vote
or such directors, even though less than a quorum, or (3) if there are no
such directors, or if such directors so direct, by independent legal counsel
in a written opinion, or (4) by the stockholders.
II-2
(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 an
undertaking by or on behalf of such director or officer to repay such amount
if it will ultimately be determined that such person is not entitled to be
indemnified by the corporation as authorized in this section. Such expenses
(including attorneys' fees) incurred by former directors and officers or
other employees and agents may be so paid upon such terms and conditions, if
any, as the corporation deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section will 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
such person's official capacity and as to action in another capacity while
holding such office.
(g) A corporation will 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 such person and incurred by such person in any such capacity, or
arising out of such person's status as such, whether or not the corporation
would have the power to indemnify such person against such liability under
this section.
(h) For purposes of this section, references to "the corporation" will
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 of 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, will stand in the same position under this section with respect
to the resulting or surviving corporation as such person would have with
respect to such constituent corporation if its separate existence had
continued.
(i) For purposes of this section, references to "other enterprises"
will include employee benefit plans; references to "fines" will include any
excise taxes assessed on a person with respect to any employee benefit plan;
and references to "serving at the request of the corporation" will 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 such
person reason-
II-3
ably believed to be in the interest of the participants and beneficiaries of
an employee benefit plan will 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 will, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and will 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)."
The Company maintains directors' and officers' liability insurance.
ITEM 16. EXHIBITS
Reference is made to the Exhibit Index which immediately precedes the
exhibits filed with this Registration Statement, which is incorporated herein
by reference.
ITEM 17. 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;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. 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 end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement; and
II-4
(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 (1)(i) and (1)(ii) do not apply if the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act each such post-effective amendment will be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time will 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, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement will be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time will be deemed to be the initial
bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
have been advised that in the opinion of the Commission such indemnification
is against public policy as expressed in the Securities Act, and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling person of
such registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection
with the securities being registered, the 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 whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
hereunto duly authorized in the City of Arlington, State of Virginia, on
September 28, 1998.
US AIRWAYS, INC.
By:/s/ Rakesh Gangwal
------------------
Rakesh Gangwal, Chief Executive
Officer (Principal Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated, on September 28, 1998.
By:/s/ Stephen M. Wolf
-------------------
Stephen M. Wolf, Chairman
of the Board of Directors
By:/s/ Rakesh Gangwal
------------------
Rakesh Gangwal, Director and
Chief Executive Officer
(Principal Executive Officer)
By:/s/ Terry L. Hall
-----------------
Terry L. Hall, Chief Financial
Officer (Principal Financial
Officer and Accounting Officer)
By:/s/ *
----------------------
Mathias J. DeVito, Director
6
By:/s/ *
-------------------------
George J. W. Goodman,
Director
By:/s/ *
-------------------
John W. Harris, Director
By:/s/ *
----------------------------
Edward A. Horrigan, Jr.,
Director
By:/s/ *
----------------------
Robert L. Johnson, Director
By:/s/ *
------------------
Robert LeBuhn, Director
By:/s/ *
------------------------
John G. Medlin, Jr., Director
By:/s/ *
----------------------
Hanne M. Merriman, Director
By:/s/ *
---------------------
Raymond W. Smith, Director
By:/s/ *
------------------
Terry L. Hall, Attorney-In-Fact
* Signed pursuant to power of attorney filed herewith.
EXHIBIT INDEX
Exhibit No. Description of Exhibit
- ----------- ----------------------
4.1 Form of Pass Through Trust Agreement
4.2 Form of Pass Through Certificate (included as part of Exhibit 4.1)
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom (Illinois)
12.1 Statements re: computations of ratios
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom (Illinois)
(included in its opinion filed as Exhibit 5.1)
23.3 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
24.1 Powers of Attorney
25.1 Form T-1 Statement of Eligibility of Trustee under the Trust
Indenture Act of Trustee
EXHIBIT 4.1
- ----------------------------------------------------------------------------
PASS THROUGH TRUST AGREEMENT
Dated as of [ ], 1998
between
US AIRWAYS, INC.
and
STATE STREET BANK AND TRUST COMPANY,
as Trustee
- ----------------------------------------------------------------------------
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01. Definitions 2
Section 1.02. Compliance Certificates and Opinions 13
Section 1.03. Form of Documents Delivered to Trustee 14
Section 1.04. Directions of Certificateholders 14
ARTICLE II
ORIGINAL ISSUANCE OF CERTIFICATES:
ACQUISITION OF TRUST PROPERTY
Section 2.01. Amount Unlimited; Issuable in Series 16
Section 2.02. Acquisition of Equipment Notes 18
Section 2.03. Acceptance by Trustee 20
Section 2.04. Limitation of Powers 21
ARTICLE III
THE CERTIFICATES
Section 3.01. Form, Denomination and Execution of Certificates 21
Section 3.02. Authentication of Certificates 22
Section 3.03. Temporary Certificates 22
Section 3.04. Transfer and Exchange 23
Section 3.05. Book-Entry and Definitive Certificates 23
Section 3.06. Mutilated, Destroyed, Lost or Stolen Certificates 26
Section 3.07. Persons Deemed Owners 26
Section 3.08. Cancellation 27
Section 3.09. Limitation of Liability for Payments 27
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS
Section 4.01. Certificate Account and Special Payments Account 27
Section 4.02. Distributions from Certificate Account and Special
Payments Account 28
Page
----
Section 4.03. Statements to Certificateholders 30
Section 4.04. Investment of Special Payment Moneys 31
ARTICLE V
THE COMPANY
Section 5.01. Maintenance of Corporate Existence 31
Section 5.02. Consolidation, Merger, Etc. 32
ARTICLE VI
DEFAULT
Section 6.01. Indenture Events of Default and Triggering Events 33
Section 6.02. Incidents of Sale of Equipment Notes 34
Section 6.03. Judicial Proceedings Instituted by Trustee; Trustee
May Bring Suit 35
Section 6.04. Control by Certificateholders 35
Section 6.05. Waiver of Past Defaults 36
Section 6.06. Right of Certificateholders to Receive Payments Not
to Be Impaired 37
Section 6.07. Certificateholders May Not Bring Suit Except Under
Certain Conditions 37
Section 6.08. Remedies Cumulative 38
Section 6.09. Undertaking for Costs 38
ARTICLE VII
THE TRUSTEE
Section 7.01. Certain Duties and Responsibilities 38
Section 7.02. Notice of Defaults 39
Section 7.03. Certain Rights of Trustee 39
Section 7.04. Not Responsible for Recitals or Issuance of
Certificates 41
Section 7.05. May Hold Certificates 41
Section 7.06. Money Held in Trust 41
Section 7.07. Compensation and Reimbursement 41
Section 7.08. Corporate Trustee Required; Eligibility 42
Section 7.09. Resignation and Removal; Appointment of Successor 43
Section 7.10. Acceptance of Appointment by Successor 45
ii
Page
----
Section 7.11. Merger, Conversion, Consolidation or Succession to
Business 45
Section 7.12. Maintenance of Agencies 46
Section 7.13. Money for Certificate Payments to be Held in Trust 47
Section 7.14. Registration of Equipment Notes in Trustee's Name 48
Section 7.15. Representations and Warranties of Trustee 48
Section 7.16. Withholding Taxes; Information Reporting 49
Section 7.17. Trustee's Liens 49
Section 7.18. Preferential Collection of Claims 50
ARTICLE VIII
CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE
Section 8.01. The Company to Furnish Trustee with Names and
Addresses of Certificateholders 50
Section 8.02. Preservation of Information; Communications to
Certificateholders 50
Section 8.03. Reports by Trustee 50
Section 8.04. Reports by the Company 51
ARTICLE IX
SUPPLEMENTAL AGREEMENTS
Section 9.01. Supplemental Agreements Without Consent of
Certificateholders 52
Section 9.02. Supplemental Agreements with Consent of
Certificateholders 53
Section 9.03. Documents Affecting Immunity or Indemnity 55
Section 9.04. Execution of Supplemental Agreements 55
Section 9.05. Effect of Supplemental Agreements 55
Section 9.06. Conformity with Trust Indenture Act 55
Section 9.07. Reference in Certificates to Supplemental Agreements 55
ARTICLE X
AMENDMENTS TO INDENTURE AND NOTE DOCUMENTS
Section 10.01. Amendments and Supplements to Indenture and Other
Note Documents 55
iii
Page
----
ARTICLE XI
TERMINATION OF TRUSTS
Section 11.01. Termination of the Trusts 57
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Limitation on Rights of Certificateholders 58
Section 12.02. Liabilities of Certificateholders 58
Section 12.03. Registration of Equipment Notes in Name of
Subordination Agent 58
Section 12.04. Notices 58
Section 12.05. Governing Law 60
Section 12.06. Severability of Provisions 60
Section 12.07. Trust Indenture Act Controls 60
Section 12.08. Effect of Headings and Table of Contents 60
Section 12.09. Successors and Assigns 60
Section 12.10. Benefits of Agreement 61
Section 12.11. Legal Holidays 61
Section 12.12. Counterparts 61
Section 12.13. Communication by Certificateholders with Other
Certificateholders 61
Section 12.14. Intention of Parties 61
EXHIBIT A - Form of Certificate A-1
iv
Reconciliation and tie between US Airways Pass Through Trust Agreement, dated
as of [ ], 1998 and the Trust Indenture Act of 1939. This
reconciliation does not constitute part of the Pass Through Trust Agreement.
Trust Indenture Act Pass Through Trust
of 1939 Section Agreement Section
------------------- ------------------
310(a)(1) 7.08
(a)(2) 7.08
312(a) 3.05; 8.01; 8.02
313(a) 8.03
314(a)(1)-(3) 8.04(a)-(c)
(a)(4) 8.04(d)
(c)(1) 1.02
(c)(2) 1.02
(d)(1) 1.02; 7.13; 11.01
(d)(2) 1.02; 7.13; 11.01
(d)(3) 1.02; 2.01
(e) 1.02
315(b) 7.02
316(a)(last sentence) 1.04(c)
(a)(1)(A) 6.04
(a)(1)(B) 6.05
(b) 6.06
(c) 1.04(d)
317(a)(1) 6.03
(b) 7.13
318(a) 12.07
v
PASS THROUGH TRUST AGREEMENT
This PASS THROUGH TRUST AGREEMENT, dated as of [ ], 1998 (the
"BASIC AGREEMENT"), between US AIRWAYS, INC., a Delaware corporation (the
"COMPANY"), and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust
company, as Trustee, is made with respect to the formation from time to time
of separate US Airways Pass Through Trusts, and the issuance from time to
time of separate series of Pass Through Certificates representing fractional
undivided interests in the respective Trusts.
W I T N E S S E T H:
-------------------
WHEREAS, from time to time, the Company and the Trustee may enter into a
Trust Supplement (this and certain other defined terms used herein are
defined in Section 1.01) pursuant to which the Trustee shall declare the
creation of a separate Trust for the benefit of the Holders of the series of
Certificates to be issued in respect of such Trust, and the initial Holders
of the Certificates of such series, as the grantors of such Trust, by their
respective acceptances of the Certificates of such series, shall join in the
creation of such Trust with the Trustee;
WHEREAS, all Certificates to be issued in respect of each separate Trust
will be issued as a separate series pursuant to this Agreement, will evidence
fractional undivided interests in such Trust and will have no rights,
benefits or interests in respect of any other separate Trust or the property
held therein, subject, however, to the provisions of any Intercreditor
Agreement to which one or more Trusts may be a party;
WHEREAS, from time to time, pursuant to the terms and conditions of this
Agreement with respect to each separate Trust formed hereunder, the Trustee
on behalf of such Trust shall purchase one or more issues of Equipment Notes
having the same interest rate as, and final maturity dates not later than the
final Regular Distribution Date of, the series of Certificates issued in
respect of such Trust and, subject to the terms of any related Intercreditor
Agreement, shall hold such Equipment Notes in trust for the benefit of the
Certificateholders of such Trust;
WHEREAS, to facilitate the sale of Equipment Notes to, and the purchase
of Equipment Notes by, the Trustee on behalf of each Trust created from time
to time pursuant to this Agreement, the Company as the "issuer", as such term
is defined in and solely for purposes of the Securities Act of 1933, as
amended, of the Certificates to be issued in respect of each Trust and as the
"obligor", as such term is defined in and solely for purposes of the Trust
Indenture Act has duly authorized the execution and delivery of this Basic
Agreement and each Trust Supplement with respect to all such Certificates
and is undertaking to perform certain administrative and ministerial duties
hereunder and is also undertaking to pay the fees and expenses of the
Trustee; and
WHEREAS, this Basic Agreement, as supplemented from time to time, is
subject to the provisions of the Trust Indenture Act and shall, to the extent
applicable, be governed by such provisions;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.01. DEFININTIONS. For all purposes of this Basic Agreement,
except as otherwise expressly provided or unless the context otherwise
requires:
(1) the terms used herein that are defined in this Article I have
the meanings assigned to them in this Article I, and include the plural as
well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, or by the rules
promulgated under the Trust Indenture Act, have the meanings assigned to them
therein;
(3) all references in this Basic Agreement to designated
"Articles", "Sections", "Subsections" and other subdivisions are to the
designated Articles, Sections, Subsections and other subdivisions of this
Basic Agreement;
(4) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Basic Agreement as a whole and not to any
particular Article, Section, Subsection or other subdivision;
(5) unless the context otherwise requires, whenever the words
"including", "include" or "includes" are used herein, it shall be deemed to
be followed by the phrase "without limitation"; and
(6) the term "this Agreement" (as distinguished from "this Basic
Agreement") refers, unless the context otherwise requires, to this Basic
Agreement as supplemented by the Trust Supplement creating a particular Trust
and establishing the series of Certificates issued or to be issued in respect
2
thereof, with reference to such Trust and such series of Certificates, as
this Basic Agreement as so supplemented may be further supplemented with
respect to such Trust and such series of Certificates.
ACT: Has the meaning, with respect to any Certificateholder,
specified in Section 1.04(a).
AFFILIATE: Means, with respect to any specified Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person. For the purposes of this
definition, "control", when used with respect to any specified Person, means
the power, directly or indirectly, to direct the management and policies of
such Person, whether through the ownership of voting securities or by
contract or otherwise, and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
AIRCRAFT: Means one or more aircraft, including engines therefor,
owned by or leased to the Company and securing one or more Equipment Notes.
AUTHORIZED AGENT: Means, with respect to the Certificates of any
series, any Paying Agent or Registrar for the Certificates of such series.
BASIC AGREEMENT: Means this Pass Through Trust Agreement, as the
same may from time to time be supplemented, amended or modified, but does not
include any Trust Supplement.
BOOK-ENTRY CERTIFICATES: Means, with respect to the Certificates
of any series, a beneficial interest in the Certificates of such series,
ownership and transfers of which shall be made through book entries as
described in Section 3.05.
BUSINESS DAY: Means, with respect to the Certificates of any
series, any day other than a Saturday, a Sunday or a day on which commercial
banks are required or authorized to close in New York, New York, or, so long
as any Certificate of such series is outstanding, the city and state in which
the Trustee or any related Loan Trustee maintains its Corporate Trust Office
or receives and disburses funds.
CERTIFICATE: Means any one of the certificates executed and
authenticated by the Trustee, substantially in the form of Exhibit A hereto.
3
CERTIFICATE ACCOUNT: Means, with respect to the Certificates of
any series, the account or accounts created and maintained for such series
pursuant to Section 4.01(a) and the related Trust Supplement.
CERTIFICATEHOLDER OR HOLDER: Means, with respect to the
Certificates of any series, the Person in whose name a Certificate of such
series is registered in the Register for Certificates of such series.
CERTIFICATE OWNER: Means, with respect to the Certificates of any
series, for purposes of Section 3.05, the Person who owns a Book-Entry
Certificate of such series.
CLEARING AGENCY: Means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended.
CLEARING AGENCY PARTICIPANT: Means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects, directly or indirectly, book-entry transfers and pledges of
securities deposited with the Clearing Agency.
COMPANY: Means US Airways, Inc., a Delaware corporation, or its
successor in interest pursuant to Section 5.02, or (only in the context of
provisions hereof, if any, when such reference is required for purposes of
compliance with the Trust Indenture Act) any other "obligor" (within the
meaning of the Trust Indenture Act) with respect to the Certificates of any
series.
CONTROLLING PARTY: Means the Person entitled to act as such
pursuant to the terms of any Intercreditor Agreement.
CORPORATE TRUST OFFICE: Means, with respect to the Trustee or any
Loan Trustee, the office of such trustee in the city at which at any
particular time its corporate trust business shall be principally
administered.
CUT-OFF DATE: Means, with respect to the Certificates of any
series, the date designated as such in the Trust Supplement establishing such
series.
DEFINITIVE CERTIFICATES: Has the meaning, with respect to the
Certificates of any series, specified in Section 3.05.
DIRECTION: Has the meaning specified in Section 1.04(a).
4
EQUIPMENT NOTES: Means, with respect to the Certificates of any
series, all of the equipment notes issued under the Indentures related to
such series of Certificates.
ERISA: Means the Employee Retirement Income Security Act of 1974,
as amended from time to time, or any successor federal statute.
ESCROW ACCOUNT: Has the meaning, with respect to the Certificates
of any series, specified in Section 2.02(b).
ESCROWED FUNDS: Has the meaning, with respect to any Trust,
specified in Section 2.02(b).
EVENT OF DEFAULT: Means, in respect of any Trust, an Indenture
Event of Default under any Indenture pursuant to which Equipment Notes held
by such Trust were issued.
FRACTIONAL UNDIVIDED INTEREST: Means the fractional undivided
interest in a Trust that is evidenced by a Certificate relating to such
Trust.
INDENTURE: Means, with respect to any Trust, each of the one or
more separate trust indenture and security agreements or trust indenture and
mortgages or similar documents described in, or on a schedule attached to,
the Trust Supplement and an indenture having substantially the same terms and
conditions which relates to a Substitute Aircraft, as each such indenture may
be amended or supplemented in accordance with its respective terms; and
"Indentures" means all of such agreements.
INDENTURE EVENT OF DEFAULT: Means, with respect to any Indenture,
any Indenture Event of Default (as such term is defined in such Indenture).
INITIAL REGULAR DISTRIBUTION DATE: Means, with respect to the
Certificates of any series, the first Regular Distribution Date on which a
Scheduled Payment is to be made.
INTERCREDITOR AGREEMENT: Means any agreement by and among the
Trustee, as trustee hereunder with respect to one or more Trusts, one or more
Liquidity Providers and a Subordination Agent providing, among other things,
for the distribution of payments made in respect of Equipment Notes held by
such Trusts.
5
ISSUANCE DATE: Means, with respect to the Certificates of any
series, the date of the issuance of such Certificates.
LEASE: Means any lease between an Owner Trustee, as the lessor,
and the Company, as the lessee, referred to in the related Indenture, as such
lease may be amended, supplemented or otherwise modified in accordance with
its terms; and "Leases" means all such Leases.
LETTER OF REPRESENTATIONS: Means, with respect to the Certificates
of any series, an agreement among the Company, the Trustee and the initial
Clearing Agency substantially in the form attached as an Exhibit to the
related Trust Supplement.
LIQUIDITY FACILITY: Means, with respect to the Certificates of any
series, any revolving credit agreement, letter of credit or similar facility
relating to the Certificates of such series between a bank or other financial
institution and a Subordination Agent, as amended, replaced, supplemented or
otherwise modified from time to time in accordance with its terms and the
terms of any Intercreditor Agreement.
LIQUIDITY PROVIDER: Means, with respect to the Certificates of any
series, a bank or other financial institution that agrees to provide a
Liquidity Facility for the benefit of the holders of Certificates of such
series.
LOAN TRUSTEE: Means, with respect to any Equipment Note or the
Indenture applicable thereto, the bank or trust company designated as loan or
indenture trustee under such Indenture, and any successor to such Loan
Trustee as such trustee; and "Loan Trustees" means all of the Loan Trustees
under the Indentures.
NOTE DOCUMENTS: Means, with respect to the Certificates of any
series, the Equipment Notes with respect to such Certificates and, with
respect to such Equipment Notes, the related Indenture, Note Purchase
Agreement and, if the related Aircraft is leased to the Company, the related
Lease and the related Owner Trustee's Purchase Agreement.
NOTE PURCHASE AGREEMENT: Means, with respect to the Certificates
of any series, any note purchase, refunding, participation or similar
agreement providing for, among other things, the purchase of Equipment Notes
by the Trustee on behalf of the relevant Trust; and "Note Purchase
Agreements" means all such agreements.
6
OFFICER'S CERTIFICATE: Means a certificate signed, (a) in the case
of the Company, by (i) the Chairman or Vice Chairman of the Board of
Directors, the President, any Executive Vice President, any Senior Vice
President or the Treasurer of the Company, signing alone, or (ii) any Vice
President of the Company signing together with the Secretary, the Assistant
Secretary, the Treasurer or any Assistant Treasurer of the Company or (b) in
the case of the Trustee or an Owner Trustee or a Loan Trustee, a Responsible
Officer of the Trustee or such Owner Trustee or such Loan Trustee, as the
case may be.
OPINION OF COUNSEL: Means a written opinion of legal counsel who
(a) in the case of counsel for the Company may be (i) a senior attorney of
the Company one of whose principal duties is furnishing advice as to legal
matters, (ii) Skadden, Arps, Slate, Meagher & Flom LLP (and any affiliate
thereof) or (iii) such other counsel designated by the Company and reasonably
acceptable to the Trustee and (b) in the case of any Owner Trustee or any
Loan Trustee, may be such counsel as may be designated by any of them whether
or not such counsel is an employee of any of them, and who shall be
reasonably acceptable to the Trustee.
OTHER AGREEMENTS: Has the meaning specified in Section 6.01(b).
OUTSTANDING: When used with respect to Certificates of any series,
means, as of the date of determination, all Certificates of such series
theretofore authenticated and delivered under this Agreement, except:
(i) Certificates of such series theretofore cancelled by
the Registrar or delivered to the Trustee or the Registrar for cancellation;
(ii) All of the Certificates of such series if money in the
full amount required to make the final distribution with respect to such
series pursuant to Section 11.01 hereof has been theretofore deposited with
the Trustee in trust for the Holders of the Certificates of such series as
provided in Section 4.01, pending distribution of such money to such
Certificateholders pursuant to payment of such final distribution payment;
and
(iii) Certificates of such series in exchange for or in lieu
of which other Certificates of such series have been authenticated and
delivered pursuant to this Agreement.
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OWNER PARTICIPANT: Means, with respect to any Equipment Note, the
"Owner Participant", if any, as referred to in the Indenture pursuant to
which such Equipment Note is issued and any permitted successor or assign of
such Owner Participant; and "Owner Participants" at any time of determination
means all of the Owner Participants thus referred to in the Indentures.
OWNER TRUSTEE: Means, with respect to any Equipment Note, the
"Owner Trustee", if any, as referred to in the Indenture pursuant to which
such Equipment Note is issued, not in its individual capacity but solely as
trustee; and "Owner Trustees" means all of the Owner Trustees party to any of
the related Indentures.
OWNER TRUSTEE'S PURCHASE AGREEMENT: Has the meaning, with respect
to the Certificates of any series if the related Aircraft is leased to the
Company, specified therefor in the related Lease.
PAYING AGENT: Means, with respect to the Certificates of any
series, the paying agent maintained and appointed for the Certificates of
such series pursuant to Section 7.12.
PERMITTED INVESTMENTS: Means obligations of the United States of
America or agencies or instrumentalities thereof for the payment of which the
full faith and credit of the United States of America is pledged, maturing in
not more than 60 days after the date of acquisition thereof or such lesser
time as is required for the distribution of any Special Payments on a Special
Distribution Date.
PERSON: Means any person, including any individual, corporation,
limited liability company, partnership, joint venture, association, joint-
stock company, trust, trustee, unincorporated organization, or government or
any agency or political subdivision thereof.
POOL BALANCE: Means, with respect to the Certificates of any
series as of any date, (i) the original aggregate face amount of the
Certificates of any series less (ii) the aggregate amount of all payments
made in respect of such Certificates other than payments made in respect of
interest or premium thereon or reimbursement of any costs or expenses
incurred in connection therewith. The Pool Balance as of any Distribution
Date shall be computed after giving effect to the payment of principal, if
any, on the Equipment Notes or other Trust Property held in the Trust and the
distribution thereof to be made on such Distribution Date.
8
POOL FACTOR: Means, with respect to any series of Certificates as
of any date, the quotient (rounded to the seventh decimal place) computed by
dividing (i) the Pool Balance of such series as at such date by (ii) the
original aggregate face amount of the Certificates of such series. The Pool
Factor as of any Distribution Date shall be computed after giving effect to
the payment of principal, if any, on the Equipment Notes or other Trust
Property held in the Trust and the distribution thereof to be made on such
Distribution Date.
POSTPONED NOTES: Means, with respect to any Trust or the related
series of Certificates, the Equipment Notes to be held in such Trust as to
which a Postponement Notice shall have been delivered pursuant to Section
2.02(b).
POSTPONEMENT NOTICE: Means, with respect to any Trust or the
related series of Certificates, an Officer's Certificate of the Company
signed by an officer of the Company (1) requesting that the Trustee
temporarily postpone purchase of the related Equipment Notes to a date later
than the Issuance Date of such series of Certificates, (2) identifying the
amount of the purchase price of each such Equipment Note and the aggregate
purchase price for all such Equipment Notes, (3) setting forth the reasons
for such postponement and (4) with respect to each such Equipment Note,
either (a) setting or resetting a new Transfer Date (which shall be on or
prior to the applicable Cut-off Date) for payment by the Trustee of such
purchase price and issuance of the related Equipment Note (subject to
subsequent change from time to time in accordance with the relevant Note
Purchase Agreement), or (b) indicating that such new Transfer Date (which
shall be on or prior to the applicable Cut-off Date) will be set by
subsequent written notice not less than one Business Day prior to such new
Transfer Date (subject to subsequent change from time to time in accordance
with the relevant Note Purchase Agreement).
POTENTIAL PURCHASER: Has the meaning, with respect to any
Certificateholder, specified in Section 6.01(b).
PTC EVENT OF DEFAULT: Means, with respect to the Certificates of
any series, any failure to pay within ten Business Days of the due date
thereof: (i) the outstanding Pool Balance of such series of Certificates on
the date specified in any Trust Supplement for such payment or (ii) interest
due on the Certificates of such series on any Distribution Date (unless the
related Subordination Agent shall have made an Interest Drawing or Drawings
(as defined in the related Intercreditor Agreement), or a withdrawal or
withdrawals pursuant to a cash collateral account under such Intercreditor
Agreement, with respect thereto in
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an aggregate amount sufficient to pay such interest and shall have
distributed such amount to the Trustee).
PURCHASING CERTIFICATEHOLDER: Has the meaning, with respect to any
Certificateholder, specified in Section 6.01(b).
RECORD DATE: Means, with respect to any Trust or the related
series of Certificates, (i) for Scheduled Payments to be distributed on any
Regular Distribution Date, other than the final distribution with respect to
such series, the 15th day (whether or not a Business Day) preceding such
Regular Distribution Date, and (ii) for Special Payments to be distributed on
any Special Distribution Date, other than the final distribution with respect
to such series, the 15th day (whether or not a Business Day) preceding such
Special Distribution Date.
REGISTER AND REGISTRAR: Means, each with respect to the
Certificates of any series, the register maintained and the registrar
appointed pursuant to Sections 3.04 and 7.12.
REGULAR DISTRIBUTION DATE: Means, with respect to distributions of
Scheduled Payments in respect of any series of Certificates, each date
designated as such in this Agreement, until payment of all the Scheduled
Payments to be made under the Equipment Notes held in the Trust have been
made.
REQUEST: Means a request by the Company setting forth the subject
matter of the request accompanied by an Officer's Certificate and an Opinion
of Counsel as provided in Section 1.02 of this Basic Agreement.
RESPONSIBLE OFFICER: Means, with respect to any Trustee, any Loan
Trustee and any Owner Trustee, any officer in the Corporate Trust Department
of the Trustee, Loan Trustee or Owner Trustee or any other officer
customarily performing functions similar to those performed by the persons
who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of his knowledge of and
familiarity with a particular subject.
RESPONSIBLE PARTY: Means, with respect to the Certificates of any
series, the person designated as such in the related Trust Supplement.
SCHEDULED PAYMENT: Means, with respect to any Equipment Note, (i)
any payment of principal or interest on such Equipment Note (other than any
such payment which is not in fact received by the Trustee or any
Subordination Agent within five days of the date on which such payment is
scheduled to be made) or (ii) any payment of interest on the Certificates of
any series with funds drawn
10
under the Liquidity Facility for such series (other than any such payment
which is not in fact received by the Trustee or any Subordination Agent
within five days of the date upon which payment is scheduled to be made),
which payment in the case of clauses (i) or clause (ii) represents the
installment of principal on such Equipment Note at the stated maturity of
such installment, the payment of regularly scheduled interest accrued on the
unpaid principal amount of such Equipment Note, or both; provided, however,
that any payment of principal, premium, if any, or interest resulting from
the redemption or purchase of any Equipment Note shall not constitute a
Scheduled Payment.
SEC: Means the Securities and Exchange Commission, as from time to
time constituted or created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties on such date.
SELLING CERTIFICATEHOLDER: Has the meaning, with respect to any
Certificateholder, specified in Section 6.01(b).
SPECIAL DISTRIBUTION DATE: Means, with respect to the Certificates
of any series, each date on which a Special Payment is to be distributed as
specified in this Agreement.
SPECIAL PAYMENT: Means (i) any payment (other than a Scheduled
Payment) in respect of, or any proceeds of, any Equipment Note or Trust
Indenture Estate (as defined in each Indenture), (ii) the amounts required to
be distributed pursuant to the last paragraph of Section 2.02(b) or (iii) the
amounts required to be distributed pursuant to the penultimate paragraph of
Section 2.02(b).
SPECIAL PAYMENTS ACCOUNT: Means, with respect to the Certificates
of any series, the account or accounts created and maintained for such series
pursuant to Section 4.01(b) and the related Trust Supplement.
SPECIFIED INVESTMENTS: Means, with respect to any Trust, unless
otherwise specified in the related Trust Supplement, (i) obligations of, or
guaranteed by, the United States Government or agencies thereof, (ii) open
market commercial paper of any corporation incorporated under the laws of the
United States of America or any state thereof rated at least P-2 or its
equivalent by Moody's Investors Service, Inc. or at least A-2 or its
equivalent by Standard & Poor's Ratings Services, a division of The McGraw-
Hill Companies, Inc., (iii) certificates of deposit issued by commercial
banks organized under the laws of
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the United States or of any political subdivision thereof having a combined
capital and surplus in excess of $100,000,000 which banks or their holding
companies have a rating of A or its equivalent by Moody's Investors Service,
Inc. or Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc.; provided, however, that the aggregate amount at any one time
so invested in certificates of deposit issued by any one bank shall not
exceed 5% of such bank's capital and surplus, (iv) U.S. dollar-denominated
offshore certificates of deposit issued by, or offshore time deposits with,
any commercial bank described in clause (iii) above or any subsidiary thereof
and (v) repurchase agreements with any financial institution having combined
capital and surplus of at least $100,000,000 with any of the obligations
described in clauses (i) through (iv) above as collateral; provided further
that if all of the above investments are unavailable, the entire amounts to
be invested may be used to purchase federal funds from an entity described in
clause (iii) above.
SUBORDIANTION AGENT: Has the meaning specified therefor in any
Intercreditor Agreement.
SUBSTITUTE AIRCRAFT: Means, with respect to any Trust, any
Aircraft of a type specified in this Agreement and, at the election of the
Company, substituted prior to the applicable Cut-off Date, if any, pursuant
to the terms of this Agreement.
TRANSFER DATE: Has the meaning assigned to that term or any of the
terms "Delivery Date", "Funding Date" or "Closing Date" in a Note Purchase
Agreement, and in any event refers to any such date as it may be changed from
time to time in accordance with the terms of such Note Purchase Agreement.
TRIGGERING EVENT: Has the meaning specified therefor in any
Intercreditor Agreement.
TRUST: Means, with respect to the Certificates of any series, the
trust under this Agreement.
TRUSTEE: Means State Street Bank and Trust Company, or its
successor in interest, and any successor or other trustee appointed as
provided herein.
TRUST INDENTURE ACT: Except as otherwise provided in Section 9.06,
means, with respect to any particular Trust, the Trust Indenture Act of 1939,
as in force at the date as of which the related Trust Supplement was
executed.
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TRUST PROPERTY: Means, with respect to any Trust, (i) subject to
any related Intercreditor Agreement, the Equipment Notes held as the property
of such Trust, all monies at any time paid thereon and all monies due and to
become due thereunder, (ii) funds from time to time deposited in the related
Escrow Account, the related Certificate Account and the related Special
Payments Account and, subject to the related Intercreditor Agreement, any
proceeds from the sale by the Trustee pursuant to Article VI hereof of any
such Equipment Note, (iii) all rights of such Trust and the Trustee, on
behalf of the Trust, under any Intercreditor Agreement, including, without
limitation, all monies receivable in respect of such rights, and (iv) all
monies receivable under any Liquidity Facility for such Trust.
TRUST SUPPLEMENT: Means an agreement supplemental hereto pursuant
to which (i) a separate Trust is created for the benefit of the Holders of
the Certificates of a series, (ii) the issuance of the Certificates of such
series representing fractional undivided interests in such Trust is
authorized and (iii) the terms of the Certificates of such series are
established.
SECTION 1.02 COMPLIANCE CERTIFICATES AND OPINIONS. Upon any
application or request (except with respect to matters set forth in Article
II) by the Company, any Owner Trustee or any Loan Trustee to the Trustee to
take any action under any provision of this Basic Agreement or, in respect of
the Certificates of any series, this Agreement, the Company, such Owner
Trustee or such Loan Trustee, as the case may be, shall furnish to the
Trustee (i) an Officer's Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Basic
Agreement or this Agreement relating to the proposed action have been
complied with and (ii) an Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent, if any, have been complied with,
except that in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of
this Basic Agreement or this Agreement relating to such particular
application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Basic Agreement or, in respect of the
Certificates of any series, this Agreement (other than a certificate provided
pursuant to Section 8.04(d)) or any Trust Supplement shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions in this Basic
Agreement or this Agreement relating thereto;
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(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained
in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.03. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any case
where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters and any such Person may certify or give an
opinion as to such matters in one or several documents.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Basic Agreement or, in respect of the Certificates of
any series, this Agreement, they may, but need not, be consolidated and form
one instrument.
Section 1.04 DIRECTIONS OF CERTIFICATE HOLDERS. (a) Any direction,
consent, request, demand, authorization, notice, waiver or other action
provided by this Agreement in respect of the Certificates of any series to be
given or taken by Certificateholders (a "DIRECTION") may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Certificateholders in person or by an agent or proxy duly appointed in
writing; and, except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are delivered to
the Trustee and, when it is hereby expressly required pursuant to this
Agreement, to the Company or any Loan Trustee. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Certificateholders signing
such instrument or instruments. Proof of execution of any such instrument or
of a writing appointing any such agent or proxy shall be sufficient for any
purpose of this Trust Agreement and conclusive in favor of the Trustee, the
Company and the related Loan Trustee, if made in the manner provided in this
Section 1.04.
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(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the certificate of any notary public
or other officer of any jurisdiction authorized to take acknowledgments of
deeds or administer oaths that the Person executing such instrument
acknowledged to him the execution thereof, or by an affidavit of a witness to
such execution sworn to before any such notary or such other officer, and
where such execution is by an officer of a corporation or association or a
member of a partnership, on behalf of such corporation, association or
partnership, such certificate or affidavit shall also constitute sufficient
proof of his authority. The fact and date of the execution of any such
instrument or writing, or the authority of the Person executing the same, may
also be proved in any other reasonable manner which the Trustee deems
sufficient.
(c) In determining whether the Certificateholders of the requisite
Fractional Undivided Interests of Certificates of any series Outstanding have
given any Direction under this Agreement, Certificates owned by the Company
or any Affiliate thereof shall be disregarded and deemed not to be
Outstanding for purposes of any such determination. In determining whether
the Trustee shall be protected in relying upon any such Direction, only
Certificates which the Trustee knows to be so owned shall be so disregarded.
Notwithstanding the foregoing, (i) if any such Person owns 100% of the
Certificates of any series Outstanding, such Certificates shall not be so
disregarded, and (ii) if any amount of Certificates of any series so owned by
any such Person have been pledged in good faith, such Certificates shall not
be disregarded if the pledgee establishes to the satisfaction of the Trustee
the pledgee's right so to act with respect to such Certificates and that the
pledgee is not the Company or any Affiliate thereof.
(d) The Company may, at its option, by delivery of an Officer's
Certificate to the Trustee, set a record date to determine the
Certificateholders in respect of the Certificates of any series, entitled to
give any Direction. Notwithstanding Section 316(c) of the Trust Indenture
Act, such record date shall be the record date specified in such Officer's
Certificate, which shall be a date not more than 30 days prior to the first
solicitation of Certificateholders of the applicable series in connection
therewith. If such a record date is fixed, such Direction may be given
before or after such record date, but only the Certificateholders of record
of the applicable series at the close of business on such record date shall
be deemed to be Certificateholders for the purposes of determining whether
Certificateholders of the requisite proportion of Outstanding Certificates of
such series have authorized or agreed or consented to such Direction, and for
that purpose the Outstanding Certificates shall be computed as of such record
date; provided, however, that no such Direction by the Certificateholders on
such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Agreement not later than one year after
such record date.
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(e) Any Direction by the Holder of any Certificate shall bind the
Holder of every Certificate issued upon the transfer thereof or in exchange
therefor or in lieu thereof, whether or not notation of such Direction is
made upon such Certificate.
(f) Except as otherwise provided in Section 1.04(c), Certificates
of any series owned by or pledged to any Person shall have an equal and
proportionate benefit under the provisions of this Agreement, without
preference, priority or distinction as among all of the Certificates of such
series.
ARTICLE II
ORIGINAL ISSUANCE OF CERTIFICATES:
ACQUISITION OF TRUST PROPERTY
Section 2.01 AMOUNT UNLIMITED; ISSUABLE IN SERIES. (a) The aggregate
principal amount of Certificates which may be authenticated and delivered
under this Basic Agreement is unlimited. The Certificates may be issued from
time to time in one or more series and shall be designated generally as the
"PASS THROUGH CERTIFICATES", with such further designations added or
incorporated in such title for the Certificates of each series as specified
in the related Trust Supplement. Each Certificate shall bear upon its face
the designation so selected for the series to which it belongs. All
Certificates of the same series shall be substantially identical except that
the Certificates of a series may differ as to denomination and as may
otherwise be provided in the Trust Supplement establishing the Certificates
of such series. Each series of Certificates issued pursuant to this
Agreement will evidence fractional undivided interests in the related Trust
and, except as may be contained in any Intercreditor Agreement, will have no
rights, benefits or interests in respect of any other Trust or the Trust
Property held therein. All Certificates of the same series shall be in all
respects equally and ratably entitled to the benefits of this Agreement
without preference, priority or distinction on account of the actual time or
times of authentication and delivery, all in accordance with the terms and
provisions of this Agreement.
(b) The following matters shall be established with respect to the
Certificates of each series issued hereunder by a Trust Supplement executed
and delivered by and among the Company and the Trustee:
(1) the formation of the Trust as to which the Certificates of
such series represent fractional undivided interests and its designation
(which designation shall distinguish such Trust from each other Trust created
under this Basic Agreement and a Trust Supplement);
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(2) the specific title of the Certificates of such series (which
title shall distinguish the Certificates of such series from each other
series of Certificates created under this Basic Agreement and a Trust
Supplement);
(3) any limit upon the aggregate principal amount of the
Certificates of such series which may be authenticated and delivered (which
limit shall not pertain to Certificates authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Certificates of the series pursuant to Sections 3.03, 3.04 and 3.06);
(4) the Cut-off Date with respect to the Certificates of such
series;
(5) the Regular Distribution Dates applicable to the Certificates
of such series;
(6) the Special Distribution Dates applicable to the Certificates
of such series;
(7) if other than as provided in Section 7.12(b), the Registrar or
the Paying Agent for the Certificates of such series, including any Co-
Registrar or additional Paying Agent;
(8) if other than as provided in Section 3.02, the denominations
in which the Certificates of such series shall be issuable;
(9) if other than United States dollars, the currency or
currencies (including currency units) in which the Certificates of such
series shall be denominated;
(10) the specific form of the Certificates of such series
(including the interest rate applicable thereto) and whether or not
Certificates of such series are to be issued as Book-Entry Certificates and,
if such Certificates are to be Book-Entry Certificates, the form of Letter of
Representations, if any (or, in the case of any Certificates denominated in a
currency other than United States dollars and if other than as provided in
Section 3.05, whether and the circumstances under which beneficial owners of
interests in such Certificates in permanent global form may exchange such
interests for Certificates of such series and of like tenor of any authorized
form and denomination);
(11) a description of the Equipment Notes to be acquired and held
in the related Trust and of the related Aircraft and Note Documents;
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(12) provisions with respect to the terms for which the
definitions set forth in Article I hereof or the terms of Section 11.01
hereof permit or require further specification in the related Trust
Supplement;
(13) any restrictions (including legends) in respect of ERISA;
(14) whether such series will be subject to an Intercreditor
Agreement and, if so, the specific designation of such Intercreditor
Agreement and the rights of Potential Purchasers upon the occurrence of a
Triggering Event;
(15) whether such series will have the benefit of a Liquidity
Facility and, if so, any terms appropriate thereto;
(16) whether there will be a deposit agreement or other
arrangement prior to the delivery of one or more Aircraft and, if so, any
terms appropriate thereto;
(17) the "Responsible Party" for purposes of directing the Trustee
to make Specified Investments; and
(18) any other terms of the Certificates of such series (which
terms shall not be inconsistent with the provisions of the Trust Indenture
Act), including any terms of the Certificates of such series which may be
required or advisable under United States laws or regulations or advisable in
connection with the marketing of Certificates of the series.
(c) At any time and from time to time after the execution and
delivery of this Basic Agreement and a Trust Supplement forming a Trust and
establishing the terms of Certificates of a series, Certificates of such
series shall be executed, authenticated and delivered by the Trustee to the
Person or Persons specified by the Company upon request of the Company and
upon satisfaction or waiver of any conditions precedent set forth in such
Trust Supplement or in any other document to which a Trustee is a party
relating to the issuance of the Certificates of such series.
Section 2.02 ACQUISTION OF EQ UIPMENT NOTES. (a) Unless otherwise
specified in the related Trust Supplement, on or prior to the Issuance Date
of the Certificates of a series, the Trustee shall execute and deliver the
related Note Purchase Agreements in the form delivered to the Trustee by the
Company and shall, subject to the respective terms thereof, perform its
obligations under such Note Purchase Agreements. The Trustee shall issue and
sell such Certificates, in authorized denominations and in such Fractional
Undivided Interests, so as to result in the receipt of consideration in an
18
amount equal to the aggregate purchase price of the Equipment Notes
contemplated to be purchased by the Trustee under the related Note Purchase
Agreements and, concurrently therewith, the Trustee shall purchase, pursuant
to the terms and conditions of the Note Purchase Agreements, such Equipment
Notes at a purchase price equal to the amount of such consideration so
received. Except as provided in Sections 3.03, 3.04 and 3.06 hereof, the
Trustee shall not execute, authenticate or deliver Certificates of such
series in excess of the aggregate amount specified in this paragraph. The
provisions of this Subsection (a) are subject to the provisions of Subsection
(b) below.
(b) If on or prior to the Issuance Date with respect to a series
of Certificates the Company shall deliver to the Trustee a Postponement
Notice relating to one or more Postponed Notes, the Trustee shall postpone
the purchase of such Postponed Notes and shall deposit into an escrow account
(as to such Trust, the "ESCROW ACCOUNT") to be maintained as part of the
related Trust an amount equal to the purchase price of such Postponed Notes
(the "ESCROWED FUNDS"). The portion of the Escrowed Funds so deposited with
respect to any particular Postponed Notes shall be invested by the Trustee at
the written direction and risk of, and for the benefit of, the Responsible
Party in Specified Investments (i) maturing no later than any scheduled
Transfer Date relating to such Postponed Notes or (ii) if no such Transfer
Date has been scheduled, maturing on the next Business Day, or (iii) if the
Company has given notice to the Trustee that such Postponed Notes will not be
issued, maturing on the next applicable Special Distribution Date, if such
investments are reasonably available for purchase. The Trustee shall make
withdrawals from the Escrow Account only as provided in this Agreement. Upon
request of the Company on one or more occasions and the satisfaction or
waiver of the closing conditions specified in the applicable Note Purchase
Agreements on or prior to the related Cut-off Date, the Trustee shall
purchase the applicable Postponed Notes with the Escrowed Funds withdrawn
from the Escrow Account. The purchase price shall equal the principal amount
of such Postponed Notes.
The Trustee shall hold all Specified Investments until the maturity
thereof and will not sell or otherwise transfer Specified Investments. If
Specified Investments held in an Escrow Account mature prior to any
applicable Transfer Date, any proceeds received on the maturity of such
Specified Investments (other than any earnings thereon) shall be reinvested
by the Trustee at the written direction and risk of, and for the benefit of,
the Responsible Party in Specified Investments maturing as provided in the
preceding paragraph.
Any earnings on Specified Investments received from time to time by the
Trustee shall be promptly distributed to the Responsible Party. The
Responsible Party shall pay to the Trustee for deposit to the relevant Escrow
Account an amount equal to any losses on such Specified Investments as
incurred. On the Initial Regular
19
Distribution Date in respect of the Certificates of any series, the
Responsible Party will pay (in immediately available funds) to the Trustee an
amount equal to the interest that would have accrued on any Postponed Notes
with respect to such Certificates, if any, purchased after the Issuance Date
if such Postponed Notes had been purchased on the Issuance Date, from the
Issuance Date to, but not including, the date of the purchase of such
Postponed Notes by the Trustee.
If, in respect of the Certificates of any series, the Company notifies
the Trustee prior to the Cut-off Date that any Postponed Notes will not be
issued on or prior to the Cut-off Date for any reason, on the next Special
Distribution Date for such Certificates occurring not less than 15 days
following the date of such notice, (i) the Responsible Party shall pay to the
Trustee for deposit in the related Special Payments Account, in immediately
available funds, an amount equal to the interest that would have accrued on
the Postponed Notes designated in such notice at a rate equal to the interest
rate applicable to such Certificates from the Issuance Date to, but not
including, such Special Distribution Date and (ii) the Trustee shall transfer
an amount equal to that amount of Escrowed Funds that would have been used to
purchase the Postponed Notes designated in such notice and the amount paid by
the Responsible Party pursuant to the immediately preceding clause (i) to the
related Special Payments Account for distribution as a Special Payment in
accordance with the provisions hereof.
If, on such Cut-off Date, an amount equal to less than all of the
Escrowed Funds (other than Escrowed Funds referred to in the immediately
preceding paragraph) has been used to purchase Postponed Notes, on the next
such Special Distribution Date occurring not less than 15 days following such
Cut-off Date (i) the Responsible Party shall pay to the Trustee for deposit
in such Special Payments Account, in immediately available funds, an amount
equal to the interest that would have accrued on such Postponed Notes
contemplated to be purchased with such unused Escrowed Funds (other than
Escrowed Funds referred to in the immediately preceding paragraph) but not so
purchased at a rate equal to the interest rate applicable to such
Certificates from the Issuance Date to, but not including, such Special
Distribution Date and (ii) the Trustee shall transfer such unused Escrowed
Funds and the amount paid by the Responsible Party pursuant to the
immediately preceding clause (i) to such Special Payments Account for
distribution as a Special Payment in accordance with the provisions hereof.
Section 2.03 ACCEPTANCE BY TRUSTEE. The Trustee, upon the execution
and delivery of a Trust Supplement creating a Trust and establishing a series
of Certificates, shall acknowledge its acceptance of all right, title and
interest in and to the Trust Property to be acquired pursuant to Section 2.02
hereof and the related Note Purchase Agreements and shall declare that the
Trustee holds and will hold such right, title and interest for the benefit of
all then present and future Certificateholders of such series,
20
upon the trusts herein and in such Trust Supplement set forth. By the
acceptance of each Certificate of such series issued to it under this
Agreement, each initial Holder of such series as grantor of such Trust shall
thereby join in the creation and declaration of such Trust.
Section 2.04 LIMITATION OF POWERS. Each Trust shall be constituted
solely for the purpose of making the investment in the Equipment Notes
provided for in the related Trust Supplement, and, except as set forth
herein, the Trustee shall not be authorized or empowered to acquire any other
investments or engage in any other activities and, in particular, the Trustee
shall not be authorized or empowered to do anything that would cause such
Trust to fail to qualify as a "grantor trust" for federal income tax purposes
(including, as subject to this restriction, acquiring any Aircraft (as
defined in the related Indentures) by bidding such Equipment Notes or
otherwise, or taking any action with respect to any such Aircraft once
acquired).
ARTICLE III
THE CERTIFICATES
Section 3.01 FORM, DENOMINATION AND EXECUTION OF CERTIFICATES. The
Certificates of each series shall be issued in fully registered form without
coupons and shall be substantially in the form attached hereto as Exhibit A,
with such omissions, variations and insertions as are permitted by this
Agreement, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange on which such
Certificates may be listed or to conform to any usage in respect thereof, or
as may, consistently herewith, be determined by the Trustee or the officers
executing such Certificates, as evidenced by the Trustee's or respective
officers' execution of the Certificates.
Except as provided in Section 3.05, the definitive Certificates of such
series shall be typed, printed, lithographed or engraved or produced by any
combination of these methods or may be produced in any other manner permitted
by the rules of any securities exchange on which the Certificates may be
listed, all as determined by the officers executing such Certificates, as
evidenced by their execution of such Certificates.
Except as otherwise provided in the related Trust Supplement, the
Certificates of each series shall be issued in minimum denominations of
$1,000 or integral multiples thereof except that one Certificate of such
series may be issued in a different denomination.
21
The Certificates of such series shall be executed on behalf of the
Trustee by manual or facsimile signature of a Responsible Officer of the
Trustee. Certificates of any series bearing the manual or facsimile
signature of an individual who was, at the time when such signature was
affixed, authorized to sign on behalf of the Trustee shall be valid and
binding obligations of the Trustee, notwithstanding that such individual has
ceased to be so authorized prior to the authentication and delivery of such
Certificates or did not hold such office at the date of such Certificates.
Section 3.02. AUTHENTICATION OF CERTIFICATES. (a) On the Issuance
Date, the Trustee shall duly execute, authenticate and deliver Certificates
of each series in authorized denominations equaling in the aggregate the
aggregate principal amount of the Equipment Notes that may be purchased by
the Trustee pursuant to the related Note Purchase Agreements, and evidencing
the entire ownership of the related Trust. Thereafter, the Trustee shall
duly execute, authenticate and deliver the Certificates of such series as
herein provided.
(b) No Certificate of any series shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless there appears on
such Certificate a certificate of authentication substantially in the form
set forth in Exhibit A hereto executed by the Trustee by manual signature,
and such certificate of authentication upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been
duly authenticated and delivered hereunder. All Certificates of any series
shall be dated the date of their authentication.
Section 3.03. TEMPORARY CERTIFICATES. Until definitive Certificates
are ready for delivery, the Trustee shall execute, authenticate and deliver
temporary Certificates of each series. Temporary Certificates of each series
shall be substantially in the form of definitive Certificates of such series
but may have insertions, substitutions, omissions and other variations
determined to be appropriate by the officers executing the temporary
Certificates of such series, as evidenced by their execution of such
temporary Certificates. If temporary Certificates of any series are issued,
the Trustee will cause definitive Certificates of such series to be prepared
without unreasonable delay. After the preparation of definitive Certificates
of such series, the temporary Certificates shall be exchangeable for
definitive Certificates upon surrender of such temporary Certificates at the
office or agency of the Trustee designated for such purpose pursuant to
Section 7.12, without charge to the Certificateholder. Upon surrender for
cancellation of any one or more temporary Certificates, the Trustee shall
execute, authenticate and deliver in exchange therefor a like face amount of
definitive Certificates of like series, in authorized denominations and of a
like Fractional Undivided Interest. Until so
22
exchanged, such temporary Certificates shall be entitled to the same benefits
under this Agreement as definitive Certificates.
Section 3.04. TRANSFER AND EXCHANGE. The Trustee shall cause to be
kept at the office or agency to be maintained by it in accordance with the
provisions of Section 7.12 a register (the "REGISTER") for each series of
Certificates in which, subject to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of Certificates of
such series and of transfers and exchanges of such Certificates as herein
provided. The Trustee shall initially be the registrar (the "REGISTRAR") for
the purpose of registering such Certificates of each series and transfers and
exchanges of such Certificates as herein provided.
All Certificates issued upon any registration of transfer or exchange of
Certificates of any series shall be valid obligations of the applicable
Trust, evidencing the same interest therein, and entitled to the same
benefits under this Agreement, as the Certificates of such series surrendered
upon such registration of transfer or exchange.
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office or such other office or agency, the Trustee shall
execute, authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Certificates of like series, in authorized
denominations of a like aggregate Fractional Undivided Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of like series, in authorized denominations and of a like
aggregate Fractional Undivided Interest, upon surrender of the Certificates
to be exchanged at any such office or agency. Whenever any Certificates are
so surrendered for exchange, the Trustee shall execute, authenticate and
deliver the Certificates that the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for
registration of transfer or exchange shall be duly endorsed or accompanied by
a written instrument of transfer in form satisfactory to the Trustee and the
Registrar duly executed by the Certificateholder thereof or its attorney duly
authorized in writing.
No service charge shall be made to a Certificateholder for any
registration of transfer or exchange of Certificates, but the Trustee shall
require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of
Certificates. All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Trustee.
Section 3.05. BOOK-ENTRY AND DEFINITIVE CERTIFICATES. (a) The
Certificates of any series may be issued in the form of one or more
typewritten Certificates represent-
23
ing the Book-Entry Certificates of such series, to be delivered to The
Depository Trust Company, the initial Clearing Agency, by, or on behalf of,
the Company. In such case, the Certificates of such series delivered to The
Depository Trust Company shall initially be registered on the Register in the
name of CEDE & Co., the nominee of the initial Clearing Agency, and no
Certificate Owner will receive a definitive certificate representing such
Certificate Owner's interest in the Certificates of such series, except as
provided above and in Subsection (d) below. As to the Certificates of any
series, unless and until definitive, fully registered Certificates (the
"DEFINITIVE CERTIFICATES") have been issued pursuant to Subsection (d) below:
(i) the provisions of this Section 3.05 shall be in full
force and effect;
(ii) the Company, the Paying Agent, the Registrar and the
Trustee may deal with the Clearing Agency Participants for all purposes
(including the making of distributions on the Certificates) as the authorized
representatives of the Certificate Owners;
(iii) to the extent that the provisions of this Section 3.05
conflict with any other provisions of this Agreement (other than the
provisions of any Trust Supplement expressly amending this Section 3.05 as
permitted by this Basic Agreement), the provisions of this Section 3.05 shall
control;
(iv) the rights of Certificate Owners shall be exercised only
through the Clearing Agency and shall be limited to those established by law
and agreements between such Certificate Owners and the Clearing Agency
Participants; and until Definitive Certificates are issued pursuant to
Subsection (d) below, the Clearing Agency will make book-entry transfers
among the Clearing Agency Participants and receive and transmit distributions
of principal, interest and premium, if any, on the Certificates to such
Clearing Agency Participants; and
(v) whenever this Agreement requires or permits actions to be
taken based upon instructions or directions of Certificateholders of such
series holding Certificates of such series evidencing a specified percentage
of the Fractional Undivided Interests in the related Trust, the Clearing
Agency shall be deemed to represent such percentage only to the extent that
it has received instructions to such effect from Clearing Agency Participants
owning or representing, respectively, such required percentage of the
beneficial interest in Certificates of such series and has
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delivered such instructions to the Trustee. The Trustee shall have no
obligation to determine whether the Clearing Agency has in fact received any
such instructions.
(b) Whenever notice or other communication to the
Certificateholders of such series is required under this Agreement, unless
and until Definitive Certificates shall have been issued pursuant to
Subsection (d) below, the Trustee shall give all such notices and
communications specified herein to be given to Certificateholders of such
series to the Clearing Agency.
(c) Unless and until Definitive Certificates of a series are
issued pursuant to Subsection (d) below, on the Record Date prior to each
applicable Regular Distribution Date and Special Distribution Date, the
Trustee will request from the Clearing Agency a securities position listing
setting forth the names of all Clearing Agency Participants reflected on the
Clearing Agency's books as holding interests in the Certificates on such
Record Date.
(d) If with respect to the Certificates of any series (i) the
Company advises the Trustee in writing that the Clearing Agency is no longer
willing or able to discharge properly its responsibilities and the Trustee or
the Company is unable to locate a qualified successor, (ii) the Company, at
its option, advises the Trustee in writing that it elects to terminate the
book-entry system through the Clearing Agency or (iii) after the occurrence
of an Event of Default, Certificate Owners of Book-Entry Certificates of such
series evidencing Fractional Undivided Interests aggregating not less than a
majority in interest in the related Trust, by Act of such Certificate Owners
delivered to the Company and the Trustee, advise the Company, the Trustee and
the Clearing Agency through the Clearing Agency Participants in writing that
the continuation of a book-entry system through the Clearing Agency
Participants is no longer in the best interests of the Certificate Owners of
such series, then the Trustee shall notify all Certificate Owners of such
series, through the Clearing Agency, of the occurrence of any such event and
of the availability of Definitive Certificates. Upon surrender to the
Trustee of all the Certificates of such series held by the Clearing Agency,
accompanied by registration instructions from the Clearing Agency
Participants for registration of Definitive Certificates in the names of
Certificate Owners of such series, the Trustee shall issue and deliver the
Definitive Certificates of such series in accordance with the instructions of
the Clearing Agency. Neither the Company, the Registrar, the Paying Agent
nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying
on, such registration instructions. Upon the issuance of Definitive
Certificates of such series, the Trustee shall recognize the Person in whose
name the Definitive Certificates are registered in the Register as
Certificateholders hereunder. Neither the Company nor
25
the Trustee shall be liable if the Trustee or the Company is unable to locate
a qualified successor Clearing Agency.
(e) Except as otherwise provided in the related Trust Supplement,
the Trustee shall enter into the applicable Letter of Representations with
respect to such series of Certificates and fulfill its responsibilities
thereunder.
(f) The provisions of this Section 3.05 may be made inapplicable
to any series or may be amended with respect to any series in the related
Trust Supplement.
Section 3.06. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If
(a) any mutilated Certificate is surrendered to the Registrar, or the
Registrar receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate, and (b) there is delivered to the Registrar and the
Trustee such security, indemnity or bond, as may be required by them to save
each of them harmless, then, in the absence of notice to the Registrar or the
Trustee that such destroyed, lost or stolen Certificate has been acquired by
a bona fide purchaser, and provided, however, that the requirements of
Section 8-405 of the Uniform Commercial Code in effect in any applicable
jurisdiction are met, the Trustee shall execute, authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate or Certificates of like series, in authorized
denominations and of like Fractional Undivided Interest and bearing a number
not contemporaneously outstanding.
In connection with the issuance of any new Certificate under this
Section 3.06, the Trustee shall require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the
Trustee and the Registrar) connected therewith.
Any duplicate Certificate issued pursuant to this Section 3.06 shall
constitute conclusive evidence of the appropriate Fractional Undivided
Interest in the related Trust, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.
The provisions of this Section 3.06 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Certificates.
Section 3.07. PERSONS DEEMED OWNERS. Prior to due presentment of a
Certificate for registration of transfer, the Trustee, the Registrar and any
Paying Agent may treat the Person in whose name any Certificate is registered
(as of the day of determination) as the owner of such Certificate for the
purpose of receiving distributions
26
pursuant to Article IV and for all other purposes whatsoever, and none of the
Trustee, the Registrar or any Paying Agent shall be affected by any notice to
the contrary.
Section 3.08 CANCELLATION. All Certificates surrendered for payment or
transfer or exchange shall, if surrendered to the Trustee or any agent of the
Trustee other than the Registrar, be delivered to the Registrar for
cancellation and shall promptly be cancelled by it. No Certificates shall be
authenticated in lieu of or in exchange for any Certificates cancelled as
provided in this Section 3.08, except as expressly permitted by this
Agreement. All cancelled Certificates held by the Registrar shall be
destroyed and a certification of their destruction delivered to the Trustee.
Section 3.09 LIMITATION OF LIABILITY FOR PAYMENTS. All payments and
distributions made to Certificateholders of any series in respect of the
Certificates of such series shall be made only from the Trust Property of the
related Trust and only to the extent that the Trustee shall have sufficient
income or proceeds from such Trust Property to make such payments in
accordance with the terms of Article IV of this Agreement. Each
Certificateholder, by its acceptance of a Certificate, agrees that it will
look solely to the income and proceeds from the Trust Property of the related
Trust for any payment or distribution due to such Certificateholder pursuant
to the terms of this Agreement and that it will not have any recourse to the
Company, the Trustee, the Loan Trustees, the Owner Trustees or the Owner
Participants, except as otherwise expressly provided herein or in the related
Intercreditor Agreement.
The Company is a party to this Agreement solely for purposes of meeting
the requirements of the Trust Indenture Act, and therefore shall not have any
right, obligation or liability hereunder (except as otherwise expressly
provided herein).
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS
Section 4.01. CERTIFICATE ACCOUNT AND SPECIAL PAYMENTS ACCOUNT. (a)
The Trustee shall establish and maintain on behalf of the Certificateholders
of each series a Certificate Account as one or more non-interest-bearing
accounts. The Trustee shall hold such Certificate Account in trust for the
benefit of the Certificateholders of such series, and shall make or permit
withdrawals therefrom only as provided in this Agreement. On each day when a
Scheduled Payment is made to the Trustee (under an Intercreditor Agreement,
if applicable) with respect to the Certificates of such series, the Trustee,
upon receipt thereof, shall immediately deposit the aggregate amount of such
Scheduled Payment in such Certificate Account.
27
(b) The Trustee shall establish and maintain on behalf of the
Certificateholders of each series a Special Payments Account as one or more
accounts, which shall be non-interest bearing except as provided in Section
4.04. The Trustee shall hold the Special Payments Account in trust for the
benefit of the Certificateholders of such series and shall make or permit
withdrawals therefrom only as provided in this Agreement. On each day when
one or more Special Payments are made to the Trustee (under an Intercreditor
Agreement, if applicable) with respect to the Certificates of such series,
the Trustee, upon receipt thereof, shall immediately deposit the aggregate
amount of such Special Payments in such Special Payments Account.
(c) The Trustee shall present (or, if applicable, cause the
Subordination Agent to present) to the related Loan Trustee of each Equipment
Note such Equipment Note on the date of its stated final maturity or, in the
case of any Equipment Note which is to be redeemed in whole pursuant to the
related Indenture, on the applicable redemption date under such Indenture.
Section 4.02 DISTRIBUTIONS FROM CERTIFICATE ACCOUNT AND SPECIAL
PAYMENTS ACCOUNT. (a) On each Regular Distribution Date with respect to a
series of Certificates or as soon thereafter as the Trustee has confirmed
receipt of the payment of all or any part of the Scheduled Payments due on
the Equipment Notes held (subject to the Intercreditor Agreement) in the
related Trust on such date, the Trustee shall distribute out of the
applicable Certificate Account the entire amount deposited therein pursuant
to Section 4.01(a). There shall be so distributed to each Certificateholder
of record of such series on the Record Date with respect to such Regular
Distribution Date (other than as provided in Section 11.01 concerning the
final distribution) by check mailed to such Certificateholder, at the address
appearing in the Register, such Certificateholder's pro rata share (based on
the Fractional Undivided Interest in the Trust held by such
Certificateholder) of the total amount in the applicable Certificate Account,
except that, with respect to Certificates registered on the Record Date in
the name of a Clearing Agency (or its nominee), such distribution shall be
made by wire transfer in immediately available funds to the account
designated by such Clearing Agency (or such nominee).
(b) On each Special Distribution Date with respect to any Special
Payment with respect to a series of Certificates or as soon thereafter as the
Trustee has confirmed receipt of any Special Payments due on the Equipment
Notes held (subject to the Intercreditor Agreement) in the related Trust or
realized upon the sale of such Equipment Notes, the Trustee shall distribute
out of the applicable Special Payments Account the entire amount of such
applicable Special Payment deposited therein pursuant to Section 4.01(b).
There shall be so distributed to each Certificateholder of record of such
series on the Record Date with respect to such Special Distribution Date
28
(other than as provided in Section 11.01 concerning the final distribution)
by check mailed to such Certificateholder, at the address appearing in the
Register, such Certificateholder's pro rata share (based on the Fractional
Undivided Interest in the related Trust held by such Certificateholder) of
the total amount in the applicable Special Payments Account on account of
such Special Payment, except that, with respect to Certificates registered on
the Record Date in the name of a Clearing Agency (or its nominee), such
distribution shall be made by wire transfer in immediately available funds to
the account designated by such Clearing Agency (or such nominee).
(c) The Trustee shall, at the expense of the Company, cause notice
of each Special Payment with respect to a series of Certificates to be mailed
to each Certificateholder of such series at his address as it appears in the
Register. In the event of redemption or purchase of Equipment Notes held in
the related Trust, such notice shall be mailed not less than 15 days prior to
the Special Distribution Date for the Special Payment resulting from such
redemption or purchase, which Special Distribution Date shall be the date of
such redemption or purchase. In the event that the Trustee receives a notice
from the Company that Postponed Notes will not be purchased by the Trustee
pursuant to Section 2.02, such notice of Special Payment shall be mailed as
soon as practicable after receipt of such notice from the Company and shall
state the Special Distribution Date for such Special Payment, which shall
occur 15 days after the date of such notice of Special Payment or (if such
15th day is not practicable) as soon as practicable thereafter. In the event
that any Special Payment is to be made pursuant to the last paragraph of
Section 2.02(b) hereof, there shall be mailed on the Cut-off Date (or, if
such mailing on the Cut-off Date is not practicable, as soon as practicable
after the Cut-off Date), notice of such Special Payment stating the Special
Distribution Date for such Special Payment, which shall occur 15 days after
the date of such notice of such Special Payment (or, if such 15th day is not
practicable, as soon as practicable thereafter). In the case of any other
Special Payments, such notice shall be mailed as soon as practicable after
the Trustee has confirmed that it has received funds for such Special
Payment, stating the Special Distribution Date for such Special Payment which
shall occur not less than 15 days after the date of such notice and as soon
as practicable thereafter. Notices mailed by the Trustee shall set forth:
(i) the Special Distribution Date and the Record Date
therefor (except as otherwise provided in Section 11.01),
(ii) the amount of the Special Payment (taking into account
any payment to be made by the Company pursuant to Section 2.02(b)) for each
$1,000 face amount Certificate and the amount thereof constituting principal,
premium, if any, and interest,
29
(iii) the reason for the Special Payment, and
(iv) if the Special Distribution Date is the same date as a
Regular Distribution Date for the Certificates of such series, the total
amount to be received on such date for each $1,000 face amount Certificate.
If the amount of premium, if any, payable upon the redemption or purchase of
an Equipment Note has not been calculated at the time that the Trustee mails
notice of a Special Payment, it shall be sufficient if the notice sets forth
the other amounts to be distributed and states that any premium received will
also be distributed.
If any redemption of the Equipment Notes held in any Trust is cancelled,
the Trustee, as soon as possible after learning thereof, shall cause notice
thereof to be mailed to each Certificateholder of the related series at its
address as it appears on the Register.
Section 4.03 STATEMENTS TO CERTIFICATEHOLDERS. (a) On each Regular
Distribution Date and Special Distribution Date, the Trustee will include
with each distribution of a Scheduled Payment or Special Payment, as the case
may be, to Certificateholders of the related series a statement setting forth
the information provided below. Such statement shall set forth (per $1,000
aggregate principal amount of Certificate as to (i) and (ii) below) the
following information:
(i) the amount of such distribution hereunder allocable to
principal and the amount allocable to premium, if any;
(ii) the amount of such distribution hereunder allocable to
interest; and
(iii) the Pool Balance and the Pool Factor of the related
Trust.
With respect to the Certificates registered in the name of a Clearing
Agency or its nominee, on the Record Date prior to each Distribution Date,
the Trustee will request from the Clearing Agency a securities position
listing setting forth the names of all the Clearing Agency Participants
reflected on the Clearing Agency's books as holding interests in the
Certificates on such Record Date. On each Distribution Date, the applicable
Trustee will mail to each such Clearing Agency Participant the statement
described above and will make available additional copies as requested by
such Clearing Agency Participant for forwarding to holders of interests in
the Certificates.
(b) Within a reasonable period of time after the end of each
calendar year but not later than the latest date permitted by law, the
Trustee shall furnish to each Person who at any time during such calendar
year was a Certificateholder of record a
30
statement containing the sum of the amounts determined pursuant to clauses
(a)(i) and (a)(ii) above with respect to the related Trust for such calendar
year or, in the event such Person was a Certificateholder of record during a
portion of such calendar year, for the applicable portion of such year, and
such other items as are readily available to the Trustee and which a
Certificateholder shall reasonably request as necessary for the purpose of
such Certificateholder's preparation of its federal income tax returns. With
respect to Certificates registered in the name of a Clearing Agency or its
nominee, such statement and such other items shall be prepared on the basis
of information supplied to the Trustee by the Clearing Agency Participants
and shall be delivered by the Trustee to such Clearing Agency Participants to
be available for forwarding by such Clearing Agency Participants to the
holders of interests in the Certificates in the manner described in Section
4.03(a).
Section 4.04. INVESTMENT OF SPECIAL PAYMENT MONEYS. Any money received
by the Trustee pursuant to Section 4.01(b) representing a Special Payment
which is not distributed on the date received shall, to the extent
practicable, be invested by the Trustee in Permitted Investments selected by
the Company in written instructions to the Trustee pending distribution of
such Special Payment pursuant to Section 4.02. Absent receipt of such
instructions from the Company, such Special Payment shall remain uninvested
by the Trustee pending receipt of written investment instructions. Any
investment made pursuant to this Section 4.04 shall be in such Permitted
Investments having maturities not later than the date that such moneys are
required to be used to make the payment required under Section 4.02 on the
applicable Special Distribution Date and the Trustee shall hold any such
Permitted Investments until maturity. The Trustee shall have no liability
with respect to any investment made pursuant to this Section 4.04, other than
by reason of the willful misconduct or negligence of the Trustee. All income
and earnings from such investments shall be distributed on such Special
Distribution Date as part of such Special Payment.
ARTICLE V
THE COMPANY
Section 5.01. MAINTENANCE OF CORPORATE EXISTENCE. The Company, at its
own cost and expense, will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence, rights
and franchises, except as otherwise specifically permitted in Section 5.02;
provided, however, that the Company shall not be required to preserve any
right or franchise if the Company shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company.
31
Section 5.02. CONSOLIDATION, MERGER, ETC. The Company shall not
consolidate with or merge into any other corporation or convey, transfer or
lease substantially all of its assets as an entirety to any Person unless:
(a) the corporation formed by such consolidation or into
which the Company is merged or the Person that acquires by conveyance,
transfer or lease substantially all of the assets of the Company as an
entirety shall be (i) organized and validly existing under the laws of the
United States of America or any state thereof or the District of Columbia,
(ii) a "citizen of the United States" as defined in 49 U.S.C. SS
40102(a)(15), as amended, and (iii) a United States certificated air carrier,
if and so long as such status is a condition of entitlement to the benefits
of Section 1110 of the Bankruptcy Reform Act of 1978, as amended (11 U.S.C.
SS 1110), with respect to the Leases or the Aircraft owned by the Company;
(b) the corporation formed by such consolidation or into
which the Company is merged or the Person which acquires by conveyance,
transfer or lease substantially all of the assets of the Company as an
entirety shall execute and deliver to the Trustee applicable to the
Certificates of each series a duly authorized, valid, binding and enforceable
agreement in form and substance reasonably satisfactory to the Trustee
containing an assumption by such successor corporation or Person of the due
and punctual performance and observance of each covenant and condition of the
Note Documents and of this Agreement applicable to the Certificates of each
series to be performed or observed by the Company; and
(c) the Company shall have delivered to the Trustee an
Officer's Certificate of the Company and an Opinion of Counsel of the Company
(that may be the Company's General Counsel or other senior attorney of the
Company) reasonably satisfactory to the Trustee, each stating that such
consolidation, merger, conveyance, transfer or lease and the assumption
agreement mentioned in clause (b) above comply with this Section 5.02 and
that all conditions precedent herein provided for relating to such
transaction have been complied with.
Upon any consolidation or merger, or any conveyance, transfer or lease
of substantially all of the assets of the Company as an entirety in
accordance with this Section 5.02, the successor corporation or Person formed
by such consolidation or into which the Company is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be substituted
for, and may exercise every right and power of, the
32
Company under this Agreement applicable to the Certificates of each series
with the same effect as if such successor corporation or Person had been
named as the Company herein. No such conveyance, transfer or lease of
substantially all of the assets of the Company as an entirety shall have the
effect of releasing any successor corporation or Person which shall have
become such in the manner prescribed in this Section 5.02 from its liability
in respect of this Agreement and any Note Document applicable to the
Certificates of such series to which it is a party.
ARTICLE VI
DEFAULT
Section 6.01. INDENTURE EVENTS OF DEFAULT AND TRIGGERING EVENTS. (a)
Upon the occurrence and during the continuation of any Indenture Event of
Default under any Indenture, the Trustee may (i) to the extent it is the
Controlling Party at such time (as determined pursuant to the related
Intercreditor Agreement), direct the exercise of remedies as provided in such
related Intercreditor Agreement and (ii) if there is no related Intercreditor
Agreement, direct the exercise of remedies or take other action as provided
in the relevant Indenture to the extent that it may do so as the holder of
the Equipment Notes issued under such Indenture and held in the related
Trust.
(b) By acceptance of its Certificate, each Certificateholder
agrees that at any time after the occurrence and during the continuation of a
Triggering Event, each Certificateholder of Certificates of certain series
(each, a "POTENTIAL PURCHASER" and, collectively, the "POTENTIAL PURCHASERS")
will have certain rights to purchase the Certificates of one or more other
series, all as set forth in the Trust Supplement applicable to the
Certificates held by such Potential Purchaser. The purchase price with
respect to the Certificates of any series shall be equal to the Pool Balance
of the Certificates of such series, together with accrued and unpaid interest
thereon to the date of such purchase, without premium, but including any
other amounts then due and payable to the Certificateholders of such series
under this Agreement, any related Intercreditor Agreement or any other Note
Document or on or in respect of the Certificates of such series; provided,
however, that if such purchase occurs after a Record Date, such purchase
price shall be reduced by the amount to be distributed hereunder on the
related Distribution Date (which deducted amounts shall remain distributable
to, and may be retained by, the Certificateholder as of such Record Date);
provided, further, that no such purchase of Certificates of such series shall
be effective unless the purchasing Certificateholder (each, a "PURCHASING
CERTIFICATEHOLDER" and, collectively, the "PURCHASING CERTIFICATEHOLDERS")
shall certify to the Trustee that contemporaneously with such purchase, one
or more Purchasing Certificateholders are purchasing, pursuant to the terms
of this Agreement and the other Agreements, if any,
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relating to the Certificates of a series that are subject to the same
Intercreditor Agreement (such other Agreements, the "OTHER AGREEMENTS"), the
Certificates of each such series that the Trust Supplement applicable to the
Certificates held by the Purchasing Certificateholder specifies may be
purchased by such Purchasing Certificateholder. Each payment of the purchase
price of the Certificates of any series shall be made to an account or
accounts designated by the Trustee and each such purchase shall be subject to
the terms of this Section 6.01. By acceptance of its Certificate, each
Certificateholder (each, a "SELLING CERTIFICATEHOLDER" and, collectively, the
"SELLING CERTIFICATEHOLDERS") of a series that is subject to purchase by
Potential Purchasers, all as set forth in the Trust Supplement applicable to
the Certificates held by the Selling Certificateholders, agrees that, at any
time after the occurrence and during the continuance of a Triggering Event,
it will, upon payment of the purchase price specified herein by one or more
Purchasing Certificateholders, forthwith sell, assign, transfer and convey to
such Purchasing Certificateholder (without recourse, representation or
warranty of any kind except for its own acts), all of the right, title,
interest and obligation of such Selling Certificateholder in this Agreement,
any related Intercreditor Agreement, the related Liquidity Facility, the
related Note Documents and all Certificates of such series held by such
Selling Certificateholder (excluding all right, title and interest under any
of the foregoing to the extent such right, title or interest is with respect
to an obligation not then due and payable as respects any action or inaction
or state of affairs occurring prior to such sale) and the Purchasing
Certificateholder shall assume all of such Selling Certificateholder's
obligations under this Agreement, any related Intercreditor Agreement, the
related Liquidity Facility and the related Note Documents. The Certificates
of such series will be deemed to be purchased on the date payment of the
purchase price is made notwithstanding the failure of any Selling
Certificateholder to deliver any Certificates of such series and, upon such a
purchase, (i) the only rights of the Selling Certificateholders will be to
deliver the Certificates to the Purchasing Certificateholder and receive the
purchase price for such Certificates of such series and (ii) if the
Purchasing Certificateholder shall so request, such Selling Certificateholder
will comply with all of the provisions of Section 3.04 hereof to enable new
Certificates of such series to be issued to the Purchasing Certificateholder
in such denominations as it shall request. All charges and expenses in
connection with the issuance of any such new Certificates shall be borne by
the Purchasing Certificateholder.
Section 6.02. INCIDENTS OF SALE OF EQUIPMENT NOTES. Upon any sale of
all or any part of the Equipment Notes held in the Trust made either under
the power of sale given under this Agreement or otherwise for the enforcement
of this Agreement, the following shall be applicable:
(1) CERTIFICATEHOLDERS AND TRUSTEE MAY PURCHASE EQUIPMENT NOTES.
Any Certificateholder, the Trustee in its individual or any other capacity or
any other
34
Person may bid for and purchase any of the Equipment Notes held in the Trust,
and upon compliance with the terms of sale, may hold, retain, possess and
dispose of such Equipment Notes in their own absolute right without further
accountability.
(2) RECEIPT OF TRUSTEE SHALL DISCHARGE PURCHASER. The receipt of
the Trustee making such sale shall be a sufficient discharge to any purchaser
for his purchase money, and, after paying such purchase money and receiving
such receipt, such purchaser or its personal representative or assigns shall
not be obliged to see to the application of such purchase money, or be in any
way answerable for any loss, misapplication or non-application thereof.
(3) APPLICATION OF MONEYS RECEIVED UPON SALE. Any moneys
collected by the Trustee upon any sale made either under the power of sale
given by this Agreement or otherwise for the enforcement of this Agreement
shall be applied as provided in Section 4.02.
Section 6.03. JUDICIAL PROCEEDINGS INSTITUTED BY TRUSTEE; TRUSTEE MAY
BRING SUIT. If there shall be a failure to make payment of the principal of,
premium, if any, or interest on any Equipment Note held in the related Trust,
or if there shall be any failure to pay Rent (as defined in the relevant
Lease) under any Lease when due and payable, then the Trustee, in its own
name and as trustee of an express trust, as holder of such Equipment Notes,
to the extent permitted by and in accordance with the terms of any related
Intercreditor Agreement and any related Note Documents (subject to rights of
the applicable Owner Trustee or Owner Participant to cure any such failure to
pay principal of, premium, if any, or interest on any Equipment Note or to
pay Rent under any Lease in accordance with the applicable Indenture), shall
be entitled and empowered to institute any suits, actions or proceedings at
law, in equity or otherwise, for the collection of the sums so due and unpaid
on such Equipment Notes or under such Lease and may prosecute any such claim
or proceeding to judgment or final decree with respect to the whole amount of
any such sums so due and unpaid.
Section 6.04. CONTROL BY CERTIFICATEHOLDERS. Subject to Section 6.03
and any related Intercreditor Agreement, the Certificateholders holding
Certificates of a series evidencing Fractional Undivided Interests
aggregating not less than a majority in interest in the related Trust shall
have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee with respect to such Trust
or pursuant to the terms of such Intercreditor Agreement, or exercising any
trust or power conferred on the Trustee under this Agreement or such
Intercreditor Agreement, including any right of the Trustee as Controlling
Party under such
35
Intercreditor Agreement or as holder of the Equipment Notes held in the
related Trust; provided, however, that
(1) such Direction shall not in the opinion of the Trustee be in
conflict with any rule of law or with this Agreement and would not involve
the Trustee in personal liability or expense,
(2) the Trustee shall not determine that the action so directed
would be unjustly prejudicial to the Certificateholders of such series not
taking part in such Direction, and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such Direction.
Section 6.05. WAIVER OF PAST DEFAULTS. Subject to any related
Intercreditor Agreement, the Certificateholders holding Certificates of a
series evidencing Fractional Undivided Interests aggregating not less than a
majority in interest in the Trust (i) may on behalf of all of the
Certificateholders waive any past Event of Default hereunder and its
consequences or (ii) if the Trustee is the Controlling Party, may direct the
Trustee to instruct the applicable Loan Trustee to waive any past Indenture
Event of Default under any related Indenture and its consequences, and
thereby annul any Direction given by such Certificateholders or the Trustee
to such Loan Trustee with respect thereto, except a default:
(1) in the deposit of any Scheduled Payment or Special Payment
under Section 4.01 or in the distribution of any payment under Section 4.02
on the Certificates of a series, or
(2) in the payment of the principal of (premium, if any) or
interest on the Equipment Notes held in the related Trust, or
(3) in respect of a covenant or provision hereof which under
Article IX hereof cannot be modified or amended without the consent of each
Certificateholder holding an Outstanding Certificate of a series affected
thereby.
Upon any such waiver, such default shall cease to exist with respect to the
Certificates of such series and any Event of Default arising therefrom shall
be deemed to have been cured for every purpose and any direction given by the
Trustee on behalf of the Certificateholders of such series to the relevant
Loan Trustee shall be annulled with respect thereto; but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon. Upon any such waiver, the
36
Trustee shall vote the Equipment Notes issued under the relevant Indenture to
waive the corresponding Indenture Event of Default.
Section 6.06. RIGHT OF CERTIFICATEHOLDERS TO RECEIVE PAYMENTS NOT TO BE
IMPAIRED. Anything in this Agreement to the contrary notwithstanding,
including, without limitation, Section 6.07 hereof, but subject to any
related Intercreditor Agreement, the right of any Certificateholder to
receive distributions of payments required pursuant to Section 4.02 hereof on
the applicable Certificates when due, or to institute suit for the
enforcement of any such payment on or after the applicable Regular
Distribution Date or Special Distribution Date, shall not be impaired or
affected without the consent of such Certificateholder.
Section 6.07. CERTIFICATEHOLDERS MAY NOT BRING SUIT EXCEPT UNDER
CERTAIN CONDITIONS. A Certificateholder of any series shall not have the
right to institute any suit, action or proceeding at law or in equity or
otherwise with respect to this Agreement, for the appointment of a receiver
or for the enforcement of any other remedy under this Agreement, unless:
(1) such Certificateholder previously shall have given written
notice to the Trustee of a continuing Event of Default;
(2) Certificateholders holding Certificates of such series
evidencing Fractional Undivided Interests aggregating not less than 25% of
the related Trust shall have requested the Trustee in writing to institute
such action, suit or proceeding and shall have offered to the Trustee
indemnity as provided in Section 7.03(e);
(3) the Trustee shall have refused or neglected to institute any
such action, suit or proceeding for 60 days after receipt of such notice,
request and offer of indemnity; and
(4) no direction inconsistent with such written request shall have
been given to the Trustee during such 60-day period by Certificateholders
holding Certificates of such series evidencing Fractional Undivided Interests
aggregating not less than a majority in interest in the related Trust.
It is understood and intended that no one or more of the
Certificateholders of any series shall have any right in any manner
whatsoever hereunder or under the related Trust Supplement or under the
Certificates of such series to (i) surrender, impair, waive, affect, disturb
or prejudice any property in the Trust Property of the related Trust, or the
lien of any related Indenture on any property subject thereto, or the rights
of the Certificateholders of such series or the holders of the related
Equipment Notes, (ii)
37
obtain or seek to obtain priority over or preference with respect to any
other such Certificateholder of such series or (iii) enforce any right under
this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all the Certificateholders of such series
subject to the provisions of this Agreement.
Section 6.08. REMEDIES CUMULATIVE. Every remedy given hereunder to the
Trustee or to any of the Certificateholders of any series shall not be
exclusive of any other remedy or remedies, and every such remedy shall be
cumulative and in addition to every other remedy given hereunder or now or
hereafter given by statute, law, equity or otherwise.
Section 6.09. UNDERTAKING FOR COSTS. In any suit for the enforcement
of any right or remedy under this Agreement, or in any suit against the
Trustee for any action taken, suffered or omitted by it as Trustee, a court
may require any party litigant in such suit to file an undertaking to pay the
costs of such suit, and may assess costs against any such party litigant, in
the manner and to the extent provided in the Trust Indenture Act; provided,
however, that neither this Section 6.09 nor the Trust Indenture Act shall be
deemed to authorize any court to require such an undertaking or to make such
an assessment in any suit instituted by the Company.
ARTICLE VII
THE TRUSTEE
Section 7.01. CERTAIN DUTIES AND RESPONSIBILITIES. (a) Except during
the continuance of an Event of Default in respect of a Trust, the Trustee
undertakes to perform such duties in respect of such Trust as are
specifically set forth in this Agreement, and no implied covenants or
obligations shall be read into this Agreement against the Trustee.
(b) In case an Event of Default in respect of a Trust has occurred
and is continuing, the Trustee shall exercise such of the rights and powers
vested in it by this Agreement in respect of such Trust, and use the same
degree of care and skill in their exercise, as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs.
(c) No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section 7.01; and
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(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent facts.
(d) Whether or not herein expressly so provided, every provision
of this Agreement relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of
this Section 7.01.
Section 7.02. NOTICE OF DEFAULTS. (a) As promptly as practicable
after, and in any event within 90 days after, the occurrence of any default
(as such term is defined below) hereunder known to the Trustee, the Trustee
shall transmit by mail to the Company, any related Owner Trustees, any
related Owner Participants, the related Loan Trustees and the
Certificateholders holding Certificates of the related series in accordance
with Section 313(c) of the Trust Indenture Act, notice of such default
hereunder known to the Trustee, unless such default shall have been cured or
waived; provided, however, that, except in the case of a default in the
payment of the principal, premium, if any, or interest on any Equipment Note,
the Trustee shall be protected in withholding such notice if and so long as
the board of directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Trustee in good faith shall
determine that the withholding of such notice is in the interests of the
Certificateholders of the related series. For the purpose of this Section
7.02 in respect of any Trust, the term "Default" means any event that is, or
after notice or lapse of time or both would become, an Event of Default in
respect of that Trust.
(b) The Trustee shall not be deemed to have knowledge of any
Default unless a Responsible Officer of the Trustee shall have received
written notice of such Default; PROVIDED, HOWEVER, that the Trustee shall be
deemed to have notice of any failure to receive Scheduled Payments hereunder.
Section 7.03. CERTAIN RIGHTS OF TRUSTEE. Subject to the provisions of
Section 315 of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting in reliance upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Request;
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(c) whenever in the administration of this Agreement or any
Intercreditor Agreement, the Trustee shall deem it desirable that a matter be
proved or established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, rely upon an
Officer's Certificate of the Company, any related Owner Trustee or any
related Loan Trustee;
(d) the Trustee may consult with counsel and the advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement or any Intercreditor
Agreement at the Direction of any of the Certificateholders pursuant to this
Agreement or any Intercreditor Agreement, unless such Certificateholders
shall have offered to the Trustee reasonable security or indemnity against
the cost, expenses and liabilities which might be incurred by it in
compliance with such Direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture or other paper or document;
(g) the Trustee may execute any of the trusts or powers under
this Agreement or any Intercreditor Agreement or perform any duties under
this Agreement or any Intercreditor Agreement either directly or by or
through agents or attorneys, and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed with
due care by it under this Agreement or any Intercreditor Agreement;
(h) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the Direction of the Certificateholders holding Certificates of any series
evidencing Fractional Undivided Interests aggregating not less than a
majority in interest in the related Trust relating to the time, method and
place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under this
Agreement or any Intercreditor Agreement; and
(i) the Trustee shall not be required to expend or risk its
own funds in the performance of any of its duties under this Agreement, or in
the
40
exercise of any of its rights or powers, if it shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk is not reasonably assured to it.
Section 7.04. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
CERTIFICATES. The recitals contained herein and in the Certificates of each
series, except the certificates of authentication, shall not be taken as the
statements of the Trustee, and the Trustee assumes no responsibility for
their correctness. Subject to Section 7.15, the Trustee makes no
representations as to the validity or sufficiency of this Basic Agreement,
any Equipment Notes, any Intercreditor Agreement, the Certificates of any
series, any Trust Supplement or any Note Documents, except that the Trustee
hereby represents and warrants that this Basic Agreement has been, and each
Trust Supplement, each Certificate, each Note Purchase Agreement and each
Intercreditor Agreement of, or relating to, each series will be executed and
delivered by one of its officers who is duly authorized to execute and
deliver such document on its behalf.
Section 7.05. MAY HOLD CERTIFICATES. The Trustee, any Paying Agent,
Registrar or any of their Affiliates or any other agent, in their respective
individual or any other capacity, may become the owner or pledgee of
Certificates and, subject to Sections 310(b) and 311 of the Trust Indenture
Act, if applicable, may otherwise deal with the Company, any Owner Trustees
or the Loan Trustees with the same rights it would have if it were not
Trustee, Paying Agent, Registrar or such other agent.
Section 7.06. MONEY HELD IN TRUST. Money held by the Trustee or the
Paying Agent in trust under this Agreement need not be segregated from other
funds except to the extent required herein or by law and neither the Trustee
nor the Paying Agent shall have any liability for interest upon any such
moneys except as provided for herein.
Section 7.07. COMPENSATION AND REIMBURSEMENT. The Company agrees:
(1) to pay, or cause to be paid, to the Trustee from time to time
reasonable compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust); and
(2) except as otherwise expressly provided herein or in any Trust
Supplement, to reimburse, or cause to be reimbursed, the Trustee upon its
request for all reasonable out-of-pocket expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Basic Agreement, any Trust Supplement or any Intercreditor Agreement
(including the reasonable compensation and the expenses and disbursements of
its agents and counsel), except any such expense, disbursement or advance as
may be
41
attributable to its negligence, willful misconduct or bad faith or as may be
incurred due to the Trustee's breach of its representations and warranties
set forth in Section 7.15; and
(3) to indemnify, or cause to be indemnified, the Trustee with
respect to the Certificates of any series, pursuant to the particular
sections of the Note Purchase Agreement specified in the related Trust
Supplement.
The Trustee shall be entitled to reimbursement from, and shall have a
lien prior to the Certificates of each series upon, all property and funds
held or collected by the Trustee in its capacity as Trustee with respect to
such series or the related Trust for any tax incurred without negligence, bad
faith or willful misconduct, on its part, arising out of or in connection
with the acceptance or administration of such Trust (other than any tax
attributable to the Trustee's compensation for serving as such), including
any costs and expenses incurred in contesting the imposition of any such tax.
The Trustee shall notify the Company of any claim for any tax for which it
may seek reimbursement. If the Trustee reimburses itself from the Trust
Property of such Trust for any such tax, it will mail a brief report within
30 days setting forth the amount of such tax and the circumstances thereof to
all Certificateholders of such series as their names and addresses appear in
the Register.
Section 7.08. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. Each Trust
shall at all times have a Trustee which shall be eligible to act as a trustee
under Section 310(a) of the Trust Indenture Act and shall have a combined
capital and surplus of at least $75,000,000 (or a combined capital and
surplus in excess of $5,000,000 and the obligations of which, whether now in
existence or hereafter incurred, are fully and unconditionally guaranteed by
a corporation organized and doing business under the laws of the United
States, any state or territory thereof or of the District of Columbia and
having a combined capital and surplus of at least $75,000,000). If such
corporation publishes reports of conditions at least annually, pursuant to
law or to the requirements of federal, state, territorial or District of
Columbia supervising or examining authority, then for the purposes of this
Section 7.08 the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of conditions so published.
In case at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 7.08 to act as Trustee of any Trust, the
Trustee shall resign immediately as Trustee of such Trust in the manner and
with the effect specified in Section 7.09.
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Section 7.09. RESIGNATION AND REMOVAL, APPOINTMENT OF SUCCESSOR. (a)
No resignation or removal of the Trustee and no appointment of a successor
Trustee of any Trust pursuant to this Article shall become effective until
the acceptance of appointment by the successor Trustee under Section 7.10.
(b) The Trustee may resign at any time as Trustee of any or all
Trusts by giving prior written notice thereof to the Company, the Authorized
Agents, the related Owner Trustees and the related Loan Trustees. If an
instrument of acceptance by a successor Trustee shall not have been delivered
to the Company, the related Owner Trustees and the Trustee within 30 days
after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(c) The Trustee may be removed at any time by Direction of the
Certificateholders of the related series holding Certificates evidencing
Fractional Undivided Interests aggregating not less than a majority in
interest in such Trust delivered to the Trustee and to the Company, the
related Owner Trustees and the related Loan Trustees.
(d) If at any time in respect of any Trust:
(1) the Trustee shall fail to comply with Section 310 of the Trust
Indenture Act, if applicable, after written request therefor by the Company
or by any Certificateholder who has been a bona fide Certificateholder for at
least six months; or
(2) the Trustee shall cease to be eligible under Section 7.08 and
shall fail to resign after written request therefor by the Company or by any
such Certificateholder; or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any case, (i) the Company may remove the Trustee or (ii) any
Certificateholder of the related series who has been a bona fide
Certificateholder for at least six months may, on behalf of itself and all
others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee of such
Trust.
43
(e) If a Responsible Officer of the Trustee shall obtain actual
knowledge of an Avoidable Tax (as defined below) in respect of any Trust
which has been or is likely to be asserted, the Trustee shall promptly notify
the Company and shall, within 30 days of such notification, resign as Trustee
of such Trust hereunder unless within such 30-day period the Trustee shall
have received notice that the Company has agreed to pay such tax. The
Company shall promptly appoint a successor Trustee of such Trust in a
jurisdiction where there are no Avoidable Taxes. As used herein, an
"Avoidable Tax" in respect of such Trust means a state or local tax: (i)
upon (w) such Trust, (x) such Trust Property, (y) Certificateholders of such
Trust or (z) the Trustee for which the Trustee is entitled to seek
reimbursement from the Trust Property of such Trust, and (ii) which would be
avoided if the Trustee were located in another state, or jurisdiction within
a state, within the United States of America. A tax shall not be an
Avoidable Tax in respect of any Trust if the Company or any Owner Trustee
shall agree to pay, and shall pay, such tax.
(f) If the Trustee shall resign, be removed or become incapable of
acting as Trustee of any Trust or if a vacancy shall occur in the office of
the Trustee of any Trust for any cause, the Company shall promptly appoint a
successor Trustee of such Trust. If, within one year after such resignation,
removal or incapability, or other occurrence of such vacancy, a successor
Trustee of such Trust shall be appointed by Direction of the
Certificateholders of the related series holding Certificates of such series
evidencing Fractional Undivided Interests aggregating not less than a
majority in interest in such Trust delivered to the Company, the related
Owner Trustees, the related Loan Trustee and the retiring Trustee, then the
successor Trustee of such Trust so appointed shall, with the approval of the
Company of such appointment, which approval shall not be unreasonably
withheld, forthwith upon its acceptance of such appointment, become the
successor Trustee of such Trust and supersede the successor Trustee of such
Trust appointed as provided above. If no successor Trustee shall have been
so appointed as provided above and accepted appointment in the manner
hereinafter provided, the resigning Trustee or any Certificateholder who has
been a bona fide Certificateholder of the related series for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor
Trustee of such Trust.
(g) The successor Trustee of a Trust shall give notice of the
resignation and removal of the Trustee and appointment of the successor
Trustee by mailing written notice of such event by first-class mail, postage
prepaid, to the Certificateholders of the related series as their names and
addresses appear in the Register. Each notice shall include the name of such
successor Trustee and the address of its Corporate Trust Office.
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Section 7.10. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. Every successor
Trustee appointed hereunder shall execute and deliver to the Company and to
the retiring Trustee with respect to any or all Trusts an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee with respect to such Trusts shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring
Trustee; but, on request of the Company or the successor Trustee, such
retiring Trustee shall execute and deliver an instrument transferring to such
successor Trustee all such rights, powers and trusts of the retiring Trustee
and shall duly assign, transfer and deliver to such successor Trustee all
Trust Property held by such retiring Trustee in respect of such Trusts
hereunder, subject nevertheless to its lien, if any, provided for in Section
7.07. Upon request of any such successor Trustee, the Company, the retiring
Trustee and such successor Trustee shall execute and deliver any and all
instruments containing such provisions as shall be necessary or desirable to
transfer and confirm to, and for more fully and certainly vesting in, such
successor Trustee all such rights, powers and trusts.
If a successor Trustee is appointed with respect to one or more (but not
all) Trusts, the Company, the predecessor Trustee and each successor Trustee
with respect to any Trust shall execute and deliver a supplemental agreement
hereto which shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
predecessor Trustee with respect to the Trusts as to which the predecessor
Trustee is not retiring shall continue to be vested in the predecessor
Trustee, and shall add to or change any of the provisions of this Basic
Agreement and the applicable Trust Supplements as shall be necessary to
provide for or facilitate the administration of the Trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental agreement shall constitute such Trustees as co-Trustees of the
same Trust and that each such Trustee shall be Trustee of separate Trusts.
No institution shall accept its appointment as a Trustee hereunder
unless at the time of such acceptance such institution shall be qualified and
eligible under this Article VII.
Section 7.11. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS. Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder;
provided, however, that such corporation shall be otherwise
45
qualified and eligible under this Article VII, without the execution or
filing of any paper or any further act on the part of any of the parties
hereto. In case any Certificates shall have been executed or authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
execution or authentication and deliver the Certificates so executed or
authenticated with the same effect as if such successor Trustee had itself
executed or authenticated such Certificates.
Section 7.12. MAINTENANCE OF AGENCIES. (a) With respect to each series
of Certificates, there shall at all times be maintained an office or agency
in the location set forth in Section 12.04 where Certificates of such series
may be presented or surrendered for registration of transfer or for exchange,
and for payment thereof, and where notices and demands, to or upon the
Trustee in respect of such Certificates or this Agreement may be served;
provided, however, that, if it shall be necessary that the Trustee maintain
an office or agency in another location with respect to the Certificates of
any series (e.g., the Certificates of such series shall be represented by
Definitive Certificates and shall be listed on a national securities
exchange), the Trustee will make all reasonable efforts to establish such an
office or agency. Written notice of the location of each such other office
or agency and of any change of location thereof shall be given by the Trustee
to the Company, any Owner Trustees, the Loan Trustees (in the case of any
Owner Trustee or Loan Trustee, at its address specified in the Note Documents
or such other address as may be notified to the Trustee) and the
Certificateholders of such series. In the event that no such office or
agency shall be maintained or no such notice of location or of change of
location shall be given, presentations and demands may be made and notices
may be served at the Corporate Trust Office of the Trustee.
(b) There shall at all times be a Registrar and a Paying Agent
hereunder with respect to the Certificates of each series. Each such
Authorized Agent shall be a bank or trust company, shall be a corporation
organized and doing business under the laws of the United States or any
state, with a combined capital and surplus of at least $75,000,000, or a
corporation having a combined capital and surplus in excess of $5,000,000,
the obligations of which are guaranteed by a corporation organized and doing
business under the laws of the United States or any state, with a combined
capital and surplus of at least $75,000,000, and shall be authorized under
such laws to exercise corporate trust powers, subject to supervision by
federal or state authorities. The Trustee shall initially be the Paying
Agent and, as provided in Section 3.04, Registrar hereunder with respect to
the Certificates of each series. Each Registrar shall furnish to the
Trustee, at stated intervals of not more than six months, and at such other
times as the Trustee may request in writing, a copy of the Register
maintained by such Registrar.
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(c) Any corporation into which any Authorized Agent may be merged
or converted or with which it may be consolidated, or any corporation
resulting from any merger, consolidation or conversion to which any
Authorized Agent shall be a party, or any corporation succeeding to the
corporate trust business of any Authorized Agent, shall be the successor of
such Authorized Agent, if such successor corporation is otherwise eligible
under this Section 7.12, without the execution or filing of any paper or any
further act on the part of the parties hereto or such Authorized Agent or
such successor corporation.
(d) Any Authorized Agent may at any time resign by giving written
notice of resignation to the Trustee, the Company, any related Owner Trustees
and the related Loan Trustees. The Company may, and at the request of the
Trustee shall, at any time terminate the agency of any Authorized Agent by
giving written notice of termination to such Authorized Agent and to the
Trustee. Upon the resignation or termination of an Authorized Agent or in
case at any time any such Authorized Agent shall cease to be eligible under
this Section 7.12 (when, in either case, no other Authorized Agent performing
the functions of such Authorized Agent shall have been appointed), the
Company shall promptly appoint one or more qualified successor Authorized
Agents, reasonably satisfactory to the Trustee, to perform the functions of
the Authorized Agent which has resigned or whose agency has been terminated
or who shall have ceased to be eligible under this Section 7.12. The Company
shall give written notice of any such appointment made by it to the Trustee,
any related Owner Trustees and the related Loan Trustees; and in each case
the Trustee shall mail notice of such appointment to all Certificateholders
of the related series as their names and addresses appear on the Register for
such series.
(e) The Company agrees to pay, or cause to be paid, from time to
time to each Authorized Agent reasonable compensation for its services and to
reimburse it for its reasonable expenses.
Section 7.13. MONEY FOR CERTIFICATE PAYMENTS TO BE HELD IN TRUST. All
moneys deposited with any Paying Agent for the purpose of any payment on
Certificates shall be deposited and held in trust for the benefit of the
Certificateholders entitled to such payment, subject to the provisions of
this Section 7.13. Moneys so deposited and held in trust shall constitute a
separate trust fund for the benefit of the Certificateholders with respect to
which such money was deposited.
The Trustee may at any time, for the purpose of obtaining the
satisfaction and discharge of this Agreement or for any other purpose, direct
any Paying Agent to pay to the Trustee all sums held in trust by such Paying
Agent, such sums to be held by the
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Trustee upon the same trusts as those upon which such sums were held by such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to
such money.
Section 7.14. REGISTRATION OF EQUIPMENT NOTES IN TRUSTEE'S NAME.
Subject to the provisions of any Intercreditor Agreement, the Trustee agrees
that all Equipment Notes to be purchased by any Trust and Permitted
Investments, if any, shall be issued in the name of the Trustee as trustee
for the applicable Trust or its nominee and held by the Trustee in trust for
the benefit of the Certificateholders of such series, or, if not so held, the
Trustee or its nominee shall be reflected as the owner of such Equipment
Notes or Permitted Investments, as the case may be, in the register of the
issuer of such Equipment Notes or Permitted Investments, as the case may be.
Section 7.15. REPRESENTATIONS AND WARRANTIES OF TRUSTEE. The Trustee
hereby represents and warrants that:
(a) the Trustee is a state chartered trust company organized
and validly existing in good standing under the laws of the Commonwealth of
Massachusetts.
(b) the Trustee has full power, authority and legal right to
execute, deliver and perform this Agreement, any Intercreditor Agreement and
the Note Purchase Agreements and has taken all necessary action to authorize
the execution, delivery and performance by it of this Agreement, any
Intercreditor Agreement and the Note Purchase Agreements;
(c) the execution, delivery and performance by the Trustee of
this Agreement, any Intercreditor Agreement and the Note Purchase Agreements
(i) will not violate any provision of any United States federal law or the
law of the state of the United States where it is located governing the
banking and trust powers of the Trustee or any order, writ, judgment, or
decree of any court, arbitrator or governmental authority applicable to the
Trustee or any of its assets, (ii) will not violate any provision of the
charter documents or by-laws of the Trustee, and (iii) will not violate any
provision of, or constitute, with or without notice or lapse of time, a
default under, or result in the creation or imposition of any lien on any
properties included in the Trust Property pursuant to the provisions of any
mortgage, indenture, contract, agreement or other undertaking to which it is
a party, which violation, default or lien could reasonably be expected to
have an adverse effect on the Trustee's performance or ability to perform its
duties hereunder or thereunder or on the transactions contemplated herein or
therein;
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(d) the execution, delivery and performance by the Trustee of
this Agreement, any Intercreditor Agreement and the Note Purchase Agreements
will not require the authorization, consent, or approval of, the giving of
notice to, the filing or registration with, or the taking of any other action
in respect of, any governmental authority or agency of the United States or
the state of the United States where it is located regulating the banking and
corporate trust activities of the Trustee; and
(e) this Agreement, any Intercreditor Agreement and the Note
Purchase Agreements have been or will be duly executed and delivered by the
Trustee and upon such execution and delivery will constitute the legal, valid
and binding agreements of the Trustee, enforceable against it in accordance
with their respective terms; provided, however, that enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the rights of creditors generally and (ii) general
principles of equity.
Section 7.16. WITHHOLDING TAXES; INFORMATION REPORTING. As to the
Certificates of any series, the Trustee, as trustee of the related grantor
trust created by this Agreement, shall exclude and withhold from each
distribution of principal, premium, if any, and interest and other amounts
due under this Agreement or under the Certificates of such series any and all
withholding taxes applicable thereto as required by law. The Trustee agrees
to act as such withholding agent and, in connection therewith, whenever any
present or future taxes or similar charges are required to be withheld with
respect to any amounts payable in respect of the Certificates of such series,
to withhold such amounts and timely pay the same to the appropriate authority
in the name of and on behalf of the Certificateholders of such series, that
it will file any necessary withholding tax returns or statements when due,
and that, as promptly as possible after the payment thereof, it will deliver
to each such Certificateholder of such series appropriate documentation
showing the payment thereof, together with such additional documentary
evidence as such Certificateholders may reasonably request from time to time.
The Trustee agrees to file any other information reports as it may be
required to file under United States law.
Section 7.17. TRUSTEE'S LIENS. The Trustee in its individual capacity
agrees that it will, in respect of each Trust created by this Agreement, at
its own cost and expense promptly take any action as may be necessary to duly
discharge and satisfy in full any mortgage, pledge, lien, charge,
encumbrance, security interest or claim ("Trustee's Liens") on or with
respect to the Trust Property of such Trust which is attributable to the
Trustee either (i) in its individual capacity and which is unrelated to the
transactions
49
contemplated by this Agreement or the related Note Documents or (ii) as
Trustee hereunder or in its individual capacity and which arises out of acts
or omissions which are not contemplated by this Agreement.
Section 7.18. PREFERENTIAL COLLECTION OF CLAIMS. The Trustee shall
comply with Section 311(a) of the Trust Indenture Act, excluding any creditor
relationship listed in Section 311(b) of the Trust Indenture Act. If the
Trustee shall resign or be removed as Trustee, it shall be subject to Section
311(a) of the Trust Indenture Act to the extent provided therein.
ARTICLE VIII
CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE
Section 8.01. THE COMPANY TO FURNISH TRUSTEE WITH NAMES AND ADDRESSES
OF CERTIFICATEHOLDERS. The Company will furnish to the Trustee within 15
days after each Record Date with respect to a Scheduled Payment, and at such
other times as the Trustee may request in writing within 30 days after
receipt by the Company of any such request, a list, in such form as the
Trustee may reasonably require, of all information in the possession or
control of the Company as to the names and addresses of the
Certificateholders of each series, in each case as of a date not more than 15
days prior to the time such list is furnished; PROVIDED, HOWEVER, that so
long as the Trustee is the sole Registrar for such series, no such list need
be furnished; and PROVIDED FURTHER, HOWEVER, that no such list need be
furnished for so long as a copy of the Register is being furnished to the
Trustee pursuant to Section 7.12.
Section 8.02. PRESERVATION OF INFORMATION, COMMUNICATIONS TO
CERTIFICATEHOLDERS. The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Certificateholders of each
series contained in the most recent list furnished to the Trustee as provided
in Section 7.12 or Section 8.01, as the case may be, and the names and
addresses of Certificateholders of each series received by the Trustee in its
capacity as Registrar, if so acting. The Trustee may destroy any list
furnished to it as provided in Section 7.12 or Section 8.01, as the case may
be, upon receipt of a new list so furnished.
Section 8.03. REPORTS BY TRUSTEE. Within 60 days after May 15 of each
year commencing with the first full year following the issuance of any series
of Certificates, the Trustee shall transmit to the Certificateholders of such
series, as provided in Section 313(c) of the Trust Indenture Act, a brief
report dated as of May 15, if required by Section 313(a) of the Trust
Indenture Act.
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Section 8.04. REPORTS BY THE COMPANY. The Company shall:
(a) file with the Trustee, within 30 days after the Company
is required to file the same with the SEC, copies of the annual reports and
of the information, documents and other reports (or copies of such portions
of any of the foregoing as the SEC may from time to time by rules and
regulations prescribe) which the Company is required to file with the SEC
pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934, as amended; or, if the Company is not required to file information,
documents or reports pursuant to either of such sections, then to file with
the Trustee and the SEC, in accordance with rules and regulations prescribed
by the SEC, such of the supplementary and periodic information, documents and
reports which may be required pursuant to section 13 of the Securities
Exchange Act of 1934, as amended, in respect of a security listed and
registered on a national securities exchange as may be prescribed in such
rules and regulations;
(b) file with the Trustee and the SEC, in accordance with the
rules and regulations prescribed by the SEC, such additional information,
documents and reports with respect to compliance by the Company with the
conditions and covenants of the Company provided for in this Agreement, as
may be required by such rules and regulations, including, in the case of
annual reports, if required by such rules and regulations, certificates or
opinions of independent public accountants, conforming to the requirements of
Section 1.02;
(c) transmit to all Certificateholders, in the manner and to
the extent provided in Section 313(c) of the Trust Indenture Act such
summaries of any information, documents and reports required to be filed by
the Company pursuant to subsections (a) and (b) of this Section 8.04 as may
be required by rules and regulations prescribed by the SEC; and
(d) furnish to the Trustee, not less often than annually, a
brief certificate from the principal executive officer, principal financial
officer or principal accounting officer as to his knowledge of the Company's
compliance with all conditions and covenants under this Agreement (it being
understood that for purposes of this paragraph (d), such compliance shall be
determined without regard to any period of grace or requirement of notice
provided under this Agreement).
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ARTICLE IX
SUPPLEMENTAL AGREEMENTS
Section 9.01. SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF
CERTIFICATEHOLDERS. Without the consent of the Certificateholders, the
Company may (but will not be required to), and the Trustee (subject to
Section 9.03) shall, at the Company's request, at any time and from time to
time, enter into one or more agreements supplemental hereto or, if
applicable, to an Intercreditor Agreement, a Note Purchase Agreement or a
Liquidity Facility, in form satisfactory to the Trustee, for any of the
following purposes:
(1) to provide for the formation of a Trust, the issuance of a
series of Certificates and other matters contemplated by Section 2.01(b); or
(2) to evidence the succession of another corporation to the
Company and the assumption by any such successor of the covenants of the
Company herein contained or of the Company's obligations under any
Intercreditor Agreement, any Note Purchase Agreement or any Liquidity
Facility; or
(3) to add to the covenants of the Company for the benefit of the
Certificateholders of any series, or to surrender any right or power
conferred upon the Company in this Agreement, any Intercreditor Agreement or
any Liquidity Facility; or
(4) to correct or supplement any provision in this Agreement, any
Intercreditor Agreement, any Note Purchase Agreement or any Liquidity
Facility which may be defective or inconsistent with any other provision
herein or therein or to cure any ambiguity or to modify any other provision
with respect to matters or questions arising under this Agreement, any
Intercreditor Agreement, any Note Purchase Agreement or any Liquidity
Facility, provided, however, that any such action shall not materially
adversely affect the interests of the Certificateholders of any series; to
correct any mistake in this Agreement, any Intercreditor Agreement, any Note
Purchase Agreement or any Liquidity Facility; or, as provided in any
Intercreditor Agreement, to give effect to or provide for a Replacement
Liquidity Facility (as defined in such Intercreditor Agreement); or
(5) to comply with any requirement of the SEC, any applicable law,
rules or regulations of any exchange or quotation system on which the
Certificates of any series are listed or of any regulatory body; or
52
(6) to modify, eliminate or add to the provisions of this
Agreement, any Intercreditor Agreement, any Note Purchase Agreement or any
Liquidity Facility to such extent as shall be necessary to continue the
qualification of this Agreement, any Intercreditor Agreement, any Note
Purchase Agreement or any Liquidity Facility (including any supplemental
agreement) under the Trust Indenture Act or under any similar Federal statute
hereafter enacted, and to add to this Agreement, any Intercreditor Agreement,
any Note Purchase Agreement or any Liquidity Facility such other provisions
as may be expressly permitted by the Trust Indenture Act, excluding, however,
the provisions referred to in Section 316(a)(2) of the Trust Indenture Act as
in effect at the date as of which this Basic Agreement was executed or any
corresponding provision in any similar Federal statute hereafter enacted; or
(7) to evidence and provide for the acceptance of appointment
under this Agreement, any Intercreditor Agreement, any Note Purchase
Agreement or any Liquidity Facility by a successor Trustee with respect to
one or more Trusts and to add to or change any of the provisions of this
Agreement, any Intercreditor Agreement or any Liquidity Facility as shall be
necessary to provide for or facilitate the administration of the Trust,
pursuant to the requirements of Section 7.10; or
(8) to provide the information required under Section 7.12 and
Section 12.04 as to the Trustee; or
(9) to make any other amendments or modifications hereto,
provided, however, that such amendments or modifications shall apply to
Certificates of any series to be thereafter issued;
provided, however, that no such supplemental agreement shall adversely affect
the status of any Trust as a grantor trust under Subpart E, Part I of
Subchapter J of Chapter 1 of Subtitle A of the Internal Revenue Code of 1986,
as amended, for U.S. federal income tax purposes.
Section 9.02. SUPPLEMENTAL AGREEMENTS WITH CONSENT OF
CERTIFICATEHOLDERS. With respect to each separate Trust and the series of
Certificates relating thereto, with the consent of the Certificateholders
holding Certificates of such series (including consents obtained in
connection with a tender offer or exchange offer for the Certificates)
evidencing Fractional Undivided Interests aggregating not less than a
majority in interest in such Trust, by Direction of said Certificateholders
delivered to the Company and the Trustee, the Company may (with the consent
of the Owner Trustees, if any, relating to such Certificates, which consent
shall not be unreasonably withheld), but
53
shall not be obligated to, and the Trustee (subject to Section 9.03) shall,
enter into an agreement or agreements supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement, any Intercreditor Agreement or any Liquidity
Facility to the extent applicable to such Certificateholders or of modifying
in any manner the rights and obligations of such Certificateholders under
this Agreement, any Intercreditor Agreement or any Liquidity Facility;
provided, however, that no such agreement shall, without the consent of the
Certificateholder of each Outstanding Certificate affected thereby:
(1) reduce in any manner the amount of, or delay the timing of,
any receipt by the Trustee of payments on the Equipment Notes held in such
Trust or distributions that are required to be made herein on any Certificate
of such series, or change any date of payment on any Certificate of such
series, or change the place of payment where, or the coin or currency in
which, any Certificate of such series is payable, or impair the right to
institute suit for the enforcement of any such payment or distribution on or
after the Regular Distribution Date or Special Distribution Date applicable
thereto; or
(2) permit the disposition of any Equipment Note included in the
Trust Property of such Trust except as permitted by this Agreement, or
otherwise deprive such Certificateholder of the benefit of the ownership of
the Equipment Notes in such Trust; or
(3) alter the priority of distributions specified in the
Intercreditor Agreement in a manner materially adverse to the interests of
the Certificateholders of any series; or
(4) reduce the specified percentage of the aggregate Fractional
Undivided Interests of such Trust that is required for any such supplemental
agreement, or reduce such specified percentage required for any waiver (of
compliance with certain provisions of this Agreement or certain defaults
hereunder and their consequences) provided for in this Agreement; or
(5) modify any of the provisions of this Section 9.02 or Section
6.05, except to increase any such percentage or to provide that certain other
provisions of this Agreement cannot be modified or waived without the consent
of the Certificateholder of each Certificate of such series affected thereby;
or
(6) adversely affect the status of any Trust as a grantor trust
under Subpart E, Part I of Subchapter J of Chapter 1 of Subtitle A of the
Internal Revenue Code of 1986, as amended, for U.S. federal income tax
purposes.
54
It shall not be necessary for any Direction of such Certificateholders
under this Section 9.02 to approve the particular form of any proposed
supplemental agreement, but it shall be sufficient if such Direction shall
approve the substance thereof.
Section 9.03. DOCUMENTS AFFECTING IMMUNITY OR INDEMNITY. If in the
opinion of the Trustee any document required to be executed by it pursuant to
the terms of Section 9.01 or 9.02 affects any interest, right, duty, immunity
or indemnity in favor of the Trustee under this Basic Agreement or any Trust
Supplement, the Trustee may in its discretion decline to execute such
document.
Section 9.04. EXECUTION OF SUPPLEMENTAL AGREEMENTS. In executing, or
accepting the additional trusts created by, any supplemental agreement
permitted by this Article or the modifications thereby of the trusts created
by this Agreement, the Trustee shall be entitled to receive, and shall be
fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental agreement is authorized or permitted by this
Agreement.
Section 9.05. EFFECT OF SUPPLEMENTAL AGREEMENTS. Upon the execution of
any agreement supplemental to this Agreement under this Article, this Basic
Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Basic Agreement for all purposes; and
every Certificateholder of each series theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby to the extent
applicable to such series.
Section 9.06. CONFORMITY WITH TRUST INDENTURE ACT. Every supplemental
agreement executed pursuant to this Article shall conform to the requirements
of the Trust Indenture Act as then in effect.
Section 9.07. REFERENCE IN CERTIFICATES TO SUPPLEMENTAL AGREEMENTS.
Certificates of each series authenticated and delivered after the execution
of any supplemental agreement applicable to such series pursuant to this
Article may bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental agreement; and, in such case, suitable
notation may be made upon Outstanding Certificates of such series after
proper presentation and demand.
ARTICLE X
AMENDMENTS TO INDENTURE AND NOTE DOCUMENTS
Section 10.01. AMENDMENTS AND SUPPLEMENTS TO INDENTURE AND OTHER NOTE
DOCUMENTS. In the event that the Trustee, as holder (or beneficial owner
through the
55
Subordination Agent) of any Equipment Notes (or as a prospective purchaser of
any Postponed Notes) in trust for the benefit of the Certificateholders of
any series or as Controlling Party under an 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, other Note Document or any other related document, the Trustee
shall forthwith send a notice of such proposed amendment, modification,
waiver or supplement to each Certificateholder of such series registered on
the Register as of the date of such notice. The Trustee shall request from
the Certificateholders of such series a Direction as to (a) 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 (or, with respect to
Postponed Notes, a prospective purchaser of) such Equipment Note has the
option to direct, (b) 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 (or, with respect to Postponed
Notes, a prospective purchaser of) such Equipment Note or a Controlling Party
and (c) how to vote (or direct the Subordination Agent to vote) any Equipment
Note (or, with respect to a Postponed Note, its commitment to acquire such
Postponed Note) if a vote has been called for with respect thereto. Provided
such a request for Certificateholder Direction shall have been 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), (i) other than as Controlling Party, the Trustee shall vote for
or give consent to any such action with respect to such Equipment Note (or
Postponed Note) in the same proportion as that of (A) the aggregate face
amounts of all Certificates actually voted in favor of or for giving consent
to such action by such Direction of Certificateholders to (B) the aggregate
face amount of all Outstanding Certificates and (ii) as Controlling Party,
the Trustee shall vote as directed in such Certificateholder Direction by the
Certificateholders of such series evidencing a Fractional Undivided Interest
aggregating not less than a majority in interest in the Trust. For purposes
of the immediately preceding sentence, a Certificate shall have been
"actually voted" if the Holder of such Certificate has delivered to the
Trustee an instrument evidencing such Holder's consent to such Direction
prior to one Business Day before the Trustee directs such action or casts
such vote or gives such consent. Notwithstanding the foregoing, but subject
to Section 6.04 and any Intercreditor Agreement, the Trustee may, with
respect to the Certificates of any series, in its own discretion and at its
own direction, consent and notify the relevant Loan Trustee of such consent
(or direct the Subordination Agent to consent and notify the Loan Trustee of
such consent) to any amendment, modification, waiver or supplement under any
related Indenture or any other related Note Document if an Event of Default
hereunder shall have occurred and be continuing or if such amendment,
modification, waiver or supplement will not materially adversely affect the
interests of the Certificateholders of such series.
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ARTICLE XI
TERMINATION OF TRUSTS
Section 11.01. TERMINATION OF THE TRUSTS. In respect of each Trust
created by the Basic Agreement as supplemented by a related Trust Supplement,
the respective obligations and responsibilities of the Company and the
Trustee with respect to such Trust shall terminate upon the distribution to
all Holders of Certificates of the series of such Trust and the Trustee of
all amounts required to be distributed to them pursuant to this Agreement and
the disposition of all property held as part of the Trust Property of such
Trust; PROVIDED, HOWEVER, that in no event shall such Trust continue beyond
21 years less one day following the death of the last survivor of all
descendents living on the date hereof of Joseph P. Kennedy, Sr., unless
applicable law shall permit a longer term, in which case such longer term
shall apply.
Notice of any termination of a Trust, specifying the applicable Regular
Distribution Date (or applicable Special Distribution Date, as the case may
be) upon which the Certificateholders of any series may surrender their
Certificates to the Trustee for payment of the final distribution and
cancellation, shall be mailed promptly by the Trustee to Certificateholders
of such series not earlier than the minimum number of days and not later than
the maximum number of days specified therefor in the related Trust Supplement
preceding such final distribution specifying (A) the Regular Distribution
Date (or Special Distribution Date, as the case may be) upon which the
proposed final payment of the Certificates of such series will be made upon
presentation and surrender of Certificates of such series at the office or
agency of the Trustee therein specified, (B) the amount of any such proposed
final payment, and (C) that the Record Date otherwise applicable to such
Regular Distribution Date (or Special Distribution Date, as the case may be)
is not applicable, payments being made only upon presentation and surrender
of the Certificates of such series at the office or agency of the Trustee
therein specified. The Trustee shall give such notice to the Registrar at
the time such notice is given to Certificateholders of such series. Upon
presentation and surrender of the Certificates of such series in accordance
with such notice, the Trustee shall cause to be distributed to
Certificateholders of such series amounts distributable on such Regular
Distribution Date (or Special Distribution Date, as the case may be) pursuant
to Section 4.02.
In the event that all of the Certificateholders of such series shall not
surrender their Certificates for cancellation within six months after the
date specified in the above-mentioned written notice, the Trustee shall give
a second written notice to the remaining Certificateholders of such series to
surrender their Certificates for cancellation and receive the final
distribution with respect thereto. No additional interest shall accrue on
57
the Certificates of such series after any Regular Distribution Date (or
Special Distribution Date, as the case may be) of such series, as specified
in the first written notice. In the event that any money held by the Trustee
for the payment of distributions on the Certificates of such series shall
remain unclaimed for two years (or such lesser time as the Trustee shall be
satisfied, after 60 days' notice from the Company, is one month prior to the
escheat period provided under applicable law) after the final distribution
date with respect thereto, the Trustee shall pay to each Loan Trustee the
appropriate amount of money relating to such Loan Trustee and shall give
written notice thereof to the related Owner Trustees and the Company.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS. The death
or incapacity of any Certificateholder of any series shall not operate to
terminate this Agreement or the related Trust, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or
to take any action or commence any proceeding in any court for a partition or
winding up of the Trust, nor otherwise affect the rights, obligations, and
liabilities of the parties hereto or any of them.
Section 12.02. LIABILITIES OF CERTIFICATEHOLDERS. Neither the
existence of the Trust nor any provision in this Agreement is intended to or
shall limit the liability the Certificateholders would otherwise incur if the
Certificateholders owned Trust Property as co-owners, or incurred any
obligations of the Trust, directly rather than through the Trust.
Section 12.03. REGISTRATION OF EQUIPMENT NOTES IN NAME OF SUBORDINATION
AGENT. If a Trust is party to an Intercreditor Agreement, the Trustee agrees
that all Equipment Notes to be purchased by such Trust shall be issued in the
name of the Subordination Agent under such Intercreditor Agreement or its
nominee and held by such Subordination Agent in trust for the benefit of the
Certificateholders, or, if not so held, such Subordination Agent or its
nominee shall be reflected as the owner of such Equipment Notes in the
register of the issuer of such Equipment Notes.
Section 12.04. NOTICES. (a) Unless otherwise specifically provided
herein or in the applicable Trust Supplement with respect to any Trust, all
notices required under the terms and provisions of this Basic Agreement or
such Trust Supplement with respect to such Trust shall be in English and in
writing, and any such notice may be given by United States mail, courier
service or telecopy, and any such notice shall be effective
58
when delivered or received or, if mailed, three days after deposit in the
United States mail with proper postage for ordinary mail prepaid,
if to the Company:
US Airways, Inc.
2345 Crystal Drive
Arlington, VA 22227
Attention: Treasurer
Telephone: (703) 872-5918
Fax: (703) 872-5936
with a copy to the attention of the Buyer's Office of the General
Counsel at the same address:
Attention: Aircraft Counsel
Fax: (703) 872-5252
if to the Trustee:
State Street Bank and Trust Company
Two International Place, 4th Floor
Boston, MA 02110
Attention: Corporate Trust Department
Facsimile: (617) 664-5151
Telephone: (617) 664-5340
(b) The Company or the Trustee, by notice to the other, may
designate additional or different addresses for subsequent notices or
communications.
(c) Any notice or communication to Certificateholders of any
series shall be mailed by first-class mail to the addresses for
Certificateholders of such series shown on the Register kept by the Registrar
and to addresses filed with the Trustee for Certificate Owners of such
series. Failure so to mail a notice or communication or any defect in such
notice or communication shall not affect its sufficiency with respect to
other Certificateholders or Certificate Owners of such series.
(d) If a notice or communication is mailed in the manner provided
above within the time prescribed, it is conclusively presumed to have been
duly given, whether or not the addressee receives it.
59
(e) If the Company mails a notice or communication to the
Certificateholders of such series, it shall mail a copy to the Trustee and to
each Paying Agent for such series at the same time.
(f) Notwithstanding the foregoing, all communications or notices
to the Trustee shall be deemed to be given only when received by a
Responsible Officer of the Trustee.
(g) The Trustee shall promptly furnish the Company with a copy of
any demand, notice or written communication received by the Trustee hereunder
from any Certificateholder, Owner Trustee or Loan Trustee.
Section 12.05. GOVERNING LAW. THIS BASIC AGREEMENT, TOGETHER WITH ALL
TRUST SUPPLEMENTS AND CERTIFICATES, SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 12.06. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions,
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or the related
Trust, or of the Certificates of such series or the rights of the
Certificateholders thereof.
Section 12.07. TRUST INDENTURE ACT CONTROLS. This Agreement is subject
to the provisions of the Trust Indenture Act and shall, to the extent
applicable, be governed by such provisions. If any provision of this
Agreement limits, qualifies or conflicts with another provision which is
required to be included in this Agreement by the Trust Indenture Act, the
required provision shall control.
Section 12.08. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article
and Section headings herein and the Table of Contents are for convenience
only and shall not affect the construction hereof.
Section 12.09. SUCCESSORS AND ASSIGNS. All covenants, agreements,
representations and warranties in this Agreement by the Trustee and the
Company shall bind and, to the extent permitted hereby, shall inure to the
benefit of and be enforceable by their respective successors and assigns,
whether so expressed or not.
60
Section 12.10. BENEFITS OF AGREEMENT. Nothing in this Agreement or in
the Certificates of any series, express or implied, shall give to any Person,
other than the parties hereto and their successors hereunder, and the
Certificateholders of each series, any benefit or any legal or equitable
right, remedy or claim under this Agreement.
Section 12.11. LEGAL HOLIDAYS. In any case where any Regular
Distribution Date or Special Distribution Date relating to any Certificate of
any series shall not be a Business Day with respect to such series, then
(notwithstanding any other provision of this Agreement) payment need not be
made on such date, but may be made on the next succeeding Business Day with
the same force and effect as if made on such Regular Distribution Date or
Special Distribution Date, and no interest shall accrue during the
intervening period.
Section 12.12. COUNTERPARTS. For the purpose of facilitating the
execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.
Section 12.13. COMMUNICATION BY CERTIFICATEHOLDERS WITH OTHER
CERTIFICATEHOLDERS. Certificateholders of any series may communicate with
other Certificateholders of such series with respect to their rights under
this Basic Agreement, the related Trust Supplement or the Certificates of
such series pursuant to Section 312(b) of the Trust Indenture Act. The
Company, the Trustee and any and all other persons benefitted by this
Agreement shall have the protection afforded by Section 312(c) of the Trust
Indenture Act.
Section 12.14. INTENTION OF PARTIES. The parties hereto intend that
each Trust be classified for U.S. federal income tax purposes as a grantor
trust under Subpart E, Part I of Subchapter J of the Internal Revenue Code of
1986, as amended, and not as a trust or association taxable as a corporation
or as a partnership. The powers granted and obligations undertaken pursuant
to this Agreement shall be so construed so as to further such intent.
61
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first written above.
US AIRWAYS, INC.
By:
-------------------------------
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By:
-------------------------------
Name:
Title:
62
EXHIBIT A
FORM OF CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.*
US AIRWAYS [ ] PASS THROUGH TRUST
Pass Through Certificate, Series [ ]
Final Regular Distribution Date: [ ], [ ]
evidencing a fractional undivided interest in a
trust, the property of which includes certain
equipment notes each secured by Aircraft owned
by or leased to US Airways, Inc.
Certificate
No.[ ] $[ ] Fractional Undivided Interest representing
.[ ]% of the Trust per $1,000 face amount
THIS CERTIFIES THAT [ ], for value received, is the
registered owner of a $[ ] ([ ] dollars) Fractional Undivided
Interest in the US Airways Pass Through Trust, Series [ ] (the "Trust")
created by State Street Bank and Trust Company, as trustee (the "Trustee"),
pursuant to a Pass Through Trust Agreement dated as of [ ], 1998 (the
"Basic Agreement"), as supplemented by Trust Supplement No. [ ] thereto
dated [ ], [ ](collectively, the "Agree-
* This legend to appear on Book-Entry Certificates to be deposited with
The Depository Trust Company.
A-1
ment"), between the Trustee and US Airways, Inc., a corporation incorporated
under Delaware law (the "Company"), a summary of certain of the pertinent
provisions of which is set forth below. To the extent not otherwise defined
herein, the capitalized terms used herein have the meanings assigned to them
in the Agreement. This Certificate is one of the duly authorized
Certificates designated as "[ ]% US Airways Pass Through Certificate, Series
[ ]" (herein called the "Certificates"). This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement. By
virtue of its acceptance hereof, the Certificateholder of this Certificate
assents to and agrees to be bound by the provisions of the Agreement and any
related Intercreditor Agreement. The property of the Trust includes certain
Equipment Notes and all rights of the Trust to receive any payments under any
Intercreditor Agreement or Liquidity Facility (the "Trust Property"). Each
issue of the Equipment Notes is or will be secured by, among other things, a
security interest in aircraft leased to or owned by the Company.
The Certificates represent fractional undivided interests in the Trust
and the Trust Property, and have no rights, benefits or interest in respect
of any other separate trust established pursuant to the terms of the Basic
Agreement for any other series of certificates issued pursuant thereto.
Subject to and in accordance with the terms of the Agreement and any
related Intercreditor Agreement, from funds then available to the Trustee,
there will be distributed on each [ ] and [ ] (a "Regular
Distribution Date"), commencing on [ ], 199[ ], to the Person in whose
name this Certificate is registered at the close of business on the 15th day
preceding the Regular Distribution Date, an amount in respect of the
Scheduled Payments on the Equipment Notes due on such Regular Distribution
Date, the receipt of which has been confirmed by the Trustee, equal to the
product of the percentage interest in the Trust evidenced by this Certificate
and an amount equal to the sum of such Scheduled Payments. Subject to and in
accordance with the terms of the Agreement and any related Intercreditor
Agreement, in the event that Special Payments on the Equipment Notes are
received by the Trustee, from funds then available to the Trustee, there
shall be distributed on the applicable Special Distribution Date, to the
Person in whose name this Certificate is registered at the close of business
on the 15th day preceding the Special Distribution Date, an amount in respect
of such Special Payments on the Equipment Notes, the receipt of which has
been confirmed by the Trustee, equal to the product of the percentage
interest in the Trust evidenced by this Certificate and an amount equal to
the sum of such Special Payments so received. If a Regular Distribution Date
or Special Distribution Date is not a Business Day, distribution shall be
made on the immediately following Business Day with the same force and effect
as if made on such Regular Distribution Date or Special Distribution Date and
no interest shall accrue during the intervening period. The
A-2
Trustee shall mail notice of each Special Payment and the Special
Distribution Date therefor to the Certificateholder of this Certificate.
Distributions on this Certificate will be made by the Trustee by check
mailed to the Person entitled thereto, without the presentation or surrender
of this Certificate or the making of any notation hereon. Except as
otherwise provided in the Agreement and notwithstanding the above, the final
distribution on this Certificate will be made after notice mailed by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency of the Trustee
specified in such notice.
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company or the Trustee or
any affiliate thereof. The Certificates are limited in right of payment, all
as more specifically set forth on the face hereof and in the Agreement. All
payments or distributions made to Certificateholders under the Agreement
shall be made only from the Trust Property and only to the extent that the
Trustee shall have sufficient income or proceeds from the Trust Property to
make such payments in accordance with the terms of the Agreement. Each
Certificateholder of this Certificate, by its acceptance hereof, agrees that
it will look solely to the income and proceeds from the Trust Property to the
extent available for distribution to such Certificateholder as provided in
the Agreement. This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds, and duties evidenced
hereby. A copy of the Agreement may be examined during normal business hours
at the principal office of the Trustee, and at such other places, if any,
designated by the Trustee, by any Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any
time by the Company and the Trustee with the consent of the
Certificateholders holding Certificates evidencing Fractional Undivided
Interests aggregating not less than a majority in interest in the Trust. Any
such consent by the Certificateholder of this Certificate shall be conclusive
and binding on such Certificateholder and upon all future Certificateholders
of this Certificate and of any Certificate issued upon the transfer hereof or
in exchange hereof or in lieu hereof whether or not notation of such consent
is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the
Certificateholders of any of the Certificates.
A-3
As provided in the Agreement and subject to certain limitations set
forth, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the offices or
agencies maintained by the Trustee in its capacity as Registrar, or by any
successor Registrar duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar, duly executed
by the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of
authorized denominations evidencing the same aggregate Fractional Undivided
Interest in the Trust will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $1,000 Fractional Undivided Interest and
integral multiples thereof except that one Certificate may be issued in a
different denomination. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered
as the owner hereof for all purposes, and neither the Trustee, the Registrar,
nor any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant
to the Agreement and the disposition of all property held as part of the
Trust Property.
THIS CERTIFICATE AND THE AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES AND CERTIFICATEHOLDERS HEREUNDER AND THEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Unless the certificate of authentication hereon has been executed by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
A-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
US AIRWAYS PASS THROUGH TRUST
By: STATE STREET BANK
AND TRUST COMPANY
as Trustee
By:
---------------------------
Title:
------------------------
Dated:
---------------------
A-5
[FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Certificates
referred to in the
within-mentioned Agreement.
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By:
------------------------
Authorized Officer
A-6
EXHIBIT 5.1
OPINION OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM (ILLINOIS)
September 28, 1998
US Airways, Inc.
2345 Crystal Drive
Arlington, VA 22227
Re: US Airways Inc. Pass Through Certificates
Ladies and Gentlemen:
We have acted as special counsel to US
Airways Inc., a Delaware corporation (the "Company"), in
connection with the registration statement on Form S-3
(the "Registration Statement") filed by the Company on
September 28, 1998 under the Securities Act of 1933, as
amended (the "Act"), relating to pass through certifi-
cates ("Pass Through Certificates") to be issued by one
or more trusts (each a "Trust") to be formed by the Com-
pany. Such Trusts are expected to acquire certain equip-
ment notes relating to aircraft either owned or leased by
the Company. The Pass Through Certificates are expected
to be issued and sold by the Company from time to time
pursuant to Rule 415 under the Act for an aggregate ini-
tial offering price not to exceed $1,000,000,000 or the
equivalent thereof in one or more foreign currencies or
composite currencies. The Pass Through Certificates will
be issued in one or more series under a pass through
trust agreement to be entered into by the Company and
State Street Bank and Trust Company (the "Trustee"), a
form of which has been filed as an exhibit to the Regis-
tration Statement (the "Pass Through Trust Agreement"),
as the same may from time to time be supplemented (each a
"Pass Through Trust Supplement"). The Pass Through Cer-
tificates will be sold or delivered from time to time as
set forth in the Registration Statement, any amendment
thereto, the prospectus with respect to the Pass Through
Certificates contained in the Registration Statement (the
"Basic Prospectus") or any supplements thereto (the "Pro-
spectus Supplements").
US Airways, Inc.
September 28, 1998
Page 2
This opinion is delivered in accordance
with the requirements of Item 601(b)(5) of Regulation S-K
under the Act.
We express no opinion herein concerning
any law other than the laws of the State of New York, the
General Corporation Law of the State of Delaware and the
laws of the United States of America to the extent spe-
cifically referred to herein. Insofar as the opinions
expressed herein relate to or are dependent upon matters
governed by the laws of the State of New York, we have
relied upon the opinion of Skadden, Arps, Slate, Meagher
& Flom LLP.
In connection with this opinion, we have
examined originals, or copies certified or otherwise
identified to our satisfaction, of (i) the Registration
Statement, (ii) the Basic Prospectus, (iii) a form of the
Pass Through Trust Agreement, (iv) a form of Pass Through
Trust Certificate and a specimen thereof, (v) the State-
ment of Eligibility and Qualification under the Trust In-
denture Act of 1939, as amended (the "1939 Act"), on Form
T-1 of the Trustee, (vi) the Amended and Restated Cer-
tificate of Incorporation of the Company, as currently in
effect, (vii) the By-Laws of the Company, as currently in
effect, and (viii) resolutions adopted by the Board of
Directors of the Company on May 19, 1998 relating to the
filing of the Registration Statement. We also have exam-
ined originals or copies, certified or otherwise identi-
fied to our satisfaction, of such records of the Company
and such agreements, certificates of public officials,
certificates of officers and other representatives of the
Company and others, and such other documents, certifi-
cates and records as we have deemed necessary or appro-
priate as a basis for the opinion set forth herein.
In our examination, we have assumed the
legal capacity of natural persons, the genuineness of all
signatures, the authenticity of all documents submitted
to us as originals, the conformity to original documents
of all documents submitted to us as certified or photo
US Airways, Inc.
September 28, 1998
Page 3
static copies and the authenticity of originals of all
later documents. In making our examination of documents
executed by parties other than the Company, we have as-
sumed that such parties (including the Trustee) had the
power, corporate or other, to enter into and perform all
obligations thereunder and have also assumed the due
authorization by all requisite action, corporate or
other, and execution and delivery by such parties of such
documents, and the validity and binding effect thereof on
such parties. As to any facts material to the opinion
expressed herein which we did not independently establish
or verify, we have relied upon oral or written statements
and representations of officers and other representatives
of the Company and others.
In addition, we have assumed that (i) the
Registration Statements, as finally amended (including
all necessary post-effective amendments) has become ef-
fective and a Prospectus Supplement supplementing the Ba-
sic Prospectus will have been prepared and filed with the
Securities and Exchange Commission (the "Commission") de-
scribing the respective Pass Through Certificates, (ii)
the Pass Through Trust Agreement shall have been quali-
fied under the 1939 Act, (iii) all Pass Through Certifi-
cates issued will be issued and sold in compliance with
applicable federal and state securities laws and solely
in the manner stated in the Registration Statement, the
Basic Prospectus and the appropriate Prospectus Supple-
ment and (iv) a definitive purchase, underwriting or
similar agreement with respect to any Pass Through Cer-
tificates will have been duly authorized and validly exe-
cuted and delivered by the Company and the other party
thereto.
Based upon the foregoing and subject to
the limitations, qualifications, exceptions and assump-
tions set forth herein, we are of the opinion that, with
respect to each series of Pass Through Certificates, when
(i) the Pass Through Trust Agreement and the Pass Through
Trust Supplement relating to such series has been duly
authorized and validly executed and delivered by the
US Airways, Inc.
September 28, 1998
Page 4
Company and the Trustee, (ii) the Board of Directors of
the Company has taken all necessary corporate action to
approve the terms of such series of Pass Through Certifi-
cates and related matters, (iii) the Pass Through Cer-
tificates of such series have been duly executed, authen-
ticated, issued and delivered in accordance with provi-
sions of the Pass Through Trust Agreement and the related
Pass Through Trust Supplement and (iv) the applicable de-
finitive purchase, underwriting or similar agreement is
approved by the Board of Directors of the Company is duly
executed and delivered by the parties thereto and payment
of the consideration provided for therein is made, such
Pass Through Certificates will be valid and legally bind-
ing obligations of the Trustee as trustee of the Trust.
Our opinion set forth above is subject to
the effects of bankruptcy, insolvency, fraudulent convey-
ance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally,
general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant
of good faith and fair dealing.
We hereby consent to the filing of this
opinion with the Commission as an exhibit to the Regis-
tration Statement. We also consent to the reference to
our firm under the heading "Legal Opinions" in the Regis-
tration Statement. In giving this consent, we do not
thereby admit that we are in the category of persons
whose consent is required under Section 7 of the Act or
the rules and regulations of the Commission.
Very truly yours,
/s/ Skadden, Arps, Slate, Meagher & Flom (Illinois)
--------------------------------------------------
<TABLE>
EXHIBIT 12.1
RATIO OF EARNINGS TO FIXED CHARGES
US Airways, Inc.
Computation of Ratio of Earnings to Fixed Charges
<CAPTION>
Six Months
Ended June 30, Years Ended December 31,
------------- -----------------------------------------------------
1998 1997 1996 1995 1994 1993
------ ------ ------ ------ ------ ------
(in thousands except ratio amounts)
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Pre-tax income (loss) $496,279 $ 673,229 $191,043 $ 37,398 $(716,183) $(375,048)
Add (deduct):
Fixed charges:
Interest expense $122,993 $ 260,029 $283,936 $301,923 $ 285,846 $ 238,628
Amortization of debt issue expense 4,537 2,684 2,844 3,724 4,300 2,346
Interest factor in noncapitalized rentals 148,891 320,625 303,383 316,977 364,462 344,129
Interest capitalized (17,687) (11,582) (8,398) (8,781) (13,760) (17,754)
Amortization of previously capitalized interest 5,064 10,269 10,286 10,238 8,802 7,423
------- --------- ------- ------- -------- --------
$760,077 $1,255,254 $783,094 $661,479 $ (66,533) $ 199,724
------- --------- ------- ------- -------- --------
Fixed charges:
Interest expense $122,993 $ 260,029 $283,936 $301,923 $ 285,846 $ 238,628
Amortization of debt issue expense 4,537 2,684 2,844 3,724 4,300 2,346
Interest factor in noncapitalized rentals 148,891 320,625 303,383 316,977 364,462 344,129
------- --------- ------- ------- -------- --------
$276,421 $ 583,338 $590,163 $622,624 $ 654,608 $ 585,103
------- --------- ------- ------- -------- --------
Ratio of earnings to fixed charges 2.7 2.2 1.3 1.1 * *
* For the years ended December 31, 1994 and 1993 earnings were not sufficient to cover fixed charges.
Additional earnings of approximately $721 million for the year ended December 31, 1994 and $385 million
for 1993, would have been required to achieve a ratio of 1.0.
</TABLE>
Exhibit 23.1
Consent of Independent Auditors
The Board of Directors
US Airways, Inc.:
We consent to the use of our report dated February 25,
1998 incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the
prospectus.
KPMG Peat Marwick LLP
Washington, DC
September 28, 1998
Exhibit 23.3
Consent of Skadden, Arps, Slate, Meagher & Flom LLP
The Board of Directors
US Airways, Inc.:
We consent to reference to our firm under the
heading "Certain United States Federal Income Tax
Consequences" in the prospectus. In giving this consent,
we do not thereby admit that we are in the category of
persons whose consent is required under Section 7 of the
Act or the rules and regulations of the Commission.
Skadden, Arps, Slate,
Meagher & Flom LLP
Washington, D.C.
September 28, 1998
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, Rakesh Gangwal,
Director of US Airways, Inc. (the "Company"), do hereby appoint
Lawrence M. Nagin and Terry L. Hall, and each of them (with full
power to each of them to act alone), attorney and agent for me
and in my name and on my behalf to sign all Registration
Statements on Form S-3 or other appropriate Forms, including any
supplements and amendments thereto, of the Company which shall
be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, with respect to the proposed
registration of the Company's pass through certificates.
IN WITNESS WHEREOF, I have hereunto set my hand
this 28th day of September 1998.
/s/ Rakesh Gangwal
------------------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, Robert LeBuhn,
Director of US Airways, Inc. (the "Company"), do hereby appoint
Lawrence M. Nagin and Terry L. Hall, and each of them (with full
power to each of them to act alone), attorney and agent for me
and in my name and on my behalf to sign all Registration
Statements on Form S-3 or other appropriate Forms, including any
supplements and amendments thereto, of the Company which shall
be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, with respect to the proposed
registration of the Company's pass through certificates.
IN WITNESS WHEREOF, I have hereunto set my hand
this 28th day of September 1998.
/s/ Robert LeBuhn
------------------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, George J. W.
Goodman, Director of US Airways, Inc. (the "Company"), do hereby
appoint Lawrence M. Nagin and Terry L. Hall, and each of them
(with full power to each of them to act alone), attorney and
agent for me and in my name and on my behalf to sign all
Registration Statements on Form S-3 or other appropriate Forms,
including any supplements and amendments thereto, of the Company
which shall be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to
the proposed registration of the Company's pass through
certificates.
IN WITNESS WHEREOF, I have hereunto set my hand
this 28th day of September 1998.
/s/ George J. W. Goodman
------------------------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, Hanne M. Merriman,
Director of US Airways, Inc. (the "Company"), do hereby appoint
Lawrence M. Nagin and Terry L. Hall, and each of them (with full
power to each of them to act alone), attorney and agent for me
and in my name and on my behalf to sign all Registration
Statements on Form S-3 or other appropriate Forms, including any
supplements and amendments thereto, of the Company which shall
be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, with respect to the proposed
registration of the Company's pass through certificates.
IN WITNESS WHEREOF, I have hereunto set my hand
this 28th day of September 1998.
/s/ Hanne M. Merriman
---------------------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, Mathias J. DeVito,
Director of US Airways, Inc. (the "Company"), do hereby appoint
Lawrence M. Nagin and Terry L. Hall, and each of them (with full
power to each of them to act alone), attorney and agent for me
and in my name and on my behalf to sign all Registration
Statements on Form S-3 or other appropriate Forms, including any
supplements and amendments thereto, of the Company which shall
be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, with respect to the proposed
registration of the Company's pass through certificates.
IN WITNESS WHEREOF, I have hereunto set my hand
this 28th day of September 1998.
/s/ Mathias J. DeVito
---------------------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, John G. Medlin,Jr.,
Director of US Airways, Inc. (the "Company"), do hereby appoint
Lawrence M. Nagin and Terry L. Hall, and each of them (with full
power to each of them to act alone), attorney and agent for me
and in my name and on my behalf to sign all Registration
Statements on Form S-3 or other appropriate Forms, including any
supplements and amendments thereto, of the Company which shall
be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, with respect to the proposed
registration of the Company's pass through certificates.
IN WITNESS WHEREOF, I have hereunto set my hand
this 28th day of September 1998.
/s/ John G. Medlin, Jr.
----------------------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, Edward A. Horrigan,
Jr., Director of US Airways, Inc. (the "Company"), do hereby
appoint Lawrence M. Nagin and Terry L. Hall, and each of them
(with full power to each of them to act alone), attorney and
agent for me and in my name and on my behalf to sign all
Registration Statements on Form S-3 or other appropriate Forms,
including any supplements and amendments thereto, of the Company
which shall be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to
the proposed registration of the Company's pass through
certificates.
IN WITNESS WHEREOF, I have hereunto set my hand
this 28th day of September 1998.
/s/ Edward A. Horrigan, Jr.
--------------------------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, Raymond W. Smith,
Director of US Airways, Inc. (the "Company"), do hereby appoint
Lawrence M. Nagin and Terry L. Hall, and each of them (with full
power to each of them to act alone), attorney and agent for me
and in my name and on my behalf to sign all Registration
Statements on Form S-3 or other appropriate Forms, including any
supplements and amendments thereto, of the Company which shall
be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, with respect to the proposed
registration of the Company's pass through certificates.
IN WITNESS WHEREOF, I have hereunto set my hand
this 28th day of September 1998.
/s/ Raymond W. Smith
--------------------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, John W. Harris,
Director of US Airways, Inc. (the "Company"), do hereby appoint
Lawrence M. Nagin and Terry L. Hall, and each of them (with full
power to each of them to act alone), attorney and agent for me
and in my name and on my behalf to sign all Registration
Statements on Form S-3 or other appropriate Forms, including any
supplements and amendments thereto, of the Company which shall
be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, with respect to the proposed
registration of the Company's pass through certificates.
IN WITNESS WHEREOF, I have hereunto set my hand
this 28th day of September 1998.
/s/ John W. Harris
------------------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, Robert L. Johnson,
Director of US Airways, Inc. (the "Company"), do hereby appoint
Lawrence M. Nagin and Terry L. Hall, and each of them (with full
power to each of them to act alone), attorney and agent for me
and in my name and on my behalf to sign all Registration
Statements on Form S-3 or other appropriate Forms, including any
supplements and amendments thereto, of the Company which shall
be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, with respect to the proposed
registration of the Company's pass through certificates.
IN WITNESS WHEREOF, I have hereunto set my hand
this 28th day of September 1998.
/s/ Robert L. Johnson
---------------------
EXHIBIT 25.1
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)
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation) (I.R.S. Employer
or organization if not a U.S. Identification No.)
national bank
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Maureen Scannell Bateman, Esq. Executive Vice President
and General Counsel
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
(US AIRWAYS, INC.)
(Exact name of obligor as specified in its charter)
DELAWARE 53-0218143
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2345 Crystal Drive,
Arlington, Virginia 22227
(Address of principal executive offices) (Zip Code)
(TYPE OF SECURITIES)
Pass Through Certificates
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory
authority to which it is subject.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System,
Washington, D.C., Federal Deposit Insurance Corporation,
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust
powers.
Trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with Obligor.
If the Obligor is an affiliate of the trustee, describe each
such affiliation.
The obligor is not an affiliate of the trustee or of its
parent, State Street Corporation.
(See note on page 2.)
Item 3. through Item 15. Not applicable.
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement
of eligibility.
1. A copy of the articles of association of the trustee as
now in effect.
A copy of the Articles of Association of the trustee, as now
in effect, is on file with the Securities and Exchange
Commission as Exhibit 1 to Amendment No. 1 to the Statement
of Eligibility and Qualification of Trustee (Form T-1) filed
with the Registration Statement of Morse Shoe, Inc. (File
No. 22-17940) and is incorporated herein by reference
thereto.
2. A copy of the certificate of authority of the trustee to
commence business, if not contained in the articles of
association.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the
trustee to commence business was necessary or issued is on
file with the Securities and Exchange Commission as Exhibit
2 to Amendment No. 1 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the
Registration Statement of Morse Shoe, Inc. (File No. 22-
17940) and is incorporated herein by reference thereto.
3. A copy of the authorization of the trustee to exercise
corporate trust powers, if such authorization is not
contained in the documents specified in paragraph (1) or
(2), above.
A copy of the authorization of the trustee to exercise
corporate trust powers is on file with the Securities and
Exchange Commission as Exhibit 3 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee (Form
T-1) filed with the Registration Statement of Morse Shoe,
Inc. (File No. 22-17940) and is incorporated herein by
reference thereto.
4. A copy of the existing by-laws of the trustee, or
instruments corresponding thereto.
A copy of the by-laws of the trustee, as now in effect, is
on file with the Securities and Exchange Commission as
Exhibit 4 to the Statement of Eligibility and Qualification
of Trustee (Form T-1) filed with the Registration Statement
of Eastern Edison Company (File No. 33-37823) and is
incorporated herein by reference thereto.
5. A copy of each indenture referred to in Item 4. if the
obligor is in default.
Not applicable.
6. The consents of United States institutional trustees
required by Section 321(b) of the Act.
The consent of the trustee required by Section 321(b) of the
Act is annexed hereto as Exhibit 6 and made a part hereof.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority is annexed hereto as
Exhibit 7 and made a part hereof.
NOTES
In answering any item of this Statement of Eligibility
which relates to matters peculiarly within the knowledge of
the obligor or any underwriter for the obligor, the trustee
has relied upon information furnished to it by the obligor
and the underwriters, and the trustee disclaims
responsibility for the accuracy or completeness of such
information.
The answer furnished to Item 2. of this statement will
be amended, if necessary, to reflect any facts which differ
from those stated and which would have been required to be
stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act
of 1939, as amended, the trustee, State Street Bank and
Trust Company, a corporation organized and existing under
the laws of The Commonwealth of Massachusetts, has duly
caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in
the City of Boston and The Commonwealth of Massachusetts, on
the 14th day of September 1998.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Ruth A. Smith
---------------------
NAME Ruth A. Smith
TITLE Vice President
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the
Trust Indenture Act of 1939, as amended, in connection with
the proposed issuance by US AIRWAYS, INC. of its PASSTHROUGH
TRUST CERTIFICATES, we hereby consent that reports of
examination by Federal, State, Territorial or District
authorities may be furnished by such authorities to the
Securities and Exchange Commission upon request therefor.
STATE STREET BANK AND TRUST COMPANY
By:/s/ Ruth A. Smith
----------------------
NAME: Ruth A. Smith
TITLE: Vice President
Dated: September 14, 1998
<TABLE> EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company, Massachusetts and
foreign and domestic subsidiaries, a state banking institution organized and operating under
the banking laws of this commonwealth and a member of the Federal Reserve System, at the close
of business June 30, 1998, published in accordance with a call made by the Federal Reserve Bank
of this District pursuant to the provisions of the Federal Reserve Act and in accordance with a
call made by the Commissioner of Banks under General Laws, Chapter 172, Section 22(a).
<CAPTION>
Thousands of
ASSETS Dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency
and coin 1,553,703
Interest-bearing balances 12,440,716
Securities 9,436,138
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary 8,785,353
Loans and lease financing receivables:
Loans and leases, net of unearned income 6,633,608
Allowance for loan and lease losses 92,999
Allocated transfer risk reserve 0
Loans and leases, net of unearned income and allowances 6,540,609
Assets held in trading accounts 1,267,679
Premises and fixed assets 491,928
Other real estate owned 100
Investments in unconsolidated subsidiaries 1,278
Customers' liability to this bank on acceptances outstanding 68,312
Intangible assets 231,294
Other assets 1,667,282
----------
Total assets 42,484,392
==========
LIABILITIES
Deposits:
In domestic offices 12,553,371
Noninterest-bearing 10,204,405
Interest-bearing 2,348,966
In foreign offices and Edge subsidiary 16,961,571
Noninterest-bearing 154,792
Interest-bearing 16,806,779
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary 8,182,794
Demand notes issued to the U.S. Treasury and Trading Liabilities 0
Trading liabilities 883,096
Other borrowed money 361,141
Subordinated notes and debentures 0
Bank's liability on acceptances executed and outstanding 68,289
Other liabilities 1,017,284
Total liabilities 40,027,546
----------
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock 29,931
Surplus 455,288
Undivided profits and capital reserves/Net unrealized
holding gains (losses) 1,964,924
Net unrealized holding gains (losses) on
available-for-sale securities 15,557
Cumulative foreign currency translation adjustments (8,854)
Total equity capital 2,456,846
---------
Total liabilities and equity capital 42,484,392
==========
</TABLE>
I, Rex S. Schuette, Senior Vice President and Comptroller of
the above named bank do hereby declare that this Report of
Condition has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal
Reserve System and is true to the best of my knowledge and
belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of
this Report of Condition and declare that it has been
examined by us and to the best of our knowledge and belief
has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve
System and is true and correct.
David A. Spina
Marshall N. Carter
Truman S. Casner
