SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
December 14, 1998
US AIRWAYS, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-8442 53-0218143
(State of Incorporation (Commission File Number) (IRS Employer
of registrant) Identification Number)
US Airways, Inc.
2345 Crystal Drive, Arlington, VA 22227
(Address of principal executive offices)(zip code)
(703) 872-7000
(Registrant's telephone number, including area code)
Item 7. Financial Information and Exhibits
The following documents are being filed as Exhibits in connection with,
and incorporated by reference into, US Airways, Inc.'s Registration Statement
on Form S-3 (Registration No. 333-64425). The Registration Statement, and the
Prospectus Supplement, dated December 4, 1998, to the Prospectus, dated No-
vember 17, 1998, relate to the offering of US Airways, Inc. Pass Through Cer-
tificates, Series 1998-1.
Reg. No.
333-64425
Exhibit No. Document
- ---------- --------
4(a)(i) Pass Through Trust Agreement, dated December 4,
1998, between State Street Bank and Trust Company,
as Pass Through Trustee, and US Airways, Inc.*
4 (a)(ii) Pass Through Trust Supplement No. 1998-1A, dated
December 14, 1998, between State Street Bank and
Trust Company, as Pass Through Trustee, and US
Airways, Inc.+
4 (a)(iii) Pass Through Trust Supplement No. 1998-1B, dated
December 14, 1998, between State Street Bank and
Trust Company, as Pass Through Trustee, and US
Airways, Inc.+
4 (a)(iv) Deposit Agreement (Class A), dated December 14,
1998, between First Security Bank, National
Association, as Escrow Agent, and Credit Suisse
First Boston, as Class A Depositary+
4 (a)(v) Deposit Agreement (Class B), dated December 14,
1998, between First Security Bank, National
Association, as Escrow Agent, and Credit Suisse
First Boston, as Class B Depositary+
4 (a)(vi) Revolving Credit Agreement (Class A), dated
December 14, 1998, between State Street Bank and
Trust Company, as Subordination Agent, and ABN AMRO
Bank N.V., as Liquidity Provider+
4 (a)(vii) Revolving Credit Agreement (Class B), dated
December 14, 1998, between State Street Bank and
Trust Company, as Subordination Agent, and ABN AMRO
Bank N.V., as Liquidity Provider+
4 (a)(viii) Revolving Credit Agreement (Class C), dated
December 14, 1998, between State Street Bank and
Trust Company, as Subordination Agent, and ABN AMRO
Bank N.V., as Liquidity Provider+
4 (a)(ix) Intercreditor Agreement, dated December 14, 1998,
among State Street Bank and Trust Company, as Pass
Through Trustee and as Subordination Agent, and ABN
AMRO Bank N.V., as Liquidity Provider+
4(a)(x) Escrow and Paying Agent Agreement (Class A), dated
December 14, 1998, among First Security Bank,
National Association, as Escrow Agent, Morgan
Stanley & Co. Incorporated, Credit Suisse First
Boston Corporation, Lehman Brothers Inc. and
Salomon Smith Barney Inc., as Underwriters, and
State Street Bank and Trust Company, as Class A
Trustee and as Paying Agent+
4(a)(xi) Escrow and Paying Agent Agreement (Class B), dated
December 14, 1998, among First Security Bank,
National Association, as Escrow Agent, Morgan
Stanley & Co. Incorporated, Credit Suisse First
Boston Corporation, Lehman Brothers Inc. and
Salomon Smith Barney Inc., as Underwriters, and
State Street Bank and Trust Company, as Class B
Trustee and as Paying Agent+
4(a)(xii) Note Purchase Agreement, dated December 14, 1998,
among US Airways, Inc., State Street Bank and Trust
Company, as Pass Through Trustee, Subordination
Agent, and as Paying Agent, and First Security
Bank, National Association, as Escrow Agent+
4(a)(xiii) Exhibit A-1 to Note Purchase Agreement - Form of
Leased Aircraft Participation Agreement+
4(a)(xiv) Exhibit A-2 to Note Purchase Agreement - Form of
Lease+
4(a)(xv) Exhibit A-3 to Note Purchase Agreement - Form of
Leased Aircraft Indenture+
4(a)(xvi) Exhibit A-4 to Note Purchase Agreement - Form of
Aircraft Purchase Agreement Assignment+
4(a)(xvii) Exhibit A-5 to Note Purchase Agreement - Form of
Leased Aircraft Trust Agreement+
4(a)(xviii) Exhibit C-1 to Note Purchase Agreement - Form of
Owned Aircraft Participation Agreement+
4(a)(xix) Exhibit C-2 to Note Purchase Agreement - Form of
Owned Aircraft Indenture+
4(a)(xx) Class A Global Certificate +
4(a)(xxi) Class B Global Certificate +
+ Filed herewith.
* Previously filed. See Registration Statement on Form
S-3(333-64425), filed with the Securities and Exchange
Commission on September 28, 1998.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
US AIRWAYS, INC.
December 28, 1998 By: /s/ Thomas A. Mutryn
-----------------------
Thomas A. Mutryn
Senior Vice President, Finance
Chief Financial Officer
EXHIBIT 4(a)(ii)
TRUST SUPPLEMENT No. 1998-1A
Dated as of December 14, 1998
between
STATE STREET BANK AND TRUST COMPANY
as Trustee,
and
US AIRWAYS, INC.
to
PASS THROUGH TRUST AGREEMENT
Dated as of December 4, 1998
US Airways Pass Through Trust 1998-1A
6.85% US Airways
Pass Through Certificates,
Series 1998-1A
This Trust Supplement No. 1998-1A, dated as of December 14, 1998 (herein
called the "Trust Supplement"), between US Airways, Inc., Inc., a Delaware
corporation (the "Company"), and State Street Bank and Trust Company (the
"Trustee"), to the Pass Through Trust Agreement, dated as of December 4,
1998, between the Company and the Trustee (the "Basic Agreement").
W I T N E S S E T H:
--------------------
WHEREAS, the Basic Agreement, unlimited as to the aggregate principal
amount of Certificates (unless otherwise specified herein, capitalized terms
used herein without definition having the respective meanings specified in
the Basic Agreement) which may be issued thereunder, has heretofore been
executed and delivered;
WHEREAS, the Company obtained commitments from AVSA for the delivery of
23 Aircraft;
WHEREAS, the Company intends to finance the acquisition of each such
Aircraft either (i) through separate leveraged lease transactions, in which
case the Company will lease such Aircraft (collectively, the "Leased
Aircraft") or (ii) through separate secured loan transactions, in which case
the Company will own such Aircraft (collectively, the "Owned Aircraft");
WHEREAS, in the case of each Leased Aircraft, each Owner Trustee, acting
on behalf of the corresponding Owner Participant, will issue pursuant to an
Indenture, on a non-recourse basis, Equipment Notes in order to finance a
portion of its purchase price of such Leased Aircraft;
WHEREAS, in the case of each Owned Aircraft, the Company will issue
pursuant to an Indenture, on a recourse basis, Equipment Notes to finance a
portion of the purchase price of such Owned Aircraft;
WHEREAS, the Trustee hereby declares the creation of this US Airways
Pass Through Trust 1998-1A (the "Applicable Trust") for the benefit of the
Applicable Certificateholders, and the initial Applicable Certificateholders
as the grantors of the Applicable Trust, by their respective acceptances of
the Applicable Certificates, join in the creation of the Applicable Trust
with the Trustee;
WHEREAS, all Certificates to be issued by the Applicable Trust will
evidence fractional undivided interests in the Applicable Trust and will
convey no rights, benefits or interests in respect of any property other than
the Trust Property except for those Certificates to which an Escrow Receipt
has been affixed;
2
WHEREAS, the Escrow Agent, the Trustee, the Escrow Paying Agent, and the
Underwriters have contemporaneously herewith entered into an Escrow Agreement
with the Escrow Paying Agent pursuant to which the Underwriters have
delivered to the Escrow Agent a portion of the proceeds from the sale of the
Applicable Certificates and have irrevocably instructed the Escrow Agent to
withdraw and pay funds from such proceeds upon request and proper
certification by the Trustee to purchase Equipment Notes as the remaining
undelivered Aircraft are delivered by AVSA under the Aircraft Purchase
Agreement from time to time prior to the Delivery Period Termination Date;
WHEREAS, the Escrow Agent on behalf of the Applicable Certificateholders
has contemporaneously herewith entered into a Deposit Agreement with the
Depositary under which the Deposits referred to therein will be made and from
which it will withdraw funds to allow the Trustee to purchase Equipment Notes
from time to time prior to the Delivery Period Termination Date;
WHEREAS, pursuant to the terms and conditions of the Basic Agreement as
supplemented by this Trust Supplement (the "Agreement") and the Note Purchase
Agreement, (i) on or shortly following the date hereof, the Trustee on behalf
of the Applicable Trust, using a portion of the proceeds from the sale of the
Applicable Certificates, shall purchase one or more Equipment Notes issued
pursuant to the Participation Agreements relating to the Aircraft described
in Exhibit C hereto (the "Delivered Aircraft Equipment Notes") in respect of
each of five of the Aircraft (such five Aircraft being the "Delivered
Aircraft") having the same interest rate as, and final maturity date not
later than the final Regular Distribution Date of, the Applicable
Certificates issued hereunder and (ii) with respect to each remaining
Aircraft, the Trustee on behalf of the Applicable Trust, using funds
withdrawn under the Escrow Agreement, shall purchase one or more Equipment
Notes having the same interest rate as, and final maturity date not later
than the final Regular Distribution Date of, the Applicable Certificates
issued hereunder and, in each case, shall hold such Equipment Notes in trust
for the benefit of the Applicable Certificateholders;
WHEREAS, all of the conditions and requirements necessary to make this
Trust Supplement, when duly executed and delivered, a valid, binding and
legal instrument in accordance with its terms and for the purposes herein
expressed, have been done, performed and fulfilled, and the execution and
delivery of this Trust Supplement in the form and with the terms hereof have
been in all respects duly authorized;
WHEREAS, this Trust Supplement is subject to the provisions of the Trust
Indenture Act of 1939, as amended, and shall, to the extent applicable, be
governed by such provisions;
3
NOW THEREFORE, in consideration of the premises herein, it is agreed
between the Company and the Trustee as follows:
ARTICLE I
THE CERTIFICATES
Section 1.01. The Certificates. There is hereby created a series of
Certificates to be issued under the Agreement to be distinguished and known
as "6.85% US Airways Pass Through Certificates, Series 1998-1A" (hereinafter
defined as the "Applicable Certificates"). Each Applicable Certificate
represents a fractional undivided interest in the Applicable Trust created
hereby. The Applicable Certificates shall be the only instruments evidencing
a fractional undivided interest in the Applicable Trust.
The terms and conditions applicable to the Applicable Certificates are
as follows:
(a) The aggregate principal amount of the Applicable Certificates
that shall be authenticated under the Agreement (except for Applicable
Certificates authenticated and delivered pursuant to Sections 3.03, 3.04 and
3.06 of the Basic Agreement) is $366,486,000.
(b) The Regular Distribution Dates with respect to any payment of
Scheduled Payments means January 30 and July 30 of each year, commencing on
January 30, 1999, until payment of all of the Scheduled Payments to be made
under the Equipment Notes has been made.
(c) The Special Distribution Dates with respect to the Applicable
Certificates means any Business Day on which a Special Payment is to be
distributed pursuant to the Agreement.
(d) At the Escrow Agent's request under the Escrow Agreement, the
Trustee shall affix the corresponding Escrow Receipt to each Applicable
Certificate. In any event, any transfer or exchange of any Applicable
Certificate shall also effect a transfer or exchange of the related Escrow
Receipt. Prior to the Final Withdrawal Date, no transfer or exchange of any
Applicable Certificate shall be permitted unless the corresponding Escrow
Receipt is attached thereto and also is so transferred or exchanged. By
acceptance of any Applicable Certificate to which an Escrow Receipt is
attached, each Holder of such an Applicable Certificate acknowledges and
accepts the
4
restrictions on transfer of the Escrow Receipt set forth herein and in the
Escrow Agreement.
(e) (i) The Applicable Certificates shall be in the form
attached hereto as Exhibit A. Any Person acquiring or accepting an
Applicable Certificate or an interest therein will, by such acquisition or
acceptance, be deemed to represent and warrant that either (i) the assets of
an employee benefit plan subject to Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or of a plan subject to Section
4975 of the Internal Revenue Code of 1986, as amended (the "Code"), have not
been used to purchase Applicable Certificates or an interest therein or (ii)
the purchase and holding of Applicable Certificates is exempt from the
prohibited transaction restrictions of ERISA and the Code pursuant to one or
more prohibited transaction statutory or administrative exemptions.
(ii) The Applicable Certificates shall be Book-Entry Certificates
and shall be subject to the conditions set forth in the Letter of
Representations between the Company and the Clearing Agency attached hereto
as Exhibit B.
(f) The Applicable Certificates are subject to the Intercreditor
Agreement, the Deposit Agreement and the Escrow Agreement.
(g) The Applicable Certificates will have the benefit of the
Liquidity Facility.
(h) The Responsible Party is the Company.
(i) The particular "sections of the Note Purchase Agreement", for
purposes of clause (3) of Section 7.07 of the Basic Agreement, are Section
6(b) (with respect to Owned Aircraft) and Section 6(c) (with respect to
Leased Aircraft) of the relevant Participation Agreement.
ARTICLE II
DEFINITIONS
Section 2.01. Definitions. For all purposes of the Basic Agreement as
supplemented by this Trust Supplement, the following capitalized terms have
the following meanings:
Agreement: Has the meaning specified in the recitals hereto.
5
Aircraft: Means each of the New Aircraft or Substitute Aircraft in
respect of which a Participation Agreement is entered into in accordance with
the Note Purchase Agreement.
Aircraft Purchase Agreement: Has the meaning specified in the Note
Purchase Agreement.
Applicable Certificateholder: Means the Person in whose name an
Applicable Certificate is registered on the Register for the Applicable
Certificates.
Applicable Delivery Date: Has the meaning specified in Section 5.01(b)
of this Trust Supplement.
Applicable Participation Agreement: Has the meaning specified in
Section 5.01(b) of this Trust Supplement.
AVSA: Means AVSA, S.A.R.L.
Business Day: Means any day other than a Saturday, a Sunday or a day on
which commercial banks are required or authorized to close in New York, New
York, Salt Lake City, Utah, Pittsburgh, Pennsylvania, or, so long as any
Applicable Certificate is outstanding, the city and state in which the
Trustee or any Loan Trustee maintains its Corporate Trust Office or receives
and disburses funds.
Cut-off Date: Means the earlier of (a) the Delivery Period Termination
Date and (b) the date on which a Triggering Event occurs.
Delivery Date: Has the meaning specified in the Participation
Agreements.
Delivery Notice: Has the meaning specified in the Participation
Agreements.
Delivery Period Termination Date: Means the earlier of (a) October 31,
1999 and (b) the date on which Equipment Notes issued with respect to all of
the New Aircraft (or Substitute Aircraft in lieu thereof) have been purchased
by the Applicable Trust and the Other Trusts in accordance with the Note
Purchase Agreement.
Deposits: Has the meaning specified in the Deposit Agreement.
Deposit Agreement: Means the Deposit Agreement dated as of December 14,
1998 relating to the Applicable Certificates between the Depositary and the
Escrow
6
Agent, as the same may be amended, supplemented or otherwise modified from
time to time in accordance with its terms.
Depositary: Means Credit Suisse First Boston, New York branch
Distribution Date: Means any Regular Distribution Date or Special
Distribution Date as the context requires.
Escrow Agent: Means, initially, First Security Bank, National
Association, and any replacement or successor therefor appointed in
accordance with the Escrow Agreement.
Escrow Agreement: Means the Escrow and Paying Agent Agreement dated as
of December 14, 1998 relating to the Applicable Certificates, among the
Escrow Agent, the Escrow Paying Agent, the Trustee and Underwriters, as the
same may be amended, supplemented or otherwise modified from time to time in
accordance with its terms.
Escrow Paying Agent: Means the Person acting as paying agent under the
Escrow Agreement.
Escrow Receipt: Means the receipt substantially in the form annexed to
the Escrow Agreement representing a fractional undivided interest in the
funds held in escrow thereunder.
Final Withdrawal: Has the meaning specified in the Escrow Agreement.
Final Withdrawal Date: Has the meaning specified in the Escrow
Agreement.
Final Withdrawal Notice: Has the meaning specified in Section 5.02 of
this Trust Supplement.
Indenture: Means each of the separate trust indentures and mortgages
relating to the Aircraft, each as specified or described in a Delivery Notice
delivered pursuant to the related Participation Agreement, in each case as
the same may be amended, supplemented or otherwise modified from time to time
in accordance with its terms.
7
Intercreditor Agreement: Means the Intercreditor Agreement dated as of
December 14, 1998 among the Trustee, the Other Trustees, the Liquidity
Provider, the liquidity providers relating to the Certificates issued under
(and as defined in) each of the Other Agreements, and State Street Bank and
Trust Company, as Subordination Agent and as trustee thereunder, as amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
Investors: Means the Underwriters together with all subsequent
beneficial owners of the Applicable Certificates.
Lease: Means, with respect to each Leased Aircraft, the lease between
an Owner Trustee, as the lessor, and the Company, as the lessee, referred to
in the related Indenture, as such lease may be amended, supplemented or
otherwise modified in accordance with its terms.
Leased Aircraft: Has the meaning specified in the third recital to this
Trust Supplement.
Liquidity Facility: Means, initially, the Revolving Credit Agreement
dated as of December 14, 1998 relating to the Applicable Certificates,
between the Liquidity Provider and State Street Bank and Trust Company as
Subordination Agent, as agent and trustee for the Applicable Trust, and, from
and after the replacement of such agreement pursuant to the Intercreditor
Agreement, the replacement liquidity facility therefor, in each case as
amended, supplemented or otherwise modified from time to time in accordance
with their respective terms.
Liquidity Provider: Means, initially, ABN AMRO Bank N.V., acting
through its Chicago Branch, and any replacements or successors therefor
appointed in accordance with the Intercreditor Agreement.
New Aircraft: Has the meaning specified in the Note Purchase Agreement.
Note Documents: Means the Note Purchase Agreement, this Trust Supplement
and, with respect to any Equipment Note, means (i) the Indenture and the
Participation Agreement relating to such Equipment Note, and (ii) in the case
of any Equipment Note related to a Leased Aircraft, the Lease relating to
such Leased Aircraft.
Note Purchase Agreement: Means the Note Purchase Agreement dated as of
December 14, 1998 among the Trustee, the Other Trustees, the Company, the
Escrow Agent, the Escrow Paying Agent and the Subordination Agent, providing
for, among other things, the purchase of certain Equipment Notes by the
Trustee on behalf of the
8
Trust, as the same may be amended, supplemented or otherwise modified from
time to time, in accordance with its terms.
Notice of Purchase Withdrawal: Has the meaning specified in the Deposit
Agreement.
Other Agreements: Means (i) the Basic Agreement as supplemented by
Trust Supplement No. 1998-1B dated the date hereof relating to US Airways
Pass Through Trust 1998-1B and (ii) the Basic Agreement as supplemented by
Trust Supplement 1998-1C dated the date hereof relating to US Airways Pass
Through Trust 1998-1C.
Other Trustees: Means the trustees under the Other Agreements, and any
successor or other trustee appointed as provided therein.
Other Trusts: Means the US Airways Pass Through Trust 1998-1B and the
US Airways Pass Through Trust 1998-1C, each created on the date hereof.
Owned Aircraft: Has the meaning specified in the third recital to this
Trust Supplement.
Owner Participant: With respect to any Equipment Note relating to a
Leased Aircraft, means the "Owner Participant" as referred to in the
Indenture pursuant to which such Equipment Note is issued and any permitted
successor or assign of such Owner Participant; and Owner Participants at any
time of determination means all of the Owner Participants thus referred to in
the Indentures.
Owner Trustee: With respect to any Equipment Note relating to a Leased
Aircraft, means the "Owner Trustee", as referred to in the Indenture pursuant
to which such Equipment Note is issued, not in its individual capacity but
solely as trustee; and Owner Trustees means all of the Owner Trustees party
to any of the Indentures.
Participation Agreement: Means each Participation Agreement relating to
the Aircraft described in Exhibit C hereto or to be entered into by the
Trustee pursuant to the Note Purchase Agreement, as the same may be amended,
supplemented or otherwise modified in accordance with its terms.
Pool Balance: Means, as of any date, (i) the original aggregate face
amount of the Applicable Certificates less (ii) the aggregate amount of all
payments made in respect of such Applicable Certificates or in respect of
Deposits relating to the Applicable Trust other than payments made in respect
of interest or premium thereon or reimbursement of any costs or expenses
incurred in connection therewith. The Pool
9
Balance as of any Distribution Date will be computed after giving effect to
any special distribution with respect to unused Deposits, payment of
principal of the Equipment Notes or payment with respect to other Trust
Property and the distribution thereof to be made on that date.
Pool Factor: Means, as of any Distribution Date, the quotient (rounded
to the seventh decimal place) computed by dividing (i) the Pool Balance by
(ii) the original aggregate face amount of the Applicable Certificates. The
Pool Factor as of any Distribution Date shall be computed after giving effect
to any special distribution with respect to unused Deposits, payment of
principal of the Equipment Notes or other Trust Property and the distribution
thereof to be made on that date.
Postponed Notes: Means the Delivered Aircraft Equipment Notes having a
scheduled Transfer Date of December 15, 1998 as specified in Exhibit C hereto
and the Delivered Aircraft Equipment Notes to be held in the Trust as to
which a Postponement Notice shall have been delivered pursuant to Section
5.01(c).
Postponement Notice: Means an Officer's Certificate of the Company (i)
requesting that the Trustee temporarily postpone purchase of one or more of
the Delivered Aircraft Equipment Notes to a date which is later than the
scheduled Transfer Date therefor as specified in Exhibit C hereto, (ii)
identifying the amount of the purchase price of each such Equipment Note and
the aggregate purchase price for all such Equipment Notes, (iii) setting
forth the reasons for such postponement and (iv) with respect to each such
Equipment Note, either (a) setting or resetting a new Transfer Date (which
shall be on or prior to December 28, 1998 (the "Postponement Cut-Off Date"))
for payment by the Trustee of such purchase price and issuance of the related
Equipment Note, or (b) indicating that such new Transfer Date (which shall be
on or prior to the Postponement Cut-off Date) will be set by subsequent
written notice not less than one Business Day prior to such new Transfer
Date.
Prospectus Supplement: Means the Prospectus Supplement dated December
4, 1998, relating to the offering of the Class A Certificates and Class B
Certificates (as defined in the Intercreditor Agreement)
Special Redemption Premium: Means the premium payable by the Company in
respect of the Final Withdrawal pursuant to the Note Purchase Agreement.
Special Payment: Means any payment (other than a Scheduled Payment) in
respect of, or any proceeds of, any Equipment Note or Trust Indenture Estate
(as defined in each Indenture) or Special Redemption Premium.
10
Substitute Aircraft: Has the meaning specified in the Note Purchase
Agreement.
Transfer Date: Has the meaning assigned to the term "Delivery Date" in
the Participation Agreement relating to each Delivered Aircraft.
Triggering Event: Has the meaning assigned to such term in the
Intercreditor Agreement.
Trust Property: Means (i) subject to the Intercreditor Agreement, the
Equipment Notes held as the property of the Applicable Trust, all monies at
any time paid thereon and all monies due and to become due thereunder, (ii)
funds from time to time deposited in the Certificate Account and the Special
Payments Account and, subject to the Intercreditor Agreement, any proceeds
from the sale by the Trustee pursuant to Article VI of the Basic Agreement of
any Equipment Note and (iii) all rights of the Applicable Trust and the
Trustee, on behalf of the Applicable Trust, under the Intercreditor
Agreement, the Escrow Agreement, the Note Purchase Agreement and the
Liquidity Facility, including, without limitation, all rights to receive
certain payments thereunder, and all monies paid to the Trustee on behalf of
the Applicable Trust pursuant to the Intercreditor Agreement or the Liquidity
Facility, provided that rights with respect to the Deposits or under the
Escrow Agreement, except for the right to direct withdrawals for the purchase
of Equipment Notes to be held herein, will not constitute Trust Property.
Underwriters: Means, collectively, Morgan Stanley & Co. Incorporated,
Credit Suisse First Boston Corporation, Lehman Brothers, Inc. and Salomon
Smith Barney Inc.
Underwriting Agreement: Means the Underwriting Agreement dated
December 4, 1998 among the Underwriters and the Company, as the same may be
amended, supplemented or otherwise modified from time to time in accordance
with its terms.
11
ARTICLE III
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
Section 3.01. Additions to Article IV of the Basic Agreement. In
addition to the provisions of Article IV of the Basic Agreement, the
following provisions shall apply to the Applicable Trust:
(a) Upon the payment of Special Redemption Premium to the
Trustee under the Note Purchase Agreement, the Trustee, upon receipt thereof,
shall immediately deposit the aggregate amount of such Special Redemption
Premium in the Special Payments Account;
(b) The distribution of amounts of Special Redemption Premium
as provided for in Section 4.02(b) of the Basic Agreement shall be on the
Special Distribution Date with respect to such Special Payment or as soon
thereafter as the Trustee has confirmed receipt of the related Special
Redemption Premium;
(c) In the event of the payment of a Special Redemption Premium
by the Company to the Trustee under the Note Purchase Agreement, the notice
provided for in Section 4.02(c) of the Basic Agreement shall be mailed,
together with the notice by the Escrow Paying Agent under Section 2.06 of the
Escrow Agreement, not less than 15 days prior to the Special Distribution
Date for such amount, which Special Distribution Date shall be the Final
Withdrawal Date; and
(d) The last sentence of the first paragraph of Section 4.02(c)
of the Basic Agreement shall apply equally if the amount of Special
Redemption Premium, if any, has not been calculated at the time the Trustee
mails notice of a Special Payment.
Section 3.02. Statements to Applicable Certificateholders. (a)
On each Distribution Date, the Trustee will include with each distribution to
Applicable Certificateholders of a Scheduled Payment or Special Payment, as
the case may be, a statement setting forth the information provided below (in
the case of a Special Payment, including any Special Redemption Premium,
reflecting in part the information provided by the Escrow Paying Agent under
the Escrow Agreement). Such statement shall set forth (per $1,000 face
amount Applicable Certificate as to (ii), (iii), (iv) and (v) below) the
following information:
(i) the aggregate amount of funds distributed on such Distribution
Date under the Agreement and under the Escrow Agreement, indicating the
amount allocable to each source;
12
(ii) the amount of such distribution under the Agreement allocable
to principal and the amount allocable to premium (including the Special
Redemption Premium), if any;
(iii) the amount of such distribution under the Agreement allocable
to interest;
(iv) the amount of such distribution under the Escrow Agreement
allocable to interest;
(v) the amount of such distribution under the Escrow Agreement
allocable to Deposits; and
(vi) the Pool Balance and the Pool Factor.
With respect to the Applicable Certificates registered in the name of a
Clearing Agency, on the Record Date prior to each Distribution Date, the
Trustee will request from such Clearing Agency a securities position listing
setting forth the names of all Clearing Agency Participants reflected on such
Clearing Agency's books as holding interests in the Applicable Certificates
on such Record Date. On each Distribution Date, the Trustee will mail to
each such Clearing Agency Participant the statement described above and will
make available additional copies as requested by such Clearing Agency
Participant for forwarding to holders of interests in the Applicable
Certificates.
(b) Within a reasonable period of time after the end of each
calendar year but not later than the latest date permitted by law, the
Trustee shall furnish to each Person who at any time during such calendar
year was an Applicable Certificateholder of record a statement containing the
sum of the amounts determined pursuant to clauses (a)(i), (a)(ii), (a)(iii),
(a)(iv) and (a)(v) above for such calendar year or, in the event such Person
was an Applicable Certificateholder of record during a portion of such
calendar year, for such portion of such year, and such other items as are
readily available to the Trustee and which an Applicable Certificateholder
shall reasonably request as necessary for the purpose of such Applicable
Certificateholder's preparation of its federal income tax returns. Such
statement and such other items shall be prepared on the basis of information
supplied to the Trustee by the Clearing Agency Participants and shall be
delivered by the Trustee to such Clearing Agency Participants to be available
for forwarding by such Clearing Agency Participants to the holders of
interests in the Applicable Certificates in the manner described in Section
3.02(a) of this Trust Supplement.
(c) Promptly following (i) the Delivery Period Termination Date, if
there has been any change in the information set forth in clauses (x), (y)
and (z) below from that set
13
forth in page S-35 of the Prospectus Supplement, and (ii) any early
redemption or purchase of, or any default in the payment of principal or
interest in respect of, any of the Equipment Notes held in the Applicable
Trust, or any Final Withdrawal, the Trustee shall furnish to Applicable
Certificateholders of record on such date a statement setting forth (x) the
expected Pool Balances for each subsequent Regular Distribution Date
following the Delivery Period Termination Date, (y) the related Pool Factors
for such Regular Distribution Dates and (z) the expected principal
distribution schedule of the Equipment Notes, in the aggregate, held as Trust
Property at the date of such notice. With respect to the Applicable
Certificates registered in the name of a Clearing Agency, on the Delivery
Period Termination Date, the Trustee will request from such Clearing Agency a
securities position listing setting forth the names of all Clearing Agency
Participants reflected on such Clearing Agency's books as holding interests
in the Applicable Certificates on such date. The Trustee will mail to each
such Clearing Agency Participant the statement described above and will make
available additional copies as requested by such Clearing Agency Participant
for forwarding to holders of interests in the Applicable Certificates.
(d) This Section 3.02 supersedes and replaces Section 4.03 of the
Basic Agreement.
ARTICLE IV
DEFAULT
Section 4.01. Purchase Rights of Certificateholders. By acceptance of
its Applicable Certificate, each Applicable Certificateholder agrees that at
any time after the occurrence and during the continuation of a Triggering
Event,
(i) each Class B Certificateholder shall have the right to
purchase all, but not less than all, of the applicable Certificates upon ten
days' written notice to the Trustee and each other Class B Certificateholder,
provided that (A) if prior to the end of such ten-day period any other Class
B Certificateholder notifies such purchasing Class B Certificateholder that
such other Class B Certificateholder wants to participate in such purchase,
then such other Class B Certificateholder may join with the purchasing Class
B Certificateholder to purchase all, but not less than all, of the Applicable
Certificates pro rata based on the Fractional Undivided Interest in the
Class B Trust held by each such Class B Certificateholder and (B) if prior to
the end of such ten-day period any other Class B Certificateholder fails to
notify the purchasing Class B Certificateholder of such other Class B
Certificateholder's desire to participate in such a purchase, then such other
Class B Certificateholder shall lose its right to purchase the Applicable
Certificates pursuant to this Section 4.01(a); and
14
(ii) each Class C Certificateholder shall have the right
(which shall not expire upon any purchase of the Applicable Certificates
pursuant to clause (i) above) to purchase all, but not less than all, of the
Applicable Certificates and the Class B Certificates upon ten days' written
notice to the Trustee, the Class B Trustee and each other Class C
Certificateholder, provided that (A) if prior to the end of such ten-day
period any other Class C Certificateholder notifies such purchasing Class C
Certificateholder that such other Class C Certificateholder wants to
participate in such purchase, then such other Class C Certificateholder may
join with the purchasing Class C Certificateholder to purchase all, but not
less than all, of the Certificates and the Class B Certificates pro rata
based on the Fractional Undivided Interest in the Class C Trust held by each
such Class C Certificateholder and (B) if prior to the end of such ten-day
period any other Class C Certificateholder fails to notify the purchasing
Class C Certificateholder of such other Class C Certificateholder's desire to
participate in such a purchase, then such other Class C Certificateholder
shall lose its right to purchase the Applicable Certificates pursuant to this
Section 4.01(a).
The purchase price with respect to the Applicable Certificates shall be
equal to the Pool Balance of the Applicable Certificates, together with
accrued and unpaid interest thereon to the date of such purchase, without
premium, but including any other amounts then due and payable to the
Applicable Certificateholders under this Agreement, the Intercreditor
Agreement, the Escrow Agreement or any Note Document or on or in respect of
the Applicable Certificates; provided, however, that (i) if such purchase
occurs after the record date specified in Section 2.03(b) of the Escrow
Agreement relating to the distribution of unused Deposits and accrued and
unpaid interest thereunder, such purchase price shall be reduced by the
aggregate amount of unused Deposits and interest to be distributed under the
Escrow Agreement (which deducted amounts shall remain distributable to, and
may be retained by, the Applicable Certificateholder as of such Record Date)
and (ii) if such purchase occurs after a Record Date, such purchase price
shall be reduced by the amount to be distributed hereunder on the related
Distribution Date (which deducted amounts shall remain distributable to, and
may be retained by, the Applicable Certificateholder as of such Record Date);
provided further that no such purchase of Applicable Certificates shall be
effective unless the purchaser(s) shall certify to the Trustee that
contemporaneously with such purchase, such purchaser(s) is purchasing,
pursuant to the terms of this Agreement and the Other Agreements, the
Applicable Certificates and the Class B Certificates which are senior to the
securities held by such purchaser(s). Each payment of the purchase price of
the Applicable Certificates referred to in the first sentence hereof shall be
made to an account or accounts designated by the Trustee and each such
purchase shall be subject to the terms of this Section 4.01(a). Each
Applicable Certificateholder agrees by its acceptance of its Applicable
Certificate that it will, subject to Section 3.04 of the Basic Agreement,
upon payment from such Class B Certificateholder(s) or Class C
Certificateholder(s), as the case may be, of the purchase price set forth in
the first sentence of this paragraph, forthwith sell, assign, transfer
15
and convey to the purchaser(s) thereof (without recourse, representation or
warranty of any kind except for its own acts), all of the right, title,
interest and obligation of such Applicable Certificateholder in this
Agreement, the Escrow Agreement, the Deposit Agreement, the Intercreditor
Agreement, the Liquidity Facility, the Note Documents and all Applicable
Certificates and Escrow Receipts held by such Applicable Certificateholder
(excluding all right, title and interest under any of the foregoing to the
extent such right, title or interest is with respect to an obligation not
then due and payable as respects any action or inaction or state of affairs
occurring prior to such sale) and the purchaser shall assume all of such
Applicable Certificateholder's obligations under this Agreement, the Escrow
Agreement, the Deposit Agreement, the Intercreditor Agreement, the Liquidity
Facility, the Note Documents and all such Applicable Certificates and Escrow
Receipts. The Applicable Certificates will be deemed to be purchased on the
date payment of the purchase price is made notwithstanding the failure of the
Applicable Certificateholders to deliver any Applicable Certificates and,
upon such a purchase, (i) the only rights of the Applicable
Certificateholders will be to deliver the Applicable Certificates to the
purchaser(s) and receive the purchase price for such Applicable Certificates
and (ii) if the purchaser(s) shall so request, such Applicable
Certificateholder will comply with all the provisions of Section 3.04 of the
Basic Agreement to enable new Applicable Certificates to be issued to the
purchaser in such denominations as it shall request. All charges and
expenses in connection with the issuance of any such new Applicable
Certificates shall be borne by the purchaser thereof.
As used in this Section 4.01(a), the terms "Class B Certificateholder",
"Class B Trust", "Class B Certificate", "Class B Trustee", "Class C
Certificateholder", "Class C Trust", "Class C Certificate" and "Class C
Trustee" shall have the respective meanings assigned to such terms in the
Intercreditor Agreement.
(b) This Section 4.01 supersedes and replaces Section 6.01(b) of the
Basic Agreement.
ARTICLE V
THE TRUSTEE
Section 5.01. Delivery of Documents; Delivery Dates. (a) The Trustee
is hereby directed (i) to execute and deliver the Intercreditor Agreement,
the Escrow Agreement, the Note Purchase Agreement and the Participation
Agreements relating to the Delivered Aircraft on or prior to the Issuance
Date, each in the form delivered to the Trustee by the Company and (ii)
subject to the respective terms thereof, to perform its obligations
thereunder. Upon request of the Company and the satisfaction or waiver of
the closing conditions specified in the Underwriting Agreement, the Trustee
shall execute, deliver, authenticate, issue and sell Applicable Certificates
in authorized denominations equaling in the aggregate the amount set
16
forth, with respect to the Applicable Trust, in Schedule I to the
Underwriting Agreement evidencing the entire ownership interest in the
Applicable Trust, which amount equals the maximum aggregate principal amount
of Equipment Notes which may be purchased by the Trustee pursuant to the Note
Purchase Agreement and the Participation Agreements. Except as provided in
Sections 3.03, 3.04, 3.05 and 3.06 of the Basic Agreement, the Trustee shall
not execute, authenticate or deliver Applicable Certificates in excess of the
aggregate amount specified in this paragraph.
(b) On or after the Issuance Date the Company may deliver from time
to time to the Trustee a Delivery Notice relating to one or more Equipment
Notes. After receipt of a Delivery Notice and in any case no later than one
Business Day prior to a Delivery Date as to which such Delivery Notice
relates (the "Applicable Delivery Date"), the Trustee shall (as and when
specified in the Delivery Notice) instruct the Escrow Agent to provide a
Notice of Purchase Withdrawal to the Depositary requesting (A) the withdrawal
of one or more Deposits on the Applicable Delivery Date in accordance with
and to the extent permitted by the terms of the Escrow Agreement and the
Deposit Agreement and (B) the payment of all, or a portion, of such Deposit
or Deposits in an amount equal in the aggregate to the purchase price of such
Equipment Notes to or on behalf of the Owner Trustee or the Company, as the
case may be, issuing such Equipment Notes, all as shall be described in the
Delivery Notice. The Trustee shall (as and when specified in such Delivery
Notice), subject to the conditions set forth in Section 3 of the Note
Purchase Agreement, enter into and perform its obligations under the
Participation Agreement specified in such Delivery Notice (the "Applicable
Participation Agreement") and cause such certificates, documents and legal
opinions relating to the Trustee to be duly delivered as required by the
Applicable Participation Agreement. If at any time prior to the Applicable
Delivery Date, the Trustee receives a notice of postponement pursuant to
Section 2(e) or 2(f) of the Note Purchase Agreement, then the Trustee shall
give the Depositary (with a copy to the Escrow Agent) a notice of
cancellation of such Notice of Purchase Withdrawal relating to such Deposit
or Deposits on such Applicable Delivery Date. Upon satisfaction of the
conditions specified in the Note Purchase Agreement and the Applicable
Participation Agreement, the Trustee shall purchase the applicable Equipment
Notes with the proceeds of the withdrawals of one or more Deposits made on
the Applicable Delivery Date in accordance with the terms of the Deposit
Agreement and the Escrow Agreement. The purchase price of such Equipment
Notes shall equal the principal amount of such Equipment Notes. Amounts
withdrawn from such Deposit or Deposits in excess of the purchase price of
the Equipment Notes or to the extent not applied on the Applicable Delivery
Date to the purchase price of the Equipment Notes, shall be re-deposited by
the Trustee with the Depositary on the Applicable Delivery Date in accordance
with the terms of the Deposit Agreement. The provisions of this Section
5.01(b) shall not apply to the Delivered Equipment Notes. The provisions of
this Section 5.01(b) and Section 5.01(c) hereof supersede and replace the
provisions of Section 2.02 of the Basic Agreement (which are inapplicable to
the Trust), and all provisions of the Basic Agreement relating to Postponed
Notes and Section
17
2.02 of the Basic Agreement shall not apply to the Applicable Trust, provided
that (i) the reference in Section 2.03 of the Basic Agreement to "Section
2.02 hereof" shall apply to the Applicable Trust and shall be deemed to refer
to Section 5.01(c) of this Trust Supplement and (ii) for purposes of Section
4.02(c) of the Basic Agreement, the reference to (x) "Postponed Notes" shall
apply to the Applicable Trust and such term shall have the meaning specified
herein and (y) "Section 2.02" shall apply to the Applicable Trust and shall
be deemed a reference to Section 5.01(c) of this Trust Supplement.
(c) The Trustee shall purchase, pursuant to the terms and conditions
of the Participation Agreements relating to the Delivered Aircraft, the
Delivered Aircraft Equipment Notes on the Issuance Date or on December 15,
1998, as specified in Exhibit C hereto.
In the case of (x) the Delivered Aircraft Equipment Notes having a
scheduled Transfer Date of December 15, 1998 and (y) any Delivered Aircraft
Equipment Notes with respect to which the Company shall deliver to the
Trustee a Postponement Notice, the Trustee shall deposit into an escrow
account (the "Postponed Notes Escrow Account") to be maintained as part of
the Applicable Trust an amount equal to the purchase price of such Postponed
Notes (the "Postponed Notes Escrowed Funds"). The Postponed Notes Escrowed
Funds so deposited shall be invested by the Trustee at the written direction
of the Company in Specified Investments (i) maturing no later than any
scheduled Transfer Date relating to the 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 any Postponed Notes will
not be issued, with respect to the portion of the Postponed Notes Escrowed
Funds relating to such Postponed Notes, maturing on the next applicable
Special Distribution Date, if such investments are reasonably available for
purchase. The Trustee shall make withdrawals from the Postponed Notes Escrow
Account only as provided in this Agreement. Upon request of the Company on
one or more occasions and the satisfaction of the closing conditions
specified in the applicable Participation Agreements on or prior to the
Postponement Cut-off Date, the Trustee shall purchase the applicable
Postponed Notes with the Postponed Notes Escrowed Funds withdrawn from the
Postponed Notes 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 a Postponed Notes 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 of the Company in
Specified Investments maturing as provided in the preceding paragraph.
Any earnings or Specified Investments received from time to time by the
Trustee shall be promptly distributed to the Company. The Company shall pay
to the Trustee
18
for deposit to the Postponed Notes Escrow Account an amount equal to any
losses on such Specified Investments as incurred.
On the January 30, 1999 Regular Distribution Date, the Company will pay
(in immediately available funds) to the Trustee an amount equal to the
interest that would have accrued on any Postponed Notes, 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 the Company notifies the Trustee prior to the Postponement Cut-off
Date that any Postponed Notes will not be issued on or prior to the
Postponement Cut-off Date for any reason, on the next Special Distribution
Date occurring not less than 15 days following the date of such notice (i)
the Company shall pay to the Trustee for deposit in the 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 the 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 Postponed Notes
Escrowed Funds that would have been used to purchase the Postponed Notes
designated in such notice and the amount paid by the Company 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 the Postponement Cut-off Date, an amount equal to less than all
of the Postponed Notes Escrowed Funds (other than Postponed Notes Escrowed
Funds referred to in the immediately preceding paragraph) has been used to
purchase Postponed Notes, on the next Special Distribution Date occurring not
less than 15 days following the Postponement Cut-off Date (i) the Company
shall pay to the Trustee for deposit in the 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
Postponed Notes Escrowed Funds (other than Postponed Notes Escrowed Funds
referred to in the immediately preceding paragraph) but not so purchased at a
rate equal to the interest rate applicable to the Applicable Certificates
from the Issuance Date to, but not including, such Special Distribution Date
and (ii) the Trustee shall transfer such unused Postponed Notes Escrowed
Funds and the amount paid by the Company 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 5.02.Withdrawal of Deposits. If any Deposits remain outstanding
on the Business Day next succeeding the Cut-off Date, (i) the Trustee shall
give the Escrow Agent notice that the Trustee's obligation to purchase
Equipment Notes under the Note Purchase Agreement has terminated and instruct
the Escrow Agent to provide a notice of Final
19
Withdrawal to the Depositary substantially in the form of Exhibit B to the
Deposit Agreement (the "Final Withdrawal Notice") and (ii) the Trustee will
make a demand upon the Company under the Note Purchase Agreement for an
amount equal to the Special Redemption Premium, such payment to be made on
the Final Withdrawal Date.
Section 5.03. The Trustee. (a) Subject to Section 5.04 of this Trust
Supplement and Section 7.15 of the Basic Agreement, the Trustee shall not be
responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Trust Supplement, the Deposit Agreement or the Escrow
Agreement or the due execution hereof or thereof by the Company or the other
parties thereto (other than the Trustee), or for or in respect of the
recitals and statements contained herein or therein, all of which recitals
and statements are made solely by the Company.
(b) Except as herein otherwise provided, no duties, responsibilities
or liabilities are assumed, or shall be construed to be assumed by the
Trustee by reason of this Trust Supplement other than as set forth in the
Basic Agreement, and this Trust Supplement is executed and accepted on behalf
of the Trustee, subject to all the terms and conditions set forth in the
Basic Agreement, upon the effectiveness thereof, as fully to all intents as
if the same were herein set forth at length.
Section 5.04. Representations and Warranties of the Trustee. The
Trustee hereby represents and warrants that:
(a) the Trustee has full power, authority and legal right to
execute, deliver and perform this Trust Supplement, the Intercreditor
Agreement, the Escrow Agreement and the Note Documents to which it is a party
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Supplement, the Intercreditor Agreement, the
Escrow Agreement and the Note Documents to which it is a party;
(b) the execution, delivery and performance by the Trustee of
this Trust Supplement, the Intercreditor Agreement, the Escrow Agreement and
the Note Documents to which it is a party (i) will not violate any provision
of any United States federal law or the law of the state of the United States
where it is located governing the banking and trust powers of the Trustee or
any order, writ, judgment, or decree of any court, arbitrator or governmental
authority applicable to the Trustee or any of its assets, (ii) will not
violate any provision of the articles of association or by-laws of the
Trustee, and (iii) will not violate any provision of, or constitute, with or
without notice or lapse of time, a default under, or result in the creation
or imposition of any lien on any properties included in the Trust Property
pursuant to the provisions of any mortgage, indenture, contract, agreement or
other undertaking to which it is a party,
20
which violation, default or lien could reasonably be expected to have an
adverse effect on the Trustee's performance or ability to perform its duties
hereunder or thereunder or on the transactions contemplated herein or
therein;
(c) the execution, delivery and performance by the Trustee of
this Trust Supplement, the Intercreditor Agreement, the Escrow Agreement and
the Note Documents to which it is a party will not require the authorization,
consent, or approval of, the giving of notice to, the filing or registration
with, or the taking of any other action in respect of, any governmental
authority or agency of the United States or the state of the United States
where it is located regulating the banking and corporate trust activities of
the Trustee; and
(d) this Trust Supplement, the Intercreditor Agreement, the
Escrow Agreement and the Note Documents to which it is a party have been, or
will be, as applicable, duly executed and delivered by the Trustee and
constitute, or will constitute, as applicable, the legal, valid and binding
agreements of the Trustee, enforceable against it in accordance with their
respective terms; provided, however, that enforce ability may be limited by
(i) applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the rights of creditors generally and (ii) general principles
of equity.
Section 5.05. Trustee Liens. The Trustee in its individual capacity
agrees, in addition to the agreements contained in Section 7.17 of the Basic
Agreement, that it will at its own cost and expense promptly take any action
as may be necessary to duly discharge and satisfy in full any Trustee's Liens
on or with respect to the Trust Property which is attributable to the Trustee
in its individual capacity and which is unrelated to the transactions
contemplated by the Intercreditor Agreement or the Note Purchase Agreement.
ARTICLE VI
SUPPLEMENTAL AGREEMENTS
Section 6.01. Supplemental Agreements Without Consent of Applicable
Certificateholders. Under the terms of, and subject to the limitations
contained in, Section 9.01 of the Basic Agreement, the Company may (but will
not be required to), and the Trustee (subject to Section 9.03 of the Basic
Agreement) shall, at the Company's request, at any time and from time to
time, enter into one or more agreements supplemental to the Escrow Agreement,
the Note Purchase Agreement or the Deposit Agreement, for any of the purposes
set forth in clauses (1) through (9) of such Section 9.01, except that (a)
clause (3) of such Section 9.01 shall be deemed to include the Company's
rights and powers conferred by the
21
Note Purchase Agreement and (b) clause (4) of such Section 9.01 shall be
deemed to include corrections or supplements to provisions of the Escrow
Agreement or the Deposit Agreement which may be defective or inconsistent
with any other provision of this Agreement or contained in any agreement
referred to in such clause (4) and the curing of any ambiguity or the
modification of any other provision with respect to matters or questions
arising under the Escrow Agreement or the Deposit Agreement.
Section 6.02. Supplemental Agreements with Consent of Applicable
Certificateholders. The provisions of Section 9.02 of the Basic Agreement
shall apply to agreements or amendments for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of the Escrow Agreement, the Deposit Agreement or the Note Purchase Agreement
to the extent applicable to the Applicable Certificateholders approving such
agreement or amendment or modifying in any manner the rights and obligations
of such Applicable Certificateholders under the Escrow Agreement, the Deposit
Agreement or the Note Purchase Agreement; provided that the provisions of
Section 9.02(1) of the Basic Agreement shall be deemed to include reductions
in any manner of, or delay in the timing of, any receipt by the Applicable
Certificateholders of payments upon the Deposits; provided, further, that the
provisions of Section 9.02(6) of the Basic Agreement shall not apply to the
Applicable Trust and any supplemental agreement having the effect described
in said Section 9.02(6) shall require only the consent of Applicable
Certificateholders holding Applicable Certificates evidencing a Fractional
Undivided Interest aggregating not less than a majority in interest in the
Applicable Trust.
ARTICLE VII
TERMINATION OF TRUST
Section 7.01. Termination of the Trust. The respective obligations and
responsibilities of the Company and the Trustee with respect to the
Applicable Trust shall terminate upon the distribution to all Applicable
Certificateholders and the Trustee of all amounts required to be distributed
to them pursuant to this Agreement and the disposition of all property held
as part of the Trust Property; provided, however, that in no event shall the
Applicable Trust continue beyond 21 years less one day following the death of
the last survivor of all descendants living on the date hereof of Joseph P.
Kennedy, Sr., unless applicable law shall permit a longer term, in which case
such longer term shall apply.
Notice of any termination, specifying the Distribution Date upon which
the Applicable Certificateholders may surrender their Applicable Certificates
to the Trustee for payment of the final distribution and cancellation, shall
be mailed promptly by the Trustee to Applicable Certificateholders not
earlier than the 60th day and not later than the 15th day next preceding such
final Distribution Date specifying (A) the Distribution Date upon which the
22
proposed final payment of the Applicable Certificates will be made upon
presentation and surrender of Applicable Certificates at the office or agency
of the Trustee therein specified, (B) the amount of any such proposed final
payment, and (c) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon
presentation and surrender of the Applicable Certificates at the office or
agency of the Trustee therein specified. The Trustee shall give such notice
to the Registrar at the time such notice is given to Applicable
Certificateholders. Upon presentation and surrender of the Applicable
Certificates in accordance with such notice, the Trustee shall cause to be
distributed to Applicable Certificateholders such final payments.
In the event that all of the Applicable Certificateholders shall not
surrender their Applicable Certificates for cancellation within six months
after the date specified in the above-mentioned written notice, the Trustee
shall give a second written notice to the remaining Applicable
Certificateholders to surrender their Applicable Certificates for
cancellation and receive the final distribution with respect thereto. No
additional interest shall accrue on the Applicable Certificates after the
Distribution Date specified in the first written notice. In the event that
any money held by the Trustee for the payment of distributions on the
Applicable Certificates shall remain unclaimed for two years (or such lesser
time as the Trustee shall be satisfied, after sixty days' notice from the
Company, is one month prior to the escheat period provided under applicable
law) after the final distribution date with respect thereto, the Trustee
shall pay to each Loan Trustee the appropriate amount of money relating to
such Loan Trustee and shall give written notice thereof to the related Owner
Trustees, the Owner Participants and the Company.
ARTICLE VIII
THE COMPANY
Section 8.01. Consolidation, Merges, Etc. Section 5.02 of the Basic
Agreement is hereby amended with respect to the Applicable Trust by deleting
the word "and" at the end of clause (b) thereof, renumbering clause (c) as
clause "(d)" and inserting a new clause (c) as follows:
"(c) immediately after giving effect to such transaction, no Indenture
Event of Default (in the case of an Owned Aircraft) or, in the case of a
Leased Aircraft, Lease Event of Default (as defined in the related Indenture)
shall have occurred and be continuing; and"
23
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.01. Basic Agreement Ratified. Except and so far as herein
expressly
24
provided, all of the provisions, terms and conditions of the Basic Agreement
are in all respects ratified and confirmed; and the Basic Agreement and this
Trust Supplement shall be taken, read and construed as one and the same
instrument.
Section 9.02. GOVERNING LAW. THIS AGREEMENT AND THE APPLICABLE
CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.
Section 9.03. Execution in Counterparts. This Trust Supplement may be
executed in any number of counterparts, each of which shall be an original,
but such counterparts shall together constitute but one and the same
instrument.
Section 9.04. Intention of Parties. The parties hereto intend that the
Applicable Trust be classified for U.S. federal income tax purposes as a
grantor trust under Subpart E, Part I of Subchapter J of the Internal Revenue
Code of 1986, as amended, and not as a trust or association taxable as a
corporation or as a partnership. Each Applicable Certificateholder and
Investor, by its acceptance of its Applicable Certificate or a beneficial
interest therein, agrees to treat the Applicable Trust as a grantor trust for
all U.S. federal, state and local income tax purposes. The powers granted
and obligations undertaken pursuant to the Agreement shall be so construed so
as to further such intent.
25
IN WITNESS WHEREOF, the Company and the Trustee have caused this Trust
Supplement to be duly executed by their respective officers thereto duly
authorized, as of the day and year first written above.
US AIRWAYS, INC.
By:______________________
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By:_____________________
Name:
Title:
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 the
registered owner hereof, Cede & Co., has an interest herein.]*
US AIRWAYS PASS THROUGH TRUST 1998-1A
6.85% US Airways Pass Through Certificate, Series 1998-1A
Issuance Date: December 14, 1998
Final Expected Distribution Date: January 30, 2018
Evidencing A Fractional Undivided Interest In The US Airways
Pass Through Trust 1998-1A, The Property Of Which Includes
Certain Equipment Notes Each Secured By An Aircraft Leased
To Or Owned By US Airways, Inc.
Certificate
No.___ $____________ Fractional Undivided Interest representing
0.000272862% 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 1998-1A (the "Trust") created
by State Street Bank and Trust Company, as
* This legend to appear on Book-Entry Certificates to be deposited with the
Depository Trust Company
A-2
trustee (the "Trustee"), pursuant to a Pass Through Trust Agreement, dated as
of December 4, 1998 (the "Basic Agreement"), between the Trustee and US
Airways, Inc., Inc., a Delaware corporation (the "Company"), as supplemented
by Trust Supplement No. 1998-1A thereto, dated as of December 14, 1998 (the
"Trust Supplement" and, together with the Basic Agreement, the "Agreement"),
between the Trustee and 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 "6.85% US Airways Pass Through Certificates,
Series 1998-1A" (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 the Intercreditor Agreement. The property of the Trust
includes certain Equipment Notes and all rights of the Trust to receive
payments under the Intercreditor Agreement and any Liquidity Facility (the
"Trust Property"). Each issue of the Equipment Notes is secured by, among
other things, a security interest in an 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 the
Intercreditor Agreement, from funds then available to the Trustee, there will
be distributed on each January 30 and July 30 (a "Regular Distribution Date")
commencing January 30, 1999, 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 the 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
A-3
the intervening period. The Trustee shall mail notice of each Special
Payment and the Special Distribution Date therefor to the Certificateholder
of this Certificate.
Distributions on this Certificate will be made by the Trustee by check
mailed to the Person entitled thereto, without presentation or surrender of
this Certificate or the making of any notation hereon, except that with
respect to Certificates registered on the Record Date in the name of a
Clearing Agency (or its nominee), such distribution shall be made by wire
transfer. Except as otherwise provided in the Agreement and notwithstanding
the above, the final distribution on this Certificate will be made after
notice mailed by the Trustee of the pendency of such distribution and only
upon presentation and surrender of this Certificate at the office or agency
of the Trustee specified in such notice.
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company or the Trustee or
any affiliate thereof. The Certificates are limited in right or payment, all
as more specifically set forth on the face hereof and in the Agreement. All
payments or distributions made to Certificateholders under the Agreement
shall be made only from the Trust Property and only to the extent that the
Trustee shall have sufficient income or proceeds from the Trust Property to
make such payments in accordance with the terms of the Agreement. Each
Certificateholder of this Certificate, by its acceptance hereof, agrees that
it will look solely to the income and proceeds from the Trust Property to the
extent available for distribution to such Certificateholder as provided in
the Agreement. This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds, and duties evidenced
hereby. A copy of the Agreement may be examined during normal business hours
at the principal office of the Trustee, and at such other places, if any,
designated by the Trustee, by any Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any
time by the Company and the Trustee with the consent of the
Certificateholders holding Certificates evidencing Fractional Undivided
Interests aggregating not less than a majority in interest in the Trust. Any
such consent by the Certificateholder of this Certificate shall be conclusive
and binding on such Certificateholder and upon all future Certificateholders
of this Certificate and of any Certificate issued upon the transfer hereof or
in exchange hereof or in lieu hereof whether or not notation of such consent
is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the
Certificateholders of any of the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Register upon surrender of this
A-4
Certificate for registration of transfer at the offices or agencies
maintained by the Trustee in its capacity as Registrar, or by any successor
Registrar, duly endorsed or accompanied by a written instrument of transfer
in form satisfactory to the Trustee and the Registrar, duly executed by the
Certificateholder hereof or such Certificateholder's attorney duly authorized
in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in
the Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $1,000 Fractional Undivided Interest and
integral multiples thereof except that one Certificate may be issued in a
different denomination. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
Each Certificateholder and Investor, by its acceptance of this
Certificate or a beneficial interest herein, agrees to treat the Trust as a
grantor trust for all U.S. federal, state and local income tax purposes.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered
as the owner hereof for all purposes, and neither the Trustee, the Registrar,
nor any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to Certificate
holders of all amounts required to be distributed to them pursuant to the
Agreement and the disposition of all property held as part of the Trust
Property.
Any Person acquiring or accepting this Certificate or an interest herein
will, by such acquisition or acceptance, be deemed to have represented and
warranted that either: (i) the assets of an employee benefit plan subject to
Title I of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or of a plan subject to Section 4975 of the Internal Revenue Code
of 1986, as amended (the "Code"), have not been used to purchase this
Certificate or an interest herein or (ii) the purchase and holding of this
Certificate or interest herein are exempt from the prohibited transaction
restrictions of ERISA and the Code pursuant to one or more prohibited
transaction statutory or administration exemptions.
A-5
THE AGREEMENT AND THIS CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
Unless the certificate of authentication hereon has been executed by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
A-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
US AIRWAYS PASS THROUGH TRUST 1998-1A
By: STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:____________________________________
Name:
Title:
FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
By: STATE STREET BANK AND TRUST COMPANY,
as Trustee
By: __________________________
Name:
Title:
EXHIBIT B
---------
[DTC Letter of Representations]
EXHIBIT C
Aircraft Type and Registration No. Scheduled Transfer Date
- ---------------------------------- -----------------------
Airbus A319/N700UW December 15, 1998
Airbus A319/N701UW December 15, 1998
Airbus A319/N702UW December 14, 1998
Airbus A319/N703UW December 14, 1998
Airbus A319/N704US December 15, 1998
EXHIBIT 4(a)(iii)
TRUST SUPPLEMENT No. 1998-1B
Dated as of December 14, 1998
between
STATE STREET BANK AND TRUST COMPANY
as Trustee,
and
US AIRWAYS, INC.
to
PASS THROUGH TRUST AGREEMENT
Dated as of December 4, 1998
US Airways Pass Through Trust 1998-1B
7.35% US Airways
Pass Through Certificates,
Series 1998-1B
This Trust Supplement No. 1998-1B, dated as of December 14, 1998 (herein
called the "Trust Supplement"), between US Airways, Inc., Inc., a Delaware
corporation (the "Company"), and State Street Bank and Trust Company (the
"Trustee"), to the Pass Through Trust Agreement, dated as of December 4,
1998, between the Company and the Trustee (the "Basic Agreement").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Basic Agreement, unlimited as to the aggregate principal
amount of Certificates (unless otherwise specified herein, capitalized terms
used herein without definition having the respective meanings specified in
the Basic Agreement) which may be issued thereunder, has heretofore been
executed and delivered;
WHEREAS, the Company obtained commitments from AVSA for the delivery of
23 Aircraft;
WHEREAS, the Company intends to finance the acquisition of each such
Aircraft either (i) through separate leveraged lease transactions, in which
case the Company will lease such Aircraft (collectively, the "Leased
Aircraft") or (ii) through separate secured loan transactions, in which case
the Company will own such Aircraft (collectively, the "Owned Aircraft");
WHEREAS, in the case of each Leased Aircraft, each Owner Trustee, acting
on behalf of the corresponding Owner Participant, will issue pursuant to an
Indenture, on a non-recourse basis, Equipment Notes in order to finance a
portion of its purchase price of such Leased Aircraft;
WHEREAS, in the case of each Owned Aircraft, the Company will issue
pursuant to an Indenture, on a recourse basis, Equipment Notes to finance a
portion of the purchase price of such Owned Aircraft;
WHEREAS, the Trustee hereby declares the creation of this US Airways
Pass Through Trust 1998-1B (the "Applicable Trust") for the benefit of the
Applicable Certificateholders, and the initial Applicable Certificateholders
as the grantors of the Applicable Trust, by their respective acceptances of
the Applicable Certificates, join in the creation of the Applicable Trust
with the Trustee;
WHEREAS, all Certificates to be issued by the Applicable Trust will
evidence fractional undivided interests in the Applicable Trust and will
convey no rights, benefits or interests in respect of any property other than
the Trust Property except for those Certificates to which an Escrow Receipt
has been affixed;
2
WHEREAS, the Escrow Agent, the Trustee, the Escrow Paying Agent, and the
Underwriters have contemporaneously herewith entered into an Escrow Agreement
with the Escrow Paying Agent pursuant to which the Underwriters have
delivered to the Escrow Agent a portion of the proceeds from the sale of the
Applicable Certificates and have irrevocably instructed the Escrow Agent to
withdraw and pay funds from such proceeds upon request and proper
certification by the Trustee to purchase Equipment Notes as the remaining
undelivered Aircraft are delivered by AVSA under the Aircraft Purchase
Agreement from time to time prior to the Delivery Period Termination Date;
WHEREAS, the Escrow Agent on behalf of the Applicable Certificateholders
has contemporaneously herewith entered into a Deposit Agreement with the
Depositary under which the Deposits referred to therein will be made and from
which it will withdraw funds to allow the Trustee to purchase Equipment Notes
from time to time prior to the Delivery Period Termination Date;
WHEREAS, pursuant to the terms and conditions of the Basic Agreement as
supplemented by this Trust Supplement (the "Agreement") and the Note Purchase
Agreement, (i) on or shortly following the date hereof, the Trustee on behalf
of the Applicable Trust, using a portion of the proceeds from the sale of the
Applicable Certificates, shall purchase one or more Equipment Notes issued
pursuant to the Participation Agreements relating to the Aircraft described
in Exhibit C hereto (the "Delivered Aircraft Equipment Notes") in respect of
each of five of the Aircraft (such five Aircraft being the "Delivered
Aircraft") having the same interest rate as, and final maturity date not
later than the final Regular Distribution Date of, the Applicable
Certificates issued hereunder and (ii) with respect to each remaining
Aircraft, the Trustee on behalf of the Applicable Trust, using funds
withdrawn under the Escrow Agreement, shall purchase one or more Equipment
Notes having the same interest rate as, and final maturity date not later
than the final Regular Distribution Date of, the Applicable Certificates
issued hereunder and, in each case, shall hold such Equipment Notes in trust
for the benefit of the Applicable Certificateholders;
WHEREAS, all of the conditions and requirements necessary to make this
Trust Supplement, when duly executed and delivered, a valid, binding and
legal instrument in accordance with its terms and for the purposes herein
expressed, have been done, performed and fulfilled, and the execution and
delivery of this Trust Supplement in the form and with the terms hereof have
been in all respects duly authorized;
WHEREAS, this Trust Supplement is subject to the provisions of the Trust
Indenture Act of 1939, as amended, and shall, to the extent applicable, be
governed by such provisions;
3
NOW THEREFORE, in consideration of the premises herein, it is agreed
between the Company and the Trustee as follows:
ARTICLE I
THE CERTIFICATES
Section 1.01. The Certificates. There is hereby created a series of
Certificates to be issued under the Agreement to be distinguished and known
as "7.35% US Airways Pass Through Certificates, Series 1998-1B" (hereinafter
defined as the "Applicable Certificates"). Each Applicable Certificate
represents a fractional undivided interest in the Applicable Trust created
hereby. The Applicable Certificates shall be the only instruments evidencing
a fractional undivided interest in the Applicable Trust.
The terms and conditions applicable to the Applicable Certificates are
as follows:
(a) The aggregate principal amount of the Applicable Certificates
that shall be authenticated under the Agreement (except for Applicable
Certificates authenticated and delivered pursuant to Sections 3.03, 3.04 and
3.06 of the Basic Agreement) is $81,282,000.
(b) The Regular Distribution Dates with respect to any payment of
Scheduled Payments means January 30 and July 30 of each year, commencing on
January 30, 1999, until payment of all of the Scheduled Payments to be made
under the Equipment Notes has been made.
(c) The Special Distribution Dates with respect to the Applicable
Certificates means any Business Day on which a Special Payment is to be
distributed pursuant to the Agreement.
(d) At the Escrow Agent's request under the Escrow Agreement, the
Trustee shall affix the corresponding Escrow Receipt to each Applicable
Certificate. In any event, any transfer or exchange of any Applicable
Certificate shall also effect a transfer or exchange of the related Escrow
Receipt. Prior to the Final Withdrawal Date, no transfer or exchange of any
Applicable Certificate shall be permitted unless the corresponding Escrow
Receipt is attached thereto and also is so transferred or exchanged. By
acceptance of any Applicable Certificate to which an Escrow Receipt is
attached, each Holder of such an Applicable Certificate acknowledges and
accepts the restrictions on transfer of the Escrow Receipt set forth herein
and in the Escrow Agreement.
4
(e) (i) The Applicable Certificates shall be in the form attached
hereto as Exhibit A. Any Person acquiring or accepting an Applicable
Certificate or an interest therein will, by such acquisition or acceptance,
be deemed to represent and warrant that either (i) the assets of an employee
benefit plan subject to Title I of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or of a plan subject to Section 4975 of
the Internal Revenue Code of 1986, as amended (the "Code"), have not been
used to purchase Applicable Certificates or an interest therein or (ii) the
purchase and holding of Applicable Certificates is exempt from the prohibited
transaction restrictions of ERISA and the Code pursuant to one or more
prohibited transaction statutory or administrative exemptions.
(ii) The Applicable Certificates shall be Book-Entry
Certificates and shall be subject to the conditions set forth in the Letter
of Representations between the Company and the Clearing Agency attached
hereto as Exhibit B.
(f) The Applicable Certificates are subject to the Intercreditor
Agreement, the Deposit Agreement and the Escrow Agreement.
(g) The Applicable Certificates will have the benefit of the
Liquidity Facility.
(h) The Responsible Party is the Company.
(i) The particular "sections of the Note Purchase Agreement", for
purposes of clause (3) of Section 7.07 of the Basic Agreement, are Section
6(b) (with respect to Owned Aircraft) and Section 6(c) (with respect to
Leased Aircraft) of the relevant Participation Agreement.
ARTICLE II
DEFINITIONS
Section 2.01. Definitions. For all purposes of the Basic Agreement as
supplemented by this Trust Supplement, the following capitalized terms have
the following meanings:
Agreement: Has the meaning specified in the recitals hereto.
5
Aircraft: Means each of the New Aircraft or Substitute Aircraft in
respect of which a Participation Agreement is entered into in accordance with
the Note Purchase Agreement.
Aircraft Purchase Agreement: Has the meaning specified in the Note
Purchase Agreement.
Applicable Certificateholder: Means the Person in whose name an
Applicable Certificate is registered on the Register for the Applicable
Certificates.
Applicable Delivery Date: Has the meaning specified in Section 5.01(b)
of this Trust Supplement.
Applicable Participation Agreement: Has the meaning specified in
Section 5.01(b) of this Trust Supplement.
AVSA: Means AVSA, S.A.R.L.
Business Day: Means any day other than a Saturday, a Sunday or a day on
which commercial banks are required or authorized to close in New York, New
York, Salt Lake City, Utah, Pittsburgh, Pennsylvania, or, so long as any
Applicable Certificate is outstanding, the city and state in which the
Trustee or any Loan Trustee maintains its Corporate Trust Office or receives
and disburses funds.
Cut-off Date: Means the earlier of (a) the Delivery Period Termination
Date and (b) the date on which a Triggering Event occurs.
Delivery Date: Has the meaning specified in the Participation
Agreements.
Delivery Notice: Has the meaning specified in the Participation
Agreements.
Delivery Period Termination Date: Means the earlier of (a) October 31,
1999 and (b) the date on which Equipment Notes issued with respect to all of
the New Aircraft (or Substitute Aircraft in lieu thereof) have been purchased
by the Applicable Trust and the Other Trusts in accordance with the Note
Purchase Agreement.
Deposits: Has the meaning specified in the Deposit Agreement.
Deposit Agreement: Means the Deposit Agreement dated as of December 14,
1998 relating to the Applicable Certificates between the Depositary and the
Escrow
6
Agent, as the same may be amended, supplemented or otherwise modified from
time to time in accordance with its terms.
Depositary: Means Credit Suisse First Boston, New York branch
Distribution Date: Means any Regular Distribution Date or Special
Distribution Date as the context requires.
Escrow Agent: Means, initially, First Security Bank, National
Association, and any replacement or successor therefor appointed in
accordance with the Escrow Agreement.
Escrow Agreement: Means the Escrow and Paying Agent Agreement dated as
of December 14, 1998 relating to the Applicable Certificates, among the
Escrow Agent, the Escrow Paying Agent, the Trustee and Underwriters, as the
same may be amended, supplemented or otherwise modified from time to time in
accordance with its terms.
Escrow Paying Agent: Means the Person acting as paying agent under the
Escrow Agreement.
Escrow Receipt: Means the receipt substantially in the form annexed to
the Escrow Agreement representing a fractional undivided interest in the
funds held in escrow thereunder.
Final Withdrawal: Has the meaning specified in the Escrow Agreement.
Final Withdrawal Date: Has the meaning specified in the Escrow
Agreement.
Final Withdrawal Notice: Has the meaning specified in Section 5.02 of
this Trust Supplement.
Indenture: Means each of the separate trust indentures and mortgages
relating to the Aircraft, each as specified or described in a Delivery Notice
delivered pursuant to the related Participation Agreement, in each case as
the same may be amended, supplemented or otherwise modified from time to time
in accordance with its terms.
7
Intercreditor Agreement: Means the Intercreditor Agreement dated as of
December 14, 1998 among the Trustee, the Other Trustees, the Liquidity
Provider, the liquidity providers relating to the Certificates issued under
(and as defined in) each of the Other Agreements, and State Street Bank and
Trust Company, as Subordination Agent and as trustee thereunder, as amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
Investors: Means the Underwriters together with all subsequent
beneficial owners of the Applicable Certificates.
Lease: Means, with respect to each Leased Aircraft, the lease between
an Owner Trustee, as the lessor, and the Company, as the lessee, referred to
in the related Indenture, as such lease may be amended, supplemented or
otherwise modified in accordance with its terms.
Leased Aircraft: Has the meaning specified in the third recital to this
Trust Supplement.
Liquidity Facility: Means, initially, the Revolving Credit Agreement
dated as of December 14, 1998 relating to the Applicable Certificates,
between the Liquidity Provider and State Street Bank and Trust Company as
Subordination Agent, as agent and trustee for the Applicable Trust, and, from
and after the replacement of such agreement pursuant to the Intercreditor
Agreement, the replacement liquidity facility therefor, in each case as
amended, supplemented or otherwise modified from time to time in accordance
with their respective terms.
Liquidity Provider: Means, initially, ABN AMRO Bank N.V., acting
through its Chicago Branch, and any replacements or successors therefor
appointed in accordance with the Intercreditor Agreement.
New Aircraft: Has the meaning specified in the Note Purchase Agreement.
Note Documents: Means the Note Purchase Agreement, this Trust Supplement
and with respect to any Equipment Note, means (i) the Indenture and the
Participation Agreement relating to such Equipment Note, and (ii) in the case
of any Equipment Note related to a Leased Aircraft, the Lease relating to
such Leased Aircraft.
Note Purchase Agreement: Means the Note Purchase Agreement dated as of
December 14, 1998 among the Trustee, the Other Trustees, the Company, the
Escrow Agent, the Escrow Paying Agent and the Subordination Agent, providing
for, among other things, the purchase of certain Equipment Notes by the
Trustee on behalf of the
8
Trust, as the same may be amended, supplemented or otherwise modified from
time to time, in accordance with its terms.
Notice of Purchase Withdrawal: Has the meaning specified in the Deposit
Agreement.
Other Agreements: Means (i) the Basic Agreement as supplemented by
Trust Supplement No. 1998-1A dated the date hereof relating to US Airways
Pass Through Trust 1998-1A and (ii) the Basic Agreement as supplemented by
Trust Supplement 1998-1C dated the date hereof relating to US Airways Pass
Through Trust 1998-1C.
Other Trustees: Means the trustees under the Other Agreements, and any
successor or other trustee appointed as provided therein.
Other Trusts: Means the US Airways Pass Through Trust 1998-1A and the
US Airways Pass Through Trust 1998-1C, each created on the date hereof.
Owned Aircraft: Has the meaning specified in the third recital to this
Trust Supplement.
Owner Participant: With respect to any Equipment Note relating to a
Leased Aircraft, means the "Owner Participant" as referred to in the
Indenture pursuant to which such Equipment Note is issued and any permitted
successor or assign of such Owner Participant; and Owner Participants at any
time of determination means all of the Owner Participants thus referred to in
the Indentures.
Owner Trustee: With respect to any Equipment Note relating to a Leased
Aircraft, means the "Owner Trustee", as referred to in the Indenture pursuant
to which such Equipment Note is issued, not in its individual capacity but
solely as trustee; and Owner Trustees means all of the Owner Trustees party
to any of the Indentures.
Participation Agreement: Means each Participation Agreement relating to
the Aircraft described in Exhibit C hereto or to be entered into by the
Trustee pursuant to the Note Purchase Agreement, as the same may be amended,
supplemented or otherwise modified in accordance with its terms.
Pool Balance: Means, as of any date, (i) the original aggregate face
amount of the Applicable Certificates less (ii) the aggregate amount of all
payments made in respect of such Applicable Certificates or in respect of
Deposits relating to the Applicable Trust other than payments made in respect
of interest or premium thereon or reimbursement of any costs or expenses
incurred in connection therewith. The Pool
9
Balance as of any Distribution Date will be computed after giving effect to
any special distribution with respect to unused Deposits, payment of
principal of the Equipment Notes or payment with respect to other Trust
Property and the distribution thereof to be made on that date.
Pool Factor: Means, as of any Distribution Date, the quotient (rounded
to the seventh decimal place) computed by dividing (i) the Pool Balance by
(ii) the original aggregate face amount of the Applicable Certificates. The
Pool Factor as of any Distribution Date shall be computed after giving effect
to any special distribution with respect to unused Deposits, payment of
principal of the Equipment Notes or other Trust Property and the distribution
thereof to be made on that date.
Postponed Notes: Means the Delivered Aircraft Equipment Notes having a
scheduled Transfer Date of December 15, 1998 as specified in Exhibit C hereto
and the Delivered Aircraft Equipment Notes to be held in the Trust as to
which a Postponement Notice shall have been delivered pursuant to Section
5.01(c).
Postponement Notice: Means an Officer's Certificate of the Company (i)
requesting that the Trustee temporarily postpone purchase of one or more of
the Delivered Aircraft Equipment Notes to a date which is later than the
scheduled Transfer Date therefor as specified in Exhibit C hereto, (ii)
identifying the amount of the purchase price of each such Equipment Note and
the aggregate purchase price for all such Equipment Notes, (iii) setting
forth the reasons for such postponement and (iv) with respect to each such
Equipment Note, either (a) setting or resetting a new Transfer Date (which
shall be on or prior to December 28, 1998 (the "Postponement Cut-Off Date"))
for payment by the Trustee of such purchase price and issuance of the related
Equipment Note, or (b) indicating that such new Transfer Date (which shall be
on or prior to the Postponement Cut-off Date) will be set by subsequent
written notice not less than one Business Day prior to such new Transfer
Date.
Prospectus Supplement: Means the Prospectus Supplement dated December
4, 1998, relating to the offering of the Class A Certificates and Class B
Certificates (as defined in the Intercreditor Agreement)
Special Redemption Premium: Means the premium payable by the Company in
respect of the Final Withdrawal pursuant to the Note Purchase Agreement.
Special Payment: Means any payment (other than a Scheduled Payment) in
respect of, or any proceeds of, any Equipment Note or Trust Indenture Estate
(as defined in each Indenture) or Special Redemption Premium.
10
Substitute Aircraft: Has the meaning specified in the Note Purchase
Agreement.
Transfer Date: Has the meaning assigned to the term "Delivery Date" in
the Participation Agreement relating to each Delivered Aircraft.
Triggering Event: Has the meaning assigned to such term in the
Intercreditor Agreement.
Trust Property: Means (i) subject to the Intercreditor Agreement, the
Equipment Notes held as the property of the Applicable Trust, all monies at
any time paid thereon and all monies due and to become due thereunder, (ii)
funds from time to time deposited in the Certificate Account and the Special
Payments Account and, subject to the Intercreditor Agreement, any proceeds
from the sale by the Trustee pursuant to Article VI of the Basic Agreement of
any Equipment Note and (iii) all rights of the Applicable Trust and the
Trustee, on behalf of the Applicable Trust, under the Intercreditor
Agreement, the Escrow Agreement, the Note Purchase Agreement and the
Liquidity Facility, including, without limitation, all rights to receive
certain payments thereunder, and all monies paid to the Trustee on behalf of
the Applicable Trust pursuant to the Intercreditor Agreement or the Liquidity
Facility, provided that rights with respect to the Deposits or under the
Escrow Agreement, except for the right to direct withdrawals for the purchase
of Equipment Notes to be held herein, will not constitute Trust Property.
Underwriters: Means, collectively, Morgan Stanley & Co. Incorporated,
Credit Suisse First Boston Corporation, Lehman Brothers, Inc. and Salomon
Smith Barney Inc.
Underwriting Agreement: Means the Underwriting Agreement dated
December 4, 1998 among the Underwriters and the Company, as the same may be
amended, supplemented or otherwise modified from time to time in accordance
with its terms.
11
ARTICLE III
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
Section 3.01. Additions to Article IV of the Basic Agreement. In
addition to the provisions of Article IV of the Basic Agreement, the
following provisions shall apply to the Applicable Trust:
(a) Upon the payment of Special Redemption Premium to the Trustee
under the Note Purchase Agreement, the Trustee, upon receipt thereof, shall
immediately deposit the aggregate amount of such Special Redemption Premium
in the Special Payments Account;
(b) The distribution of amounts of Special Redemption Premium as
provided for in Section 4.02(b) of the Basic Agreement shall be on the
Special Distribution Date with respect to such Special Payment or as soon
thereafter as the Trustee has confirmed receipt of the related Special
Redemption Premium;
(c) In the event of the payment of a Special Redemption Premium by
the Company to the Trustee under the Note Purchase Agreement, the notice
provided for in Section 4.02(c) of the Basic Agreement shall be mailed,
together with the notice by the Escrow Paying Agent under Section 2.06 of the
Escrow Agreement, not less than 15 days prior to the Special Distribution
Date for such amount, which Special Distribution Date shall be the Final
Withdrawal Date; and
(d) The last sentence of the first paragraph of Section 4.02(c) of
the Basic Agreement shall apply equally if the amount of Special Redemption
Premium, if any, has not been calculated at the time the Trustee mails notice
of a Special Payment.
Section 3.02. Statements to Applicable Certificateholders. (a) On
each Distribution Date, the Trustee will include with each distribution to
Applicable Certificateholders of a Scheduled Payment or Special Payment, as
the case may be, a statement setting forth the information provided below (in
the case of a Special Payment, including any Special Redemption Premium,
reflecting in part the information provided by the Escrow Paying Agent under
the Escrow Agreement). Such statement shall set forth (per $1,000 face
amount Applicable Certificate as to (ii), (iii), (iv) and (v) below) the
following information:
(i) the aggregate amount of funds distributed on such Distribution
Date under the Agreement and under the Escrow Agreement, indicating the
amount allocable to each source;
12
(ii) the amount of such distribution under the Agreement allocable
to principal and the amount allocable to premium (including the Special
Redemption Premium), if any;
(iii) the amount of such distribution under the Agreement allocable
to interest;
(iv) the amount of such distribution under the Escrow Agreement
allocable to interest;
(v) the amount of such distribution under the Escrow Agreement
allocable to Deposits; and
(vi) the Pool Balance and the Pool Factor.
With respect to the Applicable Certificates registered in the name of a
Clearing Agency, on the Record Date prior to each Distribution Date, the
Trustee will request from such Clearing Agency a securities position listing
setting forth the names of all Clearing Agency Participants reflected on such
Clearing Agency's books as holding interests in the Applicable Certificates
on such Record Date. On each Distribution Date, the Trustee will mail to
each such Clearing Agency Participant the statement described above and will
make available additional copies as requested by such Clearing Agency
Participant for forwarding to holders of interests in the Applicable
Certificates.
(b) Within a reasonable period of time after the end of each
calendar year but not later than the latest date permitted by law, the
Trustee shall furnish to each Person who at any time during such calendar
year was an Applicable Certificateholder of record a statement containing the
sum of the amounts determined pursuant to clauses (a)(i), (a)(ii), (a)(iii),
(a)(iv) and (a)(v) above for such calendar year or, in the event such Person
was an Applicable Certificateholder of record during a portion of such
calendar year, for such portion of such year, and such other items as are
readily available to the Trustee and which an Applicable Certificateholder
shall reasonably request as necessary for the purpose of such Applicable
Certificateholder's preparation of its federal income tax returns. Such
statement and such other items shall be prepared on the basis of information
supplied to the Trustee by the Clearing Agency Participants and shall be
delivered by the Trustee to such Clearing Agency Participants to be available
for forwarding by such Clearing Agency Participants to the holders of
interests in the Applicable Certificates in the manner described in Section
3.02(a) of this Trust Supplement.
(c) Promptly following (i) the Delivery Period Termination Date, if
there has been any change in the information set forth in clauses (x), (y)
and (z) below from that set
13
forth in page S-35 of the Prospectus Supplement, and (ii) any early
redemption or purchase of, or any default in the payment of principal or
interest in respect of, any of the Equipment Notes held in the Applicable
Trust, or any Final Withdrawal, the Trustee shall furnish to Applicable
Certificateholders of record on such date a statement setting forth (x) the
expected Pool Balances for each subsequent Regular Distribution Date
following the Delivery Period Termination Date, (y) the related Pool Factors
for such Regular Distribution Dates and (z) the expected principal
distribution schedule of the Equipment Notes, in the aggregate, held as Trust
Property at the date of such notice. With respect to the Applicable
Certificates registered in the name of a Clearing Agency, on the Delivery
Period Termination Date, the Trustee will request from such Clearing Agency a
securities position listing setting forth the names of all Clearing Agency
Participants reflected on such Clearing Agency's books as holding interests
in the Applicable Certificates on such date. The Trustee will mail to each
such Clearing Agency Participant the statement described above and will make
available additional copies as requested by such Clearing Agency Participant
for forwarding to holders of interests in the Applicable Certificates.
(d) This Section 3.02 supersedes and replaces Section 4.03 of the
Basic Agreement.
ARTICLE IV
DEFAULT
Section 4.01. Purchase Rights of Certificateholders. (a) At any time
after the occurrence and during the continuance of a Triggering Event, each
Applicable Certificateholder shall have the right to purchase, for the
purchase price set forth in Section 6.01(b) of the Basic Agreement, all, but
not less than all, of the Class A Certificates upon ten days' written notice
to the Class A Trustee and each other Applicable Certificateholder, provided
that (i) if prior to the end of such ten-day period any other Applicable
Certificateholder notifies such purchasing Applicable Certificateholder that
such other Applicable Certificateholder wants to participate in such
purchase, then such other Applicable Certificateholder may join with the
purchasing Applicable Certificateholder to purchase all, but not less than
all, of the Class A Certificates pro rata based on the Fractional Undivided
Interest in the Applicable Trust held by each such Applicable
Certificateholder and (ii) if prior to the end of such ten-day period any
other Applicable Certificateholder fails to notify the purchasing Applicable
Certificateholder of such other Applicable Certificateholder's desire to
participate in such a purchase, then such other Applicable Certificateholder
shall lose its right to purchase the Class A Certificates pursuant to this
Section 4.01(a).
(b) By acceptance of its Applicable Certificate, each Applicable
Certificateholder agrees that at any time after the occurrence and during the
continuation of a
14
Triggering Event, each Class C Certificateholder shall have the right (which
shall not expire upon any purchase of the Class A Certificates pursuant to
clause (a) above) to purchase all, but not less than all, of the Applicable
Certificates and the Class A Certificates upon ten days' written notice to
the Trustee, the Class A Trustee and each other Class C Certificateholder,
provided that (A) if prior to the end of such ten-day period any other Class
C Certificateholder notifies such purchasing Class C Certificateholder that
such other Class C Certificateholder wants to participate in such purchase,
then such other Class C Certificateholder may join with the purchasing Class
C Certificateholder to purchase all, but not less than all, of the Applicable
Certificates and the Class A Certificates pro rata based on the Fractional
Undivided Interest in the Class C Trust held by each such Class C
Certificateholder and (B) if prior to the end of such ten-day period any
other Class C Certificateholder fails to notify the purchasing Class C
Certificateholder of such other Class C Certificateholder's desire to
participate in such a purchase, then such other Class C Certificateholder
shall lose its right to purchase the Applicable Certificates pursuant to this
Section 4.01(b).
The purchase price with respect to the Applicable Certificates shall be
equal to the Pool Balance of the Applicable Certificates, together with
accrued and unpaid interest thereon to the date of such purchase, without
premium, but including any other amounts then due and payable to the
Applicable Certificateholders under this Agreement, the Intercreditor
Agreement, the Escrow Agreement or any Note Document or on or in respect of
the Applicable Certificates; provided, however, that (i) if such purchase
occurs after the record date specified in Section 2.03(b) of the Escrow
Agreement relating to the distribution of unused Deposits and accrued and
unpaid interest thereunder, such purchase price shall be reduced by the
aggregate amount of unused Deposits and interest to be distributed under the
Escrow Agreement (which deducted amounts shall remain distributable to, and
may be retained by, the Applicable Certificateholder as of such Record Date)
and (ii) if such purchase occurs after a Record Date, such purchase price
shall be reduced by the amount to be distributed hereunder on the related
Distribution Date (which deducted amounts shall remain distributable to, and
may be retained by, the Applicable Certificateholder as of such Record Date);
provided further that no such purchase of Applicable Certificates shall be
effective unless the purchaser(s) shall certify to the Trustee that
contemporaneously with such purchase, such purchaser(s) is purchasing,
pursuant to the terms of this Agreement and the Other Agreements, the
Applicable Certificates and the Class A Certificates which are senior to the
securities held by such purchaser(s). Each payment of the purchase price of
the Applicable Certificates referred to in the first sentence hereof shall be
made to an account or accounts designated by the Trustee and each such
purchase shall be subject to the terms of this Section 4.01(b). Each
Applicable Certificateholder agrees by its acceptance of its Applicable
Certificate that it will, subject to Section 3.04 of the Basic Agreement,
upon payment from such Class C Certificateholder(s) of the purchase price set
forth in the first sentence of this paragraph, forthwith sell, assign,
transfer and convey to the purchaser(s) thereof (without recourse,
representation or warranty of any kind except for its own acts), all of the
right, title,
15
interest and obligation of such Applicable Certificateholder in this
Agreement, the Escrow Agreement, the Deposit Agreement, the Intercreditor
Agreement, the Liquidity Facility, the Note Documents and all Applicable
Certificates and Escrow Receipts held by such Applicable Certificateholder
(excluding all right, title and interest under any of the foregoing to the
extent such right, title or interest is with respect to an obligation not
then due and payable as respects any action or inaction or state of affairs
occurring prior to such sale) and the purchaser shall assume all of such
Applicable Certificateholder's obligations under this Agreement, the Escrow
Agreement, the Deposit Agreement, the Intercreditor Agreement, the Liquidity
Facility, the Note Documents and all such Applicable Certificates and Escrow
Receipts. The Applicable Certificates will be deemed to be purchased on the
date payment of the purchase price is made notwithstanding the failure of the
Applicable Certificateholders to deliver any Applicable Certificates and,
upon such a purchase, (i) the only rights of the Applicable
Certificateholders will be to deliver the Applicable Certificates to the
purchaser(s) and receive the purchase price for such Applicable Certificates
and (ii) if the purchaser(s) shall so request, such Applicable
Certificateholder will comply with all the provisions of Section 3.04 of the
Basic Agreement to enable new Applicable Certificates to be issued to the
purchaser in such denominations as it shall request. All charges and
expenses in connection with the issuance of any such new Applicable
Certificates shall be borne by the purchaser thereof.
As used in this Section 4.01(a), the terms "Class A Certificate", "Class
A Trustee", "Class C Certificateholder", "Class C Trust", "Class C
Certificate" and "Class C Trustee" shall have the respective meanings
assigned to such terms in the Intercreditor Agreement.
(b) This Section 4.01 supersedes and replaces Section 6.01(b) of the
Basic Agreement.
ARTICLE V
THE TRUSTEE
Section 5.01. Delivery of Documents; Delivery Dates. (a) The Trustee
is hereby directed (i) to execute and deliver the Intercreditor Agreement,
the Escrow Agreement, the Note Purchase Agreement and the Participation
Agreements relating to the Delivered Aircraft on or prior to the Issuance
Date, each in the form delivered to the Trustee by the Company and (ii)
subject to the respective terms thereof, to perform its obligations
thereunder. Upon request of the Company and the satisfaction or waiver of
the closing conditions specified in the Underwriting Agreement, the Trustee
shall execute, deliver, authenticate, issue and sell Applicable Certificates
in authorized denominations equaling in the aggregate the amount set forth,
with respect to the Applicable Trust, in Schedule I to the Underwriting
Agreement evidencing the entire ownership interest in the Applicable Trust,
which amount equals the
16
maximum aggregate principal amount of Equipment Notes which may be purchased
by the Trustee pursuant to the Note Purchase Agreement and the Participation
Agreements. Except as provided in Sections 3.03, 3.04, 3.05 and 3.06 of the
Basic Agreement, the Trustee shall not execute, authenticate or deliver
Applicable Certificates in excess of the aggregate amount specified in this
paragraph.
(b) On or after the Issuance Date the Company may deliver from time
to time to the Trustee a Delivery Notice relating to one or more Equipment
Notes. After receipt of a Delivery Notice and in any case no later than one
Business Day prior to a Delivery Date as to which such Delivery Notice
relates (the "Applicable Delivery Date"), the Trustee shall (as and when
specified in the Delivery Notice) instruct the Escrow Agent to provide a
Notice of Purchase Withdrawal to the Depositary requesting (A) the withdrawal
of one or more Deposits on the Applicable Delivery Date in accordance with
and to the extent permitted by the terms of the Escrow Agreement and the
Deposit Agreement and (B) the payment of all, or a portion, of such Deposit
or Deposits in an amount equal in the aggregate to the purchase price of such
Equipment Notes to or on behalf of the Owner Trustee or the Company, as the
case may be, issuing such Equipment Notes, all as shall be described in the
Delivery Notice. The Trustee shall (as and when specified in such Delivery
Notice), subject to the conditions set forth in Section 3 of the Note
Purchase Agreement, enter into and perform its obligations under the
Participation Agreement specified in such Delivery Notice (the "Applicable
Participation Agreement") and cause such certificates, documents and legal
opinions relating to the Trustee to be duly delivered as required by the
Applicable Participation Agreement. If at any time prior to the Applicable
Delivery Date, the Trustee receives a notice of postponement pursuant to
Section 2(e) or 2(f) of the Note Purchase Agreement, then the Trustee shall
give the Depositary (with a copy to the Escrow Agent) a notice of
cancellation of such Notice of Purchase Withdrawal relating to such Deposit
or Deposits on such Applicable Delivery Date. Upon satisfaction of the
conditions specified in the Note Purchase Agreement and the Applicable
Participation Agreement, the Trustee shall purchase the applicable Equipment
Notes with the proceeds of the withdrawals of one or more Deposits made on
the Applicable Delivery Date in accordance with the terms of the Deposit
Agreement and the Escrow Agreement. The purchase price of such Equipment
Notes shall equal the principal amount of such Equipment Notes. Amounts
withdrawn from such Deposit or Deposits in excess of the purchase price of
the Equipment Notes or to the extent not applied on the Applicable Delivery
Date to the purchase price of the Equipment Notes, shall be re-deposited by
the Trustee with the Depositary on the Applicable Delivery Date in accordance
with the terms of the Deposit Agreement. The provisions of this Section
5.01(b) shall not apply to the Delivered aircraft Equipment Notes. The
provisions of this Section 5.01(b) and Section 5.01(c) hereof supersede and
replace the provisions of Section 2.02 of the Basic Agreement (which are
inapplicable to the Trust), and all provisions of the Basic Agreement
relating to Postponed Notes and Section 2.02 of the Basic Agreement shall not
apply to the Applicable Trust, provided that (i) the reference in Section
2.03 of the Basic Agreement to "Section 2.02 hereof" shall apply to the
17
Applicable Trust and shall be deemed to refer to Section 5.01(c) of this
Trust Supplement and (ii) for purposes of Section 4.02(c) of the Basic
Agreement, the reference to (x) "Postponed Notes" shall apply to the
Applicable Trust and such term shall have the meaning specified herein and
(y) "Section 2.02" shall apply to the Applicable Trust and shall be deemed a
reference to Section 5.01(c) of this Trust Supplement.
(c) The Trustee shall purchase, pursuant to the terms and conditions
of the Participation Agreements relating to the Delivered Aircraft, the
Delivered Aircraft Equipment Notes on the Issuance Date or on December 15,
1998, as specified in Exhibit C hereto.
In the case of (x) the Delivered Aircraft Equipment Notes having a
scheduled Transfer Date of December 15, 1998 and (y) any Delivered Aircraft
Equipment Notes with respect to which the Company shall deliver to the
Trustee a Postponement Notice relating to one or more Postponed Notes, the
Trustee shall deposit into an escrow account (the "Postponed Notes Escrow
Account") to be maintained as part of the Applicable Trust an amount equal to
the purchase price of such Postponed Notes (the "Postponed Notes Escrowed
Funds"). The Postponed Notes Escrowed Funds so deposited shall be invested
by the Trustee at the written direction of the Company in Specified
Investments (i) maturing no later than any scheduled Transfer Date relating
to the 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 any Postponed Notes will not be issued, with respect to
the portion of the Postponed Notes Escrowed Funds relating to such Postponed
Notes, maturing on the next applicable Special Distribution Date, if such
investments are reasonably available for purchase. The Trustee shall make
withdrawals from the Postponed Notes Escrow Account only as provided in this
Agreement. Upon request of the Company on one or more occasions and the
satisfaction of the closing conditions specified in the applicable
Participation Agreements on or prior to the Postponement Cut-off Date, the
Trustee shall purchase the applicable Postponed Notes with the Postponed
Notes Escrowed Funds withdrawn from the Postponed Notes 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 a Postponed Notes 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 of the Company in
Specified Investments maturing as provided in the preceding paragraph.
Any earnings or Specified Investments received from time to time by the
Trustee shall be promptly distributed to the Company. The Company shall pay
to the Trustee
18
for deposit to the Postponed Notes Escrow Account an amount equal to any
losses on such Specified Investments as incurred.
On the January 30, 1999 Regular Distribution Date, the Company will pay
(in immediately available funds) to the Trustee an amount equal to the
interest that would have accrued on any Postponed Notes, 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 the Company notifies the Trustee prior to the Postponement Cut-off
Date that any Postponed Notes will not be issued on or prior to the
Postponement Cut-off Date for any reason, on the next Special Distribution
Date occurring not less than 15 days following the date of such notice (i)
the Company shall pay to the Trustee for deposit in the 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 the 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 Postponed Notes
Escrowed Funds that would have been used to purchase the Postponed Notes
designated in such notice and the amount paid by the Company 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 the Postponement Cut-off Date, an amount equal to less than all
of the Postponed Notes Escrowed Funds (other than Postponed Notes Escrowed
Funds referred to in the immediately preceding paragraph) has been used to
purchase Postponed Notes, on the next Special Distribution Date occurring not
less than 15 days following the Postponement Cut-off Date (i) the Company
shall pay to the Trustee for deposit in the 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
Postponed Notes Escrowed Funds (other than Postponed Notes Escrowed Funds
referred to in the immediately preceding paragraph) but not so purchased at a
rate equal to the interest rate applicable to the Applicable Certificates
from the Issuance Date to, but not including, such Special Distribution Date
and (ii) the Trustee shall transfer such unused Postponed Notes Escrowed
Funds and the amount paid by the Company 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 5.02. Withdrawal of Deposits. If any Deposits remain
outstanding on the Business Day next succeeding the Cut-off Date, (i) the
Trustee shall give the Escrow Agent notice that the Trustee's obligation to
purchase Equipment Notes under the Note Purchase Agreement has terminated and
instruct the Escrow Agent to provide a notice of Final
19
Withdrawal to the Depositary substantially in the form of Exhibit B to the
Deposit Agreement (the "Final Withdrawal Notice") and (ii) the Trustee will
make a demand upon the Company under the Note Purchase Agreement for an
amount equal to the Special Redemption Premium, such payment to be made on
the Final Withdrawal Date.
Section 5.03. The Trustee. (a) Subject to Section 5.04 of this Trust
Supplement and Section 7.15 of the Basic Agreement, the Trustee shall not be
responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Trust Supplement, the Deposit Agreement or the Escrow
Agreement or the due execution hereof or thereof by the Company or the other
parties thereto (other than the Trustee), or for or in respect of the
recitals and statements contained herein or therein, all of which recitals
and statements are made solely by the Company.
(b) Except as herein otherwise provided, no duties, responsibilities
or liabilities are assumed, or shall be construed to be assumed by the
Trustee by reason of this Trust Supplement other than as set forth in the
Basic Agreement, and this Trust Supplement is executed and accepted on behalf
of the Trustee, subject to all the terms and conditions set forth in the
Basic Agreement, upon the effectiveness thereof, as fully to all intents as
if the same were herein set forth at length.
Section 5.04. Representations and Warranties of the Trustee. The
Trustee hereby represents and warrants that:
(a) the Trustee has full power, authority and legal right to
execute, deliver and perform this Trust Supplement, the Intercreditor
Agreement, the Escrow Agreement and the Note Documents to which it is a party
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Supplement, the Intercreditor Agreement, the
Escrow Agreement and the Note Documents to which it is a party;
(b) the execution, delivery and performance by the Trustee of this
Trust Supplement, the Intercreditor Agreement, the Escrow Agreement and the
Note Documents to which it is a party (i) will not violate any provision of
any United States federal law or the law of the state of the United States
where it is located governing the banking and trust powers of the Trustee or
any order, writ, judgment, or decree of any court, arbitrator or governmental
authority applicable to the Trustee or any of its assets, (ii) will not
violate any provision of the articles of association or by-laws of the
Trustee, and (iii) will not violate any provision of, or constitute, with or
without notice or lapse of time, a default under, or result in the creation
or imposition of any lien on any properties included in the Trust Property
pursuant to the provisions of any mortgage, indenture, contract, agreement or
other undertaking to which it is a party,
20
which violation, default or lien could reasonably be expected to have an
adverse effect on the Trustee's performance or ability to perform its duties
hereunder or thereunder or on the transactions contemplated herein or
therein;
(c) the execution, delivery and performance by the Trustee of this
Trust Supplement, the Intercreditor Agreement, the Escrow Agreement and the
Note Documents to which it is a party will not require the authorization,
consent, or approval of, the giving of notice to, the filing or registration
with, or the taking of any other action in respect of, any governmental
authority or agency of the United States or the state of the United States
where it is located regulating the banking and corporate trust activities of
the Trustee; and
(d) this Trust Supplement, the Intercreditor Agreement, the Escrow
Agreement and the Note Documents to which it is a party have been, or will
be, as applicable, duly executed and delivered by the Trustee and constitute,
or will constitute, as applicable, the legal, valid and binding agreements of
the Trustee, enforceable against it in accordance with their respective
terms; provided, however, that enforce ability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and (ii) general principles of
equity.
Section 5.05. Trustee Liens. The Trustee in its individual capacity
agrees, in addition to the agreements contained in Section 7.17 of the Basic
Agreement, that it will at its own cost and expense promptly take any action
as may be necessary to duly discharge and satisfy in full any Trustee's Liens
on or with respect to the Trust Property which is attributable to the Trustee
in its individual capacity and which is unrelated to the transactions
contemplated by the Intercreditor Agreement or the Note Purchase Agreement.
ARTICLE VI
SUPPLEMENTAL AGREEMENTS
Section 6.01. Supplemental Agreements Without Consent of Applicable
Certificateholders. Under the terms of, and subject to the limitations
contained in, Section 9.01 of the Basic Agreement, the Company may (but will
not be required to), and the Trustee (subject to Section 9.03 of the Basic
Agreement) shall, at the Company's request, at any time and from time to
time, enter into one or more agreements supplemental to the Escrow Agreement,
the Note Purchase Agreement or the Deposit Agreement, for any of the purposes
set forth in clauses (1) through (9) of such Section 9.01, except that (a)
clause (3) of such Section 9.01 shall be deemed to include the Company's
rights and powers conferred by the Note Purchase Agreement and (b) clause (4)
of such Section 9.01 shall be deemed to include
21
corrections or supplements to provisions of the Escrow Agreement or the
Deposit Agreement which may be defective or inconsistent with any other
provision of this Agreement or contained in any agreement referred to in such
clause (4) and the curing of any ambiguity or the modification of any other
provision with respect to matters or questions arising under the Escrow
Agreement or the Deposit Agreement.
Section 6.02. Supplemental Agreements with Consent of Applicable
Certificateholders The provisions of Section 9.02 of the Basic Agreement
shall apply to agreements or amendments for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of the Escrow Agreement, the Deposit Agreement or the Note Purchase Agreement
to the extent applicable to the Applicable Certificateholders approving such
agreement or amendment or modifying in any manner the rights and obligations
of such Applicable Certificateholders under the Escrow Agreement, the Deposit
Agreement or the Note Purchase Agreement; provided that the provisions of
Section 9.02(1) of the Basic Agreement shall be deemed to include reductions
in any manner of, or delay in the timing of, any receipt by the Applicable
Certificateholders of payments upon the Deposits; provided further that the
provisions of Section 9.02(6) of the Basic Agreement shall not apply to the
Applicable Trust and any supplemental agreement having the effect described
in said Section 9.02(6) shall require only the consent of Applicable
Certificateholders holding Applicable Certificates evidencing a Fractional
Undivided Interest aggregating not less than a majority in interest in the
Applicable Trust.
ARTICLE VII
TERMINATION OF TRUST
Section 7.01. Termination of the Trust. The respective obligations and
responsibilities of the Company and the Trustee with respect to the
Applicable Trust shall terminate upon the distribution to all Applicable
Certificateholders and the Trustee of all amounts required to be distributed
to them pursuant to this Agreement and the disposition of all property held
as part of the Trust Property; provided, however, that in no event shall the
Applicable Trust continue beyond 21 years less one day following the death of
the last survivor of all descendants living on the date thereof of Joseph P.
Kennedy, Sr., unless applicable law shall permit a longer term, in which case
such longer term shall apply.
Notice of any termination, specifying the Distribution Date upon which
the Applicable Certificateholders may surrender their Applicable Certificates
to the Trustee for payment of the final distribution and cancellation, shall
be mailed promptly by the Trustee to Applicable Certificateholders not
earlier than the 60th day and not later than the 15th day next preceding such
final Distribution Date specifying (A) the Distribution Date upon which the
proposed final payment of the Applicable Certificates will be made upon
presentation and
22
surrender of Applicable Certificates at the office or agency of the Trustee
therein specified, (B) the amount of any such proposed final payment, and (c)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Applicable Certificates at the office or agency of the Trustee therein
specified. The Trustee shall give such notice to the Registrar at the time
such notice is given to Applicable Certificateholders. Upon presentation and
surrender of the Applicable Certificates in accordance with such notice, the
Trustee shall cause to be distributed to Applicable Certificateholders such
final payments.
In the event that all of the Applicable Certificateholders shall not
surrender their Applicable Certificates for cancellation within six months
after the date specified in the above-mentioned written notice, the Trustee
shall give a second written notice to the remaining Applicable
Certificateholders to surrender their Applicable Certificates for
cancellation and receive the final distribution with respect thereto. No
additional interest shall accrue on the Applicable Certificates after the
Distribution Date specified in the first written notice. In the event that
any money held by the Trustee for the payment of distributions on the
Applicable Certificates shall remain unclaimed for two years (or such lesser
time as the Trustee shall be satisfied, after sixty days' notice from the
Company, is one month prior to the escheat period provided under applicable
law) after the final distribution date with respect thereto, the Trustee
shall pay to each Loan Trustee the appropriate amount of money relating to
such Loan Trustee and shall give written notice thereof to the related Owner
Trustees, the Owner Participants and the Company.
ARTICLE VIII
THE COMPANY
Section 8.01. Consolidation, Merges, Etc. Section 5.02 of the Basic
Agreement is hereby amended with respect to the Applicable Trust by deleting
the word "and" at the end of clause (b) thereof, renumbering clause (c)
thereof as clause "(d)" and inserting a new clause (c) as follows:
"(c) immediately after giving effect to such transaction, no Indenture
Event of Default (in the case of an Owned Aircraft) or, in the case of a
Leased Aircraft, Lease Event of Default (as defined in the related Indenture)
shall have occurred and be continuing; and"
23
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.01. Basic Agreement Ratified. Except and so far as herein
expressly provided, all of the provisions, terms and conditions of the Basic
Agreement are in all respects ratified and confirmed; and the Basic Agreement
and this Trust Supplement shall be taken, read and construed as one and the
same instrument.
Section 9.02. GOVERNING LAW. THIS AGREEMENT AND THE APPLICABLE
CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.
Section 9.03. Execution in Counterparts. This Trust Supplement may be
executed in any number of counterparts, each of which shall be an original,
but such counterparts shall together constitute but one and the same
instrument.
Section 9.04. Intention of Parties. The parties hereto intend that the
Applicable Trust be classified for U.S. federal income tax purposes as a
grantor trust under Subpart E, Part I of Subchapter J of the Internal Revenue
Code of 1986, as amended, and not as a trust or association taxable as a
corporation or as a partnership. Each Applicable Certificateholder and
Investor, by its acceptance of its Applicable Certificate or a beneficial
interest therein, agrees to treat the Applicable Trust as a grantor trust for
all U.S. federal, state and local income tax purposes. The powers granted
and obligations undertaken pursuant to the Agreement shall be so construed so
as to further such intent.
24
IN WITNESS WHEREOF, the Company and the Trustee have caused this Trust
Supplement to be duly executed by their respective officers thereto duly
authorized, as of the day and year first written above.
US AIRWAYS, INC.
By:
----------------------------
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By:
----------------------------
Name:
Title:
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 the
registered owner hereof, Cede & Co., has an interest herein.]*
US AIRWAYS PASS THROUGH TRUST 1998-1B
7.35% US Airways Pass Through Certificate, Series 1998-1B
Issuance Date: December 14, 1998
Final Expected Distribution Date: January 30, 2018
Evidencing A Fractional Undivided Interest In The US Airways Pass Through
Trust 1998-1B, The Property Of Which Includes Certain Equipment Notes Each
Secured By An Aircraft Leased To Or Owned By US Airways, Inc.
Certificate
No.______ $__________Fractional Undivided Interest representing
0.001230284% 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 1998-1B (the "Trust") created
by State Street Bank and Trust Company, as trustee (the "Trustee"), pursuant
to a Pass Through Trust Agreement, dated as of December 4,
_______________________________
* This legend to appear on Book-Entry Certifictaes to be deposited with the
Depository Trust Company.
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1998 (the "Basic Agreement"), between the Trustee and US Airways, Inc., Inc.,
a Delaware corporation (the "Company"), as supplemented by Trust Supplement
No. 1998-1B thereto, dated as of December 14, 1998 (the "Trust Supplement"
and, together with the Basic Agreement, the "Agreement"), between the Trustee
and 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 "7.35%
US Airways Pass Through Certificates, Series 1998-1B" (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 the Intercreditor
Agreement. The property of the Trust includes certain Equipment Notes and
all rights of the Trust to receive payments under the Intercreditor Agreement
and any Liquidity Facility (the "Trust Property"). Each issue of the
Equipment Notes is secured by, among other things, a security interest in an
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 the
Intercreditor Agreement, from funds then available to the Trustee, there will
be distributed on each January 30 and July 30 (a "Regular Distribution Date")
commencing January 30, 1999, 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 the 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
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the intervening period. The Trustee shall mail notice of each Special
Payment and the Special Distribution Date therefor to the Certificateholder
of this Certificate.
Distributions on this Certificate will be made by the Trustee by check
mailed to the Person entitled thereto, without presentation or surrender of
this Certificate or the making of any notation hereon, except that with
respect to Certificates registered on the Record Date in the name of a
Clearing Agency (or its nominee), such distribution shall be made by wire
transfer. Except as otherwise provided in the Agreement and notwithstanding
the above, the final distribution on this Certificate will be made after
notice mailed by the Trustee of the pendency of such distribution and only
upon presentation and surrender of this Certificate at the office or agency
of the Trustee specified in such notice.
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company or the Trustee or
any affiliate thereof. The Certificates are limited in right or payment, all
as more specifically set forth on the face hereof and in the Agreement. All
payments or distributions made to Certificateholders under the Agreement
shall be made only from the Trust Property and only to the extent that the
Trustee shall have sufficient income or proceeds from the Trust Property to
make such payments in accordance with the terms of the Agreement. Each
Certificateholder of this Certificate, by its acceptance hereof, agrees that
it will look solely to the income and proceeds from the Trust Property to the
extent available for distribution to such Certificateholder as provided in
the Agreement. This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds, and duties evidenced
hereby. A copy of the Agreement may be examined during normal business hours
at the principal office of the Trustee, and at such other places, if any,
designated by the Trustee, by any Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any
time by the Company and the Trustee with the consent of the
Certificateholders holding Certificates evidencing Fractional Undivided
Interests aggregating not less than a majority in interest in the Trust. Any
such consent by the Certificateholder of this Certificate shall be conclusive
and binding on such Certificateholder and upon all future Certificateholders
of this Certificate and of any Certificate issued upon the transfer hereof or
in exchange hereof or in lieu hereof whether or not notation of such consent
is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the
Certificateholders of any of the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Register upon surrender of this
A-4
Certificate for registration of transfer at the offices or agencies
maintained by the Trustee in its capacity as Registrar, or by any successor
Registrar, duly endorsed or accompanied by a written instrument of transfer
in form satisfactory to the Trustee and the Registrar, duly executed by the
Certificateholder hereof or such Certificateholder's attorney duly authorized
in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in
the Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $1,000 Fractional Undivided Interest and
integral multiples thereof except that one Certificate may be issued in a
different denomination. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
Each Certificateholder and Investor, by its acceptance of this
Certificate or a beneficial interest herein, agrees to treat the Trust as a
grantor trust for all U.S. federal, state and local income tax purposes.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered
as the owner hereof for all purposes, and neither the Trustee, the Registrar,
nor any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to Certificate
holders of all amounts required to be distributed to them pursuant to the
Agreement and the disposition of all property held as part of the Trust
Property.
Any Person acquiring or accepting this Certificate or an interest herein
will, by such acquisition or acceptance, be deemed to have represented and
warranted that either: (i) the assets of an employee benefit plan subject to
Title I of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or of a plan subject to Section 4975 of the Internal Revenue Code
of 1986, as amended (the "Code"), have not been used to purchase this
Certificate or an interest herein or (ii) the purchase and holding of this
Certificate or interest herein are exempt from the prohibited transaction
restrictions of ERISA and the Code pursuant to one or more prohibited
transaction statutory or administration exemptions.
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THE AGREEMENT AND THIS CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
Unless the certificate of authentication hereon has been executed by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
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IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
US AIRWAYS PASS THROUGH TRUST 1998-1B
By: STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
-----------------------------------
Name:
Title:
FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
By: STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
-------------------------------
Name:
Title:
EXHIBIT B
[DTC Letter of Representations]
B-2
EXHIBIT C
Aircraft Type and Registration No. Scheduled Transfer Date
---------------------------------- -----------------------
Airbus A319/N700UW December 15, 1998
Airbus A319/N701UW December 15, 1998
Airbus A319/N702UW December 14, 1998
Airbus A319/N703UW December 14, 1998
Airbus A319/N704US December 15, 1998
EXHIBIT 4(a)(iv)
DEPOSIT AGREEMENT
(Class A)
Dated as of December 14, 1998
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION
as Escrow Agent
and
CREDIT SUISSE FIRST BOSTON, New York Branch
as Depositary
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I FORMATION OF DEPOSITS 2
Section 1.1 Acceptance of Depositary 2
Section 1.2 Establishment of Accounts 2
ARTICLE II MAINTENANCE OF DEPOSITS 3
Section 2.1 Deposits 3
Section 2.2 Interest 3
Section 2.3 Withdrawals 3
Section 2.4 Other Accounts 4
ARTICLE III TERMINATION 5
ARTICLE IV PAYMENTS 5
ARTICLE V REPRESENTATIONS AND WARRANTIES 6
ARTICLE VI TRANSFER 7
ARTICLE VII AMENDMENT 7
ARTICLE VIII NOTICES 7
ARTICLE IX OBLIGATIONS UNCONDITIONAL 8
ARTICLE X ENTIRE AGREEMENT 8
ARTICLE XI GOVERNING LAW 8
ARTICLE XII WAIVER OF JURY TRIAL RIGHT 9
ARTICLE XIII COUNTERPARTS 9
i
ARTICLE XIV HEAD OFFICE OBLIGATION 9
Schedule I Schedule of Deposits
Exhibit A Notice of Purchase Withdrawal
Exhibit B Notice of Final Withdrawal
ii
This DEPOSIT AGREEMENT (Class A) dated as of December 14, 1998 (as
amended, modified or supplemented from time to time, this "Agreement")
between First Security Bank, National Association, a national banking
association, as Escrow Agent under the Escrow and Paying Agent Agreement
referred to below (in such capacity, together with its successors in such
capacity, the "Escrow Agent"), and Credit Suisse First Boston, a banking
institution organized under the laws of Switzerland acting through its New
York branch, as depositary bank (the "Depositary").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, US Airways, Inc. ("US Airways") and State Street Bank and Trust
Company, not in its individual capacity except as otherwise expressly
provided therein, but solely as trustee (in such capacity, together with its
successors in such capacity, the "Pass Through Trustee") have entered into a
Trust Supplement, dated December 14, 1998, to the Pass Through Trust
Agreement dated as of December 4, 1998 (together, as amended, modified or
supplemented from time to time in accordance with the terms thereof, the
"Pass Through Trust Agreement") relating to US Airways Pass Through Trust
1998-1A pursuant to which the US Airways Pass Through Trust, Series 1998-1A
Certificates referred to therein (the "Certificates") are being issued;
WHEREAS, US Airways and Morgan Stanley & Co. Incorporated, Credit Suisse
First Boston Corporation, Lehman Brothers Inc. and Salomon Smith Barney Inc.
(collectively, the "Underwriters" and, together with their respective
transferees and assigns as registered owners of the Certificates, the
"Investors") have entered into an Underwriting Agreement dated as of December
4, 1998 pursuant to which the Pass Through Trustee will issue and sell the
Certificates to the Underwriters;
WHEREAS, US Airways, the Pass Through Trustee, certain other pass
through trustees and certain other persons concurrently herewith are entering
into the Note Purchase Agreement, dated as of the date hereof (the "Note
Purchase Agreement"), pursuant to which the Pass Through Trustee has agreed
to acquire from time to time on or prior to the Delivery Period Termination
Date (as defined in the Note Purchase Agreement) equipment notes (the
"Equipment Notes") issued to finance the acquisition of aircraft by US
Airways, as lessee or as owner, utilizing a portion of the proceeds from the
sale of the Certificates (the "Net Proceeds");
WHEREAS, the Escrow Agent, the Underwriters, the Pass Through Trustee
and State Street Bank and Trust Company, as paying agent for the Escrow Agent
(in such capacity, together with its successors in such capacity, the "Paying
Agent") concurrently herewith are entering into an Escrow and Paying Agent
Agreement, dated as of the date hereof (as amended, modified or supplemented
from time to time in accordance with the terms thereof, the "Escrow and
Paying Agent Agreement"); and
WHEREAS, the Underwriters and the Pass Through Trustee intend that the
Net Proceeds be held in escrow by the Escrow Agent on behalf of the Investors
pursuant to the Escrow and Paying Agent Agreement, subject to withdrawal upon
request of and proper certification by the Pass Through Trustee for the
purpose of purchasing Equipment Notes, and that pending such withdrawal the
Net Proceeds be deposited by the Escrow Agent with the Depositary pursuant to
this Agreement, which provides for the Depositary to pay interest for
distribution to the Investors and to establish accounts from which the Escrow
Agent shall make withdrawals upon request of and proper certification by the
Pass Through Trustee.
NOW, THEREFORE, in consideration of the obligations contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
FORMATION OF DEPOSITS
---------------------
Section 1.1 Acceptance of Depositary. The Depositary hereby agrees to
act as depositary bank as provided herein and in connection therewith to
accept all amounts to be delivered to or held by the Depositary pursuant to
the terms of this Agreement. The Depositary further agrees to hold, maintain
and safeguard the Deposits and the Accounts (as defined below) during the
term of this Agreement in accordance with the provisions of this Agreement.
The Escrow Agent shall not have any right to withdraw, assign or otherwise
transfer moneys held in the Accounts except as permitted by this Agreement.
Section 1.2 Establishment of Accounts. The Escrow Agent hereby
instructs the Depositary, and the Depositary agrees, to establish the
separate deposit accounts listed on Schedule I hereto and to establish such
additional separate deposit accounts as may be required in connection with
the deposits contemplated by Section
2
2.4 hereof (each, an "Account" and collectively, the "Accounts"), each in the
name of the Escrow Agent and all on the terms and conditions set forth in
this Agreement.
ARTICLE II
MAINTENANCE OF DEPOSITS
-----------------------
Section 2.1 Deposits. The Escrow Agent shall direct the Underwriters
to deposit with the Depositary on the date of this Agreement (the "Deposit
Date") in Federal (same day) funds by official check or checks or wire or
other transfer to: Bank of New York, Reference: US Airways 1998-1, ABA#
021000018, Account # 8900329238, and the Depositary shall accept from the
Underwriters, on behalf of the Escrow Agent, the sum of US$291,181,330. Upon
acceptance of such sum, the Depositary shall (i) establish each of the
deposits specified in Schedule I hereto maturing on the respective dates set
forth therein (including any deposit made pursuant to Section 2.4 hereof,
individually, a "Deposit" and, collectively, the "Deposits") and (ii)
credit each Deposit to the related Account as set forth therein. No amount
shall be deposited in any Account other than the related Deposit.
Section 2.2 Interest. Each Deposit shall bear interest from and
including the date of deposit to but excluding the date of withdrawal at the
rate of 6.85% per annum (computed on the basis of a year of twelve 30-day
months) payable to the Paying Agent on behalf of the Escrow Agent semi-
annually in arrears on each January 30 and July 30, commencing on January 30,
1999 (each, an "Interest Payment Date"), and on the date of the Final
Withdrawal (as defined below), all in accordance with the terms of this
Agreement (whether or not any such Deposit is withdrawn on an Interest
Payment Date). Interest accrued on any Deposit that is withdrawn pursuant to
a Notice of Purchase Withdrawal (as defined below) shall be paid on the next
Interest Payment Date, notwithstanding any intervening Final Withdrawal.
Section 2.3 Withdrawals. (a) On and after the date seven (7) days
after the establishment of any Deposit, the Escrow Agent may, by providing at
least one (1) Business Day's prior notice of withdrawal to the Depositary in
the form of Exhibit A hereto (a "Notice of Purchase Withdrawal"), withdraw
not less than the entire balance of such Deposit, except that at any time
prior to the actual withdrawal of such Deposit, the Escrow Agent or the Pass
Through Trustee may, by notice to the Depositary, cancel such withdrawal
(including on the scheduled date therefor), and thereafter such Deposit shall
continue to be maintained by the Depositary in
3
accordance with the original terms thereof. Following such withdrawal the
balance in the related Account shall be zero and the Depositary shall close
such Account. As used herein, "Business Day" means any day, other than a
Saturday, Sunday or other day on which commercial banks are authorized or
required by law to close in New York, New York, Pittsburgh, Pennsylvania,
Boston, Massachusetts or Salt Lake City, Utah.
(b) The Escrow Agent may, by providing at least fifteen (15) days'
prior notice of withdrawal to the Depositary in the form of Exhibit B hereto
(a "Notice of Final Withdrawal"), withdraw the entire amount of all of the
remaining Deposits together with the payment by the Depositary of all accrued
and unpaid interest on such Deposits to but excluding the specified date of
withdrawal (a "Final Withdrawal"), on such date as shall be specified in such
Notice of Final Withdrawal. If a Notice of Final Withdrawal has not been
given to the Depositary on or before November 1, 1999 and there are
unwithdrawn Deposits on such date, the Depositary shall pay the amount of the
Final Withdrawal to the Paying Agent on November 16, 1999.
(c) If the Depositary receives a duly completed Notice of Purchase
Withdrawal or Notice of Final Withdrawal complying with the provisions of
this Agreement, it shall make the payments specified therein in accordance
with the provisions of this Agreement.
Section 2.4 Other Accounts. On the date of withdrawal of any Deposit,
the Escrow Agent, or the Pass Through Trustee on behalf of the Escrow Agent,
shall be entitled to re-deposit with the Depositary any portion thereof and
the Depositary shall accept the same for deposit hereunder. Any sums so
received for deposit shall be established as a new Deposit and credited to a
new Account, all as more fully provided in Section 2.1 hereof, and thereafter
the provisions of this Agreement shall apply thereto as fully and with the
same force and effect as if such Deposit had been established on the Deposit
Date except that (i) such Deposit may not be withdrawn prior to the date
seven days after the establishment thereof and (ii) such Deposit shall mature
on November 15, 1999 and bear interest as provided in Section 2.2. The
Depositary shall promptly give notice to the Escrow Agent of receipt of each
such re-deposit and the account number assigned thereto.
4
ARTICLE III
TERMINATION
-----------
This Agreement shall terminate on the fifth (5th) Business Day after the
later of the date on which (i) all of the Deposits shall have been withdrawn
and paid as provided herein without any re-deposit and (ii) all accrued and
unpaid interest on the Deposits shall have been paid as provided herein, but
in no event prior to the date on which the Depositary shall have performed in
full its obligations hereunder.
ARTICLE IV
PAYMENTS
--------
All payments (including, without limitation, those payments made in
respect of Taxes (as defined and provided for below)) made by the Depositary
hereunder shall be paid in United States Dollars and immediately available
funds by wire transfer (i) in the case of accrued interest on the Deposits
payable under Section 2.2 hereof or any Final Withdrawal, directly to the
Paying Agent at State Street Bank and Trust Company, 2 International Place,
4th Floor, Boston, MA 02110, ABA#011-0000-28, Account #9903-9901, Attention:
Melissa Lewandowski, Reference: US Airways 1998-1 EETC, or to such other
account as the Paying Agent may direct from time to time in writing to the
Depositary and the Escrow Agent and (ii) in the case of any withdrawal of one
or more Deposits pursuant to a Notice of Purchase Withdrawal, directly to or
as directed by the Pass Through Trustee as specified and in the manner
provided in such Notice of Purchase Withdrawal. The Depositary hereby waives
any and all rights of set-off, combination of accounts, right of retention or
similar right (whether arising under applicable law, contract or otherwise)
it may have against the Deposits howsoever arising. All payments on or in
respect of each Deposit shall be made free and clear of and without reduction
for or on account of any and all taxes, levies or other impositions or
charges (collectively, "Taxes"). However, if the Depositary or the Paying
Agent (pursuant to Section 2.4 of the Escrow and Paying Agent Agreement)
shall be required by law to deduct or withhold any Taxes from or in respect
of any sum payable hereunder, the Depositary shall: (i) make such deductions
or withholding; (ii) pay the full amount deducted or withheld (including in
respect of such additional amounts) to the competent taxation authority; and
(iii) if the Taxes required to be deducted or withheld are imposed by
Switzerland or any political subdivision thereof, pay such additional amounts
as may be necessary in order that the actual amount received by the
designated recipient of such sum under this Agreement or the Escrow and
Paying Agent Agreement after such deduction or withholding equals the sum it
would have
5
received had no such deduction or withholding been required. If the date on
which any payment due on any Deposit would otherwise fall on a day which is
not a Business Day, such payment shall be made on the next succeeding
Business Day with the same force and effect as if made on such scheduled
date, and no additional interest shall accrue in respect of such extension.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
The Depositary hereby represents and warrants to US Airways, the Escrow
Agent, the Pass Through Trustee and the Paying Agent that:
(a) it is a bank duly organized and validly existing in good
standing under the laws of its jurisdiction of organization and is duly
qualified to conduct banking business in the State of New York through its
New York branch;
(b) it has full power, authority and legal right to conduct its
business and operations as currently conducted and to enter into and perform
its obligations under this Agreement;
(c) the execution, delivery and performance of this Agreement have
been duly authorized by all necessary corporate action on the part of it and
do not require any stockholder approval, or approval or consent of any
trustee or holder of any indebtedness or obligations of it, and such document
has been duly executed and delivered by it and constitutes its legal, valid
and binding obligations enforceable against it in accordance with the terms
hereof;
(d) no authorization, consent or approval of or other action by,
and no notice to or filing with, any United States federal or state
governmental authority or regulatory body is required for the execution,
delivery or performance by it of this Agreement;
(e) neither the execution, delivery or performance by it of this
Agreement, nor compliance with the terms and provisions hereof, conflicts or
will conflict with or results or will result in a breach or violation of any
of the terms, conditions or provisions of, or will require any consent or
approval under, any law, governmental rule or regulation or the charter
documents, as amended, or bylaws, as amended, of it or any similar instrument
binding on it or any order, writ, injunction or decree of any court or
governmental authority against it or by which it or any of its
6
properties is bound or any indenture, mortgage or contract or other agreement
or instrument to which it is a party or by which it or any of its properties
is bound, or constitutes or will constitute a default thereunder or results
or will result in the imposition of any lien upon any of its properties; and
(f) there are no pending or, to its knowledge, threatened actions,
suits, investigations or proceedings (whether or not purportedly on behalf of
it) against or affecting it or any of its property before or by any court or
administrative agency which, if adversely determined, (i) would adversely
affect the ability of it to perform its obligations under this Agreement or
(ii) would call into question or challenge the validity of this Agreement or
the enforceability hereof in accordance with the terms hereof, nor is the
Depositary in default with respect to any order of any court, governmental
authority, arbitration board or administrative agency so as to adversely
affect its ability to perform its obligations under this Agreement.
ARTICLE VI
TRANSFER
--------
Neither party hereto shall be entitled to assign or otherwise transfer
this Agreement (or any interest herein) other than (in the case of the Escrow
Agent) to a successor escrow agent under Section 1.7 of the Escrow and Paying
Agent Agreement, and any purported assignment in violation thereof shall be
void. This Agreement shall be binding upon the parties hereto and their
respective successors and (in the case of the Escrow Agent) permitted
assigns.
ARTICLE VII
AMENDMENT
---------
This Agreement may not be amended, waived or otherwise modified except
by an instrument in writing signed by the party against whom the amendment,
waiver or other modification is sought to be enforced and by the Pass Through
Trustee.
ARTICLE VIII
NOTICES
-------
Unless otherwise expressly provided herein, any notice or other
communication under this Agreement shall be in writing (including by
facsimile) and
7
shall be deemed to be given and effective upon receipt thereof. All notices
shall be sent to (x) in the case of the Depositary, Credit Suisse First
Boston, 11 Madison Avenue, New York, New York 10010, Attention: Robert
Finney and Jennifer Toth (Telecopier: (212) 325-8319) or (y) in the case of
the Escrow Agent, First Security Bank, National Association, 79 South Main
Street, Salt Lake City, UT 84111, Attention: Corporate Trust Services
(Telecopier: (801) 246-5053), in each case, with a copy to the Pass Through
Trustee, State Street Bank and Trust Company, 2 International Place, 4th
Floor, Boston, MA 02110 (Telecopier: (617) 664-5151) and to US Airways, US
Airways, Inc., 2345 Crystal Drive, Arlington, VA 22227, Attention: Treasurer
(Telecopier: (703) 872-5936) (or at such other address as any such party may
specify from time to time in a written notice to the parties hereto). On or
prior to the execution of this Agreement, the Escrow Agent has delivered to
the Depositary a certificate containing specimen signatures of the
representatives of the Escrow Agent who are authorized to give notices and
instructions with respect to this Agreement. The Depositary may conclusively
rely on such certificate until the Depositary receives written notice from
the Escrow Agent to the contrary.
ARTICLE IX
OBLIGATIONS UNCONDITIONAL
-------------------------
The Depositary hereby acknowledges and agrees that its obligation to
repay each Deposit together with interest thereon as provided herein is
absolute, irrevocable and unconditional and constitutes a full recourse
obligation of the Depositary enforceable against it to the full extent of all
of its assets and properties.
ARTICLE X
ENTIRE AGREEMENT
----------------
This Agreement (including all attachments hereto) sets forth all of the
promises, covenants, agreements, conditions and understandings between the
Depositary and the Escrow Agent with respect to the subject matter hereof and
supersedes all prior and contemporaneous agreements and undertakings,
inducements or conditions, express or implied, oral or written.
ARTICLE XI
GOVERNING LAW
-------------
THIS AGREEMENT, AND THE RIGHTS AND OBLIGATIONS OF THE DEPOSITARY AND THE
ESCROW AGENT WITH RESPECT TO THE
8
DEPOSITS, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK AND SUBJECT TO THE PROVISIONS OF REGULATION D OF THE
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (OR ANY SUCCESSOR), AS THE
SAME MAY BE MODIFIED AND SUPPLEMENTED AND IN EFFECT FROM TIME TO TIME.
ARTICLE XII
WAIVER OF JURY TRIAL RIGHT
--------------------------
EACH OF THE DEPOSITARY AND THE ESCROW AGENT ACKNOWLEDGES AND ACCEPTS
THAT IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT SUCH PARTY IRREVOCABLY WAIVES ITS RIGHT TO A TRIAL BY JURY.
ARTICLE XIII
COUNTERPARTS
------------
This Agreement may be executed in one or more counterparts, all of which
taken together shall constitute one instrument.
ARTICLE XIV
HEAD OFFICE OBLIGATION
----------------------
Credit Suisse First Boston hereby agrees that the obligations of the
Depositary hereunder are also the obligations of Credit Suisse First Boston's
Head Office in Zurich, Switzerland. Accordingly, any beneficiary of this
Agreement will be able to proceed directly against Credit Suisse First
Boston's Head Office in Zurich, Switzerland if Credit Suisse First Boston's
New York branch defaults in its obligation to such beneficiary under this
Agreement.
9
IN WITNESS WHEREOF, the Escrow Agent and the Depositary have caused this
Deposit Agreement to be duly executed as of the day and year first above
written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, as Escrow Agent
By
---------------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON,
New York Branch, as Depositary
By
---------------------------------
Name:
Title:
By
---------------------------------
Name:
Title:
Schedule I
SCHEDULE OF DEPOSITS
--------------------
(Class A)
DATE TAIL NO. DEPOSIT ACCOUNT NO. MATURITY DATE
AMOUNT
12/14/98 N705UW $15,073,333 8900329238 10/31/1999
12/14/98 N101UW 17,594,667 8900329238 10/31/1999
12/14/98 N706US 15,253,333 8900329238 10/31/1999
12/14/98 N707UW 15,253,333 8900329238 10/31/1999
12/14/98 N708UW 15,264,000 8900329238 10/31/1999
12/14/98 N709UW 15,273,333 8900329238 10/31/1999
12/14/98 N102UW 17,777,333 8900329238 10/31/1999
12/14/98 N103US 17,777,333 8900329238 10/31/1999
12/14/98 N710UW 15,412,000 8900329238 10/31/1999
12/14/98 N104UW 17,789,333 8900329238 10/31/1999
12/14/98 N105UW 17,789,333 8900329238 10/31/1999
12/14/98 N711UW 15,421,333 8900329238 10/31/1999
12/14/98 N712US 15,421,333 8900329238 10/31/1999
12/14/98 N106US 17,937,333 8900329238 10/31/1999
12/14/98 N713UW 15,536,000 8900329238 10/31/1999
12/14/98 N714US 15,536,000 8900329238 10/31/1999
12/14/98 N715UW 15,536,000 8900329238 10/31/1999
12/14/98 N716UW 15,536,000 8900329238 10/31/1999
S-1
S-2
EXHIBIT A
---------
NOTICE OF PURCHASE WITHDRAWAL
-----------------------------
CREDIT SUISSE FIRST BOSTON
New York Branch
11 Madison Avenue
New York, NY 10010
Attention: Robert Finney and Jennifer Toth
Telecopier: (212) 325-8319
Ladies and Gentlemen:
Reference is made to the Deposit Agreement (Class A) dated as of
December 14, 1998 (the "Deposit Agreement") between First Security Bank,
National Association, as Escrow Agent, and Credit Suisse First Boston, New
York Branch, as Depositary (the "Depositary").
In accordance with Section 2.3(a) of the Deposit Agreement, the
undersigned hereby requests the withdrawal of the entire amount of the
Deposit, $__________, Account No. __________.
The undersigned hereby directs the Depositary to pay the proceeds of the
Deposit to _______________, Account No. __________, Reference: __________ on
_______________, _____, upon the telephonic request of a representative of
the Pass Through Trustee.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
as Escrow Agent
By
----------------------------
Name:
Title:
Dated:___________, ____
A-1
EXHIBIT B
---------
NOTICE OF FINAL WITHDRAWAL
--------------------------
CREDIT SUISSE FIRST BOSTON
New York Branch
11 Madison Avenue
New York, New York 10010
Attention: Robert Finney and Jennifer Toth
Telecopier: (212) 325-8319
Ladies and Gentlemen:
Reference is made to the Deposit Agreement (Class A) dated as of
December 14 , 1998 (the "Deposit Agreement") between First Security Bank,
National Association, as Escrow Agent, and Credit Suisse First Boston, New
York Branch (the "Depositary").
In accordance with Section 2.3(b) of the Deposit Agreement, the
undersigned hereby requests the withdrawal of the entire amount of all
Deposits.
The undersigned hereby directs the Depositary to pay the proceeds of the
Deposits and accrued interest thereon to the Paying Agent at State Street
Bank and Trust Company, ABA #011-0000-28, Account #9903-9901, Attention:
Melissa Lewandowski, Reference: US Airways 1998-1 EETC.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
as Escrow Agent
By
--------------------------------
Name:
Title:
Dated:__________, ____
B-1
EXHIBIT 4(a)(v)
DEPOSIT AGREEMENT
(Class B)
Dated as of December 14, 1998
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION
as Escrow Agent
and
CREDIT SUISSE FIRST BOSTON, New York Branch
as Depositary
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I FORMATION OF DEPOSITS 2
Section 1.1 Acceptance of Depositary 2
Section 1.2 Establishment of Accounts 2
ARTICLE II MAINTENANCE OF DEPOSITS 3
Section 2.1 Deposits 3
Section 2.2 Interest 3
Section 2.3 Withdrawals 3
Section 2.4 Other Accounts 4
ARTICLE III TERMINATION 5
ARTICLE IV PAYMENTS 5
ARTICLE V REPRESENTATIONS AND WARRANTIES 6
ARTICLE VI TRANSFER 7
ARTICLE VII AMENDMENT 7
ARTICLE VIII NOTICES 7
ARTICLE IX OBLIGATIONS UNCONDITIONAL 8
ARTICLE X ENTIRE AGREEMENT 8
ARTICLE XI GOVERNING LAW 8
ARTICLE XII WAIVER OF JURY TRIAL RIGHT 9
ARTICLE XIII COUNTERPARTS 9
i
ARTICLE XIV HEAD OFFICE OBLIGATION 9
Schedule I Schedule of Deposits
Exhibit A Notice of Purchase Withdrawal
Exhibit B Notice of Final Withdrawal
ii
This DEPOSIT AGREEMENT (Class B) dated as of December 14, 1998 (as
amended, modified or supplemented from time to time, this "Agreement")
between First Security Bank, National Association, a national banking
association, as Escrow Agent under the Escrow and Paying Agent Agreement
referred to below (in such capacity, together with its successors in such
capacity, the "Escrow Agent"), and Credit Suisse First Boston, a banking
institution organized under the laws of Switzerland acting through its New
York branch, as depositary bank (the "Depositary").
W I T N E S S E T H
-------------------
WHEREAS, US Airways, Inc. ("US Airways") and State Street Bank and Trust
Company, not in its individual capacity except as otherwise expressly
provided therein, but solely as trustee (in such capacity, together with its
successors in such capacity, the "Pass Through Trustee") have entered into a
Trust Supplement, dated December 14, 1998, to the Pass Through Trust
Agreement dated as of December 4, 1998 (together, as amended, modified or
supplemented from time to time in accordance with the terms thereof, the
"Pass Through Trust Agreement") relating to US Airways Pass Through Trust
1998-1B pursuant to which the US Airways Pass Through Trust, Series 1998-1B
Certificates referred to therein (the "Certificates") are being issued;
WHEREAS, US Airways and Morgan Stanley & Co. Incorporated, Credit Suisse
First Boston Corporation, Lehman Brothers Inc. and Salomon Smith Barney Inc.
(collectively, the "Underwriters" and, together with their respective
transferees and assigns as registered owners of the Certificates, the
"Investors") have entered into an Underwriting Agreement dated as of December
4, 1998 pursuant to which the Pass Through Trustee will issue and sell the
Certificates to the Underwriters;
WHEREAS, US Airways, the Pass Through Trustee, certain other pass
through trustees and certain other persons concurrently herewith are entering
into the Note Purchase Agreement, dated as of the date hereof (the "Note
Purchase Agreement"), pursuant to which the Pass Through Trustee has agreed
to acquire from time to time on or prior to the Delivery Period Termination
Date (as defined in the Note Purchase Agreement) equipment notes (the
"Equipment Notes") issued to finance the acquisition of aircraft by US
Airways, as lessee or as owner, utilizing a portion of the proceeds from the
sale of the Certificates (the "Net Proceeds");
WHEREAS, the Escrow Agent, the Underwriters, the Pass Through Trustee
and State Street Bank and Trust Company, as paying agent for the Escrow Agent
(in such capacity, together with its successors in such capacity, the "Paying
Agent") concurrently herewith are entering into an Escrow and Paying Agent
Agreement, dated as of the date hereof (as amended, modified or supplemented
from time to time in accordance with the terms thereof, the "Escrow and
Paying Agent Agreement"); and
WHEREAS, the Underwriters and the Pass Through Trustee intend that the
Net Proceeds be held in escrow by the Escrow Agent on behalf of the Investors
pursuant to the Escrow and Paying Agent Agreement, subject to withdrawal upon
request of and proper certification by the Pass Through Trustee for the
purpose of purchasing Equipment Notes, and that pending such withdrawal the
Net Proceeds be deposited by the Escrow Agent with the Depositary pursuant to
this Agreement, which provides for the Depositary to pay interest for
distribution to the Investors and to establish accounts from which the Escrow
Agent shall make withdrawals upon request of and proper certification by the
Pass Through Trustee.
NOW, THEREFORE, in consideration of the obligations contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
FORMATION OF DEPOSITS
---------------------
Section 1.1 Acceptance of Depositary. The Depositary hereby agrees to
act as depositary bank as provided herein and in connection therewith to
accept all amounts to be delivered to or held by the Depositary pursuant to
the terms of this Agreement. The Depositary further agrees to hold, maintain
and safeguard the Deposits and the Accounts (as defined below) during the
term of this Agreement in accordance with the provisions of this Agreement.
The Escrow Agent shall not have any right to withdraw, assign or otherwise
transfer moneys held in the Accounts except as permitted by this Agreement.
Section 1.2 Establishment of Accounts. The Escrow Agent hereby
instructs the Depositary, and the Depositary agrees, to establish the
separate deposit accounts listed on Schedule I hereto and to establish such
additional separate deposit accounts as may be required in connection with
the deposits contemplated by Section
2
2.4 hereof (each, an "Account" and collectively, the "Accounts"), each in the
name of the Escrow Agent and all on the terms and conditions set forth in
this Agreement.
ARTICLE II
MAINTENANCE OF DEPOSITS
-----------------------
Section 2.1 Deposits. The Escrow Agent shall direct the Underwriters to
deposit with the Depositary on the date of this Agreement (the "Deposit
Date") in Federal (same day) funds by official check or checks or wire or
other transfer to: Bank of New York, Reference: US Airways 1998-1, ABA#
021000018, Account # 8900329238, and the Depositary shall accept from the
Underwriters, on behalf of the Escrow Agent, the sum of US$64,114,059. Upon
acceptance of such sum, the Depositary shall (i) establish each of the
deposits specified in Schedule I hereto maturing on the respective dates set
forth therein (including any deposit made pursuant to Section 2.4 hereof,
individually, a "Deposit" and, collectively, the "Deposits") and (ii)
credit each Deposit to the related Account as set forth therein. No amount
shall be deposited in any Account other than the related Deposit.
Section 2.2 Interest. Each Deposit shall bear interest from and
including the date of deposit to but excluding the date of withdrawal at the
rate of 7.35% per annum (computed on the basis of a year of twelve 30-day
months) payable to the Paying Agent on behalf of the Escrow Agent semi-
annually in arrears on each January 30 and July 30, commencing on January 30,
1999 (each, an "Interest Payment Date"), and on the date of the Final
Withdrawal (as defined below), all in accordance with the terms of this
Agreement (whether or not any such Deposit is withdrawn on an Interest
Payment Date). Interest accrued on any Deposit that is withdrawn pursuant to
a Notice of Purchase Withdrawal (as defined below) shall be paid on the next
Interest Payment Date, notwithstanding any intervening Final Withdrawal.
Section 2.3 Withdrawals. (a) On and after the date seven (7) days
after the establishment of any Deposit, the Escrow Agent may, by providing at
least one (1) Business Day's prior notice of withdrawal to the Depositary in
the form of Exhibit A hereto (a "Notice of Purchase Withdrawal"), withdraw
not less than the entire balance of such Deposit, except that at any time
prior to the actual withdrawal of such Deposit, the Escrow Agent or the Pass
Through Trustee may, by notice to the Depositary, cancel such withdrawal
(including on the scheduled date therefor), and thereafter such Deposit shall
continue to be maintained by the Depositary in
3
accordance with the original terms thereof. Following such withdrawal the
balance in the related Account shall be zero and the Depositary shall close
such Account. As used herein, "Business Day" means any day, other than a
Saturday, Sunday or other day on which commercial banks are authorized or
required by law to close in New York, New York, Pittsburgh, Pennsylvania,
Boston, Massachusetts or Salt Lake City, Utah.
(b) The Escrow Agent may, by providing at least fifteen (15) days'
prior notice of withdrawal to the Depositary in the form of Exhibit B hereto
(a "Notice of Final Withdrawal"), withdraw the entire amount of all of the
remaining Deposits together with the payment by the Depositary of all accrued
and unpaid interest on such Deposits to but excluding the specified date of
withdrawal (a "Final Withdrawal"), on such date as shall be specified in such
Notice of Final Withdrawal. If a Notice of Final Withdrawal has not been
given to the Depositary on or before November 1, 1999 and there are
unwithdrawn Deposits on such date, the Depositary shall pay the amount of the
Final Withdrawal to the Paying Agent on November 16, 1999.
(c) If the Depositary receives a duly completed Notice of Purchase
Withdrawal or Notice of Final Withdrawal complying with the provisions of
this Agreement, it shall make the payments specified therein in accordance
with the provisions of this Agreement.
Section 2.4 Other Accounts. On the date of withdrawal of any Deposit,
the Escrow Agent, or the Pass Through Trustee on behalf of the Escrow Agent,
shall be entitled to re-deposit with the Depositary any portion thereof and
the Depositary shall accept the same for deposit hereunder. Any sums so
received for deposit shall be established as a new Deposit and credited to a
new Account, all as more fully provided in Section 2.1 hereof, and thereafter
the provisions of this Agreement shall apply thereto as fully and with the
same force and effect as if such Deposit had been established on the Deposit
Date except that (i) such Deposit may not be withdrawn prior to the date
seven days after the establishment thereof and (ii) such Deposit shall mature
on November 15, 1999 and bear interest as provided in Section 2.2. The
Depositary shall promptly give notice to the Escrow Agent of receipt of each
such re-deposit and the account number assigned thereto.
4
ARTICLE III
TERMINATION
-----------
This Agreement shall terminate on the fifth (5th) Business Day after the
later of the date on which (i) all of the Deposits shall have been withdrawn
and paid as provided herein without any re-deposit and (ii) all accrued and
unpaid interest on the Deposits shall have been paid as provided herein, but
in no event prior to the date on which the Depositary shall have performed in
full its obligations hereunder.
ARTICLE IV
PAYMENTS
--------
All payments (including, without limitation, those payments made in
respect of Taxes (as defined and provided for below)) made by the Depositary
hereunder shall be paid in United States Dollars and immediately available
funds by wire transfer (i) in the case of accrued interest on the Deposits
payable under Section 2.2 hereof or any Final Withdrawal, directly to the
Paying Agent at State Street Bank and Trust Company, 2 International Place,
4th Floor, Boston, MA 02110, ABA#011-0000-28, Account #9903-9901, Attention:
Melissa Lewandowski, Reference: US Airways 1998-1 EETC, or to such other
account as the Paying Agent may direct from time to time in writing to the
Depositary and the Escrow Agent and (ii) in the case of any withdrawal of one
or more Deposits pursuant to a Notice of Purchase Withdrawal, directly to or
as directed by the Pass Through Trustee as specified and in the manner
provided in such Notice of Purchase Withdrawal. The Depositary hereby waives
any and all rights of set-off, combination of accounts, right of retention or
similar right (whether arising under applicable law, contract or otherwise)
it may have against the Deposits howsoever arising. All payments on or in
respect of each Deposit shall be made free and clear of and without reduction
for or on account of any and all taxes, levies or other impositions or
charges (collectively, "Taxes"). However, if the Depositary or the Paying
Agent (pursuant to Section 2.4 of the Escrow and Paying Agent Agreement)
shall be required by law to deduct or withhold any Taxes from or in respect
of any sum payable hereunder, the Depositary shall: (i) make such deductions
or withholding; (ii) pay the full amount deducted or withheld (including in
respect of such additional amounts) to the competent taxation authority; and
(iii) if the Taxes required to be deducted or withheld are imposed by
Switzerland or any political subdivision thereof, pay such additional amounts
as may be necessary in order that the actual amount received by the
designated recipient of such sum under this Agreement or the Escrow and
Paying Agent Agreement after such deduction or withholding equals the sum it
would have
5
received had no such deduction or withholding been required. If the date on
which any payment due on any Deposit would otherwise fall on a day which is
not a Business Day, such payment shall be made on the next succeeding
Business Day with the same force and effect as if made on such scheduled
date, and no additional interest shall accrue in respect of such extension.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
The Depositary hereby represents and warrants to US Airways, the Escrow
Agent, the Pass Through Trustee and the Paying Agent that:
(a) it is a bank duly organized and validly existing in good
standing under the laws of its jurisdiction of organization and is duly
qualified to conduct banking business in the State of New York through its
New York branch;
(b) it has full power, authority and legal right to conduct its
business and operations as currently conducted and to enter into and perform
its obligations under this Agreement;
(c) the execution, delivery and performance of this Agreement have
been duly authorized by all necessary corporate action on the part of it and
do not require any stockholder approval, or approval or consent of any
trustee or holder of any indebtedness or obligations of it, and such document
has been duly executed and delivered by it and constitutes its legal, valid
and binding obligations enforceable against it in accordance with the terms
hereof;
(d) no authorization, consent or approval of or other action by,
and no notice to or filing with, any United States federal or state
governmental authority or regulatory body is required for the execution,
delivery or performance by it of this Agreement;
(e) neither the execution, delivery or performance by it of this
Agreement, nor compliance with the terms and provisions hereof, conflicts or
will conflict with or results or will result in a breach or violation of any
of the terms, conditions or provisions of, or will require any consent or
approval under, any law, governmental rule or regulation or the charter
documents, as amended, or bylaws, as amended, of it or any similar instrument
binding on it or any order, writ, injunction or decree of any court or
governmental authority against it or by which it or any of its properties is
bound or any indenture, mortgage or contract or other agreement or instrument
to which it is a party or by which it or any of its
6
properties is bound, or constitutes or will constitute a default thereunder
or results or will result in the imposition of any lien upon any of its
properties; and
(f) there are no pending or, to its knowledge, threatened actions,
suits, investigations or proceedings (whether or not purportedly on behalf of
it) against or affecting it or any of its property before or by any court or
administrative agency which, if adversely determined, (i) would adversely
affect the ability of it to perform its obligations under this Agreement or
(ii) would call into question or challenge the validity of this Agreement or
the enforceability hereof in accordance with the terms hereof, nor is the
Depositary in default with respect to any order of any court, governmental
authority, arbitration board or administrative agency so as to adversely
affect its ability to perform its obligations under this Agreement.
ARTICLE VI
TRANSFER
--------
Neither party hereto shall be entitled to assign or otherwise transfer
this Agreement (or any interest herein) other than (in the case of the Escrow
Agent) to a successor escrow agent under Section 1.7 of the Escrow and Paying
Agent Agreement, and any purported assignment in violation thereof shall be
void. This Agreement shall be binding upon the parties hereto and their
respective successors and (in the case of the Escrow Agent) permitted
assigns.
ARTICLE VII
AMENDMENT
---------
This Agreement may not be amended, waived or otherwise modified except
by an instrument in writing signed by the party against whom the amendment,
waiver or other modification is sought to be enforced and by the Pass Through
Trustee.
ARTICLE VIII
NOTICES
-------
Unless otherwise expressly provided herein, any notice or other
communication under this Agreement shall be in writing (including by
facsimile) and
7
shall be deemed to be given and effective upon receipt thereof. All notices
shall be sent to (x) in the case of the Depositary, Credit Suisse First
Boston, 11 Madison Avenue, New York, New York 10010, Attention: Robert
Finney and Jennifer Toth (Telecopier: (212) 325-8319) or (y) in the case of
the Escrow Agent, First Security Bank, National Association, 79 South Main
Street, Salt Lake City, UT 84111, Attention: Corporate Trust Services
(Telecopier: (801) 246-5053), in each case, with a copy to the Pass Through
Trustee, State Street Bank and Trust Company, 2 International Place, 4th
Floor, Boston, MA 02110 (Telecopier: (617) 664-5151) and to US Airways, US
Airways, Inc., 2345 Crystal Drive, Arlington, VA 22227, Attention: Treasurer
(Telecopier: (703) 872-5936) (or at such other address as any such party may
specify from time to time in a written notice to the parties hereto). On or
prior to the execution of this Agreement, the Escrow Agent has delivered to
the Depositary a certificate containing specimen signatures of the
representatives of the Escrow Agent who are authorized to give notices and
instructions with respect to this Agreement. The Depositary may conclusively
rely on such certificate until the Depositary receives written notice from
the Escrow Agent to the contrary.
ARTICLE IX
OBLIGATIONS UNCONDITIONAL
-------------------------
The Depositary hereby acknowledges and agrees that its obligation to
repay each Deposit together with interest thereon as provided herein is
absolute, irrevocable and unconditional and constitutes a full recourse
obligation of the Depositary enforceable against it to the full extent of all
of its assets and properties.
ARTICLE X
ENTIRE AGREEMENT
----------------
This Agreement (including all attachments hereto) sets forth all of the
promises, covenants, agreements, conditions and understandings between the
Depositary and the Escrow Agent with respect to the subject matter hereof
and supersedes all prior and contemporaneous agreements and undertakings,
inducements or conditions, express or implied, oral or written.
ARTICLE XI
GOVERNING LAW
-------------
THIS AGREEMENT, AND THE RIGHTS AND OBLIGATIONS OF THE DEPOSITARY AND THE
ESCROW AGENT WITH RESPECT TO THE
8
DEPOSITS, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK AND SUBJECT TO THE PROVISIONS OF REGULATION D OF THE
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (OR ANY SUCCESSOR), AS THE
SAME MAY BE MODIFIED AND SUPPLEMENTED AND IN EFFECT FROM TIME TO TIME.
ARTICLE XII
WAIVER OF JURY TRIAL RIGHT
--------------------------
EACH OF THE DEPOSITARY AND THE ESCROW AGENT ACKNOWLEDGES AND ACCEPTS
THAT IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT SUCH PARTY IRREVOCABLY WAIVES ITS RIGHT TO A TRIAL BY JURY.
ARTICLE XIII
COUNTERPARTS
------------
This Agreement may be executed in one or more counterparts, all of
which taken together shall constitute one instrument.
ARTICLE XIV
HEAD OFFICE OBLIGATION
----------------------
Credit Suisse First Boston hereby agrees that the obligations of the
Depositary hereunder are also the obligations of Credit Suisse First Boston's
Head Office in Zurich, Switzerland. Accordingly, any beneficiary of this
Agreement will be able to proceed directly against Credit Suisse First
Boston's Head Office in Zurich, Switzerland if Credit Suisse First Boston's
New York branch defaults in its obligation to such beneficiary under this
Agreement.
9
IN WITNESS WHEREOF, the Escrow Agent and the Depositary have caused this
Deposit Agreement to be duly executed as of the day and year first above
written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, as Escrow Agent
By___________________________
Name:
Title:
CREDIT SUISSE FIRST BOSTON, New
York Branch, as Depositary
By_____________________________
Name:
Title:
By_____________________________
Name:
Title:
Schedule I
SCHEDULE OF DEPOSITS
--------------------
(Class B)
DATE TAIL NO. DEPOSIT ACCOUNT NO. MATURITY DATE
AMOUNT
12/14/98 N705UW $3,523,910 8900329238 10/31/1999
12/14/98 N101UW 4,706,573 8900329238 10/31/1999
12/14/98 N706US 3,414,504 8900329238 10/31/1999
12/14/98 N707UW 3,249,879 8900329238 10/31/1999
12/14/98 N708UW 3,387,021 8900329238 10/31/1999
12/14/98 N709UW 3,406,805 8900329238 10/31/1999
12/14/98 N102UW 3,100,808 8900329238 10/31/1999
12/14/98 N103US 4,179,107 8900329238 10/31/1999
12/14/98 N710UW 3,353,182 8900329238 10/31/1999
12/14/98 N104UW 4,069,042 8900329238 10/31/1999
12/14/98 N105UW 4,069,042 8900329238 10/31/1999
12/14/98 N711UW 3,369,900 8900329238 10/31/1999
12/14/98 N712US 3,369,900 8900329238 10/31/1999
12/14/98 N106US 3,846,114 8900329238 10/31/1999
12/14/98 N713UW 3,292,757 8900329238 10/31/1999
12/14/98 N714US 3,292,757 8900329238 10/31/1999
12/14/98 N715UW 3,241,379 8900329238 10/31/1999
12/14/98 N716UW 3,241,379 8900329238 10/31/1999
S-1
S-2
EXHIBIT A
---------
NOTICE OF PURCHASE WITHDRAWAL
-----------------------------
CREDIT SUISSE FIRST BOSTON
New York Branch
11 Madison Avenue
New York, NY 10010
Attention: Robert Finney and Jennifer Toth
Telecopier: (212) 325-8319
Ladies and Gentlemen:
Reference is made to the Deposit Agreement (Class B) dated as of
December 14, 1998 (the "Deposit Agreement") between First Security Bank,
National Association, as Escrow Agent, and Credit Suisse First Boston, New
York Branch, as Depositary (the "Depositary").
In accordance with Section 2.3(a) of the Deposit Agreement, the
undersigned hereby requests the withdrawal of the entire amount of the
Deposit, $__________, Account No. ___________.
The undersigned hereby directs the Depositary to pay the proceeds of the
Deposit to _________, Account No. _______________, Reference: __________ on
__________, ______, upon the telephonic request of a representative of the
Pass Through Trustee.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
as Escrow Agent
By______________________
Name:
Title:
Dated:__________, _____
A-1
EXHIBIT B
---------
NOTICE OF FINAL WITHDRAWAL
--------------------------
CREDIT SUISSE FIRST BOSTON
New York Branch
11 Madison Avenue
New York, New York 10010
Attention: Robert Finney and Jennifer Toth
Telecopier: (212) 325-8319
Ladies and Gentlemen:
Reference is made to the Deposit Agreement (Class B) dated as of
December 14 , 1998 (the "Deposit Agreement") between First Security Bank,
National Association, as Escrow Agent, and Credit Suisse First Boston, New
York Branch (the "Depositary").
In accordance with Section 2.3(b) of the Deposit Agreement, the
undersigned hereby requests the withdrawal of the entire amount of all
Deposits.
The undersigned hereby directs the Depositary to pay the proceeds of the
Deposits and accrued interest thereon to the Paying Agent at State Street
Bank and Trust Company, ABA#011-0000-28, Account #9903-9901, Attention:
Melissa Lewandowski, Reference: US Airways 1998-1 EETC.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
as Escrow Agent
By______________________
Name:
Title:
Dated:__________, _____
B-1
EXHIBIT 4(a)(vi)
_______________________________________________________________
REVOLVING CREDIT AGREEMENT
(1998-1A)
Dated as of December 14, 1998
between
STATE STREET BANK and TRUST COMPANY,
as Subordination Agent,
as agent and trustee for the
US Airways Pass Through Trust 1998-1A
as Borrower
and
ABN AMRO BANK N.V.,
acting through its Chicago Branch
as Liquidity Provider
_________________________________________________________________
Relating to
US Airways Pass Through Trust 1998-1A
6.85% US Airways Pass Through Certificates,
Series 1998-1A
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms 1
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. The Advances 7
Section 2.02. Making the Advances 7
Section 2.03. Fees 9
Section 2.04. Reduction or Termination of the Maximum Commitment 9
Section 2.05. Repayments of Interest Advances or the Final Advance 10
Section 2.06. Repayments of Provider Advances 10
Section 2.07. Payments to the Liquidity Provider Under the
Intercreditor Agreement 11
Section 2.08. Book Entries 12
Section 2.09. Payments from Available Funds Only 12
Section 2.10. Extension of the Expiry Date; Non-Extension Advance 12
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. Increased Costs 13
Section 3.02. Capital Adequacy 13
Section 3.03. Payments Free of Deductions 14
Section 3.04. Payments 15
Section 3.05. Computations 15
Section 3.06. Payment on Non-Business Days 15
Section 3.07. Interest 16
Section 3.08. Replacement of Borrower 17
Section 3.09. Funding Loss Indemnification 17
Section 3.10. Illegality 18
i
TABLE OF CONTENTS
(Continued)
Page
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ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to Effectiveness of Section 2.01 18
Section 4.02. Conditions Precedent to Borrowing 20
ARTICLE V
COVENANTS
Section 5.01. Affirmative Covenants of the Borrower 20
Section 5.02. Negative Covenants of the Borrower 21
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. Liquidity Events of Default 21
ARTICLE VII
MISCELLANEOUS
Section 7.01. Amendments, Etc. 21
Section 7.02. Notices, Etc. 21
Section 7.03. No Waiver; Remedies 23
Section 7.04. Further Assurances 23
Section 7.05. Indemnification; Survival of Certain Provisions 23
Section 7.06. Liability of the Liquidity Provider 24
Section 7.07. Costs, Expenses and Taxes 24
Section 7.08. Binding Effect; Participations 25
Section 7.09. Severability 26
Section 7.10. GOVERNING LAW 26
Section 7.11. Submission to Jurisdiction; Waiver of Jury Trial;
Waiver of Immunity 27
ii
TABLE OF CONTENTS
(Continued)
Page
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Section 7.12. Execution in Counterparts 28
Section 7.13. Entirety 28
Section 7.14. Headings 28
Section 7.15. Liquidity Provider's Obligation to Make Advances 28
ANNEX I Interest Advance Notice of Borrowing
ANNEX II Non-Extension Advance Notice of Borrowing
ANNEX III Downgrade Advance Notice of Borrowing
ANNEX IV Final Advance Notice of Borrowing
ANNEX V Notice of Termination
ANNEX VI Notice of Replacement Subordination Agent
iii
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT dated as of December 14, 1998, between
STATE STREET BANK and TRUST COMPANY, a Massachusetts trust company, not in
its individual capacity but solely as Subordination Agent under the
Intercreditor Agreement (each as defined below), as agent and trustee for the
Class A Trust (as defined below) (the "Borrower"), and ABN AMRO BANK N.V., a
bank organized under the laws of The Netherlands, acting through its Chicago
Branch (the "Liquidity Provider").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Class A Trust Agreement (such term and all
other capitalized terms used in these recitals having the meanings set forth
or referred to in Section 1.01), the Class A Trust is issuing the Class A
Certificates; and
WHEREAS, the Borrower, in order to support the timely payment of a
portion of the interest on the Class A Certificates in accordance with their
terms, has requested the Liquidity Provider to enter into this Agreement,
providing in part for the Borrower to request in specified circumstances that
Advances be made hereunder.
NOW, THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms. (a) Definitions. As used in
this Agreement and unless otherwise expressly indicated, or unless the
context clearly requires otherwise, the following capitalized terms shall
have the following respective meanings for all purposes of this Agreement:
"Additional Cost " has the meaning assigned to such term in Section
3.01.
"Advance" means an Interest Advance, a Final Advance, a Provider
Advance, an Applied Provider Advance or an Unpaid Advance, as the case may
be.
"Applicable Liquidity Rate" has the meaning assigned to such term in
Section 3.07(g).
"Applicable Margin" means (x) with respect to any Unpaid Advance or
Applied Provider Advance, 2.00%, (y) with respect to any Unapplied Non-
Extension Advance that is a LIBOR Advance, 0.45%, or (z) with respect to any
Unapplied Downgrade
1
Advance that is a LIBOR Advance, 0.45% for the first year after the date of
such Advance and 1.00% thereafter
"Applied Downgrade Advance" has the meaning assigned to such term in
Section 2.06(a).
"Applied Non-Extension Advance" has the meaning assigned to such term in
Section 2.06(a).
"Applied Provider Advance" has the meaning assigned to such term in
Section 2.06(a).
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to (a) the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or if such
rate is not so published for any day that is a Business Day, the average of
the quotations for such day for such transactions received by the Liquidity
Provider from three Federal funds brokers of recognized standing selected by
it, plus (b) one quarter of one percent (1/4 of 1%) per annum.
"Base Rate Advance" means an Advance that bears interest at a rate based
upon the Base Rate.
"Borrower" has the meaning assigned to such term in the recital of
parties to this Agreement.
"Borrowing" means the making of Advances requested by delivery of a
Notice of Borrowing.
"Business Day" means any day other than a Saturday or Sunday or a day on
which commercial banks are required or authorized to close in New York, New
York, Chicago, Illinois, Pittsburgh, Pennsylvania, or, so long as any Class A
Certificate is outstanding, the city and state in which the Class A Trustee,
the Borrower or any Loan Trustee maintains its Corporate Trust Office or
receives or disburses funds, and, if the applicable Business Day relates to
any Advance or other amount bearing interest based on the LIBOR Rate, on
which dealings are carried on in the London interbank market.
"Certificates of Deposit" has the meaning assigned to such term in the
Deposit Agreement.
"Deposits" has the meaning assigned to such terms in the Deposit
Agreement.
2
"Depositary" has the meaning assigned to such term in the Deposit
Agreement.
"Deposit Agreement" means the Deposit Agreement dated December 14, 1998
between First Security Bank, National Association, as Escrow Agent and Credit
Suisse First Boston, as Depositary, pertaining to the Class A Certificates,
as the same may be amended, modified or supplemented from time to time in
accordance with the terms thereof.
"Downgrade Advance" means an Advance made pursuant to Section 2.02(c).
"Effective Date" has the meaning specified in Section 4.01. The
delivery of the certificate of the Liquidity Provider contemplated by Section
4.01(e) shall be conclusive evidence that the Effective Date has occurred.
"Excluded Taxes" means (i) taxes imposed on the overall net income of
the Liquidity Provider or of its Lending Office by the jurisdiction where
such Liquidity Provider's principal office or such Lending Office is located,
and (ii) Excluded Withholding Taxes.
"Excluded Withholding Taxes" means (i) withholding Taxes imposed by the
United States except to the extent that such United States withholding Taxes
are imposed as a result of any change in applicable law (excluding from
change in applicable law for this purpose a change in an applicable treaty or
other change in law affecting the applicability of a treaty) after the date
hereof, or in the case of a successor Liquidity Provider (including a
transferee of an Advance) or Lending Office, after the date on which such
successor Liquidity Provider obtains its interest or on which the Lending
Office is changed, and (ii) any withholding Taxes imposed by the United
States which are imposed or increased as a result of the Liquidity Provider
failing to deliver to the Borrower any certificate or document (which
certificate or document in the good faith judgment of the Liquidity Provider
it is legally entitled to provide) which is reasonably requested by the
Borrower to establish that payments under this Agreement are exempt from (or
entitled to a reduced rate of) withholding Tax.
"Expenses" means liabilities, obligations, damages, settlements,
penalties, claims, actions, suits, costs, expenses, and disbursements
(including, without limitation, reasonable fees and disbursements of legal
counsel and costs of investigation), provided that Expenses shall not include
any Taxes.
"Expiry Date" means December 12, 1999, initially, or any date to which
the Expiry Date is extended pursuant to Section 2.10.
"Final Advance" means an Advance made pursuant to Section 2.02(d).
3
"Intercreditor Agreement" means the Intercreditor Agreement dated the
date hereof, among the Trustees, the Liquidity Provider, the liquidity
provider under each Liquidity Facility (other than this Agreement) and the
Subordination Agent, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Interest Advance" means an Advance made pursuant to Section 2.02(a).
"Interest Period" means, with respect to any LIBOR Advance, each of the
following periods:
(i) the period beginning either (x) on the third Business Day
following the Liquidity Provider's receipt of the Notice of Borrowing for
such LIBOR Advance or (y) the date of the withdrawal of funds from the Class
A Cash Collateral Account for the purpose of paying interest on the Class A
Certificates as contemplated by Section 2.06(a) hereof and, in each case,
ending on the next Regular Distribution Date; and
(ii) each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the next Regular
Distribution Date;
provided, however, that if (x) the Final Advance shall have been made, or (y)
other outstanding Advances shall have been converted into the Final Advance,
then the Interest Periods shall be successive periods of one month beginning
on the third Business Day following the Liquidity Provider's receipt of the
Notice of Borrowing for such Final Advance (in the case of clause (x) above)
or the Regular Distribution Date following such conversion (in the case of
clause (y) above).
"Lending Office" means the lending office of the Liquidity Provider
presently located at Chicago, Illinois, or such other lending office as the
Liquidity Provider from time to time shall notify the Borrower as its lending
office hereunder; provided that the Liquidity Provider shall not change its
Lending Office to a Lending Office outside the United States of America
except in accordance with Section 3.01, 3.02 or 3.03 hereof.
"LIBOR Advance" means an Advance bearing interest at a rate based upon
the LIBOR Rate.
"LIBOR Rate" means, with respect to any Interest Period:
(i) the rate per annum appearing on display page 3750 (British
Bankers Association-LIBOR) of the Dow Jones Markets Service (or any successor
or substitute therefor ) at approximately 11:00 A.M. (London
4
time) two Business Days before the first day of such Interest Period, as the
rate for dollar deposits with a maturity comparable to such Interest Period,
or
(ii) if the rate calculated pursuant to clause (i) above is not
available, the average (rounded upwards, if necessary, to the next 1/16 of
1%) of the rates per annum at which deposits in dollars are offered for the
relevant Interest Period by three banks of recognized standing selected by
the Liquidity Provider in the London interbank market at approximately 11:00
A.M. (London time) two Business Days before the first day of such Interest
Period in an amount approximately equal to the principal amount of the LIBOR
Advance to which such Interest Period is to apply and for a period comparable
to such Interest Period.
"Liquidity Event of Default" means the occurrence of either (a) the
Acceleration of all of the Equipment Notes (provided that, with respect to
the period prior to the Delivery Period Expiry Date, such Equipment Notes
have an aggregate outstanding principal balance in excess of $300,000,000) or
(b) a US Airways Bankruptcy Event.
"Liquidity Indemnitee" means (i) the Liquidity Provider, (ii) the
directors, officers, employees and agents of the Liquidity Provider, and
(iii) the successors and permitted assigns of the persons described in
clauses (i) and (ii), inclusive.
"Liquidity Provider" has the meaning assigned to such term in the
recital of parties to this Agreement.
"Maximum Available Commitment" shall mean, subject to the proviso
contained in the third sentence of Section 2.02(a), at any time of
determination, (a) the Maximum Commitment at such time less (b) the aggregate
amount of each Interest Advance outstanding at such time; provided that
following a Provider Advance or a Final Advance, the Maximum Available
Commitment shall be zero.
"Maximum Commitment" means, for any day, the lesser of (x) $37,656,437
and (y) the Required Amount on such day.
"Non-Extension Advance" means an Advance made pursuant to Section
2.02(b).
"Notice of Borrowing" has the meaning specified in Section 2.02(e).
"Notice of Replacement Subordination Agent" has the meaning specified in
Section 3.08.
5
"Performing Note Deficiency" means any time that less than 65% of the
then aggregate outstanding principal amount of all Equipment Notes are
Performing Equipment Notes.
"Prospectus Supplement" means the Prospectus Supplement dated December
4, 1998, relating to the Class A Certificates and the Class B Certificates,
as such Prospectus Supplement may be amended or supplemented.
"Provider Advance" means a Downgrade Advance or a Non-Extension Advance.
"Regulatory Change" has the meaning assigned to such term in Section
3.01.
"Replenishment Amount" has the meaning assigned to such term in Section
2.06(b).
"Required Amount" means, for any day, the sum of the aggregate amount of
interest, calculated at the rate per annum equal to the Stated Interest Rate
for the Class A Certificates, that would be payable on the Class A
Certificates on each of the three successive semiannual Regular Distribution
Dates immediately following such day or, if such day is a Regular
Distribution Date, on such day and the succeeding two semiannual Regular
Distribution Dates, in each case calculated on the basis of the Pool Balance
of the Class A Certificates on such day and without regard to expected future
payments of principal on the Class A Certificates.
"Tax Letter" means the letter dated the date hereof between the
Liquidity Provider and US Airways pertaining to this Agreement.
"Termination Date" means the earliest to occur of the following: (i)
the Expiry Date; (ii) the date on which the Borrower delivers to the
Liquidity Provider a certificate, signed by a Responsible Officer of the
Borrower, certifying that all of the Class A Certificates have been paid in
full (or provision has been made for such payment in accordance with the
Intercreditor Agreement and the Trust Agreements) or are otherwise no longer
entitled to the benefits of this Agreement; (iii) the date on which the
Borrower delivers to the Liquidity Provider a certificate, signed by a
Responsible Officer of the Borrower, certifying that a Replacement Liquidity
Facility has been substituted for this Agreement in full pursuant to Section
3.6(e) of the Intercreditor Agreement; (iv) the fifth Business Day following
the receipt by the Borrower of a Termination Notice from the Liquidity
Provider pursuant to Section 6.01 hereof; and (v) the date on which no
Advance is or may (including by reason of reinstatement as herein provided)
become available for a Borrowing hereunder.
6
"Termination Notice" means the Notice of Termination substantially in
the form of Annex V to this Agreement.
"Transferee" has the meaning assigned to such term in Section 7.08(b).
"Unapplied Downgrade Advance" means any Downgrade Advance other than an
Applied Downgrade Advance.
"Unapplied Provider Advance" means any Provider Advance other than an
Applied Provider Advance.
"Unpaid Advance" has the meaning assigned to such term in Section 2.05.
(b) Terms Defined in the Intercreditor Agreement. For all purposes
of this Agreement, the following terms shall have the respective meanings
assigned to such terms in the Intercreditor Agreement:
"Acceleration", "AIFS", "Certificates", "Class A Cash Collateral
Account", "Class A Certificates", "Class A Certificateholders", "Class A
Trust", "Class A Trust Agreement", "Class A Trustee", "Class B Certificates",
"Class C Certificates", "Closing Date", "Controlling Party", "Corporate Trust
Office", "Delivery Period Expiry Date", "Distribution Date", "Downgraded
Facility", "Equipment Notes", "Fee Letter","Final Legal Distribution Date",
"Financing Agreement", "Indenture", "Interest Payment Date", "Investment
Earnings", "Liquidity Facility", "Liquidity Obligations", "Loan Trustee",
"Moody's", "Non-Extended Facility", "Note Purchase Agreement", "Operative
Agreements", "Performing Equipment Note", "Person", "Pool Balance", "Rating
Agency", "Ratings Confirmation", "Regular Distribution Date", "Replacement
Liquidity Facility", "Responsible Officer", "Scheduled Payment", "Special
Payment", "Standard & Poor's", "Stated Interest Rate", "Subordination Agent",
"Taxes", "Threshold Rating", "Trust Agreements", "Trustee", "Underwriters",
"Underwriting Agreement", "US Airways", "US Airways Bankruptcy Event" and
"Written Notice".
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. The Advances. The Liquidity Provider hereby irrevocably
agrees, on the terms and conditions hereinafter set forth, to make Advances
to the Borrower from time to time on any Business Day during the period from
the Effective Date until 12:00 Noon (New York City time) on the Expiry Date
(unless the obligations of the Liquidity
7
Provider shall be earlier terminated in accordance with the terms of Section
2.04(b)) in an aggregate amount at any time outstanding not to exceed the
Maximum Commitment.
Section 2.02. Making the Advances. (a) Interest Advances shall be
made in one or more Borrowings by delivery to the Liquidity Provider of one
or more written and completed Notices of Borrowing in substantially the form
of Annex I attached hereto, signed by a Responsible Officer of the Borrower,
in an amount not exceeding the Maximum Available Commitment at such time and
shall be used solely for the payment when due of interest on the Class A
Certificates at the Stated Interest Rate therefor in accordance with Section
3.6(a) of the Intercreditor Agreement. Each Interest Advance made hereunder
shall automatically reduce the Maximum Available Commitment and the amount
available to be borrowed hereunder by subsequent Advances by the amount of
such Interest Advance (subject to reinstatement as provided in the next
sentence). Upon repayment to the Liquidity Provider in full of the amount of
any Interest Advance made pursuant to this Section 2.02(a), together with
accrued interest thereon (as provided herein), the Maximum Available
Commitment shall be reinstated by the amount of such repaid Interest Advance,
but not to exceed the Maximum Commitment; provided, however, that the Maximum
Available Commitment shall not be so reinstated at any time if (i) a
Liquidity Event of Default shall have occurred and be continuing and (ii)
there is a Performing Note Deficiency.
(b) A Non-Extension Advance shall be made in a single Borrowing if
this Agreement is not extended in accordance with Section 3.6(d) of the
Intercreditor Agreement (unless a Replacement Liquidity Facility to replace
this Agreement shall have been delivered to the Borrower as contemplated by
said Section 3.6(d) within the time period specified in such Section) by
delivery to the Liquidity Provider of a written and completed Notice of
Borrowing in substantially the form of Annex II attached hereto, signed by a
Responsible Officer of the Borrower, in an amount equal to the Maximum
Available Commitment at such time, and shall be used to fund the Class A Cash
Collateral Account in accordance with said Section 3.6(d) and Section 3.6(f)
of the Intercreditor Agreement.
(c) A Downgrade Advance shall be made in a single Borrowing upon a
downgrading of the Liquidity Provider's short-term unsecured debt rating
issued by either Rating Agency below the applicable Threshold Rating (as
provided for in Section 3.6(c) of the Intercreditor Agreement) unless a
Replacement Liquidity Facility to replace this Agreement shall have been
previously delivered to the Borrower in accordance with said Section 3.6(c),
by delivery to the Liquidity Provider of a written and completed Notice of
Borrowing in substantially the form of Annex III attached hereto, signed by a
Responsible Officer of the Borrower, in an amount equal to the Maximum
Available Commitment at such time, and shall be used to fund the Class A Cash
Collateral Account in accordance with said Section 3.6(c) and Section 3.6(f)
of the Intercreditor Agreement.
(d) A Final Advance shall be made in a single Borrowing upon the
receipt by the Borrower of a Termination Notice from the Liquidity Provider
pursuant to Section 6.01
8
hereof by delivery to the Liquidity Provider of a written and completed
Notice of Borrowing in substantially the form of Annex IV attached hereto,
signed by a Responsible Officer of the Borrower, in an amount equal to the
Maximum Available Commitment at such time, and shall be used to fund the
Class A Cash Collateral Account (in accordance with Section 3.6(i) of the
Intercreditor Agreement) and Section 3.6(f) of the Intercreditor Agreement.
(e) Each Borrowing shall be made on notice in writing (a "Notice
of Borrowing") in substantially the form required by Section 2.02(a),
2.02(b), 2.02(c) or 2.02(d), as the case may be, given by the Borrower to the
Liquidity Provider. If a Notice of Borrowing is delivered by the Borrower in
respect of any Borrowing no later than 1:00 p.m. (New York City time) on a
Business Day, upon satisfaction of the conditions precedent set forth in
Section 4.02 with respect to a requested Borrowing, the Liquidity Provider
shall make available to the Borrower, in accordance with its payment
instructions, the amount of such Borrowing in U.S. dollars and immediately
available funds, before 4:00 pm (New York City time) on such Business Day or
on such later Business Day specified in such Notice of Borrowing. If a
Notice of Borrowing is delivered by the Borrower in respect of any Borrowing
after 1:00 pm (New York City time) on a Business Day, upon satisfaction of
the conditions precedent set forth in Section 4.02 with respect to a
requested Borrowing, the Liquidity Provider shall make available to the
Borrower, in accordance with its payment instructions, the amount of such
Borrowing in U.S. dollars and immediately available funds, before 12:00 Noon
(New York City time) on the first Business Day next following the day of
receipt of such Notice of Borrowing or on such later Business Day specified
by the Borrower in such Notice of Borrowing. Payments of proceeds of a
Borrowing shall be made by wire transfer of immediately available funds to
the Borrower in accordance with such wire transfer instructions as the
Borrower shall furnish from time to time to the Liquidity Provider for such
purpose. Each Notice of Borrowing shall be irrevocable and binding on the
Borrower.
(f) Upon the making of any Advance requested pursuant to a Notice
of Borrowing, in accordance with the Borrower's payment instructions, the
Liquidity Provider shall be fully discharged of its obligation hereunder with
respect to such Notice of Borrowing, and the Liquidity Provider shall not
thereafter be obligated to make any further Advances hereunder in respect of
such Notice of Borrowing to the Borrower or to any other Person. Following
the making of any Advance pursuant to Section 2.02(b), (c) or (d) hereof to
fund the Class A Cash Collateral Account, the Liquidity Provider shall have
no interest in or rights to the Class A Cash Collateral Account, such Advance
or any other amounts from time to time on deposit in the Class A Cash
Collateral Account; provided that the foregoing shall not affect or impair
the obligations of the Subordination Agent to make the distributions
contemplated by Section 3.6(e) or (f) of the Intercreditor Agreement. By
paying to the Borrower proceeds of Advances requested by the Borrower in
accordance with the provisions of this Agreement, the Liquidity Provider
makes no representation as to, and assumes no responsibility for, the
correctness or sufficiency for any purpose of the amount of the Advances so
made and requested.
9
Section 2.03. Fees. The Borrower agrees to pay to the Liquidity
Provider the fees set forth in the Fee Letter.
Section 2.04. Reduction or Termination of the Maximum Commitment
(a) Automatic Reduction. Promptly following each date on which the
Required Amount is reduced as a result of a reduction in the Pool Balance of
the Class A Certificates or otherwise, the Maximum Commitment shall
automatically be reduced to an amount equal to such reduced Required Amount
(as calculated by the Borrower). The Borrower shall give notice of any such
automatic reduction of the Maximum Commitment to the Liquidity Provider
within two Business Days thereof. The failure by the Borrower to furnish any
such notice shall not affect such automatic reduction of the Maximum
Commitment.
(b) Termination. Upon the making of any Provider Advance or Final
Advance hereunder or the occurrence of the Termination Date, the obligation
of the Liquidity Provider to make further Advances hereunder shall
automatically and irrevocably terminate, and the Borrower shall not be
entitled to request any further Borrowing hereunder.
Section 2.05. Repayments of Interest Advances or the Final Advance.
Subject to Sections 2.06, 2.07 and 2.09 hereof, the Borrower hereby agrees,
without notice of an Advance or demand for repayment from the Liquidity
Provider (which notice and demand are hereby waived by the Borrower), to pay,
or to cause to be paid, to the Liquidity Provider on each date on which the
Liquidity Provider shall make an Interest Advance or the Final Advance, an
amount equal to (a) the amount of such Advance (any such Advance, until
repaid, is referred to herein as an "Unpaid Advance"), plus (b) interest on
the amount of each such Unpaid Advance as provided in Section 3.07 hereof;
provided that if (i) the Liquidity Provider shall make a Provider Advance at
any time after making one or more Interest Advances which shall not have been
repaid in accordance with this Section 2.05 or (ii) this Liquidity Facility
shall become a Downgraded Facility or Non-Extended Facility at any time when
unreimbursed Interest Advances have reduced the Maximum Available Commitment
to zero, then such Interest Advances shall cease to constitute Unpaid
Advances and shall be deemed to have been changed into an Applied Downgrade
Advance or an Applied Non-Extension Advance, as the case may be, for all
purposes of this Agreement (including, without limitation, for the purpose of
determining when such Interest Advance is required to be repaid to the
Liquidity Provider in accordance with Section 2.06 and for the purposes of
Section 2.06(b)). The Borrower and the Liquidity Provider agree that the
repayment in full of each Interest Advance and Final Advance on the date such
Advance is made is intended to be a contemporaneous exchange for new value
given to the Borrower by the Liquidity Provider.
Section 2.06. Repayments of Provider Advances. (a) Amounts advanced
hereunder in respect of a Provider Advance shall be deposited in the Class A
Cash Collateral Account, invested and withdrawn from the Class A Cash
Collateral Account as set forth in Sections 3.6(c), (d) and (f) of the
Intercreditor Agreement. The Borrower agrees to pay to the
10
Liquidity Provider, on each Regular Distribution Date, commencing on the
first Regular Distribution Date after the making of a Provider Advance,
interest on the principal amount of any such Provider Advance as provided in
Section 3.07; provided, however, that amounts in respect of a Provider
Advance withdrawn from the Class A Cash Collateral Account for the purpose of
paying interest on the Class A Certificates in accordance with Section 3.6(f)
of the Intercreditor Agreement (the amount of any such withdrawal being (y)
in the case of a Downgrade Advance, an "Applied Downgrade Advance" and (z) in
the case of a Non-Extension Advance, an "Applied Non-Extension Advance" and,
together with an Applied Downgrade Advance, an "Applied Provider Advance")
shall thereafter (subject to Section 2.06(b)) be treated as an Interest
Advance under this Agreement for purposes of determining the Applicable
Liquidity Rate for interest payable thereon; provided further, however, that
if, following the making of a Provider Advance, the Liquidity Provider
delivers a Termination Notice to the Borrower pursuant to Section 6.01
hereof, such Provider Advance shall thereafter be treated as a Final Advance
under this Agreement for purposes of determining the Applicable Liquidity
Rate for interest payable thereon. Subject to Sections 2.07 and 2.09 hereof,
immediately upon the withdrawal of any amounts from the Class A Cash
Collateral Account on account of a reduction in the Required Amount, the
Borrower shall repay to the Liquidity Provider a portion of the Provider
Advances in a principal amount equal to such reduction, plus interest on the
principal amount prepaid as provided in Section 3.07 hereof.
(b) At any time when an Applied Provider Advance (or any portion
thereof) is outstanding, upon the deposit in the Class A Cash Collateral
Account of any amount pursuant to clause "third" of Section 2.4(b) of the
Intercreditor Agreement, clause "third" of Section 3.2 of the Intercreditor
Agreement or clause "fourth" of Section 3.3 of the Intercreditor Agreement
(any such amount being a "Replenishment Amount") for the purpose of
replenishing or increasing the balance thereof up to the Required Amount at
such time, (i) the aggregate outstanding principal amount of all Applied
Provider Advances (and of Provider Advances treated as an Interest Advance
for purposes of determining the Applicable Liquidity Rate for interest
payable thereon) shall be automatically reduced by the amount of such
Replenishment Amount and (ii) the aggregate outstanding principal amount of
all Unapplied Provider Advances shall be automatically increased by the
amount of such Replenishment Amount.
(c) Upon the provision of a Replacement Liquidity Facility in
replacement of this Agreement in accordance with Section 3.6(e) of the
Intercreditor Agreement, amounts remaining on deposit in the Class A Cash
Collateral Account after giving effect to any Applied Provider Advance on the
date of such replacement shall be reimbursed to the Liquidity Provider, but
only to the extent such amounts are necessary to repay in full to the
Liquidity Provider all amounts owing to it hereunder.
Section 2.07. Payments to the Liquidity Provider Under the
Intercreditor Agreement. In order to provide for payment or repayment to the
Liquidity Provider of any amounts hereunder, the Intercreditor Agreement
provides that amounts available and referred
11
to in Articles II and III of the Intercreditor Agreement, to the extent
payable to the Liquidity Provider pursuant to the terms of the Intercreditor
Agreement (including, without limitation, Section 3.6(f) of the Intercreditor
Agreement), shall be paid to the Liquidity Provider in accordance with the
terms thereof. Amounts so paid to the Liquidity Provider shall be applied by
the Liquidity Provider to Liquidity Obligations then due and payable in
accordance with the Intercreditor Agreement or, if not provided for in the
Intercreditor Agreement, then in such manner as the Liquidity Provider shall
deem appropriate.
Section 2.08. Book Entries. The Liquidity Provider shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower resulting from Advances made from time to time
and the amounts of principal and interest payable hereunder and paid from
time to time in respect thereof; provided, however, that the failure by the
Liquidity Provider to maintain such account or accounts shall not affect the
obligations of the Borrower in respect of Advances.
Section 2.09. Payments from Available Funds Only. All payments to be
made by the Borrower under this Agreement shall be made only from the amounts
that constitute Scheduled Payments, Special Payments or payments under
Section 6(c) or 8, as the case may be, of the Participation Agreements and
Section 7 of the Note Purchase Agreement and only to the extent that the
Borrower shall have sufficient income or proceeds therefrom to enable the
Borrower to make payments in accordance with the terms hereof after giving
effect to the priority of payments provisions set forth in the Intercreditor
Agreement. The Liquidity Provider agrees that it will look solely to such
amounts to the extent available for distribution to it as provided in the
Intercreditor Agreement and this Agreement and that the Borrower, in its
individual capacity, is not personally liable to it for any amounts payable
or liability under this Agreement except as expressly provided in this
Agreement, the Intercreditor Agreement or any Participation Agreement.
Amounts on deposit in the Class A Cash Collateral Account shall be available
to the Borrower to make payments under this Agreement only to the extent and
for the purposes expressly contemplated in Section 3.6(f) of the
Intercreditor Agreement.
Section 2.10. Extension of the Expiry Date; Non-Extension Advance. No
earlier than the 60th day and no later than the 40th day prior to the then
effective Expiry Date (unless such Expiry Date is on or after the date that
is 15 days after the Final Legal Distribution Date for the Class A
Certificates), the Borrower shall request that the Liquidity Provider extend
the Expiry Date for a period of 364 days after the then effective Expiry Date
(unless the obligations of the Liquidity Provider are earlier terminated in
accordance with the terms hereof). The Liquidity Provider shall advise the
Borrower, no earlier than 40 days and no later than 25 days prior to the then
effective Expiry Date, whether, in its sole discretion, it agrees to so
extend the Expiry Date. If the Liquidity Provider advises the Borrower on or
before the 25th day prior to the Expiry Date then in effect that such Expiry
Date shall not be so extended, or fails to irrevocably and unconditionally
advise the Borrower on or before the 25th day prior to the Expiry Date then
in effect that such Expiry Date shall be so extended (and, in each case, if
the Liquidity Provider shall not have been replaced in accordance with
12
Section 3.6(e) of the Intercreditor Agreement), the Borrower shall be
entitled on and after such 25th day (but prior to the then effective Expiry
Date) to request a Non-Extension Advance in accordance with Section 2.02(b)
hereof and Section 3.6(d) of the Intercreditor Agreement.
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. Increased Costs. The Borrower shall pay to the Liquidity
Provider from time to time such amounts as may be necessary to compensate the
Liquidity Provider for any increased costs incurred by the Liquidity
Provider which are attributable to its making or maintaining any LIBOR
Advances hereunder or its obligation to make any such Advances hereunder, or
any reduction in any amount receivable by the Liquidity Provider under this
Agreement or the Intercreditor Agreement in respect of any such Advances or
such obligation (such increases in costs and reductions in amounts receivable
being herein called "Additional Costs"), resulting from any change after the
date of this Agreement in U.S. federal, state, municipal, or foreign laws or
regulations (including Regulation D of the Board of Governors of the Federal
Reserve System), or the adoption or making after the date of this Agreement
of any interpretations, directives, or requirements applying to a class of
banks including the Liquidity Provider under any U.S. federal, state,
municipal, or any foreign laws or regulations (whether or not having the
force of law) by any court, central bank or monetary authority charged with
the interpretation or administration thereof (a "Regulatory Change"), which:
(1) changes the basis of taxation of any amounts payable to the Liquidity
Provider under this Agreement in respect of any such Advances (other than
Excluded Taxes); or (2) imposes or modifies any reserve, special deposit,
compulsory loan or similar requirements relating to any extensions of credit
or other assets of, or any deposits with other liabilities of, the Liquidity
Provider (including any such Advances or any deposits referred to in the
definition of LIBOR Rate or related definitions). The Liquidity Provider
agrees to use reasonable efforts (consistent with applicable legal and
regulatory restrictions) to change the jurisdiction of its Lending Office if
making such change would avoid the need for, or reduce the amount of, any
amount payable under this Section that may thereafter accrue and would not,
in the reasonable judgment of the Liquidity Provider, be otherwise
disadvantageous to the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.01 as promptly as practicable after
it obtains knowledge thereof and determines to request such compensation,
which notice shall describe in reasonable detail the calculation of the
amounts owed under this Section. Determinations by the Liquidity Provider
for purposes of this Section 3.01 of the effect of any Regulatory Change on
its costs of making or maintaining Advances or on amounts receivable by it in
respect of Advances, and of the additional amounts required to compensate the
Liquidity Provider in respect of any Additional Costs, shall be prima facie
evidence of the amount owed under this Section.
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Section 3.02. Capital Adequacy. If (1) the adoption, after the date
hereof, of any applicable governmental law, rule or regulation regarding
capital adequacy, (2) any change, after the date hereof, in the
interpretation or administration of any such law, rule or regulation by any
central bank or other governmental authority charged with the interpretation
or administration thereof or (3) compliance by the Liquidity Provider or any
corporation controlling the Liquidity Provider with any applicable guideline
or request of general applicability, issued after the date hereof, by any
central bank or other governmental authority (whether or not having the force
of law) that constitutes a change of the nature described in clause (2), has
the effect of requiring an increase in the amount of capital required to be
maintained by the Liquidity Provider or any corporation controlling the
Liquidity Provider, and such increase is based upon the Liquidity Provider's
obligations hereunder and other similar obligations, the Borrower shall pay
to the Liquidity Provider from time to time such additional amount or amounts
as are necessary to compensate the Liquidity Provider for such portion of
such increase as shall be reasonably allocable to the Liquidity Provider's
obligations to the Borrower hereunder. The Liquidity Provider agrees to use
reasonable efforts (consistent with applicable legal and regulatory
restrictions) to change the jurisdiction of its Lending Office if making such
change would avoid the need for, or reduce the amount of, any amount payable
under this Section that may thereafter accrue and would not, in the
reasonable judgment of the Liquidity Provider, be otherwise materially
disadvantageous to the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.02 as promptly as practicable after
it obtains knowledge thereof and determines to request such compensation,
which notice shall describe in reasonable detail the calculation of the
amounts owed under this Section. Determinations by the Liquidity Provider
for purposes of this Section 3.02 of the effect of any increase in the amount
of capital required to be maintained by the Liquidity Provider and of the
amount allocable to the Liquidity Provider's obligations to the Borrower
hereunder shall be prima facie evidence of the amounts owed under this
Section.
Section 3.03. Payments Free of Deductions. (a) All payments made by
the Borrower under this Agreement shall be made free and clear of, and
without reduction for or on account of, any present or future stamp or other
taxes, levies, imposts, duties, charges, fees, deductions, withholdings,
restrictions or conditions of any nature whatsoever now or hereafter imposed,
levied, collected, withheld or assessed, excluding Excluded Taxes (such non-
excluded taxes being referred to herein, collectively, as "Non-Excluded
Taxes" and, individually, as a "Non-Excluded Tax"). If any Non-Excluded
Taxes are required to be withheld from any amounts payable to the Liquidity
Provider under this Agreement, the amounts so payable to the Liquidity
Provider shall be increased to the extent necessary to yield to the Liquidity
Provider (after payment of all Non-Excluded Taxes) interest or any other such
amounts payable under this Agreement at the rates or in the amounts specified
in this Agreement. The Liquidity Provider agrees to use reasonable efforts
(consistent with its
14
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Lending Office if making such change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of the Liquidity Provider,
be otherwise disadvantageous to the Liquidity Provider. From time to time
upon the reasonable request of the Borrower, the Liquidity Provider agrees to
provide to the Borrower two original Internal Revenue Service Forms 1001 or
4224, as appropriate, or any successor or other form prescribed by the
Internal Revenue Service, certifying that the Liquidity Provider is exempt
from or entitled to a reduced rate of United States withholding tax on
payments pursuant to this Agreement.
(b) All payments (including, without limitation, Advances) made by the
Liquidity Provider under this Agreement shall be made free and clear of, and
without reduction for or on account of, any Taxes. If any Taxes are required
to be withheld or deducted from any amounts payable to the Borrower under
this Agreement, the Liquidity Provider shall (i) within the time prescribed
therefor by applicable law pay to the appropriate governmental or taxing
authority the full amount of any such Taxes (and any additional Taxes in
respect of the payment required under clause (ii) hereof) and make such
reports or returns in connection therewith at the time or times and in the
manner prescribed by applicable law, and (ii) pay to the Borrower an
additional amount which (after deduction of all such Taxes) will be
sufficient to yield to the Borrower the full amount which would have been
received by it had no such withholding or deduction been made. Within 30
days after the date of each payment hereunder, the Liquidity Provider shall
furnish to the Borrower the original or a certified copy of (or other
documentary evidence of) the payment of the Taxes applicable to such payment.
Section 3.04. Payments. The Borrower shall make or cause to be made
each payment to the Liquidity Provider under this Agreement so as to cause
the same to be received by the Liquidity Provider not later than 1:00 P.M.
(New York City time) on the day when due. The Borrower shall make all such
payments in lawful money of the United States of America, to the Liquidity
Provider in immediately available funds, by wire transfer to ABN AMRO Bank,
New York, N.Y., ABA #026009580, Account Name: ABN AMRO Bank, Chicago Branch
CPU, Account No. [650-001-1789-41] , Account Name: US Airways Liquidity
Facility 1998-1A.
Section 3.05. Computations. All computations of interest based on the
Base Rate shall be made on the basis of a year of 365 or 366 days, as the
case may be, and all computations of interest based on the LIBOR Rate shall
be made on the basis of a year of 360 days, in each case for the actual
number of days (including the first day but excluding the last day) occurring
in the period for which such interest is payable.
Section 3.06. Payment on Non-Business Days. Whenever any payment to be
made hereunder shall be stated to be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day and no
additional interest shall be due as a
15
result (and if so made, shall be deemed to have been made when due). If any
payment in respect of interest on an Advance is so deferred to the next
succeeding Business Day, such deferral shall not delay the commencement of
the next Interest Period for such Advance (if such Advance is a LIBOR
Advance) or reduce the number of days for which interest will be payable on
such Advance on the next interest payment date for such Advance.
Section 3.07. Interest. (a) Subject to Section 2.09, the Borrower
shall pay, or shall cause to be paid, without duplication, interest on (i)
the unpaid principal amount of each Advance from and including the date of
such Advance (or, in the case of an Applied Provider Advance, from and
including the date on which the amount thereof was withdrawn from the Class A
Cash Collateral Account to pay interest on the Class A Certificates) to but
excluding the date such principal amount shall be paid in full (or, in the
case of an Applied Provider Advance, the date on which the Class A Cash
Collateral Account is fully replenished in respect of such Advance) and (ii)
any other amount due hereunder (whether fees, commissions, expenses or other
amounts or, to the extent permitted by law, installments of interest on
Advances or any such other amount) which is not paid when due (whether at
stated maturity, by acceleration or otherwise) from and including the due
date thereof to but excluding the date such amount is paid in full, in each
such case, at a fluctuating interest rate per annum for each day equal to the
Applicable Liquidity Rate (as defined below) for such Advance or such other
amount as in effect for such day, but in no event at a rate per annum greater
than the maximum rate permitted by applicable law; provided, however, that,
if at any time the otherwise applicable interest rate as set forth in this
Section 3.07 shall exceed the maximum rate permitted by applicable law, then
any subsequent reduction in such interest rate will not reduce the rate of
interest payable pursuant to this Section 3.07 below the maximum rate
permitted by applicable law until the total amount of interest accrued equals
the amount of interest that would have accrued if such otherwise applicable
interest rate as set forth in this Section 3.07 had at all times been in
effect.
(b) Each Advance will be either a Base Rate Advance or a LIBOR Advance
as provided in this Section. Each such Advance will be a Base Rate Advance
for the period from the date of its borrowing to (but excluding) the third
Business Day following the Liquidity Provider's receipt of the Notice of
Borrowing for such Advance. Thereafter, such Advance shall be a LIBOR
Advance; provided that (i) an Applied Provider Advance shall always be a
LIBOR Advance unless the Borrower elects otherwise and (ii) the Borrower (at
the direction of the Controlling Party, so long as the Liquidity Provider is
not the Controlling Party) may (x) convert the Final Advance or an Unapplied
Provider Advance into a Base Rate Advance on the last day of an Interest
Period for such Advance by giving the Liquidity Provider no less than four
Business Days' prior written notice of such election or (y) elect to maintain
the Final Advance or Unapplied Provider Advance as a Base Rate Advance by not
requesting a conversion of the Final Advance of Unapplied Provider Advance
(as the case may be) to a LIBOR Advance under Clause (5) of the applicable
Notice of Borrowing (or, if such Final Advance is deemed to have been made,
without delivery of a Notice of Borrowing pursuant to Section 2.06, by
requesting, prior to 11:00 A.M. on the first Business Day
16
immediately following the Borrower's receipt of the applicable Termination
Notice, that such Final Advance not be converted from a Base Rate Advance to
a LIBOR Advance).
(c) Each LIBOR Advance shall bear interest during each Interest Period
at a rate per annum equal to the LIBOR Rate for such Interest Period plus the
Applicable Margin for such LIBOR Advance, payable in arrears on the last day
of such Interest Period and, in the event of the payment of principal of such
LIBOR Advance on a day other than such last day, on the date of such payment
(to the extent of interest accrued on the amount of principal repaid).
(d) Each Base Rate Advance shall bear interest at a rate per annum
equal to the Base Rate plus the Applicable Margin for such Base Rate Advance,
payable in arrears on each Regular Distribution Date and, in the event of the
payment of principal of such Base Rate Advance on a day other than a Regular
Distribution Date, on the date of such payment (to the extent of interest
accrued on the amount of principal repaid).
(e) [Reserved]
(f) Each amount not paid when due hereunder (whether fees, commissions,
expenses or other amounts or, to the extent permitted by applicable law,
installments of interest on Advances but excluding Advances) shall bear
interest at a rate per annum equal to the Base Rate plus 2.00% until paid.
(g) Each change in the Base Rate shall become effective immediately.
The rates of interest specified in this Section 3.07 with respect to any
Advance or other amount shall be referred to as the "Applicable Liquidity
Rate".
Section 3.08. Replacement of Borrower. From time to time and subject
to the successor Borrower's meeting the eligibility requirements set forth in
Section 6.9 of the Intercreditor Agreement applicable to the Subordination
Agent, upon the effective date and time specified in a written and completed
Notice of Replacement Subordination Agent in substantially the form of Annex
VI attached hereto (a "Notice of Replacement Subordination Agent") delivered
to the Liquidity Provider by the then Borrower, the successor Borrower
designated therein shall be substituted for as the Borrower for all purposes
hereunder.
Section 3.09. Funding Loss Indemnification. The Borrower shall pay to
the Liquidity Provider, upon the request of the Liquidity Provider, such
amount or amounts as shall be sufficient (in the reasonable opinion of the
Liquidity Provider) to compensate it for any loss, cost, or expense incurred
by reason of the liquidation or redeployment of deposits or other funds
acquired by the Liquidity Provider to fund or maintain any LIBOR Advance (but
excluding loss of anticipated profits) incurred as a result of:
17
(1) Any repayment of a LIBOR Advance on a date other than the last day
of the Interest Period for such Advance; or
(2) Any failure by the Borrower to borrow a LIBOR Advance on the date
for borrowing specified in the relevant notice under Section 2.02.
Section 3.10. Illegality. Notwithstanding any other provision in this
Agreement, if any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation
or administration thereof, or compliance by the Liquidity Provider (or its
Lending Office) with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency shall
make it unlawful or impossible for the Liquidity Provider (or its Lending
Office) to maintain or fund its LIBOR Advances, then upon notice to the
Borrower by the Liquidity Provider, the outstanding principal amount of the
LIBOR Advances shall be converted to Base Rate Advances (a) immediately upon
demand of the Liquidity Provider, if such change or compliance with such
request, in the judgment of the Liquidity Provider, requires immediate
repayment; or (b) at the expiration of the last Interest Period to expire
before the effective date of any such change or request.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to Effectiveness of Section 2.01.
Section 2.01 of this Agreement shall become effective on and as of the first
date (the "Effective Date") on which the following conditions precedent have
been satisfied or waived:
(a) The Liquidity Provider shall have received on or before the Closing
Date each of the following, and in the case of each document delivered
pursuant to paragraphs (i), (ii) and (iii), each in form and substance
satisfactory to the Liquidity Provider:
(i) This Agreement duly executed on behalf of the Borrower;
(ii) The Intercreditor Agreement duly executed on behalf of each
of the parties thereto;
(iii) Fully executed copies of each of the Operative Agreements
executed and delivered on or before the Closing Date (other than this
Agreement and the Intercreditor Agreement);
18
(iv) A copy of the Prospectus Supplement and specimen copies of
the Class A Certificates;
(v) An executed copy of each document, instrument, certificate
and opinion delivered on or before the Closing Date pursuant to the Class A
Trust Agreement, the Intercreditor Agreement and the other Operative
Agreements (in the case of each such opinion, other than the opinion of
counsel for the Underwriters, either addressed to the Liquidity Provider or
accompanied by a letter from the counsel rendering such opinion to the effect
that the Liquidity Provider is entitled to rely on such opinion as of its
date as if it were addressed to the Liquidity Provider);
(vi) Evidence that there shall have been made and shall be in
full force and effect, all filings, recordings and/or registrations, and
there shall have been given or taken any notice or other similar action as
may be reasonably necessary or, to the extent reasonably requested by the
Liquidity Provider, reasonably advisable, in order to establish, perfect,
protect and preserve the right, title and interest, remedies, powers,
privileges, liens and security interests of, or for the benefit of, the
Trustees, the Borrower and the Liquidity Provider created by the Operative
Agreements executed and delivered on or prior to the Closing Date;
(vii) An agreement from US Airways, pursuant to which (i) US
Airways agrees to provide copies of quarterly financial statements and
audited annual financial statements to the Liquidity Provider, and such other
information as the Liquidity Provider shall reasonably request with respect
to the transactions contemplated by the Operative Agreements, in each case,
only to the extent that US Airways is obligated to provide such information
pursuant to Section 16 of the Leases (related to Leased Aircraft) or the
corresponding section of the Indentures (related to Owned Aircraft) to the
parties thereto and (ii) US Airways agrees to allow the Liquidity Provider to
inspect US Airways' books and records regarding such transactions, and to
discuss such transactions with officers and employees of US Airways; and
(viii) Such other documents, instruments, opinions and approvals
pertaining to the transactions contemplated hereby or by the other Operative
Agreements as the Liquidity Provider shall have reasonably requested.
(b) The following statement shall be true on and as of the Effective
Date: no event has occurred and is continuing, or would result from the
entering into of this Agreement or the making of any Advance, which
constitutes a Liquidity Event of Default.
19
(c) The Liquidity Provider shall have received payment in full of all
fees and other sums required to be paid to or for the account of the
Liquidity Provider on or prior to the Effective Date.
(d) All conditions precedent to the issuance of the Certificates under
the Trust Agreements shall have been satisfied or waived, all conditions
precedent to the effectiveness of the other Liquidity Facilities shall have
been satisfied or waived, and all conditions precedent to the purchase of the
Class A Certificates and Class B Certificates by the Underwriters under the
Underwriting Agreement and the purchase of the Class C Certificates by AIFS
under the Class C Purchase Agreement shall have been satisfied (unless any of
such conditions precedent shall have been waived by the Underwriters).
(e) The Borrower shall have received a certificate, dated the date
hereof, signed by a duly authorized representative of the Liquidity Provider,
certifying that all conditions precedent to the effectiveness of Section 2.01
have been satisfied or waived.
Section 4.02. Conditions Precedent to Borrowing. The obligation of the
Liquidity Provider to make an Advance on the occasion of each Borrowing shall
be subject to the conditions precedent that the Effective Date shall have
occurred and, prior to the date of such Borrowing, the Borrower shall have
delivered a Notice of Borrowing which conforms to the terms and conditions of
this Agreement and has been completed as may be required by the relevant form
of the Notice of Borrowing for the type of Advances requested.
ARTICLE V
COVENANTS
Section 5.01. Affirmative Covenants of the Borrower. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any
amount to the Liquidity Provider hereunder, the Borrower will, unless the
Liquidity Provider shall otherwise consent in writing:
(a) Performance of This and Other Agreements. Punctually pay or cause
to be paid all amounts payable by it under this Agreement and the other
Operative Agreements and observe and perform in all material respects the
conditions, covenants and requirements applicable to it contained in this
Agreement and the other Operative Agreements.
(b) Reporting Requirements. Furnish to the Liquidity Provider with
reasonable promptness, such other information and data with respect to the
transactions contemplated by the Operative Agreements as from time to time
may be reasonably
20
requested by the Liquidity Provider; and permit the Liquidity Provider, upon
reasonable notice, to inspect the Borrower's books and records with respect
to such transactions and to meet with officers and employees of the Borrower
to discuss such transactions.
(c) Certain Operative Agreements. Furnish to the Liquidity Provider
with reasonable promptness, such Operative Agreements entered into after the
date hereof as from time to time may be reasonably requested by the Liquidity
Provider.
Section 5.02. Negative Covenants of the Borrower. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any
amount to the Liquidity Provider hereunder, the Borrower will not appoint or
permit or suffer to be appointed any successor Borrower without the prior
written consent of the Liquidity Provider, which consent shall not be
unreasonably withheld or delayed.
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. Liquidity Events of Default. If (a) any Liquidity Event
of Default has occurred and is continuing and (b) there is a Performing Note
Deficiency, the Liquidity Provider may, in its discretion, deliver to the
Borrower a Termination Notice, the effect of which shall be to cause (i) this
Agreement to expire on the fifth Business Day after the date on which such
Termination Notice is received by the Borrower, (ii) the Borrower to promptly
request, and the Liquidity Provider to promptly make, a Final Advance in
accordance with Section 2.02(d) hereof and Section 3.6(i) of the
Intercreditor Agreement, (iii) all other outstanding Advances to be
automatically converted into Final Advances for purposes of determining the
Applicable Liquidity Rate for interest payable thereon, and (iv) subject to
Sections 2.07 and 2.09 hereof, all Advances (including, without limitation,
any Provider Advance and Applied Provider Advance), any accrued interest
thereon and any other amounts outstanding hereunder to become immediately due
and payable to the Liquidity Provider.
ARTICLE VII
MISCELLANEOUS
Section 7.01. Amendments, Etc No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in writing and
signed by the Liquidity Provider, and, in the case of an amendment or of a
waiver by the Borrower, the Borrower, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given.
21
Section 7.02. Notices, Etc Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be
in writing (including telecopier and mailed or delivered or sent by
telecopier):
Borrower: STATE STREET BANK AND TRUST COMPANY
Two International Place
4th Floor
Boston, MA 02110
Attention: Corporate Trust Department
Telephone: (617) 664-5340
Telecopy: (617) 664-5151
Liquidity Provider: ABN AMRO BANK N.V.
Aerospace Department
135 South LaSalle Street, #660
Chicago, IL 60674-9135
Attention: Claudia Heldring
Telephone: (312) 904-2900
Telecopy: (312) 606-8428
with a copy to:
ABN AMRO Bank N.V.
135 South LaSalle Street, #625
Chicago, IL 60674-9135
Attention: Loan Administration
Telephone: (312) 904-2961
Telecopy: (312) 904-1288
or, as to each of the foregoing, at such other address as shall be designated
by such Person in a written notice to the others. All such notices and
communications shall be effective (i) if given by telecopier, when
transmitted to the telecopier number specified above, (ii) if given by mail,
when deposited in the mails addressed as specified above, and (iii) if given
by other means, when delivered at the address specified above, except that
written notices to the Liquidity Provider pursuant to the provisions of
Articles II and III hereof shall not be effective until received by the
Liquidity Provider. A copy of all notices delivered hereunder to either
party shall in addition be delivered to each of the parties to the
Participation Agreements at their respective addresses set forth therein.
22
Section 7.03. No Waiver; Remedies. No failure on the part of the
Liquidity Provider to exercise, and no delay in exercising, any right under
this Agreement shall operate as a waiver thereof; nor shall any single or
partial exercise of any right under this Agreement preclude any other or
further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
Section 7.04. Further Assurances. The Borrower agrees to do such
further acts and things and to execute and deliver to the Liquidity Provider
such additional assignments, agreements, powers and instruments as the
Liquidity Provider may reasonably require or deem advisable to carry into
effect the purposes of this Agreement and the other Operative Agreements or
to better assure and confirm unto the Liquidity Provider its rights, powers
and remedies hereunder and under the other Operative Agreements.
Section 7.05. Indemnification; Survival of Certain Provisions. The
Liquidity Provider shall be indemnified hereunder to the extent and in the
manner described in Section 6(c) or 8, as the case may be, of the
Participation Agreements. In addition, the Borrower agrees to indemnify,
protect, defend and hold harmless the Liquidity Provider from, against and in
respect of, and shall pay on demand, all Expenses of any kind or nature
whatsoever (other than any Expenses of the nature described in Sections 3.01,
3.02 or 7.07 hereof or in the Fee Letter (regardless of whether indemnified
against pursuant to said Sections or in such Fee Letter)), that may be
imposed, incurred by or asserted against any Liquidity Indemnitee, in any way
relating to, resulting from, or arising out of or in connection with any
action, suit or proceeding by any third party against such Liquidity
Indemnitee and relating to this Agreement, the Fee Letter, the Intercreditor
Agreement or any Financing Agreement; provided, however, that the Borrower
shall not be required to indemnify, protect, defend and hold harmless any
Liquidity Indemnitee in respect of any Expense of such Liquidity Indemnitee
to the extent such Expense is (i) attributable to the gross negligence or
willful misconduct of such Liquidity Indemnitee or any other Liquidity
Indemnitee, (ii) ordinary and usual operating overhead expense, or (iii)
attributable to the failure by such Liquidity Indemnitee or any other
Liquidity Indemnitee to perform or observe any agreement, covenant or
condition on its part to be performed or observed in this Agreement, the
Intercreditor Agreement, the Fee Letter, the Tax Letter or any other
Operative Agreement to which it is a party. The indemnities contained in
Section 6(c) or 8, as the case may be, of the Participation Agreements, and
the provisions of Sections 3.01, 3.02, 3.03, 3.09, 7.05 and 7.07 hereof,
shall survive the termination of this Agreement.
Section 7.06. Liability of the Liquidity Provider. (a) Neither the
Liquidity Provider nor any of its officers, employees, directors or
affiliates shall be liable or responsible for: (i) the use which may be made
of the Advances or any acts or omissions of the Borrower or any beneficiary
or transferee in connection therewith; (ii) the validity, sufficiency or
genuineness of documents, or of any endorsement thereon, even if such
documents should prove to be in any or all respects invalid, insufficient,
fraudulent or forged; or (iii) the making of Advances by the Liquidity
Provider against delivery of a Notice of Borrowing and other
23
documents which do not comply with the terms hereof; provided, however, that
the Borrower shall have a claim against the Liquidity Provider, and the
Liquidity Provider shall be liable to the Borrower, to the extent of any
damages suffered by the Borrower which were the result of (A) the Liquidity
Provider's willful misconduct or negligence in determining whether documents
presented hereunder comply with the terms hereof, or (B) any breach by the
Liquidity Provider of any of the terms of this Agreement, including, but not
limited to, the Liquidity Provider's failure to make lawful payment hereunder
after the delivery to it by the Borrower of a Notice of Borrowing strictly
complying with the terms and conditions hereof.
(b) Neither the Liquidity Provider nor any of its officers, employees,
directors or affiliates shall be liable or responsible in any respect for (i)
any error, omission, interruption or delay in transmission, dispatch or
delivery of any message or advice, however transmitted, in connection with
this Agreement or any Notice of Borrowing delivered hereunder, or (ii) any
action, inaction or omission which may be taken by it in good faith, absent
willful misconduct or negligence (in which event the extent of the Liquidity
Provider's potential liability to the Borrower shall be limited as set forth
in the immediately preceding paragraph), in connection with this Agreement or
any Notice of Borrowing.
Section 7.07. Costs, Expenses and Taxes. The Borrower agrees to pay,
or cause to be paid (A) on the Effective Date and on such later date or dates
on which the Liquidity Provider shall make demand, all reasonable out-of-
pocket costs and expenses (including, without limitation, the reasonable fees
and expenses of outside counsel for the Liquidity Provider) of the Liquidity
Provider in connection with the preparation, negotiation, execution,
delivery, filing and recording of this Agreement, any other Operative
Agreement and any other documents which may be delivered in connection with
this Agreement and (B) on demand, all reasonable costs and expenses
(including reasonable counsel fees and expenses) of the Liquidity Provider in
connection with (i) the enforcement of this Agreement or any other Operative
Agreement, (ii) the modification or amendment of, or supplement to, this
Agreement or any other Operative Agreement or such other documents which may
be delivered in connection herewith or therewith (whether or not the same
shall become effective) or (iii) any action or proceeding relating to any
order, injunction, or other process or decree restraining or seeking to
restrain the Liquidity Provider from paying any amount under this Agreement,
the Intercreditor Agreement or any other Operative Agreement or otherwise
affecting the application of funds in the Class A Cash Collateral Account.
In addition, the Borrower shall pay any and all recording, stamp and other
similar taxes and fees payable or determined to be payable in connection with
the execution, delivery, filing and recording of this Agreement, any other
Operative Agreement and such other documents, and agrees to save the
Liquidity Provider harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such
taxes or fees.
Section 7.08. Binding Effect; Participations. (a) This Agreement
shall be binding upon and inure to the benefit of the Borrower and the
Liquidity Provider and their respective successors and assigns, except that
neither the Liquidity Provider (except as
24
otherwise provided in this Section 7.08) nor (except as contemplated by
Section 3.08) the Borrower shall have the right to assign its rights or
obligations hereunder or any interest herein without the prior written
consent of the other party, subject to the requirements of Section 7.08(b).
The Liquidity Provider may grant participations herein or in any of its
rights hereunder (including, without limitation, funded participations and
participations in rights to receive interest payments hereunder) and under
the other Operative Agreements to such Persons as the Liquidity Provider may
in its sole discretion select, subject to the requirements of Section
7.08(b). No such participation by the Liquidity Provider, however, will
relieve the Liquidity Provider of its obligations hereunder. In connection
with any participation or any proposed participation, the Liquidity Provider
may disclose to the participant or the proposed participant any information
that the Borrower is required to deliver or to disclose to the Liquidity
Provider pursuant to this Agreement. The Borrower acknowledges and agrees
that the Liquidity Provider's source of funds may derive in part from its
participants. Accordingly, references in this Agreement and the other
Operative Agreements to determinations, reserve and capital adequacy
requirements, increased costs, reduced receipts, additional amounts due
pursuant to Section 3.03(a) and the like as they pertain to the Liquidity
Provider shall be deemed also to include those of each of its participants
(subject, in each case, to the maximum amount that would have been incurred
by or attributable to the Liquidity Provider directly if the Liquidity
Provider, rather than the participant, had held the interest participated).
(b) If, pursuant to subsection (a) above, the Liquidity Provider sells
any participation in this Agreement to any bank or other entity (each, a
"Transferee"), then, concurrently with the effectiveness of such
participation, the Transferee shall (i) represent to the Liquidity Provider
(for the benefit of the Liquidity Provider and the Borrower) either (A) that
it is incorporated under the laws of the United States or a state thereof or
(B) that under applicable law and treaties, no taxes will be required to be
withheld with respect to any payments to be made to such Transferee in
respect of this Agreement, (ii) furnish to the Liquidity Provider and the
Borrower either (x) a statement that it is incorporated under the laws of the
United States or a state thereof or (y) if it is not so incorporated, two
copies of a properly completed United States Internal Revenue Service Form
4224 or Form 1001, as appropriate, or other applicable form, certificate or
document prescribed by the Internal Revenue Service certifying, in each case,
such Transferee's entitlement to a complete exemption from United States
federal withholding tax in respect to any and all payments to be made
hereunder, and (iii) agree (for the benefit of the Liquidity Provider and the
Borrower) to provide the Liquidity Provider and the Borrower a new Form 4224
or Form 1001, as appropriate, (A) on or before the date that any such form
expires or becomes obsolete or (B) after the occurrence of any event
requiring a change in the most recent form previously delivered by it and
prior to the immediately following due date of any payment by the Borrower
hereunder, certifying in the case of a Form 1001 or Form 4224 that such
Transferee is entitled to a complete exemption from United States federal
withholding tax on payments under this Agreement. Unless the Borrower has
received forms or other documents reasonably satisfactory to it (and required
by applicable law) indicating that payments
25
hereunder are not subject to United States federal withholding tax, the
Borrower will withhold taxes as required by law from such payments at the
applicable statutory rate.
(c) Notwithstanding the other provisions of this Section 7.08, the
Liquidity Provider may assign and pledge all or any portion of the Advances
owing to it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal
Reserve Bank, provided that any payment in respect of such assigned Advances
made by the Borrower to the Liquidity Provider in accordance with the terms
of this Agreement shall satisfy the Borrower's obligations hereunder in
respect of such assigned Advance to the extent of such payment. No such
assignment shall release the Liquidity Provider from its obligations
hereunder.
Section 7.09. Severability. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of
such provision in any other jurisdiction.
Section 7.10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 7.11. Submission to Jurisdiction; Waiver of Jury Trial; Waiver
of Immunity. (a) Each of the parties hereto hereby irrevocably and
unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any other Operative Agreement, or
for recognition and enforcement of any judgment in respect hereof or thereof,
to the nonexclusive general jurisdiction of the courts of the State of New
York, the courts of the United States of America for the Southern District of
New York, and the appellate courts from any thereof;
(ii) consents that any such action or proceeding may be brought in such
courts, and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action
or proceeding was brought in an inconvenient court and agrees not to plead or
claim the same;
(iii) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form and mail), postage prepaid, to each party
hereto at its address set forth in Section 7.02 hereof, or at such other
address of which the Liquidity Provider shall have been notified pursuant
thereto; and
26
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction.
(b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH HEREBY AGREE TO WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING
TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING
ESTABLISHED, including, without limitation, contract claims, tort claims,
breach of duty claims and all other common law and statutory claims. The
Borrower and the Liquidity Provider each warrant and represent that it has
reviewed this waiver with its legal counsel, and that it knowingly and
voluntarily waives its jury trial rights following consultation with such
legal counsel. THIS WAIVER IS IRREVOCABLE, AND CANNOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
(c) The Liquidity Provider hereby waives any immunity it may have from
the jurisdiction of the courts of the United States or of any State and
waives any immunity any of its properties located in the United States may
have from attachment or execution upon a judgment entered by any such court
under the United States Foreign Sovereign Immunities Act of 1976 or any
similar successor legislation.
Section 7.12. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.
Section 7.13. Entirety. This Agreement, the Intercreditor Agreement
and the other Operative Agreements to which the Liquidity Provider is a party
constitute the entire agreement of the parties hereto with respect to the
subject matter hereof and supersedes all prior understandings and agreements
of such parties.
Section 7.14. Headings. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
Section 7.15. LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES. EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE OBLIGATIONS OF THE LIQUIDITY
PROVIDER TO MAKE ADVANCES HEREUNDER, AND THE BORROWER'S RIGHTS TO DELIVER
NOTICES OF BORROWING REQUESTING THE MAKING OF ADVANCES HEREUNDER, SHALL BE
27
UNCONDITIONAL AND IRREVOCABLE, AND SHALL BE PAID OR PERFORMED, IN EACH CASE
STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
28
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized
as of the date first set forth above.
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity but solely as
Subordination Agent, as agent and trustee
for the Class A Trust, as Borrower
By:
-----------------------------------------
Name:
Title:
ABN AMRO BANK, N.V., acting through its Chicago
Branch, as Liquidity Provider
By:
-----------------------------------------
Name:
Title:
By:
-----------------------------------------
Name:
Title:
29
Annex I to
Revolving Credit Agreement
INTEREST ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned borrower
(the "Borrower"), hereby certifies to ABN AMRO BANK N.V. (the "Liquidity
Provider"), with reference to the Revolving Credit Agreement (1998-1A) dated
as of December 14, 1998, between the Borrower and the Liquidity Provider (the
"Liquidity Agreement"; the terms defined therein and not otherwise defined
herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of an Interest Advance by the Liquidity Provider to be used, subject to
clause (3)(v) below, for the payment of the interest on the Class A
Certificates which was payable on ____________, ____ (the "Distribution
Date") in accordance with the terms and provisions of the Class A Trust
Agreement and the Class A Certificates, which Advance is requested to be made
on ____________, ____.
(3) The amount of the Interest Advance requested hereby (i) is
$_______________.__, to be applied in respect of the payment of the interest
which was due and payable on the Class A Certificates on the Distribution
Date, (ii) does not include any amount with respect to the payment of
principal of, or premium on, the Class A Certificates, the Class B
Certificates or the Class C Certificates, or interest on the Class B
Certificates or the Class C Certificates, (iii) was computed in accordance
with the provisions of the Class A Certificates, the Class A Trust Agreement
and the Intercreditor Agreement (a copy of which computation is attached
hereto as Schedule I), (iv) does not exceed the Maximum Available Commitment
on the date hereof, (v) does not include any amount of interest which was due
and payable on the Class A Certificates on such Distribution Date but which
remains unpaid due to the failure of the Depositary to pay any amount of
accrued interest on the Deposits on such Distribution Date and (vi) has not
been and is not the subject of a prior or contemporaneous Notice of
Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will apply the same in accordance with the
terms of Section 3.6(b) of the Intercreditor Agreement, (b) no portion of
such amount shall be applied by the Borrower for any other purpose and (c) no
portion of such amount until so applied shall be commingled with other funds
held by the Borrower.
I-1
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, the making of the Interest Advance as requested by this Notice of
Borrowing shall automatically reduce, subject to reinstatement in accordance
with the terms of the Liquidity Agreement, the Maximum Available Commitment
by an amount equal to the amount of the Interest Advance requested to be made
hereby as set forth in clause (i) of paragraph (3) of this Certificate and
such reduction shall automatically result in corresponding reductions in the
amounts available to be borrowed pursuant to a subsequent Advance.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST
COMPANY,
not in its individual
capacity but solely as
Subordination Agent, as
Borrower
By:
--------------------------
Name:
Title:
I-2
SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Interest Advance Notice of
Borrowing]
I-3
Annex II to
Revolving Credit Agreement
NON-EXTENSION ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "Borrower"), hereby certifies to ABN AMRO BANK N.V.
(the "Liquidity Provider"), with reference to the Revolving Credit Agreement
(1998-1A) dated as of December 14, 1998, between the Borrower and the
Liquidity Provider (the "Liquidity Agreement"; the terms defined therein and
not otherwise defined herein being used herein as therein defined or
referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Non-Extension Advance by the Liquidity Provider to be used for the
funding of the Class A Cash Collateral Account in accordance with Section
3.6(d) of the Intercreditor Agreement, which Advance is requested to be made
on __________, ____.
(3) The amount of the Non-Extension Advance requested hereby (i) is
$_______________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the Class A
Cash Collateral Account in accordance with Section 3.6(d) of the
Intercreditor Agreement, (ii) does not include any amount with respect to the
payment of the principal of, or premium on, the Class A Certificates, or
principal of, or interest or premium on, the Class B Certificates or the
Class C Certificates, (iii) was computed in accordance with the provisions of
the Class A Certificates, the Class A Trust Agreement and the Intercreditor
Agreement (a copy of which computation is attached hereto as Schedule I), and
(iv) has not been and is not the subject of a prior or contemporaneous Notice
of Borrowing under the Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class A
Cash Collateral Account and apply the same in accordance with the terms of
Section 3.6(d) of the Intercreditor Agreement, (b) no portion of such amount
shall be applied by the Borrower for any other purpose and (c) no portion of
such amount until so applied shall be commingled with other funds held by the
Borrower.
(5) The Borrower hereby requests that the Advance requested hereby be a
Base Rate Advance [and that such Base Rate Advance be converted into a LIBOR
Advance on the third Business Day following your receipt of this notice]*.
* Bracketed language may be included at Borrower's option.
II-1
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Non-Extension Advance as requested by this
Notice of Borrowing shall automatically and irrevocably terminate the
obligation of the Liquidity Provider to make further Advances under the
Liquidity Agreement; and (B) following the making by the Liquidity Provider
of the Non-Extension Advance requested by this Notice of Borrowing, the
Borrower shall not be entitled to request any further Advances under the
Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity
but solely as Subordination
Agent, as Borrower
By:
----------------------------
Name:
Title:
II-2
SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with Non-Extension Advance Notice
of Borrowing]
II-3
Annex III to
Revolving Credit Agreement
DOWNGRADE ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "Borrower"), hereby certifies to ABN AMRO BANK N.V.
(the "Liquidity Provider"), with reference to the Revolving Credit Agreement
(1998-1A) dated as of December 14, 1998, between the Borrower and the
Liquidity Provider (the "Liquidity Agreement"; the terms defined therein and
not otherwise defined herein being used herein as therein defined or
referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Downgrade Advance by the Liquidity Provider to be used for the funding
of the Class A Cash Collateral Account in accordance with Section 3.6(c) of
the Intercreditor Agreement by reason of the downgrading of the short-term
unsecured debt rating of the Liquidity Provider issued by either Rating
Agency below the Threshold Rating, which Advance is requested to be made on
__________, ____.
(3) The amount of the Downgrade Advance requested hereby (i) is
$_______________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the Class A
Cash Collateral Account in accordance with Section 3.6(c) of the
Intercreditor Agreement, (ii) does not include any amount with respect to the
payment of the principal of, or premium on, the Class A Certificates, or
principal of, or interest or premium on, the Class B Certificates or the
Class C Certificates, (iii) was computed in accordance with the provisions of
the Class A Certificates, the Class A Trust Agreement and the Intercreditor
Agreement (a copy of which computation is attached hereto as Schedule I), and
(iv) has not been and is not the subject of a prior or contemporaneous Notice
of Borrowing under the Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class A
Cash Collateral Account and apply the same in accordance with the terms of
Section 3.6(c) of the Intercreditor Agreement, (b) no portion of such amount
shall be applied by the Borrower for any other purpose and (c) no portion of
such amount until so applied shall be commingled with other funds held by the
Borrower.
III-1
(5) The Borrower hereby requests that the Advance requested hereby be a
Base Rate Advance [and that such Base Rate Advance be converted into a LIBOR
Advance on the third Business Day following your receipt of this notice]*.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Downgrade Advance as requested by this
Notice of Borrowing shall automatically and irrevocably terminate the
obligation of the Liquidity Provider to make further Advances under the
Liquidity Agreement; and (B) following the making by the Liquidity Provider
of the Downgrade Advance requested by this Notice of Borrowing, the Borrower
shall not be entitled to request any further Advances under the Liquidity
Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST
COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:
---------------------------------
Name:
Title:
* Bracketed language may be included at Borrower's option.
III-2
SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with Downgrade Advance Notice of
Borrowing]
III-3
Annex IV to
Revolving Credit Agreement
FINAL ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned borrower
(the "Borrower"), hereby certifies to ABN AMRO BANK N.V. (the "Liquidity
Provider"), with reference to the Revolving Credit Agreement (1998-1A) dated
as of December 14, 1998, between the Borrower and the Liquidity Provider (the
"Liquidity Agreement"; the terms defined therein and not otherwise defined
herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Final Advance by the Liquidity Provider to be used for the funding of
the Class A Cash Collateral Account in accordance with Section 3.6(i) of the
Intercreditor Agreement by reason of the receipt by the Borrower of a
Termination Notice from the Liquidity Provider with respect to the Liquidity
Agreement, which Advance is requested to be made on ____________, ____.
(3) The amount of the Final Advance requested hereby (i) is
$_________________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the Class A
Cash Collateral Account in accordance with Section 3.6(i) of the
Intercreditor Agreement, (ii) does not include any amount with respect to the
payment of principal of, or premium on, the Class A Certificates, or
principal of, or interest or premium on, the Class B Certificates or the
Class C Certificates, (iii) was computed in accordance with the provisions of
the Class A Certificates, the Class A Trust Agreement and the Intercreditor
Agreement (a copy of which computation is attached hereto as Schedule I), and
(iv) has not been and is not the subject of a prior or contemporaneous Notice
of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class A
Cash Collateral Account and apply the same in accordance with the terms of
Section 3.6(i) of the Intercreditor Agreement, (b) no portion of such amount
shall be applied by the Borrower for any other purpose and (c) no portion of
such amount until so applied shall be commingled with other funds held by the
Borrower.
IV-1
(5) The Borrower hereby requests that the Advance requested hereby
be a Base Rate Advance [and that such Base Rate Advance be converted into a
LIBOR Advance on the third Business Day following your receipt of this
notice]*.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Final Advance as requested by this Notice of
Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity Agreement;
and (B) following the making by the Liquidity Provider of the Final Advance
requested by this Notice of Borrowing, the Borrower shall not be entitled to
request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST
COMPANY,
not in its individual
capacity but solely as
Subordination Agent, as
Borrower
By:
-----------------------------
Name:
Title:
* Bracketed language may be included at Borrower's option.
IV-2
SCHEDULE I TO FINAL ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Final Advance Notice of
Borrowing]
IV-3
Annex V to
Revolving Credit Agreement
NOTICE OF TERMINATION
[Date]
State Street Bank and Trust Company,
as Subordination Agent, as Borrower
Two International Place, 4th Floor
Boston, MA 02110
Attention: Corporate Trust Administration
Revolving Credit Agreement dated as of December 14, 1998, between State
Street Bank and Trust Company, as Subordination Agent, as agent and
trustee for the US Airways Pass Through Trust, 1998-1A, as Borrower, and
ABN AMRO BANK, N.V. (the "Liquidity Agreement")
Ladies and Gentlemen:
You are hereby notified that pursuant to Section 6.01 of the Liquidity
Agreement, by reason of the occurrence of a Liquidity Event of Default and
the existence of a Performing Note Deficiency (each as defined therein), we
are giving this notice to you in order to cause (i) our obligations to make
Advances (as defined therein) under such Liquidity Agreement to terminate on
the fifth Business Day after the date on which you receive this notice and
(ii) you to request a Final Advance under the Liquidity Agreement pursuant to
Section 3.6(i) of the Intercreditor Agreement (as defined in the Liquidity
Agreement) as a consequence of your receipt of this notice.
V-1
THIS NOTICE IS THE "NOTICE OF TERMINATION" PROVIDED FOR UNDER THE
LIQUIDITY AGREEMENT. OUR OBLIGATIONS TO MAKE ADVANCES UNDER THE LIQUIDITY
AGREEMENT WILL TERMINATE ON THE FIFTH BUSINESS DAY AFTER THE DATE ON WHICH
YOU RECEIVE THIS NOTICE.
Very truly yours,
ABN AMRO BANK, N.V.,
Chicago Branch
as Liquidity Provider
By:
------------------------------
Name:
Title:
cc: State Street Bank and Trust Company,
as Class A Trustee
V-2
Annex VI to
Revolving Credit Agreement
NOTICE OF REPLACEMENT SUBORDINATION AGENT
[Date]
Attention:
Revolving Credit Agreement dated as of December 14, 1998, between State
Street Bank and Trust Company, as Subordination Agent, as agent and
trustee for the US Airways Pass Through Trust, 1998-1A, as Borrower, and
ABN AMRO BANK N.V. (the "Liquidity Agreement")
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
______________________________
[Name of Transferee]
______________________________
[Address of Transferee]
all rights and obligations of the undersigned as Borrower under the Liquidity
Agreement referred to above. The transferee has succeeded the undersigned as
Subordination Agent under the Intercreditor Agreement referred to in the
first paragraph of the Liquidity Agreement, pursuant to the terms of Section
8.1 of the Intercreditor Agreement.
By this transfer, all rights of the undersigned as Borrower under the
Liquidity Agreement are transferred to the transferee and the transferee
shall hereafter have the sole rights and obligations as Borrower thereunder.
The undersigned shall pay any costs and expenses of such transfer,
including, but not limited to, transfer taxes or governmental charges.
VI-1
We ask that this transfer be effective as of _______________, ____.
STATE STREET BANK AND TRUST
COMPANY,
not in its individual
capacity but solely as
Subordination Agent, as
Borrower
By:
----------------------------
Name:
Title:
By:
----------------------------
Name:
Title:
VI-2
EXHIBIT 4(a)(vii)
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REVOLVING CREDIT AGREEMENT
(1998-1B)
Dated as of December 14, 1998
between
STATE STREET BANK and TRUST COMPANY,
as Subordination Agent,
as agent and trustee for the
US Airways Pass Through Trust 1998-1B
as Borrower
and
ABN AMRO BANK N.V.,
acting through its Chicago Branch
as Liquidity Provider
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Relating to
US Airways Pass Through Trust 1998-1B
7.35% US Airways Pass Through Certificates,
Series 1998-1B
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms 1
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. The Advances 7
Section 2.02. Making the Advances 8
Section 2.03. Fees 10
Section 2.04. Reduction or Termination of the Maximum Commitment 10
Section 2.05. Repayments of Interest Advances or the Final Advance 10
Section 2.06. Repayments of Provider Advances 10
Section 2.07. Payments to the Liquidity Provider Under the Intercreditor
Agreement 11
Section 2.08. Book Entries 12
Section 2.09. Payments from Available Funds Only 12
Section 2.10. Extension of the Expiry Date; Non-Extension Advance 12
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. Increased Costs 13
Section 3.02. Capital Adequacy 14
Section 3.03. Payments Free of Deductions 14
Section 3.04. Payments 15
Section 3.05. Computations 15
Section 3.06. Payment on Non-Business Days 15
Section 3.07. Interest 16
Section 3.08. Replacement of Borrower 17
Section 3.09. Funding Loss Indemnification 17
Section 3.10. Illegality 18
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TABLE OF CONTENTS
(Continued)
Page
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ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to Effectiveness of Section 2.01 18
Section 4.02. Conditions Precedent to Borrowing 20
ARTICLE V
COVENANTS
Section 5.01. Affirmative Covenants of the Borrower 20
Section 5.02. Negative Covenants of the Borrower 21
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. Liquidity Events of Default 21
ARTICLE VII
MISCELLANEOUS
Section 7.01. Amendments, Etc. 21
Section 7.02. Notices, Etc. 22
Section 7.03. No Waiver; Remedies 23
Section 7.04. Further Assurances 23
Section 7.05. Indemnification; Survival of Certain Provisions 23
Section 7.06. Liability of the Liquidity Provider 24
Section 7.07. Costs, Expenses and Taxes 24
Section 7.08. Binding Effect; Participations 25
Section 7.09. Severability 26
Section 7.10. GOVERNING LAW 26
Section 7.11. Submission to Jurisdiction; Waiver of Jury Trial; Waiver
of Immunity 26
Section 7.12. Execution in Counterparts 27
Section 7.13. Entirety 28
Section 7.14. Headings 28
Section 7.15. LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES 28
ii
TABLE OF CONTENTS
(Continued)
Page
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ANNEX I Interest Advance Notice of Borrowing
ANNEX II Non-Extension Advance Notice of Borrowing
ANNEX III Downgrade Advance Notice of Borrowing
ANNEX IV Final Advance Notice of Borrowing
ANNEX V Notice of Termination
ANNEX VI Notice of Replacement Subordination Agent
iii
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT dated as of December 14, 1998, between
STATE STREET BANK and TRUST COMPANY, a Massachusetts trust company, not in
its individual capacity but solely as Subordination Agent under the
Intercreditor Agreement (each as defined below), as agent and trustee for the
Class B Trust (as defined below) (the "Borrower"), and ABN AMRO BANK N.V.,
a bank organized under the laws of The Netherlands, acting through its
Chicago Branch (the "Liquidity Provider").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Class B Trust Agreement (such term and all
other capitalized terms used in these recitals having the meanings set forth
or referred to in Section 1.01), the Class B Trust is issuing the Class B
Certificates; and
WHEREAS, the Borrower, in order to support the timely payment of a
portion of the interest on the Class B Certificates in accordance with their
terms, has requested the Liquidity Provider to enter into this Agreement,
providing in part for the Borrower to request in specified circumstances that
Advances be made hereunder.
NOW, THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms. (a) Definitions. As used in
this Agreement and unless otherwise expressly indicated, or unless the
context clearly requires otherwise, the following capitalized terms shall
have the following respective meanings for all purposes of this Agreement:
"Additional Cost" has the meaning assigned to such term in
Section 3.01.
"Advance" means an Interest Advance, a Final Advance, a Provider
Advance, an Applied Provider Advance or an Unpaid Advance, as the case may
be.
"Applicable Liquidity Rate" has the meaning assigned to such term
in Section 3.07(g).
"Applicable Margin" means (x) with respect to any Unpaid Advance
or Applied Provider Advance, 2.00%, (y) with respect to any Unapplied Non-
Extension Advance that is a LIBOR Advance, 0.45%, or (z) with respect to any
Unapplied Downgrade
1
Advance that is a LIBOR Advance, 0.45% for the first year after the date of
such Advance and 0.75% thereafter
"Applied Downgrade Advance" has the meaning assigned to such term
in Section 2.06(a).
"Applied Non-Extension Advance" has the meaning assigned to such
term in Section 2.06(a).
"Applied Provider Advance" has the meaning assigned to such term
in Section 2.06(a).
"Base Rate" means a fluctuating interest rate per annum in effect
from time to time, which rate per annum shall at all times be equal to (a)
the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds brokers,
as published for such day (or, if such day is not a Business Day, for the
next preceding Business Day) by the Federal Reserve Bank of New York, or if
such rate is not so published for any day that is a Business Day, the average
of the quotations for such day for such transactions received by the
Liquidity Provider from three Federal funds brokers of recognized standing
selected by it, plus (b) one quarter of one percent (1/4 of 1%) per annum.
"Base Rate Advance" means an Advance that bears interest at a
rate based upon the Base Rate.
"Borrower" has the meaning assigned to such term in the recital
of parties to this Agreement.
"Borrowing" means the making of Advances requested by delivery of
a Notice of Borrowing.
"Business Day" means any day other than a Saturday or Sunday or a
day on which commercial banks are required or authorized to close in New
York, New York, Chicago, Illinois, Pittsburgh, Pennsylvania, or, so long as
any Class B Certificate is outstanding, the city and state in which the Class
B Trustee, the Borrower or any Loan Trustee maintains its Corporate Trust
Office or receives or disburses funds, and, if the applicable Business Day
relates to any Advance or other amount bearing interest based on the LIBOR
Rate, on which dealings are carried on in the London interbank market.
"Certificates of Deposit" has the meaning assigned to such term
in the Deposit Agreement.
"Deposits" has the meaning assigned to such terms in the Deposit
Agreement.
2
"Depositary" has the meaning assigned to such term in the Deposit
Agreement.
"Deposit Agreement" means the Deposit Agreement dated December
14, 1998 between First Security Bank, National Association, as Escrow Agent
and Credit Suisse First Boston, as Depositary, pertaining to the Class B
Certificates, as the same may be amended, modified or supplemented from time
to time in accordance with the terms thereof.
"Downgrade Advance" means an Advance made pursuant to Section
2.02(c).
"Effective Date" has the meaning specified in Section 4.01. The
delivery of the certificate of the Liquidity Provider contemplated by Section
4.01(e) shall be conclusive evidence that the Effective Date has occurred.
"Excluded Taxes" means (i) taxes imposed on the overall net
income of the Liquidity Provider or of its Lending Office by the jurisdiction
where such Liquidity Provider's principal office or such Lending Office is
located, and (ii) Excluded Withholding Taxes.
"Excluded Withholding Taxes" means (i) withholding Taxes imposed
by the United States except to the extent that such United States withholding
Taxes are imposed as a result of any change in applicable law (excluding from
change in applicable law for this purpose a change in an applicable treaty or
other change in law affecting the applicability of a treaty) after the date
hereof, or in the case of a successor Liquidity Provider (including a
transferee of an Advance) or Lending Office, after the date on which such
successor Liquidity Provider obtains its interest or on which the Lending
Office is changed, and (ii) any withholding Taxes imposed by the United
States which are imposed or increased as a result of the Liquidity Provider
failing to deliver to the Borrower any certificate or document (which
certificate or document in the good faith judgment of the Liquidity Provider
it is legally entitled to provide) which is reasonably requested by the
Borrower to establish that payments under this Agreement are exempt from (or
entitled to a reduced rate of) withholding Tax.
"Expenses" means liabilities, obligations, damages, settlements,
penalties, claims, actions, suits, costs, expenses, and disbursements
(including, without limitation, reasonable fees and disbursements of legal
counsel and costs of investigation), provided that Expenses shall not include
any Taxes.
"Expiry Date" means December 12, 1999, initially, or any date to
which the Expiry Date is extended pursuant to Section 2.10.
"Final Advance" means an Advance made pursuant to Section
2.02(d).
3
"Intercreditor Agreement" means the Intercreditor Agreement dated
the date hereof, among the Trustees, the Liquidity Provider, the liquidity
provider under each Liquidity Facility (other than this Agreement) and the
Subordination Agent, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Interest Advance" means an Advance made pursuant to Section
2.02(a).
"Interest Period" means, with respect to any LIBOR Advance, each
of the following periods:
(i) the period beginning either (x) on the third Business Day
following the Liquidity Provider's receipt of the Notice of Borrowing for
such LIBOR Advance or (y) the date of the withdrawal of funds from the Class
B Cash Collateral Account for the purpose of paying interest on the Class B
Certificates as contemplated by Section 2.06(a) hereof and, in each case,
ending on the next Regular Distribution Date; and
(ii) each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the next Regular
Distribution Date;
provided, however, that if (x) the Final Advance shall have been made, or (y)
other outstanding Advances shall have been converted into the Final Advance,
then the Interest Periods shall be successive periods of one month beginning
on the third Business Day following the Liquidity Provider's receipt of the
Notice of Borrowing for such Final Advance (in the case of clause (x) above)
or the Regular Distribution Date following such conversion (in the case of
clause (y) above).
"Lending Office" means the lending office of the Liquidity
Provider presently located at Chicago, Illinois, or such other lending office
as the Liquidity Provider from time to time shall notify the Borrower as its
lending office hereunder; provided that the Liquidity Provider shall not
change its Lending Office to a Lending Office outside the United States of
America except in accordance with Section 3.01, 3.02 or 3.03 hereof.
"LIBOR Advance" means an Advance bearing interest at a rate based
upon the LIBOR Rate.
"LIBOR Rate" means, with respect to any Interest Period:
(i) the rate per annum appearing on display page 3750 (British
Bankers Association-LIBOR) of the Dow Jones Markets Service (or any successor
or substitute therefor ) at approximately 11:00 A.M. (London
4
time) two Business Days before the first day of such Interest Period, as the
rate for dollar deposits with a maturity comparable to such Interest Period,
or
(ii) if the rate calculated pursuant to clause (i) above is not
available, the average (rounded upwards, if necessary, to the next 1/16 of
1%) of the rates per annum at which deposits in dollars are offered for the
relevant Interest Period by three banks of recognized standing selected by
the Liquidity Provider in the London interbank market at approximately 11:00
A.M. (London time) two Business Days before the first day of such Interest
Period in an amount approximately equal to the principal amount of the LIBOR
Advance to which such Interest Period is to apply and for a period comparable
to such Interest Period.
"Liquidity Event of Default" means the occurrence of either (a)
the Acceleration of all of the Equipment Notes (provided that, with respect
to the period prior to the Delivery Period Expiry Date, such Equipment Notes
have an aggregate outstanding principal balance in excess of $300,000,000) or
(b) a US Airways Bankruptcy Event.
"Liquidity Indemnitee" means (i) the Liquidity Provider, (ii) the
directors, officers, employees and agents of the Liquidity Provider, and
(iii) the successors and permitted assigns of the persons described in
clauses (i) and (ii), inclusive.
"Liquidity Provider" has the meaning assigned to such term in the
recital of parties to this Agreement.
"Maximum Available Commitment" shall mean, subject to the proviso
contained in the third sentence of Section 2.02(a), at any time of
determination, (a) the Maximum Commitment at such time less (b) the aggregate
amount of each Interest Advance outstanding at such time; provided that
following a Provider Advance or a Final Advance, the Maximum Available
Commitment shall be zero.
"Maximum Commitment" means, for any day, the lesser of (x)
$8,961,341 and (y) the Required Amount on such day.
"Non-Extension Advance" means an Advance made pursuant to Section
2.02(b).
"Notice of Borrowing" has the meaning specified in Section
2.02(e).
"Notice of Replacement Subordination Agent" has the meaning
specified in Section 3.08.
5
"Performing Note Deficiency" means any time that less than 65% of
the then aggregate outstanding principal amount of all Equipment Notes are
Performing Equipment Notes.
"Prospectus Supplement" means the Prospectus Supplement dated
December 4, 1998, relating to the Class A Certificates and the Class B
Certificates, as such Prospectus Supplement may be amended or supplemented.
"Provider Advance" means a Downgrade Advance or a Non-Extension
Advance.
"Regulatory Change" has the meaning assigned to such term in
Section 3.01.
"Replenishment Amount" has the meaning assigned to such term in
Section 2.06(b).
"Required Amount" means, for any day, the sum of the aggregate
amount of interest, calculated at the rate per annum equal to the Stated
Interest Rate for the Class B Certificates, that would be payable on the
Class B Certificates on each of the three successive semiannual Regular
Distribution Dates immediately following such day or, if such day is a
Regular Distribution Date, on such day and the succeeding two semiannual
Regular Distribution Dates, in each case calculated on the basis of the Pool
Balance of the Class B Certificates on such day and without regard to
expected future payments of principal on the Class B Certificates.
"Tax Letter" means the letter dated the date hereof between the
Liquidity Provider and US Airways pertaining to this Agreement.
"Termination Date" means the earliest to occur of the following:
(i) the Expiry Date; (ii) the date on which the Borrower delivers to the
Liquidity Provider a certificate, signed by a Responsible Officer of the
Borrower, certifying that all of the Class B Certificates have been paid in
full (or provision has been made for such payment in accordance with the
Intercreditor Agreement and the Trust Agreements) or are otherwise no longer
entitled to the benefits of this Agreement; (iii) the date on which the
Borrower delivers to the Liquidity Provider a certificate, signed by a
Responsible Officer of the Borrower, certifying that a Replacement Liquidity
Facility has been substituted for this Agreement in full pursuant to Section
3.6(e) of the Intercreditor Agreement; (iv) the fifth Business Day following
the receipt by the Borrower of a Termination Notice from the Liquidity
Provider pursuant to Section 6.01 hereof; and (v) the date on which no
Advance is or may (including by reason of reinstatement as herein provided)
become available for a Borrowing hereunder.
6
"Termination Notice" means the Notice of Termination
substantially in the form of Annex V to this Agreement.
"Transferee" has the meaning assigned to such term in Section
7.08(b).
"Unapplied Downgrade Advance" means any Downgrade Advance other
than an Applied Downgrade Advance.
"Unapplied Provider Advance" means any Provider Advance other
than an Applied Provider Advance.
"Unpaid Advance" has the meaning assigned to such term in Section
2.05.
(b) Terms Defined in the Intercreditor Agreement. For all
purposes of this Agreement, the following terms shall have the respective
meanings assigned to such terms in the Intercreditor Agreement:
"Acceleration", "AIFS", "Certificates", "Class A Certificates",
"Class B Cash Collateral Account","Class B Certificates", "Class B
Certificateholders", "Class B Trust", "Class B Trust Agreement", "Class
B Trustee", "Class C Certificates", "Class C Purchase Agreement",
"Closing Date", "Controlling Party", "Corporate Trust Office",
"Delivery Period Expiry Date", "Distribution Date", "Downgraded
Facility", "Equipment Notes", "Fee Letter","Final Legal Distribution
Date", "Financing Agreement", "Indenture", "Interest Payment Date",
"Investment Earnings", "Liquidity Facility", "Liquidity Obligations",
"Loan Trustee", "Moody's", "Non-Extended Facility", "Note Purchase
Agreement", "Operative Agreements", "Performing Equipment Note",
"Person", "Pool Balance", "Rating Agency", "Ratings Confirmation",
"Regular Distribution Date", "Replacement Liquidity Facility",
"Responsible Officer", "Scheduled Payment", "Special Payment",
"Standard & Poor's", "Stated Interest Rate", "Subordination Agent",
"Taxes", "Threshold Rating", "Trust Agreements", "Trustee",
"Underwriters", "Underwriting Agreement", "US Airways", "US Airways
Bankruptcy Event" and "Written Notice".
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. The Advances. The Liquidity Provider hereby irrevocably
agrees, on the terms and conditions hereinafter set forth, to make Advances
to the Borrower from time to time on any Business Day during the period from
the Effective Date until 12:00 Noon (New York City time) on the Expiry Date
(unless the obligations of the Liquidity
7
Provider shall be earlier terminated in accordance with the terms of Section
2.04(b)) in an aggregate amount at any time outstanding not to exceed the
Maximum Commitment.
Section 2.02. Making the Advances. (a) Interest Advances shall be
made in one or more Borrowings by delivery to the Liquidity Provider of one
or more written and completed Notices of Borrowing in substantially the form
of Annex I attached hereto, signed by a Responsible Officer of the Borrower,
in an amount not exceeding the Maximum Available Commitment at such time and
shall be used solely for the payment when due of interest on the Class B
Certificates at the Stated Interest Rate therefor in accordance with Section
3.6(a) of the Intercreditor Agreement. Each Interest Advance made hereunder
shall automatically reduce the Maximum Available Commitment and the amount
available to be borrowed hereunder by subsequent Advances by the amount of
such Interest Advance (subject to reinstatement as provided in the next
sentence). Upon repayment to the Liquidity Provider in full of the amount of
any Interest Advance made pursuant to this Section 2.02(a), together with
accrued interest thereon (as provided herein), the Maximum Available
Commitment shall be reinstated by the amount of such repaid Interest Advance,
but not to exceed the Maximum Commitment; provided, however, that the Maximum
Available Commitment shall not be so reinstated at any time if (i) a
Liquidity Event of Default shall have occurred and be continuing and (ii)
there is a Performing Note Deficiency.
(b) A Non-Extension Advance shall be made in a single Borrowing if this
Agreement is not extended in accordance with Section 3.6(d) of the
Intercreditor Agreement (unless a Replacement Liquidity Facility to replace
this Agreement shall have been delivered to the Borrower as contemplated by
said Section 3.6(d) within the time period specified in such Section) by
delivery to the Liquidity Provider of a written and completed Notice of
Borrowing in substantially the form of Annex II attached hereto, signed by a
Responsible Officer of the Borrower, in an amount equal to the Maximum
Available Commitment at such time, and shall be used to fund the Class B Cash
Collateral Account in accordance with said Section 3.6(d) and Section 3.6(f)
of the Intercreditor Agreement.
(c) A Downgrade Advance shall be made in a single Borrowing upon a
downgrading of the Liquidity Provider's short-term unsecured debt rating
issued by either Rating Agency below the applicable Threshold Rating (as
provided for in Section 3.6(c) of the Intercreditor Agreement) unless a
Replacement Liquidity Facility to replace this Agreement shall have been
previously delivered to the Borrower in accordance with said Section 3.6(c),
by delivery to the Liquidity Provider of a written and completed Notice of
Borrowing in substantially the form of Annex III attached hereto, signed by a
Responsible Officer of the Borrower, in an amount equal to the Maximum
Available Commitment at such time, and shall be used to fund the Class B Cash
Collateral Account in accordance with said Section 3.6(c) and Section 3.6(f)
of the Intercreditor Agreement.
(d) A Final Advance shall be made in a single Borrowing upon the
receipt by the Borrower of a Termination Notice from the Liquidity Provider
pursuant to Section 6.01
8
hereof by delivery to the Liquidity Provider of a written and completed
Notice of Borrowing in substantially the form of Annex IV attached hereto,
signed by a Responsible Officer of the Borrower, in an amount equal to the
Maximum Available Commitment at such time, and shall be used to fund the
Class B Cash Collateral Account (in accordance with Section 3.6(i) of the
Intercreditor Agreement) and Section 3.6(f) of the Intercreditor Agreement.
(e) Each Borrowing shall be made on notice in writing (a "Notice of
Borrowing") in substantially the form required by Section 2.02(a), 2.02(b),
2.02(c) or 2.02(d), as the case may be, given by the Borrower to the
Liquidity Provider. If a Notice of Borrowing is delivered by the Borrower in
respect of any Borrowing no later than 1:00 p.m. (New York City time) on a
Business Day, upon satisfaction of the conditions precedent set forth in
Section 4.02 with respect to a requested Borrowing, the Liquidity Provider
shall make available to the Borrower, in accordance with its payment
instructions, the amount of such Borrowing in U.S. dollars and immediately
available funds, before 4:00 pm (New York City time) on such Business Day or
on such later Business Day specified in such Notice of Borrowing. If a
Notice of Borrowing is delivered by the Borrower in respect of any Borrowing
after 1:00 pm (New York City time) on a Business Day, upon satisfaction of
the conditions precedent set forth in Section 4.02 with respect to a
requested Borrowing, the Liquidity Provider shall make available to the
Borrower, in accordance with its payment instructions, the amount of such
Borrowing in U.S. dollars and immediately available funds, before 12:00 Noon
(New York City time) on the first Business Day next following the day of
receipt of such Notice of Borrowing or on such later Business Day specified
by the Borrower in such Notice of Borrowing. Payments of proceeds of a
Borrowing shall be made by wire transfer of immediately available funds to
the Borrower in accordance with such wire transfer instructions as the
Borrower shall furnish from time to time to the Liquidity Provider for such
purpose. Each Notice of Borrowing shall be irrevocable and binding on the
Borrower.
(f) Upon the making of any Advance requested pursuant to a Notice of
Borrowing, in accordance with the Borrower's payment instructions, the
Liquidity Provider shall be fully discharged of its obligation hereunder with
respect to such Notice of Borrowing, and the Liquidity Provider shall not
thereafter be obligated to make any further Advances hereunder in respect of
such Notice of Borrowing to the Borrower or to any other Person. Following
the making of any Advance pursuant to Section 2.02(b), (c) or (d) hereof to
fund the Class B Cash Collateral Account, the Liquidity Provider shall have
no interest in or rights to the Class B Cash Collateral Account, such Advance
or any other amounts from time to time on deposit in the Class B Cash
Collateral Account; provided that the foregoing shall not affect or impair
the obligations of the Subordination Agent to make the distributions
contemplated by Section 3.6(e) or (f) of the Intercreditor Agreement. By
paying to the Borrower proceeds of Advances requested by the Borrower in
accordance with the provisions of this Agreement, the Liquidity Provider
makes no representation as to, and assumes no responsibility for, the
correctness or sufficiency for any purpose of the amount of the Advances so
made and requested.
9
Section 2.03. Fees. The Borrower agrees to pay to the Liquidity
Provider the fees set forth in the Fee Letter.
Section 2.04. Reduction or Termination of the Maximum Commitment. (a)
Automatic Reduction. Promptly following each date on which the Required
Amount is reduced as a result of a reduction in the Pool Balance of the Class
B Certificates or otherwise, the Maximum Commitment shall automatically be
reduced to an amount equal to such reduced Required Amount (as calculated by
the Borrower). The Borrower shall give notice of any such automatic
reduction of the Maximum Commitment to the Liquidity Provider within two
Business Days thereof. The failure by the Borrower to furnish any such
notice shall not affect such automatic reduction of the Maximum Commitment.
(b) Termination. Upon the making of any Provider Advance or Final
Advance hereunder or the occurrence of the Termination Date, the obligation
of the Liquidity Provider to make further Advances hereunder shall
automatically and irrevocably terminate, and the Borrower shall not be
entitled to request any further Borrowing hereunder.
Section 2.05. Repayments of Interest Advances or the Final Advance.
Subject to Sections 2.06, 2.07 and 2.09 hereof, the Borrower hereby agrees,
without notice of an Advance or demand for repayment from the Liquidity
Provider (which notice and demand are hereby waived by the Borrower), to pay,
or to cause to be paid, to the Liquidity Provider on each date on which the
Liquidity Provider shall make an Interest Advance or the Final Advance, an
amount equal to (a) the amount of such Advance (any such Advance, until
repaid, is referred to herein as an "Unpaid Advance"), plus (b) interest on
the amount of each such Unpaid Advance as provided in Section 3.07 hereof;
provided that if (i) the Liquidity Provider shall make a Provider Advance at
any time after making one or more Interest Advances which shall not have been
repaid in accordance with this Section 2.05 or (ii) this Liquidity Facility
shall become a Downgraded Facility or Non-Extended Facility at any time when
unreimbursed Interest Advances have reduced the Maximum Available Commitment
to zero, then such Interest Advances shall cease to constitute Unpaid
Advances and shall be deemed to have been changed into an Applied Downgrade
Advance or an Applied Non-Extension Advance, as the case may be, for all
purposes of this Agreement (including, without limitation, for the purpose of
determining when such Interest Advance is required to be repaid to the
Liquidity Provider in accordance with Section 2.06 and for the purposes of
Section 2.06(b)). The Borrower and the Liquidity Provider agree that the
repayment in full of each Interest Advance and Final Advance on the date such
Advance is made is intended to be a contemporaneous exchange for new value
given to the Borrower by the Liquidity Provider.
Section 2.06. Repayments of Provider Advances. (a) Amounts advanced
hereunder in respect of a Provider Advance shall be deposited in the Class B
Cash Collateral Account, invested and withdrawn from the Class B Cash
Collateral Account as set forth in Sections 3.6(c), (d) and (f) of the
Intercreditor Agreement. The Borrower agrees to pay to the Liquidity
Provider, on each Regular Distribution Date, commencing on the first Regular
10
Distribution Date after the making of a Provider Advance, interest on the
principal amount of any such Provider Advance as provided in Section 3.07;
provided, however, that amounts in respect of a Provider Advance withdrawn
from the Class B Cash Collateral Account for the purpose of paying interest
on the Class B Certificates in accordance with Section 3.6(f) of the
Intercreditor Agreement (the amount of any such withdrawal being (y) in the
case of a Downgrade Advance, an "Applied Downgrade Advance" and (z) in the
case of a Non-Extension Advance, an "Applied Non-Extension Advance" and,
together with an Applied Downgrade Advance, an "Applied Provider Advance")
shall thereafter (subject to Section 2.06(b)) be treated as an Interest
Advance under this Agreement for purposes of determining the Applicable
Liquidity Rate for interest payable thereon; provided further, however, that
if, following the making of a Provider Advance, the Liquidity Provider
delivers a Termination Notice to the Borrower pursuant to Section 6.01
hereof, such Provider Advance shall thereafter be treated as a Final Advance
under this Agreement for purposes of determining the Applicable Liquidity
Rate for interest payable thereon. Subject to Sections 2.07 and 2.09 hereof,
immediately upon the withdrawal of any amounts from the Class B Cash
Collateral Account on account of a reduction in the Required Amount, the
Borrower shall repay to the Liquidity Provider a portion of the Provider
Advances in a principal amount equal to such reduction, plus interest on the
principal amount prepaid as provided in Section 3.07 hereof.
(b) At any time when an Applied Provider Advance (or any portion
thereof) is outstanding, upon the deposit in the Class B Cash Collateral
Account of any amount pursuant to clause "third" of Section 2.4(b) of the
Intercreditor Agreement, clause "third" of Section 3.2 of the Intercreditor
Agreement or clause "fourth" of Section 3.3 of the Intercreditor Agreement
(any such amount being a "Replenishment Amount") for the purpose of
replenishing or increasing the balance thereof up to the Required Amount at
such time, (i) the aggregate outstanding principal amount of all Applied
Provider Advances (and of Provider Advances treated as an Interest Advance
for purposes of determining the Applicable Liquidity Rate for interest
payable thereon) shall be automatically reduced by the amount of such
Replenishment Amount and (ii) the aggregate outstanding principal amount of
all Unapplied Provider Advances shall be automatically increased by the
amount of such Replenishment Amount.
(c) Upon the provision of a Replacement Liquidity Facility in
replacement of this Agreement in accordance with Section 3.6(e) of the
Intercreditor Agreement, amounts remaining on deposit in the Class B Cash
Collateral Account after giving effect to any Applied Provider Advance on the
date of such replacement shall be reimbursed to the Liquidity Provider, but
only to the extent such amounts are necessary to repay in full to the
Liquidity Provider all amounts owing to it hereunder.
Section 2.07. Payments to the Liquidity Provider Under the
Intercreditor Agreement. In order to provide for payment or repayment to the
Liquidity Provider of any amounts hereunder, the Intercreditor Agreement
provides that amounts available and referred to in Articles II and III of the
Intercreditor Agreement, to the extent payable to the Liquidity
11
Provider pursuant to the terms of the Intercreditor Agreement (including,
without limitation, Section 3.6(f) of the Intercreditor Agreement), shall be
paid to the Liquidity Provider in accordance with the terms thereof. Amounts
so paid to the Liquidity Provider shall be applied by the Liquidity Provider
to Liquidity Obligations then due and payable in accordance with the
Intercreditor Agreement or, if not provided for in the Intercreditor
Agreement, then in such manner as the Liquidity Provider shall deem
appropriate.
Section 2.08. Book Entries. The Liquidity Provider shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower resulting from Advances made from time to time
and the amounts of principal and interest payable hereunder and paid from
time to time in respect thereof; provided, however, that the failure by the
Liquidity Provider to maintain such account or accounts shall not affect the
obligations of the Borrower in respect of Advances.
Section 2.09. Payments from Available Funds Only. All payments to be
made by the Borrower under this Agreement shall be made only from the amounts
that constitute Scheduled Payments, Special Payments or payments under
Section 6(c) or 8, as the case may be, of the Participation Agreements and
Section 7 of the Note Purchase Agreement and only to the extent that the
Borrower shall have sufficient income or proceeds therefrom to enable the
Borrower to make payments in accordance with the terms hereof after giving
effect to the priority of payments provisions set forth in the Intercreditor
Agreement. The Liquidity Provider agrees that it will look solely to such
amounts to the extent available for distribution to it as provided in the
Intercreditor Agreement and this Agreement and that the Borrower, in its
individual capacity, is not personally liable to it for any amounts payable
or liability under this Agreement except as expressly provided in this
Agreement, the Intercreditor Agreement or any Participation Agreement.
Amounts on deposit in the Class B Cash Collateral Account shall be available
to the Borrower to make payments under this Agreement only to the extent and
for the purposes expressly contemplated in Section 3.6(f) of the
Intercreditor Agreement.
Section 2.10. Extension of the Expiry Date; Non-Extension Advance. No
earlier than the 60th day and no later than the 40th day prior to the then
effective Expiry Date (unless such Expiry Date is on or after the date that
is 15 days after the Final Legal Distribution Date for the Class B
Certificates), the Borrower shall request that the Liquidity Provider extend
the Expiry Date for a period of 364 days after the then effective Expiry Date
(unless the obligations of the Liquidity Provider are earlier terminated in
accordance with the terms hereof). The Liquidity Provider shall advise the
Borrower, no earlier than 40 days and no later than 25 days prior to the then
effective Expiry Date, whether, in its sole discretion, it agrees to so
extend the Expiry Date. If the Liquidity Provider advises the Borrower on or
before the 25th day prior to the Expiry Date then in effect that such Expiry
Date shall not be so extended, or fails to irrevocably and unconditionally
advise the Borrower on or before the 25th day prior to the Expiry Date then
in effect that such Expiry Date shall be so extended (and, in each case, if
the Liquidity Provider shall not have been replaced in accordance with
Section 3.6(e) of the Intercreditor Agreement), the Borrower shall be
entitled on and after such
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25th day (but prior to the then effective Expiry Date) to request a Non-
Extension Advance in accordance with Section 2.02(b) hereof and Section
3.6(d) of the Intercreditor Agreement.
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. Increased Costs. The Borrower shall pay to the Liquidity
Provider from time to time such amounts as may be necessary to compensate the
Liquidity Provider for any increased costs incurred by the Liquidity
Provider which are attributable to its making or maintaining any LIBOR
Advances hereunder or its obligation to make any such Advances hereunder, or
any reduction in any amount receivable by the Liquidity Provider under this
Agreement or the Intercreditor Agreement in respect of any such Advances or
such obligation (such increases in costs and reductions in amounts receivable
being herein called "Additional Costs"), resulting from any change after
the date of this Agreement in U.S. federal, state, municipal, or foreign laws
or regulations (including Regulation D of the Board of Governors of the
Federal Reserve System), or the adoption or making after the date of this
Agreement of any interpretations, directives, or requirements applying to a
class of banks including the Liquidity Provider under any U.S. federal,
state, municipal, or any foreign laws or regulations (whether or not having
the force of law) by any court, central bank or monetary authority charged
with the interpretation or administration thereof (a "Regulatory Change"),
which: (1) changes the basis of taxation of any amounts payable to the
Liquidity Provider under this Agreement in respect of any such Advances
(other than Excluded Taxes); or (2) imposes or modifies any reserve, special
deposit, compulsory loan or similar requirements relating to any extensions
of credit or other assets of, or any deposits with other liabilities of, the
Liquidity Provider (including any such Advances or any deposits referred to
in the definition of LIBOR Rate or related definitions). The Liquidity
Provider agrees to use reasonable efforts (consistent with applicable legal
and regulatory restrictions) to change the jurisdiction of its Lending Office
if making such change would avoid the need for, or reduce the amount of, any
amount payable under this Section that may thereafter accrue and would not,
in the reasonable judgment of the Liquidity Provider, be otherwise
disadvantageous to the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.01 as promptly as practicable after
it obtains knowledge thereof and determines to request such compensation,
which notice shall describe in reasonable detail the calculation of the
amounts owed under this Section. Determinations by the Liquidity Provider
for purposes of this Section 3.01 of the effect of any Regulatory Change on
its costs of making or maintaining Advances or on amounts receivable by it in
respect of Advances, and of the additional amounts required to compensate the
Liquidity Provider in respect of any Additional Costs, shall be prima facie
evidence of the amount owed under this Section.
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Section 3.02. Capital Adequacy. If (1) the adoption, after the date
hereof, of any applicable governmental law, rule or regulation regarding
capital adequacy, (2) any change, after the date hereof, in the
interpretation or administration of any such law, rule or regulation by any
central bank or other governmental authority charged with the interpretation
or administration thereof or (3) compliance by the Liquidity Provider or any
corporation controlling the Liquidity Provider with any applicable guideline
or request of general applicability, issued after the date hereof, by any
central bank or other governmental authority (whether or not having the force
of law) that constitutes a change of the nature described in clause (2), has
the effect of requiring an increase in the amount of capital required to be
maintained by the Liquidity Provider or any corporation controlling the
Liquidity Provider, and such increase is based upon the Liquidity Provider's
obligations hereunder and other similar obligations, the Borrower shall pay
to the Liquidity Provider from time to time such additional amount or amounts
as are necessary to compensate the Liquidity Provider for such portion of
such increase as shall be reasonably allocable to the Liquidity Provider's
obligations to the Borrower hereunder. The Liquidity Provider agrees to use
reasonable efforts (consistent with applicable legal and regulatory
restrictions) to change the jurisdiction of its Lending Office if making such
change would avoid the need for, or reduce the amount of, any amount payable
under this Section that may thereafter accrue and would not, in the
reasonable judgment of the Liquidity Provider, be otherwise materially
disadvantageous to the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.02 as promptly as practicable after
it obtains knowledge thereof and determines to request such compensation,
which notice shall describe in reasonable detail the calculation of the
amounts owed under this Section. Determinations by the Liquidity Provider
for purposes of this Section 3.02 of the effect of any increase in the amount
of capital required to be maintained by the Liquidity Provider and of the
amount allocable to the Liquidity Provider's obligations to the Borrower
hereunder shall be prima facie evidence of the amounts owed under this
Section.
Section 3.03. Payments Free of Deductions. (a) All payments made by
the Borrower under this Agreement shall be made free and clear of, and
without reduction for or on account of, any present or future stamp or other
taxes, levies, imposts, duties, charges, fees, deductions, withholdings,
restrictions or conditions of any nature whatsoever now or hereafter imposed,
levied, collected, withheld or assessed, excluding Excluded Taxes (such non-
excluded taxes being referred to herein, collectively, as "Non-Excluded
Taxes" and, individually, as a "Non-Excluded Tax"). If any Non-Excluded
Taxes are required to be withheld from any amounts payable to the Liquidity
Provider under this Agreement, the amounts so payable to the Liquidity
Provider shall be increased to the extent necessary to yield to the Liquidity
Provider (after payment of all Non-Excluded Taxes) interest or any other such
amounts payable under this Agreement at the rates or in the amounts specified
in this Agreement. The Liquidity Provider agrees to use reasonable efforts
(consistent with its
14
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Lending Office if making such change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of the Liquidity Provider,
be otherwise disadvantageous to the Liquidity Provider. From time to time
upon the reasonable request of the Borrower, the Liquidity Provider agrees to
provide to the Borrower two original Internal Revenue Service Forms 1001 or
4224, as appropriate, or any successor or other form prescribed by the
Internal Revenue Service, certifying that the Liquidity Provider is exempt
from or entitled to a reduced rate of United States withholding tax on
payments pursuant to this Agreement.
(b) All payments (including, without limitation, Advances) made by the
Liquidity Provider under this Agreement shall be made free and clear of, and
without reduction for or on account of, any Taxes. If any Taxes are required
to be withheld or deducted from any amounts payable to the Borrower under
this Agreement, the Liquidity Provider shall (i) within the time prescribed
therefor by applicable law pay to the appropriate governmental or taxing
authority the full amount of any such Taxes (and any additional Taxes in
respect of the payment required under clause (ii) hereof) and make such
reports or returns in connection therewith at the time or times and in the
manner prescribed by applicable law, and (ii) pay to the Borrower an
additional amount which (after deduction of all such Taxes) will be
sufficient to yield to the Borrower the full amount which would have been
received by it had no such withholding or deduction been made. Within 30
days after the date of each payment hereunder, the Liquidity Provider shall
furnish to the Borrower the original or a certified copy of (or other
documentary evidence of) the payment of the Taxes applicable to such payment.
Section 3.04. Payments. The Borrower shall make or cause to be made
each payment to the Liquidity Provider under this Agreement so as to cause
the same to be received by the Liquidity Provider not later than 1:00 P.M.
(New York City time) on the day when due. The Borrower shall make all such
payments in lawful money of the United States of America, to the Liquidity
Provider in immediately available funds, by wire transfer to ABN AMRO Bank,
New York, N.Y., ABA #026009580, Account Name: ABN AMRO Bank, Chicago Branch
CPU, Account No. [650-001-1789-41] , Account Name: US Airways Liquidity
Facility 1998-1A.
Section 3.05. Computations. All computations of interest based on the
Base Rate shall be made on the basis of a year of 365 or 366 days, as the
case may be, and all computations of interest based on the LIBOR Rate shall
be made on the basis of a year of 360 days, in each case for the actual
number of days (including the first day but excluding the last day) occurring
in the period for which such interest is payable.
Section 3.06. Payment on Non-Business Days. Whenever any payment to be
made hereunder shall be stated to be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day and no
additional interest shall be due as a
15
result (and if so made, shall be deemed to have been made when due). If any
payment in respect of interest on an Advance is so deferred to the next
succeeding Business Day, such deferral shall not delay the commencement of
the next Interest Period for such Advance (if such Advance is a LIBOR
Advance) or reduce the number of days for which interest will be payable on
such Advance on the next interest payment date for such Advance.
Section 3.07. Interest. (a) Subject to Section 2.09, the Borrower
shall pay, or shall cause to be paid, without duplication, interest on (i)
the unpaid principal amount of each Advance from and including the date of
such Advance (or, in the case of an Applied Provider Advance, from and
including the date on which the amount thereof was withdrawn from the Class B
Cash Collateral Account to pay interest on the Class B Certificates) to but
excluding the date such principal amount shall be paid in full (or, in the
case of an Applied Provider Advance, the date on which the Class B Cash
Collateral Account is fully replenished in respect of such Advance) and (ii)
any other amount due hereunder (whether fees, commissions, expenses or other
amounts or, to the extent permitted by law, installments of interest on
Advances or any such other amount) which is not paid when due (whether at
stated maturity, by acceleration or otherwise) from and including the due
date thereof to but excluding the date such amount is paid in full, in each
such case, at a fluctuating interest rate per annum for each day equal to the
Applicable Liquidity Rate (as defined below) for such Advance or such other
amount as in effect for such day, but in no event at a rate per annum greater
than the maximum rate permitted by applicable law; provided, however, that,
if at any time the otherwise applicable interest rate as set forth in this
Section 3.07 shall exceed the maximum rate permitted by applicable law, then
any subsequent reduction in such interest rate will not reduce the rate of
interest payable pursuant to this Section 3.07 below the maximum rate
permitted by applicable law until the total amount of interest accrued equals
the amount of interest that would have accrued if such otherwise applicable
interest rate as set forth in this Section 3.07 had at all times been in
effect.
(b) Each Advance will be either a Base Rate Advance or a LIBOR Advance
as provided in this Section. Each such Advance will be a Base Rate Advance
for the period from the date of its borrowing to (but excluding) the third
Business Day following the Liquidity Provider's receipt of the Notice of
Borrowing for such Advance. Thereafter, such Advance shall be a LIBOR
Advance; provided that (i) an Applied Provider Advance shall always be a
LIBOR Advance unless the Borrower elects otherwise and (ii) the Borrower (at
the direction of the Controlling Party, so long as the Liquidity Provider is
not the Controlling Party) may (x) convert the Final Advance or an Unapplied
Provider Advance into a Base Rate Advance on the last day of an Interest
Period for such Advance by giving the Liquidity Provider no less than four
Business Days' prior written notice of such election or (y) elect to maintain
the Final Advance or Unapplied Provider Advance as a Base Rate Advance by not
requesting a conversion of the Final Advance of Unapplied Provider Advance
(as the case may be) to a LIBOR Advance under Clause (5) of the applicable
Notice of Borrowing (or, if such Final Advance is deemed to have been made,
without delivery of a Notice of Borrowing pursuant to Section 2.06, by
requesting, prior to 11:00 A.M. on the first Business Day
16
immediately following the Borrower's receipt of the applicable Termination
Notice, that such Final Advance not be converted from a Base Rate Advance to
a LIBOR Advance).
(c) Each LIBOR Advance shall bear interest during each Interest Period
at a rate per annum equal to the LIBOR Rate for such Interest Period plus the
Applicable Margin for such LIBOR Advance, payable in arrears on the last day
of such Interest Period and, in the event of the payment of principal of such
LIBOR Advance on a day other than such last day, on the date of such payment
(to the extent of interest accrued on the amount of principal repaid).
(d) Each Base Rate Advance shall bear interest at a rate per annum
equal to the Base Rate plus the Applicable Margin for such Base Rate Advance,
payable in arrears on each Regular Distribution Date and, in the event of the
payment of principal of such Base Rate Advance on a day other than a Regular
Distribution Date, on the date of such payment (to the extent of interest
accrued on the amount of principal repaid).
(e) [Reserved]
(f) Each amount not paid when due hereunder (whether fees, commissions,
expenses or other amounts or, to the extent permitted by applicable law,
installments of interest on Advances but excluding Advances) shall bear
interest at a rate per annum equal to the Base Rate plus 2.00% until paid.
(g) Each change in the Base Rate shall become effective immediately.
The rates of interest specified in this Section 3.07 with respect to any
Advance or other amount shall be referred to as the "Applicable Liquidity
Rate".
Section 3.08. Replacement of Borrower. From time to time and subject
to the successor Borrower's meeting the eligibility requirements set forth in
Section 6.9 of the Intercreditor Agreement applicable to the Subordination
Agent, upon the effective date and time specified in a written and completed
Notice of Replacement Subordination Agent in substantially the form of Annex
VI attached hereto (a "Notice of Replacement Subordination Agent")
delivered to the Liquidity Provider by the then Borrower, the successor
Borrower designated therein shall be substituted for as the Borrower for all
purposes hereunder.
Section 3.09. Funding Loss Indemnification. The Borrower shall pay to
the Liquidity Provider, upon the request of the Liquidity Provider, such
amount or amounts as shall be sufficient (in the reasonable opinion of the
Liquidity Provider) to compensate it for any loss, cost, or expense incurred
by reason of the liquidation or redeployment of deposits or other funds
acquired by the Liquidity Provider to fund or maintain any LIBOR Advance (but
excluding loss of anticipated profits) incurred as a result of:
17
(1) Any repayment of a LIBOR Advance on a date other than the last day
of the Interest Period for such Advance; or
(2) Any failure by the Borrower to borrow a LIBOR Advance on the date
for borrowing specified in the relevant notice under Section 2.02.
Section 3.10. Illegality. Notwithstanding any other provision in this
Agreement, if any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation
or administration thereof, or compliance by the Liquidity Provider (or its
Lending Office) with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency shall
make it unlawful or impossible for the Liquidity Provider (or its Lending
Office) to maintain or fund its LIBOR Advances, then upon notice to the
Borrower by the Liquidity Provider, the outstanding principal amount of the
LIBOR Advances shall be converted to Base Rate Advances (a) immediately upon
demand of the Liquidity Provider, if such change or compliance with such
request, in the judgment of the Liquidity Provider, requires immediate
repayment; or (b) at the expiration of the last Interest Period to expire
before the effective date of any such change or request.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to Effectiveness of Section 2.01.
Section 2.01 of this Agreement shall become effective on and as of the first
date (the "Effective Date") on which the following conditions precedent
have been satisfied or waived:
(a) The Liquidity Provider shall have received on or before the Closing
Date each of the following, and in the case of each document delivered
pursuant to paragraphs (i), (ii) and (iii), each in form and substance
satisfactory to the Liquidity Provider:
(i) This Agreement duly executed on behalf of the Borrower;
(ii) The Intercreditor Agreement duly executed on behalf of each
of the parties thereto;
(iii) Fully executed copies of each of the Operative Agreements
executed and delivered on or before the Closing Date (other than this
Agreement and the Intercreditor Agreement);
18
(iv) A copy of the Prospectus Supplement and specimen copies of
the Class A Certificates;
(v) An executed copy of each document, instrument, certificate
and opinion delivered on or before the Closing Date pursuant to the Class A
Trust Agreement, the Intercreditor Agreement and the other Operative
Agreements (in the case of each such opinion, other than the opinion of
counsel for the Underwriters, either addressed to the Liquidity Provider or
accompanied by a letter from the counsel rendering such opinion to the effect
that the Liquidity Provider is entitled to rely on such opinion as of its
date as if it were addressed to the Liquidity Provider);
(vi) Evidence that there shall have been made and shall be in
full force and effect, all filings, recordings and/or registrations, and
there shall have been given or taken any notice or other similar action as
may be reasonably necessary or, to the extent reasonably requested by the
Liquidity Provider, reasonably advisable, in order to establish, perfect,
protect and preserve the right, title and interest, remedies, powers,
privileges, liens and security interests of, or for the benefit of, the
Trustees, the Borrower and the Liquidity Provider created by the Operative
Agreements executed and delivered on or prior to the Closing Date;
(vii) An agreement from US Airways, pursuant to which (i) US
Airways agrees to provide copies of quarterly financial statements and
audited annual financial statements to the Liquidity Provider, and such other
information as the Liquidity Provider shall reasonably request with respect
to the transactions contemplated by the Operative Agreements, in each case,
only to the extent that US Airways is obligated to provide such information
pursuant to Section 16 of the Leases (related to Leased Aircraft) or the
corresponding section of the Indentures (related to Owned Aircraft) to the
parties thereto and (ii) US Airways agrees to allow the Liquidity Provider to
inspect US Airways' books and records regarding such transactions, and to
discuss such transactions with officers and employees of US Airways; and
(viii) Such other documents, instruments, opinions and approvals
pertaining to the transactions contemplated hereby or by the other Operative
Agreements as the Liquidity Provider shall have reasonably requested.
(b) The following statement shall be true on and as of the Effective
Date: no event has occurred and is continuing, or would result from the
entering into of this Agreement or the making of any Advance, which
constitutes a Liquidity Event of Default.
19
(c) The Liquidity Provider shall have received payment in full of all
fees and other sums required to be paid to or for the account of the
Liquidity Provider on or prior to the Effective Date.
(d) All conditions precedent to the issuance of the Certificates under
the Trust Agreements shall have been satisfied or waived, all conditions
precedent to the effectiveness of the other Liquidity Facilities shall have
been satisfied or waived, and all conditions precedent to the purchase of the
Class A Certificates and Class B Certificates by the Underwriters under the
Underwriting Agreement and the purchase of the Class C Certificates by AIFS
under the Class C Purchase Agreement shall have been satisfied (unless any of
such conditions precedent shall have been waived by the Underwriters).
(e) The Borrower shall have received a certificate, dated the date
hereof, signed by a duly authorized representative of the Liquidity Provider,
certifying that all conditions precedent to the effectiveness of Section 2.01
have been satisfied or waived.
Section 4.02. Conditions Precedent to Borrowing. The obligation of the
Liquidity Provider to make an Advance on the occasion of each Borrowing shall
be subject to the conditions precedent that the Effective Date shall have
occurred and, prior to the date of such Borrowing, the Borrower shall have
delivered a Notice of Borrowing which conforms to the terms and conditions of
this Agreement and has been completed as may be required by the relevant form
of the Notice of Borrowing for the type of Advances requested.
ARTICLE V
COVENANTS
Section 5.01. Affirmative Covenants of the Borrower. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any
amount to the Liquidity Provider hereunder, the Borrower will, unless the
Liquidity Provider shall otherwise consent in writing:
(a) Performance of This and Other Agreements. Punctually pay or cause
to be paid all amounts payable by it under this Agreement and the other
Operative Agreements and observe and perform in all material respects the
conditions, covenants and requirements applicable to it contained in this
Agreement and the other Operative Agreements.
(b) Reporting Requirements. Furnish to the Liquidity Provider with
reasonable promptness, such other information and data with respect to the
transactions
20
contemplated by the Operative Agreements as from time to time may be
reasonably requested by the Liquidity Provider; and permit the Liquidity
Provider, upon reasonable notice, to inspect the Borrower's books and records
with respect to such transactions and to meet with officers and employees of
the Borrower to discuss such transactions.
(c) Certain Operative Agreements. Furnish to the Liquidity Provider
with reasonable promptness, such Operative Agreements entered into after the
date hereof as from time to time may be reasonably requested by the Liquidity
Provider.
Section 5.02. Negative Covenants of the Borrower. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any
amount to the Liquidity Provider hereunder, the Borrower will not appoint or
permit or suffer to be appointed any successor Borrower without the prior
written consent of the Liquidity Provider, which consent shall not be
unreasonably withheld or delayed.
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. Liquidity Events of Default. If (a) any Liquidity Event
of Default has occurred and is continuing and (b) there is a Performing Note
Deficiency, the Liquidity Provider may, in its discretion, deliver to the
Borrower a Termination Notice, the effect of which shall be to cause (i) this
Agreement to expire on the fifth Business Day after the date on which such
Termination Notice is received by the Borrower, (ii) the Borrower to promptly
request, and the Liquidity Provider to promptly make, a Final Advance in
accordance with Section 2.02(d) hereof and Section 3.6(i) of the
Intercreditor Agreement, (iii) all other outstanding Advances to be
automatically converted into Final Advances for purposes of determining the
Applicable Liquidity Rate for interest payable thereon, and (iv) subject to
Sections 2.07 and 2.09 hereof, all Advances (including, without limitation,
any Provider Advance and Applied Provider Advance), any accrued interest
thereon and any other amounts outstanding hereunder to become immediately due
and payable to the Liquidity Provider.
ARTICLE VII
MISCELLANEOUS
Section 7.01. Amendments, Etc. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in writing and
signed by the Liquidity Provider, and, in the
21
case of an amendment or of a waiver by the Borrower, the Borrower, and then
such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.
Section 7.02. Notices, Etc. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be
in writing (including telecopier and mailed or delivered or sent by
telecopier):
Borrower: STATE STREET BANK AND TRUST COMPANY
Two International Place
4th Floor
Boston, MA 02110
Attention: Corporate Trust Department
Telephone: (617) 664-5340
Telecopy: (617) 664-5151
Liquidity Provider: ABN AMRO BANK N.V.
Aerospace Department
135 South LaSalle Street, #660
Chicago, IL 60674-9135
Attention: Claudia Heldring
Telephone: (312) 904-2900
Telecopy: (312) 606-8428
with a copy to:
ABN AMRO Bank N.V.
135 South LaSalle Street, #625
Chicago, IL 60674-9135
22
Attention: Loan Administration
Telephone: (312) 904-2961
Telecopy: (312) 904-1288
23
or, as to each of the foregoing, at such other address as shall be designated
by such Person in a written notice to the others. All such notices and
communications shall be effective (i) if given by telecopier, when
transmitted to the telecopier number specified above, (ii) if given by mail,
when deposited in the mails addressed as specified above, and (iii) if given
by other means, when delivered at the address specified above, except that
written notices to the Liquidity Provider pursuant to the provisions of
Articles II and III hereof shall not be effective until received by the
Liquidity Provider. A copy of all notices delivered hereunder to either
party shall in addition be delivered to each of the parties to the
Participation Agreements at their respective addresses set forth therein.
Section 7.03. No Waiver; Remedies. No failure on the part of the
Liquidity Provider to exercise, and no delay in exercising, any right under
this Agreement shall operate as a waiver thereof; nor shall any single or
partial exercise of any right under this Agreement preclude any other or
further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
Section 7.04. Further Assurances. The Borrower agrees to do such
further acts and things and to execute and deliver to the Liquidity Provider
such additional assignments, agreements, powers and instruments as the
Liquidity Provider may reasonably require or deem advisable to carry into
effect the purposes of this Agreement and the other Operative Agreements or
to better assure and confirm unto the Liquidity Provider its rights, powers
and remedies hereunder and under the other Operative Agreements.
Section 7.05. Indemnification; Survival of Certain Provisions. The
Liquidity Provider shall be indemnified hereunder to the extent and in the
manner described in Section 6(c) or 8, as the case may be, of the
Participation Agreements. In addition, the Borrower agrees to indemnify,
protect, defend and hold harmless the Liquidity Provider from, against and in
respect of, and shall pay on demand, all Expenses of any kind or nature
whatsoever (other than any Expenses of the nature described in Sections 3.01,
3.02 or 7.07 hereof or in the Fee Letter (regardless of whether indemnified
against pursuant to said Sections or in such Fee Letter)), that may be
imposed, incurred by or asserted against any Liquidity Indemnitee, in any way
relating to, resulting from, or arising out of or in connection with any
action, suit or proceeding by any third party against such Liquidity
Indemnitee and relating to this Agreement, the Fee Letter, the Intercreditor
Agreement or any Financing Agreement; provided, however, that the Borrower
shall not be required to indemnify, protect, defend and hold harmless any
Liquidity Indemnitee in respect of any Expense of such Liquidity Indemnitee
to the extent such Expense is (i) attributable to the gross negligence or
willful misconduct of such Liquidity Indemnitee or any other Liquidity
Indemnitee, (ii) ordinary and usual operating overhead expense, or (iii)
attributable to the failure by such Liquidity Indemnitee or any other
Liquidity Indemnitee to perform or observe any agreement, covenant or
condition on its part to be performed or observed in this Agreement, the
Intercreditor Agreement, the Fee Letter, the Tax Letter or any other
Operative Agreement to which it is a party. The indemnities contained in
Section 6(c) or 8, as the case may be, of the Participation
24
Agreements, and the provisions of Sections 3.01, 3.02, 3.03, 3.09, 7.05 and
7.07 hereof, shall survive the termination of this Agreement.
Section 7.06. Liability of the Liquidity Provider. (a) Neither the
Liquidity Provider nor any of its officers, employees, directors or
affiliates shall be liable or responsible for: (i) the use which may be made
of the Advances or any acts or omissions of the Borrower or any beneficiary
or transferee in connection therewith; (ii) the validity, sufficiency or
genuineness of documents, or of any endorsement thereon, even if such
documents should prove to be in any or all respects invalid, insufficient,
fraudulent or forged; or (iii) the making of Advances by the Liquidity
Provider against delivery of a Notice of Borrowing and other documents which
do not comply with the terms hereof; provided, however, that the Borrower
shall have a claim against the Liquidity Provider, and the Liquidity Provider
shall be liable to the Borrower, to the extent of any damages suffered by the
Borrower which were the result of (A) the Liquidity Provider's willful
misconduct or negligence in determining whether documents presented hereunder
comply with the terms hereof, or (B) any breach by the Liquidity Provider of
any of the terms of this Agreement, including, but not limited to, the
Liquidity Provider's failure to make lawful payment hereunder after the
delivery to it by the Borrower of a Notice of Borrowing strictly complying
with the terms and conditions hereof.
(b) Neither the Liquidity Provider nor any of its officers, employees,
directors or affiliates shall be liable or responsible in any respect for (i)
any error, omission, interruption or delay in transmission, dispatch or
delivery of any message or advice, however transmitted, in connection with
this Agreement or any Notice of Borrowing delivered hereunder, or (ii) any
action, inaction or omission which may be taken by it in good faith, absent
willful misconduct or negligence (in which event the extent of the Liquidity
Provider's potential liability to the Borrower shall be limited as set forth
in the immediately preceding paragraph), in connection with this Agreement or
any Notice of Borrowing.
Section 7.07. Costs, Expenses and Taxes. The Borrower agrees to pay,
or cause to be paid (A) on the Effective Date and on such later date or dates
on which the Liquidity Provider shall make demand, all reasonable out-of-
pocket costs and expenses (including, without limitation, the reasonable fees
and expenses of outside counsel for the Liquidity Provider) of the Liquidity
Provider in connection with the preparation, negotiation, execution,
delivery, filing and recording of this Agreement, any other Operative
Agreement and any other documents which may be delivered in connection with
this Agreement and (B) on demand, all reasonable costs and expenses
(including reasonable counsel fees and expenses) of the Liquidity Provider in
connection with (i) the enforcement of this Agreement or any other Operative
Agreement, (ii) the modification or amendment of, or supplement to, this
Agreement or any other Operative Agreement or such other documents which may
be delivered in connection herewith or therewith (whether or not the same
shall become effective) or (iii) any action or proceeding relating to any
order, injunction, or other process or decree restraining or seeking to
restrain the Liquidity Provider from paying any amount under this Agreement,
the Intercreditor Agreement or any other Operative Agreement or otherwise
25
affecting the application of funds in the Class A Cash Collateral Account.
In addition, the Borrower shall pay any and all recording, stamp and other
similar taxes and fees payable or determined to be payable in connection with
the execution, delivery, filing and recording of this Agreement, any other
Operative Agreement and such other documents, and agrees to save the
Liquidity Provider harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such
taxes or fees.
Section 7.08. Binding Effect; Participations. (a) This Agreement
shall be binding upon and inure to the benefit of the Borrower and the
Liquidity Provider and their respective successors and assigns, except that
neither the Liquidity Provider (except as otherwise provided in this Section
7.08) nor (except as contemplated by Section 3.08) the Borrower shall have
the right to assign its rights or obligations hereunder or any interest
herein without the prior written consent of the other party, subject to the
requirements of Section 7.08(b). The Liquidity Provider may grant
participations herein or in any of its rights hereunder (including, without
limitation, funded participations and participations in rights to receive
interest payments hereunder) and under the other Operative Agreements to such
Persons as the Liquidity Provider may in its sole discretion select, subject
to the requirements of Section 7.08(b). No such participation by the
Liquidity Provider, however, will relieve the Liquidity Provider of its
obligations hereunder. In connection with any participation or any proposed
participation, the Liquidity Provider may disclose to the participant or the
proposed participant any information that the Borrower is required to deliver
or to disclose to the Liquidity Provider pursuant to this Agreement. The
Borrower acknowledges and agrees that the Liquidity Provider's source of
funds may derive in part from its participants. Accordingly, references in
this Agreement and the other Operative Agreements to determinations, reserve
and capital adequacy requirements, increased costs, reduced receipts,
additional amounts due pursuant to Section 3.03(a) and the like as they
pertain to the Liquidity Provider shall be deemed also to include those of
each of its participants (subject, in each case, to the maximum amount that
would have been incurred by or attributable to the Liquidity Provider
directly if the Liquidity Provider, rather than the participant, had held the
interest participated).
(b) If, pursuant to subsection (a) above, the Liquidity Provider sells
any participation in this Agreement to any bank or other entity (each, a
"Transferee"), then, concurrently with the effectiveness of such
participation, the Transferee shall (i) represent to the Liquidity Provider
(for the benefit of the Liquidity Provider and the Borrower) either (A) that
it is incorporated under the laws of the United States or a state thereof or
(B) that under applicable law and treaties, no taxes will be required to be
withheld with respect to any payments to be made to such Transferee in
respect of this Agreement, (ii) furnish to the Liquidity Provider and the
Borrower either (x) a statement that it is incorporated under the laws of the
United States or a state thereof or (y) if it is not so incorporated, two
copies of a properly completed United States Internal Revenue Service Form
4224 or Form 1001, as appropriate, or other applicable form, certificate or
document prescribed by the Internal Revenue Service certifying, in each case,
such Transferee's entitlement to a complete exemption from United States
federal withholding tax in respect to any and all payments to be
26
made hereunder, and (iii) agree (for the benefit of the Liquidity Provider
and the Borrower) to provide the Liquidity Provider and the Borrower a new
Form 4224 or Form 1001, as appropriate, (A) on or before the date that any
such form expires or becomes obsolete or (B) after the occurrence of any
event requiring a change in the most recent form previously delivered by it
and prior to the immediately following due date of any payment by the
Borrower hereunder, certifying in the case of a Form 1001 or Form 4224 that
such Transferee is entitled to a complete exemption from United States
federal withholding tax on payments under this Agreement. Unless the
Borrower has received forms or other documents reasonably satisfactory to it
(and required by applicable law) indicating that payments hereunder are not
subject to United States federal withholding tax, the Borrower will withhold
taxes as required by law from such payments at the applicable statutory rate.
(c) Notwithstanding the other provisions of this Section 7.08, the
Liquidity Provider may assign and pledge all or any portion of the Advances
owing to it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal
Reserve Bank, provided that any payment in respect of such assigned Advances
made by the Borrower to the Liquidity Provider in accordance with the terms
of this Agreement shall satisfy the Borrower's obligations hereunder in
respect of such assigned Advance to the extent of such payment. No such
assignment shall release the Liquidity Provider from its obligations
hereunder.
Section 7.09. Severability. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of
such provision in any other jurisdiction.
Section 7.10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 7.11. Submission to Jurisdiction; Waiver of Jury Trial; Waiver
of Immunity. (a) Each of the parties hereto hereby irrevocably and
unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any other Operative Agreement, or
for recognition and enforcement of any judgment in respect hereof or thereof,
to the nonexclusive general jurisdiction of the courts of the State of New
York, the courts of the United States of America for the Southern District of
New York, and the appellate courts from any thereof;
27
(ii) consents that any such action or proceeding may be brought in
such courts, and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(iii) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form and mail), postage prepaid, to each party
hereto at its address set forth in Section 7.02 hereof, or at such other
address of which the Liquidity Provider shall have been notified pursuant
thereto; and
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction.
(b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH HEREBY AGREE TO WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING
TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING
ESTABLISHED, including, without limitation, contract claims, tort claims,
breach of duty claims and all other common law and statutory claims. The
Borrower and the Liquidity Provider each warrant and represent that it has
reviewed this waiver with its legal counsel, and that it knowingly and
voluntarily waives its jury trial rights following consultation with such
legal counsel. THIS WAIVER IS IRREVOCABLE, AND CANNOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
(c) The Liquidity Provider hereby waives any immunity it may have from
the jurisdiction of the courts of the United States or of any State and
waives any immunity any of its properties located in the United States may
have from attachment or execution upon a judgment entered by any such court
under the United States Foreign Sovereign Immunities Act of 1976 or any
similar successor legislation.
Section 7.12. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.
Section 7.13. Entirety. This Agreement, the Intercreditor Agreement
and the other Operative Agreements to which the Liquidity Provider is a party
constitute the entire
28
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior understandings and agreements of such parties.
Section 7.14. Headings. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
Section 7.15. LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES. EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE OBLIGATIONS OF THE LIQUIDITY
PROVIDER TO MAKE ADVANCES HEREUNDER, AND THE BORROWER'S RIGHTS TO DELIVER
NOTICES OF BORROWING REQUESTING THE MAKING OF ADVANCES HEREUNDER, SHALL BE
UNCONDITIONAL AND IRREVOCABLE, AND SHALL BE PAID OR PERFORMED, IN EACH CASE
STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
29
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized
as of the date first set forth above.
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity but solely as
Subordination Agent, as agent and trustee
for the Class B Trust, as Borrower
By:
-----------------------------------
Name:
Title:
ABN AMRO BANK, N.V., acting through its Chicago
Branch, as Liquidity Provider
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
30
Annex I to
Revolving Credit Agreement
INTEREST ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned borrower
(the "Borrower"), hereby certifies to ABN AMRO BANK N.V. (the "Liquidity
Provider"), with reference to the Revolving Credit Agreement (1998-1B) dated
as of December 14, 1998, between the Borrower and the Liquidity Provider (the
"Liquidity Agreement"; the terms defined therein and not otherwise defined
herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of an Interest Advance by the Liquidity Provider to be used, subject to
clause (3)(v) below, for the payment of the interest on the Class B
Certificates which was payable on ____________, _____ (the "Distribution
Date") in accordance with the terms and provisions of the Class B Trust
Agreement and the Class B Certificates, which Advance is requested to be made
on ____________, ____.
(3) The amount of the Interest Advance requested hereby (i) is
$_______________.__, to be applied in respect of the payment of the interest
which was due and payable on the Class B Certificates on the Distribution
Date, (ii) does not include any amount with respect to the payment of
principal of, or premium on, the Class A Certificates, the Class B
Certificates or the Class C Certificates, or interest on the Class A
Certificates or the Class C Certificates, (iii) was computed in accordance
with the provisions of the Class B Certificates, the Class B Trust Agreement
and the Intercreditor Agreement (a copy of which computation is attached
hereto as Schedule I), (iv) does not exceed the Maximum Available Commitment
on the date hereof, (v) does not include any amount of interest which was due
and payable on the Class B Certificates on such Distribution Date but which
remains unpaid due to the failure of the Depositary to pay any amount of
accrued interest on the Deposits on such Distribution Date and (vi) has not
been and is not the subject of a prior or contemporaneous Notice of
Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will apply the same in accordance with the
terms of Section 3.6(b) of the Intercreditor Agreement, (b) no portion of
such amount shall be applied by the Borrower for any other purpose and (c) no
portion of such amount until so applied shall be commingled with other funds
held by the Borrower.
I-1
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, the making of the Interest Advance as requested by this Notice of
Borrowing shall automatically reduce, subject to reinstatement in accordance
with the terms of the Liquidity Agreement, the Maximum Available Commitment
by an amount equal to the amount of the Interest Advance requested to be made
hereby as set forth in clause (i) of paragraph (3) of this Certificate and
such reduction shall automatically result in corresponding reductions in the
amounts available to be borrowed pursuant to a subsequent Advance.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:
-------------------------------------
Name:
Title:
I-2
SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Interest Advance Notice of
Borrowing]
I-3
Annex II to
Revolving Credit Agreement
NON-EXTENSION ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "Borrower"), hereby certifies to ABN AMRO BANK
N.V. (the "Liquidity Provider"), with reference to the Revolving Credit
Agreement (1998-1B) dated as of December 14, 1998, between the Borrower and
the Liquidity Provider (the "Liquidity Agreement"; the terms defined
therein and not otherwise defined herein being used herein as therein defined
or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Non-Extension Advance by the Liquidity Provider to be used for the
funding of the Class B Cash Collateral Account in accordance with Section
3.6(d) of the Intercreditor Agreement, which Advance is requested to be made
on __________, ____.
(3) The amount of the Non-Extension Advance requested hereby (i) is
$_______________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the Class B
Cash Collateral Account in accordance with Section 3.6(d) of the
Intercreditor Agreement, (ii) does not include any amount with respect to the
payment of the principal of, or premium on, the Class B Certificates, or
principal of, or interest or premium on, the Class A Certificates or the
Class C Certificates, (iii) was computed in accordance with the provisions of
the Class B Certificates, the Class B Trust Agreement and the Intercreditor
Agreement (a copy of which computation is attached hereto as Schedule I), and
(iv) has not been and is not the subject of a prior or contemporaneous Notice
of Borrowing under the Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class B
Cash Collateral Account and apply the same in accordance with the terms of
Section 3.6(d) of the Intercreditor Agreement, (b) no portion of such amount
shall be applied by the Borrower for any other purpose and (c) no portion of
such amount until so applied shall be commingled with other funds held by the
Borrower.
(5) The Borrower hereby requests that the Advance requested hereby be a
Base Rate Advance [and that such Base Rate Advance be converted into a LIBOR
Advance on the third Business Day following your receipt of this notice]*.
* Bracketed language may be included at Borrower's option.
II-1
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Non-Extension Advance as requested by this
Notice of Borrowing shall automatically and irrevocably terminate the
obligation of the Liquidity Provider to make further Advances under the
Liquidity Agreement; and (B) following the making by the Liquidity Provider
of the Non-Extension Advance requested by this Notice of Borrowing, the
Borrower shall not be entitled to request any further Advances under the
Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity but solely
as Subordination Agent, as Borrower
By:
-----------------------------------
Name:
Title:
II-2
SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with Non-Extension Advance Notice
of Borrowing]
II-3
Annex III to
Revolving Credit Agreement
DOWNGRADE ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "Borrower"), hereby certifies to ABN AMRO BANK
N.V. (the "Liquidity Provider"), with reference to the Revolving Credit
Agreement (1998-1B) dated as of December 14, 1998, between the Borrower and
the Liquidity Provider (the "Liquidity Agreement"; the terms defined
therein and not otherwise defined herein being used herein as therein defined
or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Downgrade Advance by the Liquidity Provider to be used for the funding
of the Class B Cash Collateral Account in accordance with Section 3.6(c) of
the Intercreditor Agreement by reason of the downgrading of the short-term
unsecured debt rating of the Liquidity Provider issued by either Rating
Agency below the Threshold Rating, which Advance is requested to be made on
__________, ____.
(3) The amount of the Downgrade Advance requested hereby (i) is
$_______________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the Class B
Cash Collateral Account in accordance with Section 3.6(c) of the
Intercreditor Agreement, (ii) does not include any amount with respect to the
payment of the principal of, or premium on, the Class B Certificates, or
principal of, or interest or premium on, the Class A Certificates or the
Class C Certificates, (iii) was computed in accordance with the provisions of
the Class B Certificates, the Class B Trust Agreement and the Intercreditor
Agreement (a copy of which computation is attached hereto as Schedule I), and
(iv) has not been and is not the subject of a prior or contemporaneous Notice
of Borrowing under the Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class B
Cash Collateral Account and apply the same in accordance with the terms of
Section 3.6(c) of the Intercreditor Agreement, (b) no portion of such amount
shall be applied by the Borrower for any other purpose and (c) no portion of
such amount until so applied shall be commingled with other funds held by the
Borrower.
III-1
(5) The Borrower hereby requests that the Advance requested hereby be a
Base Rate Advance [and that such Base Rate Advance be converted into a LIBOR
Advance on the third Business Day following your receipt of this notice]*.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Downgrade Advance as requested by this
Notice of Borrowing shall automatically and irrevocably terminate the
obligation of the Liquidity Provider to make further Advances under the
Liquidity Agreement; and (B) following the making by the Liquidity Provider
of the Downgrade Advance requested by this Notice of Borrowing, the Borrower
shall not be entitled to request any further Advances under the Liquidity
Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST
COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:
-------------------------------------
Name:
Title:
- -------------------------------
* Bracketed language may be included at Borrower's option.
III-2
SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with Downgrade Advance Notice of
Borrowing]
III-3
Annex IV to
Revolving Credit Agreement
FINAL ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned borrower
(the "Borrower"), hereby certifies to ABN AMRO BANK N.V. (the "Liquidity
Provider"), with reference to the Revolving Credit Agreement (1998-1B) dated
as of December 14, 1998, between the Borrower and the Liquidity Provider (the
"Liquidity Agreement"; the terms defined therein and not otherwise defined
herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Final Advance by the Liquidity Provider to be used for the funding of
the Class B Cash Collateral Account in accordance with Section 3.6(i) of the
Intercreditor Agreement by reason of the receipt by the Borrower of a
Termination Notice from the Liquidity Provider with respect to the Liquidity
Agreement, which Advance is requested to be made on ____________, ____.
(3) The amount of the Final Advance requested hereby (i) is
$_________________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the Class B
Cash Collateral Account in accordance with Section 3.6(i) of the
Intercreditor Agreement, (ii) does not include any amount with respect to the
payment of principal of, or premium on, the Class B Certificates, or
principal of, or interest or premium on, the Class A Certificates or the
Class C Certificates, (iii) was computed in accordance with the provisions of
the Class B Certificates, the Class B Trust Agreement and the Intercreditor
Agreement (a copy of which computation is attached hereto as Schedule I), and
(iv) has not been and is not the subject of a prior or contemporaneous Notice
of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class B
Cash Collateral Account and apply the same in accordance with the terms of
Section 3.6(i) of the Intercreditor Agreement, (b) no portion of such amount
shall be applied by the Borrower for any other purpose and (c) no portion of
such amount until so applied shall be commingled with other funds held by the
Borrower.
IV-1
(5) The Borrower hereby requests that the Advance requested hereby be a
Base Rate Advance [and that such Base Rate Advance be converted into a LIBOR
Advance on the third Business Day following your receipt of this notice]*.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Final Advance as requested by this Notice of
Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity Agreement;
and (B) following the making by the Liquidity Provider of the Final Advance
requested by this Notice of Borrowing, the Borrower shall not be entitled to
request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:
-------------------------------------
Name:
Title:
* Bracketed language may be included at Borrower's option.
IV-2
SCHEDULE I TO FINAL ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Final Advance Notice of
Borrowing]
IV-3
Annex V to
Revolving Credit Agreement
NOTICE OF TERMINATION
[Date]
State Street Bank and Trust Company,
as Subordination Agent, as Borrower
Two International Place, 4th Floor
Boston, MA 02110
Attention: Corporate Trust Administration
Revolving Credit Agreement dated as of December 14, 1998, between State
Street Bank and Trust Company, as Subordination Agent, as agent and trustee
for the US Airways Pass Through Trust, 1998-1B, as Borrower, and ABN AMRO
BANK, N.V. (the "Liquidity Agreement")
Ladies and Gentlemen:
You are hereby notified that pursuant to Section 6.01 of the Liquidity
Agreement, by reason of the occurrence of a Liquidity Event of Default and
the existence of a Performing Note Deficiency (each as defined therein), we
are giving this notice to you in order to cause (i) our obligations to make
Advances (as defined therein) under such Liquidity Agreement to terminate on
the fifth Business Day after the date on which you receive this notice and
(ii) you to request a Final Advance under the Liquidity Agreement pursuant to
Section 3.6(i) of the Intercreditor Agreement (as defined in the Liquidity
Agreement) as a consequence of your receipt of this notice.
V-1
THIS NOTICE IS THE "NOTICE OF TERMINATION" PROVIDED FOR UNDER THE
LIQUIDITY AGREEMENT. OUR OBLIGATIONS TO MAKE ADVANCES UNDER THE LIQUIDITY
AGREEMENT WILL TERMINATE ON THE FIFTH BUSINESS DAY AFTER THE DATE ON WHICH
YOU RECEIVE THIS NOTICE.
Very truly yours,
ABN AMRO BANK, N.V.,
Chicago Branch
as Liquidity Provider
By:
-------------------------
Name:
Title:
cc: State Street Bank and Trust Company,
as Class B Trustee
V-2
Annex VI to
Revolving Credit Agreement
NOTICE OF REPLACEMENT SUBORDINATION AGENT
[Date]
Attention:
Revolving Credit Agreement dated as of December 14, 1998, between State
Street Bank and Trust Company, as Subordination Agent, as agent and trustee
for the US Airways Pass Through Trust, 1998-1B, as Borrower, and ABN AMRO
BANK N.V. (the "Liquidity Agreement")
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
--------------------------
[Name of Transferee]
--------------------------
[Address of Transferee]
all rights and obligations of the undersigned as Borrower under the Liquidity
Agreement referred to above. The transferee has succeeded the undersigned as
Subordination Agent under the Intercreditor Agreement referred to in the
first paragraph of the Liquidity Agreement, pursuant to the terms of Section
8.1 of the Intercreditor Agreement.
By this transfer, all rights of the undersigned as Borrower under the
Liquidity Agreement are transferred to the transferee and the transferee
shall hereafter have the sole rights and obligations as Borrower thereunder.
The undersigned shall pay any costs and expenses of such transfer,
including, but not limited to, transfer taxes or governmental charges.
VI-1
We ask that this transfer be effective as of _______________, ____.
STATE STREET BANK AND TRUST
COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
VI-2
EXHIBIT 4(a)(viii)
- -----------------------------------------------------------------------------
REVOLVING CREDIT AGREEMENT
(1998-1C)
Dated as of December 14, 1998
between
STATE STREET BANK and TRUST COMPANY,
as Subordination Agent,
as agent and trustee for the
US Airways Pass Through Trust 1998-1C
as Borrower
and
ABN AMRO BANK N.V.,
acting through its Chicago B ranch
as Liquidity Provider
- -----------------------------------------------------------------------------
Relating to
US Airways Pass Through Trust 1998-1C
6.82% US Airways Pass Through Certificates,
Series 1998-1C
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms 1
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. The Advances 7
Section 2.02. Making the Advances 8
Section 2.03. Fees 9
Section 2.04. Reduction or Termination of the Maximum Commitment 10
Section 2.05. Repayments of Interest Advances or the Final Advance 10
Section 2.06. Repayments of Provider Advances 10
Section 2.07. Payments to the Liquidity Provider Under the Intercreditor
Agreement 11
Section 2.08. Book Entries 12
Section 2.09. Payments from Available Funds Only 12
Section 2.10. Extension of the Expiry Date; Non-Extension Advance 12
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. Increased Costs 13
Section 3.02. Capital Adequacy 13
Section 3.03. Payments Free of Deductions 14
Section 3.04. Payments 15
Section 3.05. Computations 15
Section 3.06. Payment on Non-Business Days 15
Section 3.07. Interest 16
Section 3.08. Replacement of Borrower 17
Section 3.09. Funding Loss Indemnification 17
Section 3.10. Illegality 18
i
TABLE OF CONTENTS
(Continued)
Page
----
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to Effectiveness of Section 2.01 18
Section 4.02. Conditions Precedent to Borrowing 20
ARTICLE V
COVENANTS
Section 5.01. Affirmative Covenants of the Borrower 20
Section 5.02. Negative Covenants of the Borrower 21
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. Liquidity Events of Default 21
ARTICLE VII
MISCELLANEOUS
Section 7.01. Amendments, Etc. 21
Section 7.02. Notices, Etc. 21
Section 7.03. No Waiver; Remedies 22
Section 7.04. Further Assurances 23
Section 7.05. Indemnification; Survival of Certain Provisions 23
Section 7.06. Liability of the Liquidity Provider 23
Section 7.07. Costs, Expenses and Taxes 24
Section 7.08. Binding Effect; Participations 24
Section 7.09. Severability 26
Section 7.10. GOVERNING LAW 26
Section 7.11. Submission to Jurisdiction; Waiver of Jury Trial; Waiver of
Immunity 26
Section 7.12. Execution in Counterparts 27
Section 7.13. Entirety 27
ii
TABLE OF CONTENTS
(Continued)
Page
----
Section 7.14. Headings 27
Section 7.15. Liquidity Provider's Obligation to Make Advances 27
ANNEX I Interest Advance Notice of Borrowing
ANNEX II Non-Extension Advance Notice of Borrowing
ANNEX III Downgrade Advance Notice of Borrowing
ANNEX IV Final Advance Notice of Borrowing
ANNEX V Notice of Termination
ANNEX VI Notice of Replacement Subordination Agent
iii
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT dated as of December 14, 1998, between
STATE STREET BANK and TRUST COMPANY, a Massachusetts trust company, not in
its individual capacity but solely as Subordination Agent under the
Intercreditor Agreement (each as defined below), as agent and trustee for the
Class C Trust (as defined below) (the "Borrower"), and ABN AMRO BANK N.V.,
a bank organized under the laws of The Netherlands, acting through its
Chicago Branch (the "Liquidity Provider").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Class C Trust Agreement (such term and all
other capitalized terms used in these recitals having the meanings set forth
or referred to in Section 1.01), the Class C Trust is issuing the Class C
Certificates; and
WHEREAS, the Borrower, in order to support the timely payment of a
portion of the interest on the Class C Certificates in accordance with their
terms, has requested the Liquidity Provider to enter into this Agreement,
providing in part for the Borrower to request in specified circumstances that
Advances be made hereunder.
NOW, THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms. (a) Definitions. As used in
this Agreement and unless otherwise expressly indicated, or unless the
context clearly requires otherwise, the following capitalized terms shall
have the following respective meanings for all purposes of this Agreement:
"Additional Cost" has the meaning assigned to such term in Section
3.01.
"Advance" means an Interest Advance, a Final Advance, a Provider
Advance, an Applied Provider Advance or an Unpaid Advance, as the case may
be.
"Applicable Liquidity Rate" has the meaning assigned to such term in
Section 3.07(g).
"Applicable Margin" means (x) with respect to any Unpaid Advance or
Applied Provider Advance, 2.00%, (y) with respect to any Unapplied Non-
Extension Advance that is a LIBOR Advance, 0.45%, or (z) with respect to any
Unapplied Downgrade
Advance that is a LIBOR Advance, 0.45% for the first year after the date of
such Advance and 0.75% thereafter
"Applied Downgrade Advance" has the meaning assigned to such term in
Section 2.06(a).
"Applied Non-Extension Advance" has the meaning assigned to such term
in Section 2.06(a).
"Applied Provider Advance" has the meaning assigned to such term in
Section 2.06(a).
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to (a) the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or if such
rate is not so published for any day that is a Business Day, the average of
the quotations for such day for such transactions received by the Liquidity
Provider from three Federal funds brokers of recognized standing selected by
it, plus (b) one quarter of one percent (1/4 of 1%) per annum.
"Base Rate Advance" means an Advance that bears interest at a rate
based upon the Base Rate.
"Borrower" has the meaning assigned to such term in the recital of
parties to this Agreement.
"Borrowing" means the making of Advances requested by delivery of a
Notice of Borrowing.
"Business Day" means any day other than a Saturday or Sunday or a day
on which commercial banks are required or authorized to close in New York,
New York, Chicago, Illinois, Pittsburgh, Pennsylvania, or, so long as any
Class C Certificate is outstanding, the city and state in which the Class C
Trustee, the Borrower or any Loan Trustee maintains its Corporate Trust
Office or receives or disburses funds, and, if the applicable Business Day
relates to any Advance or other amount bearing interest based on the LIBOR
Rate, on which dealings are carried on in the London interbank market.
"Certificates of Deposit" has the meaning assigned to such term in the
Deposit Agreement.
"Deposits" has the meaning assigned to such terms in the Deposit
Agreement.
2
"Depositary" has the meaning assigned to such term in the Deposit
Agreement.
"Deposit Agreement" means the Deposit Agreement dated December 14,
1998 between First Security Bank, National Association, as Escrow Agent and
Citibank, N.A. as Depositary, pertaining to the Class C Certificates, as the
same may be amended, modified or supplemented from time to time in accordance
with the terms thereof.
"Downgrade Advance" means an Advance made pursuant to Section 2.02(c).
"Effective Date" has the meaning specified in Section 4.01. The
delivery of the certificate of the Liquidity Provider contemplated by Section
4.01(e) shall be conclusive evidence that the Effective Date has occurred.
"Excluded Taxes" means (i) taxes imposed on the overall net income of
the Liquidity Provider or of its Lending Office by the jurisdiction where
such Liquidity Provider's principal office or such Lending Office is located,
and (ii) Excluded Withholding Taxes.
"Excluded Withholding Taxes" means (i) withholding Taxes imposed by
the United States except to the extent that such United States withholding
Taxes are imposed as a result of any change in applicable law (excluding from
change in applicable law for this purpose a change in an applicable treaty or
other change in law affecting the applicability of a treaty) after the date
hereof, or in the case of a successor Liquidity Provider (including a
transferee of an Advance) or Lending Office, after the date on which such
successor Liquidity Provider obtains its interest or on which the Lending
Office is changed, and (ii) any withholding Taxes imposed by the United
States which are imposed or increased as a result of the Liquidity Provider
failing to deliver to the Borrower any certificate or document (which
certificate or document in the good faith judgment of the Liquidity Provider
it is legally entitled to provide) which is reasonably requested by the
Borrower to establish that payments under this Agreement are exempt from (or
entitled to a reduced rate of) withholding Tax.
"Expenses" means liabilities, obligations, damages, settlements,
penalties, claims, actions, suits, costs, expenses, and disbursements
(including, without limitation, reasonable fees and disbursements of legal
counsel and costs of investigation), provided that Expenses shall not include
any Taxes.
"Expiry Date" means December 12, 1999, initially, or any date to which
the Expiry Date is extended pursuant to Section 2.10.
"Final Advance" means an Advance made pursuant to Section 2.02(d).
3
"Intercreditor Agreement" means the Intercreditor Agreement dated the
date hereof, among the Trustees, the Liquidity Provider, the liquidity
provider under each Liquidity Facility (other than this Agreement) and the
Subordination Agent, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Interest Advance" means an Advance made pursuant to Section 2.02(a).
"Interest Period" means, with respect to any LIBOR Advance, each of
the following periods:
(i) the period beginning either (x) on the third Business Day
following the Liquidity Provider's receipt of the Notice of Borrowing for
such LIBOR Advance or (y) the date of the withdrawal of funds from the Class
C Cash Collateral Account for the purpose of paying interest on the Class C
Certificates as contemplated by Section 2.06(a) hereof and, in each case,
ending on the next Regular Distribution Date; and
(ii) each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the next Regular
Distribution Date;
provided, however, that if (x) the Final Advance shall have been made, or (y)
other outstanding Advances shall have been converted into the Final Advance,
then the Interest Periods shall be successive periods of one month beginning
on the third Business Day following the Liquidity Provider's receipt of the
Notice of Borrowing for such Final Advance (in the case of clause (x) above)
or the Regular Distribution Date following such conversion (in the case of
clause (y) above).
"Lending Office" means the lending office of the Liquidity Provider
presently located at Chicago, Illinois, or such other lending office as the
Liquidity Provider from time to time shall notify the Borrower as its lending
office hereunder; provided that the Liquidity Provider shall not change its
Lending Office to a Lending Office outside the United States of America
except in accordance with Section 3.01, 3.02 or 3.03 hereof.
"LIBOR Advance" means an Advance bearing interest at a rate based upon
the LIBOR Rate.
"LIBOR Rate" means, with respect to any Interest Period:
(i) the rate per annum appearing on display page 3750 (British
Bankers Association-LIBOR) of the Dow Jones Markets Service (or any successor
or substitute therefor ) at approximately 11:00 A.M. (London
4
time) two Business Days before the first day of such Interest Period, as the
rate for dollar deposits with a maturity comparable to such Interest Period,
or
(ii) if the rate calculated pursuant to clause (i) above is not
available, the average (rounded upwards, if necessary, to the next 1/16 of
1%) of the rates per annum at which deposits in dollars are offered for the
relevant Interest Period by three banks of recognized standing selected by
the Liquidity Provider in the London interbank market at approximately 11:00
A.M. (London time) two Business Days before the first day of such Interest
Period in an amount approximately equal to the principal amount of the LIBOR
Advance to which such Interest Period is to apply and for a period comparable
to such Interest Period.
"Liquidity Event of Default" means the occurrence of either (a) the
Acceleration of all of the Equipment Notes (provided that, with respect to
the period prior to the Delivery Period Expiry Date, such Equipment Notes
have an aggregate outstanding principal balance in excess of $300,000,000) or
(b) a US Airways Bankruptcy Event.
"Liquidity Indemnitee" means (i) the Liquidity Provider, (ii) the
directors, officers, employees and agents of the Liquidity Provider, and
(iii) the successors and permitted assigns of the persons described in
clauses (i) and (ii), inclusive.
"Liquidity Provider" has the meaning assigned to such term in the
recital of parties to this Agreement.
"Maximum Available Commitment" shall mean, subject to the proviso
contained in the third sentence of Section 2.02(a), at any time of
determination, (a) the Maximum Commitment at such time less (b) the aggregate
amount of each Interest Advance outstanding at such time; provided that
following a Provider Advance or a Final Advance, the Maximum Available
Commitment shall be zero.
"Maximum Commitment" means, for any day, the lesser of (x)
$14,461,742, and (y) the Required Amount on such day.
"Non-Extension Advance" means an Advance made pursuant to Section
2.02(b).
"Notice of Borrowing" has the meaning specified in Section 2.02(e).
"Notice of Replacement Subordination Agent" has the meaning specified
in Section 3.08.
5
"Offering Memorandum" means the Offering Memorandum dated December ,
--
1998 relating to the Class C Certificates, as such Offering Memorandum may be
amended or supplemented.
"Performing Note Deficiency" means any time that less than 65% of the
then aggregate outstanding principal amount of all Equipment Notes are
Performing Equipment Notes.
"Provider Advance" means a Downgrade Advance or a Non-Extension
Advance.
"Regulatory Change" has the meaning assigned to such term in Section
3.01.
"Replenishment Amount" has the meaning assigned to such term in
Section 2.06(b).
"Required Amount" means, for any day, the sum of the aggregate amount
of interest, calculated at the rate per annum equal to the Stated Interest
Rate for the Class C Certificates, that would be payable on the Class C
Certificates on each of the three successive semiannual Regular Distribution
Dates immediately following such day or, if such day is a Regular
Distribution Date, on such day and the succeeding two semiannual Regular
Distribution Dates, in each case calculated on the basis of the Pool Balance
of the Class C Certificates on such day and without regard to expected future
payments of principal on the Class C Certificates.
"Tax Letter" means the letter dated the date hereof between the
Liquidity Provider and US Airways pertaining to this Agreement.
"Termination Date" means the earliest to occur of the following: (i)
the Expiry Date; (ii) the date on which the Borrower delivers to the
Liquidity Provider a certificate, signed by a Responsible Officer of the
Borrower, certifying that all of the Class C Certificates have been paid in
full (or provision has been made for such payment in accordance with the
Intercreditor Agreement and the Trust Agreements) or are otherwise no longer
entitled to the benefits of this Agreement; (iii) the date on which the
Borrower delivers to the Liquidity Provider a certificate, signed by a
Responsible Officer of the Borrower, certifying that a Replacement Liquidity
Facility has been substituted for this Agreement in full pursuant to Section
3.6(e) of the Intercreditor Agreement; (iv) the fifth Business Day following
the receipt by the Borrower of a Termination Notice from the Liquidity
Provider pursuant to Section 6.01 hereof; and (v) the date on which no
Advance is or may (including by reason of reinstatement as herein provided)
become available for a Borrowing hereunder.
6
"Termination Notice" means the Notice of Termination substantially in
the form of Annex V to this Agreement.
"Transferee" has the meaning assigned to such term in Section 7.08(b).
"Unapplied Downgrade Advance" means any Downgrade Advance other than
an Applied Downgrade Advance.
"Unapplied Provider Advance" means any Provider Advance other than an
Applied Provider Advance.
"Unpaid Advance" has the meaning assigned to such term in Section
2.05.
(b) Terms Defined in the Intercreditor Agreement. For all purposes of
this Agreement, the following terms shall have the respective meanings
assigned to such terms in the Intercreditor Agreement:
"Acceleration", "AIFS", "Certificates", "Class A Certificates",
"Class B Certificates", "Class C Cash Collateral Account", "Class C
Certificates", "Class C Certificateholders", "Class C Purchase
Agreement", "Class C Trust", "Class C Trust Agreement", "Class C
Trustee","Closing Date", "Controlling Party", "Corporate Trust
Office", "Delivery Period Expiry Date", "Distribution Date",
"Downgraded Facility", "Equipment Notes", "Fee Letter","Final
Legal Distribution Date", "Financing Agreement", "Indenture",
"Interest Payment Date", "Investment Earnings", "Liquidity
Facility", "Liquidity Obligations", "Loan Trustee", "Moody's",
"Non-Extended Facility", "Note Purchase Agreement", "Operative
Agreements", "Performing Equipment Note", "Person", "Pool
Balance", "Rating Agency", "Ratings Confirmation", "Regular
Distribution Date", "Replacement Liquidity Facility", "Responsible
Officer", "Scheduled Payment", "Special Payment", "Standard &
Poor's", "Stated Interest Rate", "Subordination Agent", "Taxes",
"Threshold Rating", "Trust Agreements", "Trustee", "Underwriters",
"Underwriting Agreement", "US Airways", "US Airways Bankruptcy Event"
and "Written Notice".
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. The Advances. The Liquidity Provider hereby irrevocably
agrees, on the terms and conditions hereinafter set forth, to make Advances
to the Borrower from time to time on any Business Day during the period from
the Effective Date until 12:00 Noon (New York City time) on the Expiry Date
(unless the obligations of the Liquidity Provider shall be earlier terminated
in accordance with the terms of Section 2.04(b)) in an aggregate amount at
any time outstanding not to exceed the Maximum Commitment.
7
Section 2.02. Making the Advances. (a) Interest Advances shall be
made in one or more Borrowings by delivery to the Liquidity Provider of one
or more written and completed Notices of Borrowing in substantially the form
of Annex I attached hereto, signed by a Responsible Officer of the Borrower,
in an amount not exceeding the Maximum Available Commitment at such time and
shall be used solely for the payment when due of interest on the Class C
Certificates at the Stated Interest Rate therefor in accordance with Section
3.6(a) of the Intercreditor Agreement. Each Interest Advance made hereunder
shall automatically reduce the Maximum Available Commitment and the amount
available to be borrowed hereunder by subsequent Advances by the amount of
such Interest Advance (subject to reinstatement as provided in the next
sentence). Upon repayment to the Liquidity Provider in full of the amount of
any Interest Advance made pursuant to this Section 2.02(a), together with
accrued interest thereon (as provided herein), the Maximum Available
Commitment shall be reinstated by the amount of such repaid Interest Advance,
but not to exceed the Maximum Commitment; provided, however, that the Maximum
Available Commitment shall not be so reinstated at any time if (i) a
Liquidity Event of Default shall have occurred and be continuing and (ii)
there is a Performing Note Deficiency.
(b) A Non-Extension Advance shall be made in a single Borrowing if this
Agreement is not extended in accordance with Section 3.6(d) of the
Intercreditor Agreement (unless a Replacement Liquidity Facility to replace
this Agreement shall have been delivered to the Borrower as contemplated by
said Section 3.6(d) within the time period specified in such Section) by
delivery to the Liquidity Provider of a written and completed Notice of
Borrowing in substantially the form of Annex II attached hereto, signed by a
Responsible Officer of the Borrower, in an amount equal to the Maximum
Available Commitment at such time, and shall be used to fund the Class C Cash
Collateral Account in accordance with said Section 3.6(d) and Section 3.6(f)
of the Intercreditor Agreement.
(c) A Downgrade Advance shall be made in a single Borrowing upon a
downgrading of the Liquidity Provider's short-term unsecured debt rating
issued by either Rating Agency below the applicable Threshold Rating (as
provided for in Section 3.6(c) of the Intercreditor Agreement) unless a
Replacement Liquidity Facility to replace this Agreement shall have been
previously delivered to the Borrower in accordance with said Section 3.6(c),
by delivery to the Liquidity Provider of a written and completed Notice of
Borrowing in substantially the form of Annex III attached hereto, signed by a
Responsible Officer of the Borrower, in an amount equal to the Maximum
Available Commitment at such time, and shall be used to fund the Class C Cash
Collateral Account in accordance with said Section 3.6(c) and Section 3.6(f)
of the Intercreditor Agreement.
(d) A Final Advance shall be made in a single Borrowing upon the
receipt by the Borrower of a Termination Notice from the Liquidity Provider
pursuant to Section 6.01 hereof by delivery to the Liquidity Provider of a
written and completed Notice of Borrowing in substantially the form of Annex
IV attached hereto, signed by a Responsible Officer of the Borrower, in an
amount equal to the Maximum Available Commitment at such time, and shall
8
be used to fund the Class C Cash Collateral Account (in accordance with
Section 3.6(i) of the Intercreditor Agreement) and Section 3.6(f) of the
Intercreditor Agreement.
(e) Each Borrowing shall be made on notice in writing (a "Notice of
Borrowing") in substantially the form required by Section 2.02(a), 2.02(b),
2.02(c) or 2.02(d), as the case may be, given by the Borrower to the
Liquidity Provider. If a Notice of Borrowing is delivered by the Borrower in
respect of any Borrowing no later than 1:00 p.m. (New York City time) on a
Business Day, upon satisfaction of the conditions precedent set forth in
Section 4.02 with respect to a requested Borrowing, the Liquidity Provider
shall make available to the Borrower, in accordance with its payment
instructions, the amount of such Borrowing in U.S. dollars and immediately
available funds, before 4:00 pm (New York City time) on such Business Day or
on such later Business Day specified in such Notice of Borrowing. If a
Notice of Borrowing is delivered by the Borrower in respect of any Borrowing
after 1:00 pm (New York City time) on a Business Day, upon satisfaction of
the conditions precedent set forth in Section 4.02 with respect to a
requested Borrowing, the Liquidity Provider shall make available to the
Borrower, in accordance with its payment instructions, the amount of such
Borrowing in U.S. dollars and immediately available funds, before 12:00 Noon
(New York City time) on the first Business Day next following the day of
receipt of such Notice of Borrowing or on such later Business Day specified
by the Borrower in such Notice of Borrowing. Payments of proceeds of a
Borrowing shall be made by wire transfer of immediately available funds to
the Borrower in accordance with such wire transfer instructions as the
Borrower shall furnish from time to time to the Liquidity Provider for such
purpose. Each Notice of Borrowing shall be irrevocable and binding on the
Borrower.
(f) Upon the making of any Advance requested pursuant to a Notice of
Borrowing, in accordance with the Borrower's payment instructions, the
Liquidity Provider shall be fully discharged of its obligation hereunder with
respect to such Notice of Borrowing, and the Liquidity Provider shall not
thereafter be obligated to make any further Advances hereunder in respect of
such Notice of Borrowing to the Borrower or to any other Person. Following
the making of any Advance pursuant to Section 2.02(b), (c) or (d) hereof to
fund the Class C Cash Collateral Account, the Liquidity Provider shall have
no interest in or rights to the Class C Cash Collateral Account, such Advance
or any other amounts from time to time on deposit in the Class C Cash
Collateral Account; provided that the foregoing shall not affect or impair
the obligations of the Subordination Agent to make the distributions
contemplated by Section 3.6(e) or (f) of the Intercreditor Agreement. By
paying to the Borrower proceeds of Advances requested by the Borrower in
accordance with the provisions of this Agreement, the Liquidity Provider
makes no representation as to, and assumes no responsibility for, the
correctness or sufficiency for any purpose of the amount of the Advances so
made and requested.
Section 2.03. Fees. The Borrower agrees to pay to the Liquidity
Provider the fees set forth in the Fee Letter.
9
Section 2.04. Reduction or Termination of the Maximum Commitment.
(a) Automatic Reduction. Promptly following each date on which the
Required Amount is reduced as a result of a reduction in the Pool Balance of
the Class C Certificates or otherwise, the Maximum Commitment shall
automatically be reduced to an amount equal to such reduced Required Amount
(as calculated by the Borrower). The Borrower shall give notice of any such
automatic reduction of the Maximum Commitment to the Liquidity Provider
within two Business Days thereof. The failure by the Borrower to furnish any
such notice shall not affect such automatic reduction of the Maximum
Commitment.
(b) Termination. Upon the making of any Provider Advance or Final
Advance hereunder or the occurrence of the Termination Date, the obligation
of the Liquidity Provider to make further Advances hereunder shall
automatically and irrevocably terminate, and the Borrower shall not be
entitled to request any further Borrowing hereunder.
Section 2.05. Repayments of Interest Advances or the Final Advance.
Subject to Sections 2.06, 2.07 and 2.09 hereof, the Borrower hereby agrees,
without notice of an Advance or demand for repayment from the Liquidity
Provider (which notice and demand are hereby waived by the Borrower), to pay,
or to cause to be paid, to the Liquidity Provider on each date on which the
Liquidity Provider shall make an Interest Advance or the Final Advance, an
amount equal to (a) the amount of such Advance (any such Advance, until
repaid, is referred to herein as an "Unpaid Advance"), plus (b) interest on
the amount of each such Unpaid Advance as provided in Section 3.07 hereof;
provided that if (i) the Liquidity Provider shall make a Provider Advance at
any time after making one or more Interest Advances which shall not have been
repaid in accordance with this Section 2.05 or (ii) this Liquidity Facility
shall become a Downgraded Facility or Non-Extended Facility at any time when
unreimbursed Interest Advances have reduced the Maximum Available Commitment
to zero, then such Interest Advances shall cease to constitute Unpaid
Advances and shall be deemed to have been changed into an Applied Downgrade
Advance or an Applied Non-Extension Advance, as the case may be, for all
purposes of this Agreement (including, without limitation, for the purpose of
determining when such Interest Advance is required to be repaid to the
Liquidity Provider in accordance with Section 2.06 and for the purposes of
Section 2.06(b)). The Borrower and the Liquidity Provider agree that the
repayment in full of each Interest Advance and Final Advance on the date such
Advance is made is intended to be a contemporaneous exchange for new value
given to the Borrower by the Liquidity Provider.
Section 2.06. Repayments of Provider Advances. (a) Amounts advanced
hereunder in respect of a Provider Advance shall be deposited in the Class C
Cash Collateral Account, invested and withdrawn from the Class C Cash
Collateral Account as set forth in Sections 3.6(c), (d) and (f) of the
Intercreditor Agreement. The Borrower agrees to pay to the Liquidity
Provider, on each Regular Distribution Date, commencing on the first Regular
Distribution Date after the making of a Provider Advance, interest on the
principal amount of any such Provider Advance as provided in Section 3.07;
provided, however, that amounts in
10
respect of a Provider Advance withdrawn from the Class C Cash Collateral
Account for the purpose of paying interest on the Class C Certificates in
accordance with Section 3.6(f) of the Intercreditor Agreement (the amount of
any such withdrawal being (y) in the case of a Downgrade Advance, an
"Applied Downgrade Advance" and (z) in the case of a Non-Extension Advance,
an "Applied Non-Extension Advance" and, together with an Applied Downgrade
Advance, an "Applied Provider Advance") shall thereafter (subject to
Section 2.06(b)) be treated as an Interest Advance under this Agreement for
purposes of determining the Applicable Liquidity Rate for interest payable
thereon; provided further, however, that if, following the making of a
Provider Advance, the Liquidity Provider delivers a Termination Notice to the
Borrower pursuant to Section 6.01 hereof, such Provider Advance shall
thereafter be treated as a Final Advance under this Agreement for purposes of
determining the Applicable Liquidity Rate for interest payable thereon.
Subject to Sections 2.07 and 2.09 hereof, immediately upon the withdrawal of
any amounts from the Class C Cash Collateral Account on account of a
reduction in the Required Amount, the Borrower shall repay to the Liquidity
Provider a portion of the Provider Advances in a principal amount equal to
such reduction, plus interest on the principal amount prepaid as provided in
Section 3.07 hereof.
(b) At any time when an Applied Provider Advance (or any portion
thereof) is outstanding, upon the deposit in the Class C Cash Collateral
Account of any amount pursuant to clause "third" of Section 2.4(b) of the
Intercreditor Agreement, clause "third" of Section 3.2 of the Intercreditor
Agreement or clause "fourth" of Section 3.3 of the Intercreditor Agreement
(any such amount being a "Replenishment Amount") for the purpose of
replenishing or increasing the balance thereof up to the Required Amount at
such time, (i) the aggregate outstanding principal amount of all Applied
Provider Advances (and of Provider Advances treated as an Interest Advance
for purposes of determining the Applicable Liquidity Rate for interest
payable thereon) shall be automatically reduced by the amount of such
Replenishment Amount and (ii) the aggregate outstanding principal amount of
all Unapplied Provider Advances shall be automatically increased by the
amount of such Replenishment Amount.
(c) Upon the provision of a Replacement Liquidity Facility in
replacement of this Agreement in accordance with Section 3.6(e) of the
Intercreditor Agreement, amounts remaining on deposit in the Class C Cash
Collateral Account after giving effect to any Applied Provider Advance on the
date of such replacement shall be reimbursed to the Liquidity Provider, but
only to the extent such amounts are necessary to repay in full to the
Liquidity Provider all amounts owing to it hereunder.
Section 2.07. Payments to the Liquidity Provider Under the
Intercreditor Agreement. In order to provide for payment or repayment to the
Liquidity Provider of any amounts hereunder, the Intercreditor Agreement
provides that amounts available and referred to in Articles II and III of the
Intercreditor Agreement, to the extent payable to the Liquidity Provider
pursuant to the terms of the Intercreditor Agreement (including, without
limitation, Section 3.6(f) of the Intercreditor Agreement), shall be paid to
the Liquidity Provider in
11
accordance with the terms thereof. Amounts so paid to the Liquidity Provider
shall be applied by the Liquidity Provider to Liquidity Obligations then due
and payable in accordance with the Intercreditor Agreement or, if not
provided for in the Intercreditor Agreement, then in such manner as the
Liquidity Provider shall deem appropriate.
Section 2.08. Book Entries. The Liquidity Provider shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower resulting from Advances made from time to time
and the amounts of principal and interest payable hereunder and paid from
time to time in respect thereof; provided, however, that the failure by the
Liquidity Provider to maintain such account or accounts shall not affect the
obligations of the Borrower in respect of Advances.
Section 2.09. Payments from Available Funds Only. All payments to be
made by the Borrower under this Agreement shall be made only from the amounts
that constitute Scheduled Payments, Special Payments or payments under
Section 6(c) or 8, as the case may be, of the Participation Agreements and
Section 7 of the Note Purchase Agreement and only to the extent that the
Borrower shall have sufficient income or proceeds therefrom to enable the
Borrower to make payments in accordance with the terms hereof after giving
effect to the priority of payments provisions set forth in the Intercreditor
Agreement. The Liquidity Provider agrees that it will look solely to such
amounts to the extent available for distribution to it as provided in the
Intercreditor Agreement and this Agreement and that the Borrower, in its
individual capacity, is not personally liable to it for any amounts payable
or liability under this Agreement except as expressly provided in this
Agreement, the Intercreditor Agreement or any Participation Agreement.
Amounts on deposit in the Class C Cash Collateral Account shall be available
to the Borrower to make payments under this Agreement only to the extent and
for the purposes expressly contemplated in Section 3.6(f) of the
Intercreditor Agreement.
Section 2.10. Extension of the Expiry Date; Non-Extension Advance. No
earlier than the 60th day and no later than the 40th day prior to the then
effective Expiry Date (unless such Expiry Date is on or after the date that
is 15 days after the Final Legal Distribution Date for the Class C
Certificates), the Borrower shall request that the Liquidity Provider extend
the Expiry Date for a period of 364 days after the then effective Expiry Date
(unless the obligations of the Liquidity Provider are earlier terminated in
accordance with the terms hereof). The Liquidity Provider shall advise the
Borrower, no earlier than 40 days and no later than 25 days prior to the then
effective Expiry Date, whether, in its sole discretion, it agrees to so
extend the Expiry Date. If the Liquidity Provider advises the Borrower on or
before the 25th day prior to the Expiry Date then in effect that such Expiry
Date shall not be so extended, or fails to irrevocably and unconditionally
advise the Borrower on or before the 25th day prior to the Expiry Date then
in effect that such Expiry Date shall be so extended (and, in each case, if
the Liquidity Provider shall not have been replaced in accordance with
Section 3.6(e) of the Intercreditor Agreement), the Borrower shall be
entitled on and after such 25th day (but prior to the then effective Expiry
Date) to request a Non-Extension Advance in accordance with Section 2.02(b)
hereof and Section 3.6(d) of the Intercreditor Agreement.
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ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. Increased Costs. The Borrower shall pay to the Liquidity
Provider from time to time such amounts as may be necessary to compensate the
Liquidity Provider for any increased costs incurred by the Liquidity
Provider which are attributable to its making or maintaining any LIBOR
Advances hereunder or its obligation to make any such Advances hereunder, or
any reduction in any amount receivable by the Liquidity Provider under this
Agreement or the Intercreditor Agreement in respect of any such Advances or
such obligation (such increases in costs and reductions in amounts receivable
being herein called "Additional Costs"), resulting from any change after
the date of this Agreement in U.S. federal, state, municipal, or foreign laws
or regulations (including Regulation D of the Board of Governors of the
Federal Reserve System), or the adoption or making after the date of this
Agreement of any interpretations, directives, or requirements applying to a
class of banks including the Liquidity Provider under any U.S. federal,
state, municipal, or any foreign laws or regulations (whether or not having
the force of law) by any court, central bank or monetary authority charged
with the interpretation or administration thereof (a "Regulatory Change"),
which: (1) changes the basis of taxation of any amounts payable to the
Liquidity Provider under this Agreement in respect of any such Advances
(other than Excluded Taxes); or (2) imposes or modifies any reserve, special
deposit, compulsory loan or similar requirements relating to any extensions
of credit or other assets of, or any deposits with other liabilities of, the
Liquidity Provider (including any such Advances or any deposits referred to
in the definition of LIBOR Rate or related definitions). The Liquidity
Provider agrees to use reasonable efforts (consistent with applicable legal
and regulatory restrictions) to change the jurisdiction of its Lending Office
if making such change would avoid the need for, or reduce the amount of, any
amount payable under this Section that may thereafter accrue and would not,
in the reasonable judgment of the Liquidity Provider, be otherwise
disadvantageous to the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.01 as promptly as practicable after
it obtains knowledge thereof and determines to request such compensation,
which notice shall describe in reasonable detail the calculation of the
amounts owed under this Section. Determinations by the Liquidity Provider
for purposes of this Section 3.01 of the effect of any Regulatory Change on
its costs of making or maintaining Advances or on amounts receivable by it in
respect of Advances, and of the additional amounts required to compensate the
Liquidity Provider in respect of any Additional Costs, shall be prima facie
evidence of the amount owed under this Section.
Section 3.02. Capital Adequacy. If (1) the adoption, after the date
hereof, of any applicable governmental law, rule or regulation regarding
capital adequacy, (2) any change, after the date hereof, in the
interpretation or administration of any such law, rule or
13
regulation by any central bank or other governmental authority charged with
the interpretation or administration thereof or (3) compliance by the
Liquidity Provider or any corporation controlling the Liquidity Provider with
any applicable guideline or request of general applicability, issued after
the date hereof, by any central bank or other governmental authority (whether
or not having the force of law) that constitutes a change of the nature
described in clause (2), has the effect of requiring an increase in the
amount of capital required to be maintained by the Liquidity Provider or any
corporation controlling the Liquidity Provider, and such increase is based
upon the Liquidity Provider's obligations hereunder and other similar
obligations, the Borrower shall pay to the Liquidity Provider from time to
time such additional amount or amounts as are necessary to compensate the
Liquidity Provider for such portion of such increase as shall be reasonably
allocable to the Liquidity Provider's obligations to the Borrower hereunder.
The Liquidity Provider agrees to use reasonable efforts (consistent with
applicable legal and regulatory restrictions) to change the jurisdiction of
its Lending Office if making such change would avoid the need for, or reduce
the amount of, any amount payable under this Section that may thereafter
accrue and would not, in the reasonable judgment of the Liquidity Provider,
be otherwise materially disadvantageous to the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.02 as promptly as practicable after
it obtains knowledge thereof and determines to request such compensation,
which notice shall describe in reasonable detail the calculation of the
amounts owed under this Section. Determinations by the Liquidity Provider
for purposes of this Section 3.02 of the effect of any increase in the amount
of capital required to be maintained by the Liquidity Provider and of the
amount allocable to the Liquidity Provider's obligations to the Borrower
hereunder shall be prima facie evidence of the amounts owed under this
Section.
Section 3.03. Payments Free of Deductions. (a) All payments made by
the Borrower under this Agreement shall be made free and clear of, and
without reduction for or on account of, any present or future stamp or other
taxes, levies, imposts, duties, charges, fees, deductions, withholdings,
restrictions or conditions of any nature whatsoever now or hereafter imposed,
levied, collected, withheld or assessed, excluding Excluded Taxes (such non-
excluded taxes being referred to herein, collectively, as "Non-Excluded
Taxes" and, individually, as a "Non-Excluded Tax"). If any Non-Excluded
Taxes are required to be withheld from any amounts payable to the Liquidity
Provider under this Agreement, the amounts so payable to the Liquidity
Provider shall be increased to the extent necessary to yield to the Liquidity
Provider (after payment of all Non-Excluded Taxes) interest or any other such
amounts payable under this Agreement at the rates or in the amounts specified
in this Agreement. The Liquidity Provider agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions)
to change the jurisdiction of its Lending Office if making such change would
avoid the need for, or reduce the amount of, any such additional amounts that
may thereafter accrue and would not, in the reasonable judgment of the
14
Liquidity Provider, be otherwise disadvantageous to the Liquidity Provider.
From time to time upon the reasonable request of the Borrower, the Liquidity
Provider agrees to provide to the Borrower two original Internal Revenue
Service Forms 1001 or 4224, as appropriate, or any successor or other form
prescribed by the Internal Revenue Service, certifying that the Liquidity
Provider is exempt from or entitled to a reduced rate of United States
withholding tax on payments pursuant to this Agreement.
(b) All payments (including, without limitation, Advances) made by the
Liquidity Provider under this Agreement shall be made free and clear of, and
without reduction for or on account of, any Taxes. If any Taxes are required
to be withheld or deducted from any amounts payable to the Borrower under
this Agreement, the Liquidity Provider shall (i) within the time prescribed
therefor by applicable law pay to the appropriate governmental or taxing
authority the full amount of any such Taxes (and any additional Taxes in
respect of the payment required under clause (ii) hereof) and make such
reports or returns in connection therewith at the time or times and in the
manner prescribed by applicable law, and (ii) pay to the Borrower an
additional amount which (after deduction of all such Taxes) will be
sufficient to yield to the Borrower the full amount which would have been
received by it had no such withholding or deduction been made. Within 30
days after the date of each payment hereunder, the Liquidity Provider shall
furnish to the Borrower the original or a certified copy of (or other
documentary evidence of) the payment of the Taxes applicable to such payment.
Section 3.04. Payments. The Borrower shall make or cause to be made
each payment to the Liquidity Provider under this Agreement so as to cause
the same to be received by the Liquidity Provider not later than 1:00 P.M.
(New York City time) on the day when due. The Borrower shall make all such
payments in lawful money of the United States of America, to the Liquidity
Provider in immediately available funds, by wire transfer to ABN AMRO Bank,
New York, N.Y., ABA #026009580, Account Name: ABN AMRO Bank, Chicago Branch
CPU, Account No. [650-001-1789-41], Account Name: US Airways Liquidity
Facility 1998-1A.
Section 3.05. Computations. All computations of interest based on the
Base Rate shall be made on the basis of a year of 365 or 366 days, as the
case may be, and all computations of interest based on the LIBOR Rate shall
be made on the basis of a year of 360 days, in each case for the actual
number of days (including the first day but excluding the last day) occurring
in the period for which such interest is payable.
Section 3.06. Payment on Non-Business Days. Whenever any payment to be
made hereunder shall be stated to be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day and no
additional interest shall be due as a result (and if so made, shall be deemed
to have been made when due). If any payment in respect of interest on an
Advance is so deferred to the next succeeding Business Day, such deferral
shall not delay the commencement of the next Interest Period for such Advance
(if
15
such Advance is a LIBOR Advance) or reduce the number of days for which
interest will be payable on such Advance on the next interest payment date
for such Advance.
Section 3.07. Interest. (a) Subject to Section 2.09, the Borrower
shall pay, or shall cause to be paid, without duplication, interest on (i)
the unpaid principal amount of each Advance from and including the date of
such Advance (or, in the case of an Applied Provider Advance, from and
including the date on which the amount thereof was withdrawn from the Class C
Cash Collateral Account to pay interest on the Class C Certificates) to but
excluding the date such principal amount shall be paid in full (or, in the
case of an Applied Provider Advance, the date on which the Class C Cash
Collateral Account is fully replenished in respect of such Advance) and (ii)
any other amount due hereunder (whether fees, commissions, expenses or other
amounts or, to the extent permitted by law, installments of interest on
Advances or any such other amount) which is not paid when due (whether at
stated maturity, by acceleration or otherwise) from and including the due
date thereof to but excluding the date such amount is paid in full, in each
such case, at a fluctuating interest rate per annum for each day equal to the
Applicable Liquidity Rate (as defined below) for such Advance or such other
amount as in effect for such day, but in no event at a rate per annum greater
than the maximum rate permitted by applicable law; provided, however, that,
if at any time the otherwise applicable interest rate as set forth in this
Section 3.07 shall exceed the maximum rate permitted by applicable law, then
any subsequent reduction in such interest rate will not reduce the rate of
interest payable pursuant to this Section 3.07 below the maximum rate
permitted by applicable law until the total amount of interest accrued equals
the amount of interest that would have accrued if such otherwise applicable
interest rate as set forth in this Section 3.07 had at all times been in
effect.
(b) Each Advance will be either a Base Rate Advance or a LIBOR Advance
as provided in this Section. Each such Advance will be a Base Rate Advance
for the period from the date of its borrowing to (but excluding) the third
Business Day following the Liquidity Provider's receipt of the Notice of
Borrowing for such Advance. Thereafter, such Advance shall be a LIBOR
Advance; provided that (i) an Unapplied Provider Advance shall always be a
LIBOR Advance unless the Borrower elects otherwise and (ii) the Borrower (at
the direction of the Controlling Party, so long as the Liquidity Provider is
not the Controlling Party) may (x) convert the Final Advance or an Unapplied
Provider Advance into a Base Rate Advance on the last day of an Interest
Period for such Advance by giving the Liquidity Provider no less than four
Business Days' prior written notice of such election or (y) elect to maintain
the Final Advance or an Unapplied Provider Advance as a Base Rate Advance by
not requesting a conversion of the Final Advance or Unapplied Provider
Advance (as the case may be) to a LIBOR Advance under Clause (5) of the
applicable Notice of Borrowing (or, if such Final Advance is deemed to have
been made, without delivery of a Notice of Borrowing pursuant to Section
2.06, by requesting, prior to 11:00 A.M. on the first Business Day
immediately following the Borrower's receipt of the applicable Termination
Notice, that such Final Advance not be converted from a Base Rate Advance to
a LIBOR Advance).
16
(c) Each LIBOR Advance shall bear interest during each Interest Period
at a rate per annum equal to the LIBOR Rate for such Interest Period plus the
Applicable Margin for such LIBOR Advance, payable in arrears on the last day
of such Interest Period and, in the event of the payment of principal of such
LIBOR Advance on a day other than such last day, on the date of such payment
(to the extent of interest accrued on the amount of principal repaid).
(d) Each Base Rate Advance shall bear interest at a rate per annum
equal to the Base Rate plus the Applicable Margin for such Base Rate Advance,
payable in arrears on each Regular Distribution Date and, in the event of the
payment of principal of such Base Rate Advance on a day other than a Regular
Distribution Date, on the date of such payment (to the extent of interest
accrued on the amount of principal repaid).
(e) [Reserved].
(f) Each amount not paid when due hereunder (whether fees, commissions,
expenses or other amounts or, to the extent permitted by applicable law,
installments of interest on Advances but excluding Advances) shall bear
interest at a rate per annum equal to the Base Rate plus 2.00% until paid.
(g) Each change in the Base Rate shall become effective immediately.
The rates of interest specified in this Section 3.07 with respect to any
Advance or other amount shall be referred to as the "Applicable Liquidity
Rate".
Section 3.08. Replacement of Borrower. From time to time and subject
to the successor Borrower's meeting the eligibility requirements set forth in
Section 6.9 of the Intercreditor Agreement applicable to the Subordination
Agent, upon the effective date and time specified in a written and completed
Notice of Replacement Subordination Agent in substantially the form of Annex
VI attached hereto (a "Notice of Replacement Subordination Agent")
delivered to the Liquidity Provider by the then Borrower, the successor
Borrower designated therein shall be substituted for as the Borrower for all
purposes hereunder.
Section 3.09. Funding Loss Indemnification. The Borrower shall pay to
the Liquidity Provider, upon the request of the Liquidity Provider, such
amount or amounts as shall be sufficient (in the reasonable opinion of the
Liquidity Provider) to compensate it for any loss, cost, or expense incurred
by reason of the liquidation or redeployment of deposits or other funds
acquired by the Liquidity Provider to fund or maintain any LIBOR Advance (but
excluding loss of anticipated profits) incurred as a result of:
(1) Any repayment of a LIBOR Advance on a date other than the last day
of the Interest Period for such Advance; or
17
(2) Any failure by the Borrower to borrow a LIBOR Advance on the date
for borrowing specified in the relevant notice under Section 2.02.
Section 3.10. Illegality. Notwithstanding any other provision in this
Agreement, if any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation
or administration thereof, or compliance by the Liquidity Provider (or its
Lending Office) with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency shall
make it unlawful or impossible for the Liquidity Provider (or its Lending
Office) to maintain or fund its LIBOR Advances, then upon notice to the
Borrower by the Liquidity Provider, the outstanding principal amount of the
LIBOR Advances shall be converted to Base Rate Advances (a) immediately upon
demand of the Liquidity Provider, if such change or compliance with such
request, in the judgment of the Liquidity Provider, requires immediate
repayment; or (b) at the expiration of the last Interest Period to expire
before the effective date of any such change or request.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to Effectiveness of Section 2.01.
Section 2.01 of this Agreement shall become effective on and as of the first
date (the "Effective Date") on which the following conditions precedent
have been satisfied or waived:
(a) The Liquidity Provider shall have received on or before the Closing
Date each of the following, and in the case of each document delivered
pursuant to paragraphs (i), (ii) and (iii), each in form and substance
satisfactory to the Liquidity Provider:
(i) This Agreement duly executed on behalf of the Borrower;
(ii) The Intercreditor Agreement duly executed on behalf of each
of the parties thereto;
(iii) Fully executed copies of each of the Operative Agreements
executed and delivered on or before the Closing Date (other than this
Agreement and the Intercreditor Agreement);
(iv) A copy of the Offering Memorandum and specimen copies of the
Class C Certificates;
18
(v) An executed copy of each document, instrument, certificate
and opinion delivered on or before the Closing Date pursuant to the Class C
Trust Agreement, the Intercreditor Agreement and the other Operative
Agreements applicable to the Class C Certificates (in the case of each such
opinion, either addressed to the Liquidity Provider or accompanied by a
letter from the counsel rendering such opinion to the effect that the
Liquidity Provider is entitled to rely on such opinion as of its date as if
it were addressed to the Liquidity Provider);
(vi) Evidence that there shall have been made and shall be in
full force and effect, all filings, recordings and/or registrations, and
there shall have been given or taken any notice or other similar action as
may be reasonably necessary or, to the extent reasonably requested by the
Liquidity Provider, reasonably advisable, in order to establish, perfect,
protect and preserve the right, title and interest, remedies, powers,
privileges, liens and security interests of, or for the benefit of, the
Trustees, the Borrower and the Liquidity Provider created by the Operative
Agreements executed and delivered on or prior to the Closing Date;
(vii) An agreement from US Airways, pursuant to which (i) US
Airways agrees to provide copies of quarterly financial statements and
audited annual financial statements to the Liquidity Provider, and such other
information as the Liquidity Provider shall reasonably request with respect
to the transactions contemplated by the Operative Agreements, in each case,
only to the extent that US Airways is obligated to provide such information
pursuant to Section 16 of the Leases (related to Leased Aircraft) or the
corresponding section of the Indentures (related to Owned Aircraft) to the
parties thereto and (ii) US Airways agrees to allow the Liquidity Provider to
inspect US Airways' books and records regarding such transactions, and to
discuss such transactions with officers and employees of US Airways; and
(viii) Such other documents, instruments, opinions and approvals
pertaining to the transactions contemplated hereby or by the other Operative
Agreements as the Liquidity Provider shall have reasonably requested.
(b) The following statement shall be true on and as of the Effective
Date: no event has occurred and is continuing, or would result from the
entering into of this Agreement or the making of any Advance, which
constitutes a Liquidity Event of Default.
(c) The Liquidity Provider shall have received payment in full of all
fees and other sums required to be paid to or for the account of the
Liquidity Provider on or prior to the Effective Date.
19
(d) All conditions precedent to the issuance of the Certificates under
the Trust Agreements shall have been satisfied or waived, all conditions
precedent to the effectiveness of the other Liquidity Facilities shall have
been satisfied or waived, and all conditions precedent to the purchase of the
Class A Certificates and Class B Certificates by the Underwriters under the
Underwriting Agreement and the purchase of the Class C Certificates by AIFS
under the Class C Purchase Agreement shall have been satisfied (unless any of
such conditions precedent shall have been waived by the Underwriters or AIFS,
as the case may be).
(e) The Borrower shall have received a certificate, dated the date
hereof, signed by a duly authorized representative of the Liquidity Provider,
certifying that all conditions precedent to the effectiveness of Section 2.01
have been satisfied or waived.
Section 4.02. Conditions Precedent to Borrowing. The obligation of the
Liquidity Provider to make an Advance on the occasion of each Borrowing shall
be subject to the conditions precedent that the Effective Date shall have
occurred and, prior to the date of such Borrowing, the Borrower shall have
delivered a Notice of Borrowing which conforms to the terms and conditions of
this Agreement and has been completed as may be required by the relevant form
of the Notice of Borrowing for the type of Advances requested.
ARTICLE V
COVENANTS
Section 5.01. Affirmative Covenants of the Borrower. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any
amount to the Liquidity Provider hereunder, the Borrower will, unless the
Liquidity Provider shall otherwise consent in writing:
(a) Performance of This and Other Agreements. Punctually pay or cause
to be paid all amounts payable by it under this Agreement and the other
Operative Agreements and observe and perform in all material respects the
conditions, covenants and requirements applicable to it contained in this
Agreement and the other Operative Agreements.
(b) Reporting Requirements. Furnish to the Liquidity Provider with
reasonable promptness, such other information and data with respect to the
transactions contemplated by the Operative Agreements as from time to time
may be reasonably requested by the Liquidity Provider; and permit the
Liquidity Provider, upon reasonable notice, to inspect the Borrower's books
and records with respect to such transactions and to meet with officers and
employees of the Borrower to discuss such transactions.
20
(c) Certain Operative Agreements. Furnish to the Liquidity Provider
with reasonable promptness, such Operative Agreements entered into after the
date hereof as from time to time may be reasonably requested by the Liquidity
Provider.
Section 5.02. Negative Covenants of the Borrower. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any
amount to the Liquidity Provider hereunder, the Borrower will not appoint or
permit or suffer to be appointed any successor Borrower without the prior
written consent of the Liquidity Provider, which consent shall not be
unreasonably withheld or delayed.
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. Liquidity Events of Default. If (a) any Liquidity Event
of Default has occurred and is continuing and (b) there is a Performing Note
Deficiency, the Liquidity Provider may, in its discretion, deliver to the
Borrower a Termination Notice, the effect of which shall be to cause (i) this
Agreement to expire on the fifth Business Day after the date on which such
Termination Notice is received by the Borrower, (ii) the Borrower to promptly
request, and the Liquidity Provider to promptly make, a Final Advance in
accordance with Section 2.02(d) hereof and Section 3.6(i) of the
Intercreditor Agreement, (iii) all other outstanding Advances to be
automatically converted into Final Advances for purposes of determining the
Applicable Liquidity Rate for interest payable thereon, and (iv) subject to
Sections 2.07 and 2.09 hereof, all Advances (including, without limitation,
any Provider Advance and Applied Provider Advance), any accrued interest
thereon and any other amounts outstanding hereunder to become immediately due
and payable to the Liquidity Provider.
ARTICLE VII
MISCELLANEOUS
Section 7.01. Amendments, Etc. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in writing and
signed by the Liquidity Provider, and, in the case of an amendment or of a
waiver by the Borrower, the Borrower, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given.
Section 7.02. Notices, Etc. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be
in writing (including telecopier and mailed or delivered or sent by
telecopier):
21
Borrower: STATE STREET BANK AND TRUST COMPANY
Two International Place
4th Floor
Boston, MA 02110
Attention: Corporate Trust Department
Telephone: (617) 664-5340
Telecopy: (617) 664-5151
Liquidity Provider: ABN AMRO BANK N.V.
Aerospace Department
135 South LaSalle Street, #660
Chicago, IL 60674-9135
Attention: Claudia Heldring
Telephone: (312) 904-2900
Telecopy: (312) 606-8428
with a copy to:
ABN AMRO Bank N.V.
135 South LaSalle Street, #625
Chicago, IL 60674-9135
Attention: Loan Administration
Telephone: (312) 904-2961
Telecopy: (312) 904-1288
or, as to each of the foregoing, at such other address as shall be designated
by such Person in a written notice to the others. All such notices and
communications shall be effective (i) if given by telecopier, when
transmitted to the telecopier number specified above, (ii) if given by mail,
when deposited in the mails addressed as specified above, and (iii) if given
by other means, when delivered at the address specified above, except that
written notices to the Liquidity Provider pursuant to the provisions of
Articles II and III hereof shall not be effective until received by the
Liquidity Provider. A copy of all notices delivered hereunder to either
party shall in addition be delivered to each of the parties to the
Participation Agreements at their respective addresses set forth therein.
Section 7.03. No Waiver; Remedies. No failure on the part of the
Liquidity Provider to exercise, and no delay in exercising, any right under
this Agreement shall operate as a waiver thereof; nor shall any single or
partial exercise of any right under this Agreement preclude any other or
further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
22
Section 7.04. Further Assurances. The Borrower agrees to do such
further acts and things and to execute and deliver to the Liquidity Provider
such additional assignments, agreements, powers and instruments as the
Liquidity Provider may reasonably require or deem advisable to carry into
effect the purposes of this Agreement and the other Operative Agreements or
to better assure and confirm unto the Liquidity Provider its rights, powers
and remedies hereunder and under the other Operative Agreements.
Section 7.05. Indemnification; Survival of Certain Provisions. The
Liquidity Provider shall be indemnified hereunder to the extent and in the
manner described in Section 6(c) or 8, as the case may be, of the
Participation Agreements. In addition, the Borrower agrees to indemnify,
protect, defend and hold harmless the Liquidity Provider from, against and in
respect of, and shall pay on demand, all Expenses of any kind or nature
whatsoever (other than any Expenses of the nature described in Sections 3.01,
3.02 or 7.07 hereof or in the Fee Letter (regardless of whether indemnified
against pursuant to said Sections or in such Fee Letter)), that may be
imposed, incurred by or asserted against any Liquidity Indemnitee, in any way
relating to, resulting from, or arising out of or in connection with any
action, suit or proceeding by any third party against such Liquidity
Indemnitee and relating to this Agreement, the Fee Letter, the Intercreditor
Agreement or any Financing Agreement; provided, however, that the Borrower
shall not be required to indemnify, protect, defend and hold harmless any
Liquidity Indemnitee in respect of any Expense of such Liquidity Indemnitee
to the extent such Expense is (i) attributable to the gross negligence or
willful misconduct of such Liquidity Indemnitee or any other Liquidity
Indemnitee, (ii) ordinary and usual operating overhead expense, or (iii)
attributable to the failure by such Liquidity Indemnitee or any other
Liquidity Indemnitee to perform or observe any agreement, covenant or
condition on its part to be performed or observed in this Agreement, the
Intercreditor Agreement, the Fee Letter, the Tax Letter or any other
Operative Agreement to which it is a party. The indemnities contained in
Section 6(c) or 8, as the case may be, of the Participation Agreements, and
the provisions of Sections 3.01, 3.02, 3.03, 3.09, 7.05 and 7.07 hereof,
shall survive the termination of this Agreement.
Section 7.06. Liability of the Liquidity Provider. (a) Neither the
Liquidity Provider nor any of its officers, employees, directors or
affiliates shall be liable or responsible for: (i) the use which may be made
of the Advances or any acts or omissions of the Borrower or any beneficiary
or transferee in connection therewith; (ii) the validity, sufficiency or
genuineness of documents, or of any endorsement thereon, even if such
documents should prove to be in any or all respects invalid, insufficient,
fraudulent or forged; or (iii) the making of Advances by the Liquidity
Provider against delivery of a Notice of Borrowing and other documents which
do not comply with the terms hereof; provided, however, that the Borrower
shall have a claim against the Liquidity Provider, and the Liquidity Provider
shall be liable to the Borrower, to the extent of any damages suffered by the
Borrower which were the result of (A) the Liquidity Provider's willful
misconduct or negligence in determining whether documents presented hereunder
comply with the terms hereof, or (B) any breach by the Liquidity Provider of
any of the terms of this Agreement, including, but not limited to, the
23
Liquidity Provider's failure to make lawful payment hereunder after the
delivery to it by the Borrower of a Notice of Borrowing strictly complying
with the terms and conditions hereof.
(b) Neither the Liquidity Provider nor any of its officers, employees,
directors or affiliates shall be liable or responsible in any respect for (i)
any error, omission, interruption or delay in transmission, dispatch or
delivery of any message or advice, however transmitted, in connection with
this Agreement or any Notice of Borrowing delivered hereunder, or (ii) any
action, inaction or omission which may be taken by it in good faith, absent
willful misconduct or negligence (in which event the extent of the Liquidity
Provider's potential liability to the Borrower shall be limited as set forth
in the immediately preceding paragraph), in connection with this Agreement or
any Notice of Borrowing.
Section 7.07. Costs, Expenses and Taxes. The Borrower agrees to pay,
or cause to be paid (A) on the Effective Date and on such later date or dates
on which the Liquidity Provider shall make demand, all reasonable out-of-
pocket costs and expenses (including, without limitation, the reasonable fees
and expenses of outside counsel for the Liquidity Provider) of the Liquidity
Provider in connection with the preparation, negotiation, execution,
delivery, filing and recording of this Agreement, any other Operative
Agreement and any other documents which may be delivered in connection with
this Agreement and (B) on demand, all reasonable costs and expenses
(including reasonable counsel fees and expenses) of the Liquidity Provider in
connection with (i) the enforcement of this Agreement or any other Operative
Agreement, (ii) the modification or amendment of, or supplement to, this
Agreement or any other Operative Agreement or such other documents which may
be delivered in connection herewith or therewith (whether or not the same
shall become effective) or (iii) any action or proceeding relating to any
order, injunction, or other process or decree restraining or seeking to
restrain the Liquidity Provider from paying any amount under this Agreement,
the Intercreditor Agreement or any other Operative Agreement or otherwise
affecting the application of funds in the Class C Cash Collateral Account.
In addition, the Borrower shall pay any and all recording, stamp and other
similar taxes and fees payable or determined to be payable in connection with
the execution, delivery, filing and recording of this Agreement, any other
Operative Agreement and such other documents, and agrees to save the
Liquidity Provider harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such
taxes or fees.
Section 7.08. Binding Effect; Participations. (a) This Agreement
shall be binding upon and inure to the benefit of the Borrower and the
Liquidity Provider and their respective successors and assigns, except that
neither the Liquidity Provider (except as otherwise provided in this Section
7.08) nor (except as contemplated by Section 3.08) the Borrower shall have
the right to assign its rights or obligations hereunder or any interest
herein without the prior written consent of the other party, subject to the
requirements of Section 7.08(b). The Liquidity Provider may grant
participations herein or in any of its rights hereunder (including, without
limitation, funded participations and participations in rights to receive
interest payments hereunder) and under the other Operative Agreements to such
24
Persons as the Liquidity Provider may in its sole discretion select, subject
to the requirements of Section 7.08(b). No such participation by the
Liquidity Provider, however, will relieve the Liquidity Provider of its
obligations hereunder. In connection with any participation or any proposed
participation, the Liquidity Provider may disclose to the participant or the
proposed participant any information that the Borrower is required to deliver
or to disclose to the Liquidity Provider pursuant to this Agreement. The
Borrower acknowledges and agrees that the Liquidity Provider's source of
funds may derive in part from its participants. Accordingly, references in
this Agreement and the other Operative Agreements to determinations, reserve
and capital adequacy requirements, increased costs, reduced receipts,
additional amounts due pursuant to Section 3.03(a) and the like as they
pertain to the Liquidity Provider shall be deemed also to include those of
each of its participants (subject, in each case, to the maximum amount that
would have been incurred by or attributable to the Liquidity Provider
directly if the Liquidity Provider, rather than the participant, had held the
interest participated).
(b) If, pursuant to subsection (a) above, the Liquidity Provider sells
any participation in this Agreement to any bank or other entity (each, a
"Transferee"), then, concurrently with the effectiveness of such
participation, the Transferee shall (i) represent to the Liquidity Provider
(for the benefit of the Liquidity Provider and the Borrower) either (A) that
it is incorporated under the laws of the United States or a state thereof or
(B) that under applicable law and treaties, no taxes will be required to be
withheld with respect to any payments to be made to such Transferee in
respect of this Agreement, (ii) furnish to the Liquidity Provider and the
Borrower either (x) a statement that it is incorporated under the laws of the
United States or a state thereof or (y) if it is not so incorporated, two
copies of a properly completed United States Internal Revenue Service Form
4224 or Form 1001, as appropriate, or other applicable form, certificate or
document prescribed by the Internal Revenue Service certifying, in each case,
such Transferee's entitlement to a complete exemption from United States
federal withholding tax in respect to any and all payments to be made
hereunder, and (iii) agree (for the benefit of the Liquidity Provider and the
Borrower) to provide the Liquidity Provider and the Borrower a new Form 4224
or Form 1001, as appropriate, (A) on or before the date that any such form
expires or becomes obsolete or (B) after the occurrence of any event
requiring a change in the most recent form previously delivered by it and
prior to the immediately following due date of any payment by the Borrower
hereunder, certifying in the case of a Form 1001 or Form 4224 that such
Transferee is entitled to a complete exemption from United States federal
withholding tax on payments under this Agreement. Unless the Borrower has
received forms or other documents reasonably satisfactory to it (and required
by applicable law) indicating that payments hereunder are not subject to
United States federal withholding tax, the Borrower will withhold taxes as
required by law from such payments at the applicable statutory rate.
(c) Notwithstanding the other provisions of this Section 7.08, the
Liquidity Provider may assign and pledge all or any portion of the Advances
owing to it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of
25
the Board of Governors of the Federal Reserve System and any Operating
Circular issued by such Federal Reserve Bank, provided that any payment in
respect of such assigned Advances made by the Borrower to the Liquidity
Provider in accordance with the terms of this Agreement shall satisfy the
Borrower's obligations hereunder in respect of such assigned Advance to the
extent of such payment. No such assignment shall release the Liquidity
Provider from its obligations hereunder.
Section 7.09. Severability. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of
such provision in any other jurisdiction.
Section 7.10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 7.11. Submission to Jurisdiction; Waiver of Jury Trial; Waiver
of Immunity. (a) Each of the parties hereto hereby irrevocably and
unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any other Operative Agreement, or
for recognition and enforcement of any judgment in respect hereof or thereof,
to the nonexclusive general jurisdiction of the courts of the State of New
York, the courts of the United States of America for the Southern District of
New York, and the appellate courts from any thereof;
(ii) consents that any such action or proceeding may be brought in
such courts, and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(iii) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form and mail), postage prepaid, to each party
hereto at its address set forth in Section 7.02 hereof, or at such other
address of which the Liquidity Provider shall have been notified pursuant
thereto; and
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction.
26
(b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH HEREBY AGREE TO WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING
TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING
ESTABLISHED, including, without limitation, contract claims, tort claims,
breach of duty claims and all other common law and statutory claims. The
Borrower and the Liquidity Provider each warrant and represent that it has
reviewed this waiver with its legal counsel, and that it knowingly and
voluntarily waives its jury trial rights following consultation with such
legal counsel. THIS WAIVER IS IRREVOCABLE, AND CANNOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
(c) The Liquidity Provider hereby waives any immunity it may have from
the jurisdiction of the courts of the United States or of any State and
waives any immunity any of its properties located in the United States may
have from attachment or execution upon a judgment entered by any such court
under the United States Foreign Sovereign Immunities Act of 1976 or any
similar successor legislation.
Section 7.12. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.
Section 7.13. Entirety. This Agreement, the Intercreditor Agreement
and the other Operative Agreements to which the Liquidity Provider is a party
constitute the entire agreement of the parties hereto with respect to the
subject matter hereof and supersedes all prior understandings and agreements
of such parties.
Section 7.14. Headings. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
Section 7.15. LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES. EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE OBLIGATIONS OF THE LIQUIDITY
PROVIDER TO MAKE ADVANCES HEREUNDER, AND THE BORROWER'S RIGHTS TO DELIVER
NOTICES OF BORROWING REQUESTING THE MAKING OF ADVANCES HEREUNDER, SHALL BE
UNCONDITIONAL AND IRREVOCABLE, AND SHALL BE PAID OR PERFORMED, IN EACH CASE
STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
27
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized
as of the date first set forth above.
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity but solely as
Subordination Agent, as agent and trustee
for the Class C Trust, as Borrower
By:
---------------------------------------
Name:
Title:
ABN AMRO BANK, N.V., acting through its Chicago
Branch, as Liquidity Provider
By:
---------------------------------------
Name:
Title:
By:
---------------------------------------
Name:
Title:
28
Annex I to
Revolving Credit Agreement
INTEREST ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned borrower
(the "Borrower"), hereby certifies to ABN AMRO BANK N.V. (the "Liquidity
Provider"), with reference to the Revolving Credit Agreement (1998-1C) dated
as of December 14, 1998, between the Borrower and the Liquidity Provider (the
"Liquidity Agreement"; the terms defined therein and not otherwise defined
herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of an Interest Advance by the Liquidity Provider to be used, subject to
clause (3)(v) below, for the payment of the interest on the Class C
Certificates which was payable on ____________, _____ (the "Distribution
Date") in accordance with the terms and provisions of the Class C Trust
Agreement and the Class C Certificates, which Advance is requested to be made
on ____________, ____.
(3) The amount of the Interest Advance requested hereby (i) is
$_______________.__, to be applied in respect of the payment of the interest
which was due and payable on the Class C Certificates on the Distribution
Date, (ii) does not include any amount with respect to the payment of
principal of, or premium on, the Class A Certificates, the Class B
Certificates or the Class C Certificates, or interest on the Class A
Certificates or the Class B Certificates, (iii) was computed in accordance
with the provisions of the Class C Certificates, the Class C Trust Agreement
and the Intercreditor Agreement (a copy of which computation is attached
hereto as Schedule I), (iv) does not exceed the Maximum Available Commitment
on the date hereof, (v) does not include any amount of interest which was due
and payable on the Class C Certificates on such Distribution Date but which
remains unpaid due to the failure of the Depositary to pay any amount of
accrued interest on the Deposits on such Distribution Date and (vi) has not
been and is not the subject of a prior or contemporaneous Notice of
Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will apply the same in accordance with the
terms of Section 3.6(b) of the Intercreditor Agreement, (b) no portion of
such amount shall be applied by the Borrower for any other purpose and (c) no
portion of such amount until so applied shall be commingled with other funds
held by the Borrower.
I-1
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, the making of the Interest Advance as requested by this Notice of
Borrowing shall automatically reduce, subject to reinstatement in accordance
with the terms of the Liquidity Agreement, the Maximum Available Commitment
by an amount equal to the amount of the Interest Advance requested to be made
hereby as set forth in clause (i) of paragraph (3) of this Certificate and
such reduction shall automatically result in corresponding reductions in the
amounts available to be borrowed pursuant to a subsequent Advance.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the day of , .
---- --------- ----
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:
----------------------------------
Name:
Title:
I-2
SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Interest Advance Notice of
Borrowing]
I-3
Annex II to
Revolving Credit Agreement
NON-EXTENSION ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "Borrower"), hereby certifies to ABN AMRO BANK
N.V. (the "Liquidity Provider"), with reference to the Revolving Credit
Agreement (1998-1C) dated as of December 14, 1998, between the Borrower and
the Liquidity Provider (the "Liquidity Agreement"; the terms defined
therein and not otherwise defined herein being used herein as therein defined
or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Non-Extension Advance by the Liquidity Provider to be used for the
funding of the Class C Cash Collateral Account in accordance with Section
3.6(d) of the Intercreditor Agreement, which Advance is requested to be made
on __________, ____.
(3) The amount of the Non-Extension Advance requested hereby (i) is
$_______________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the Class C
Cash Collateral Account in accordance with Section 3.6(d) of the
Intercreditor Agreement, (ii) does not include any amount with respect to the
payment of the principal of, or premium on, the Class C Certificates, or
principal of, or interest or premium on, the Class A Certificates or the
Class B Certificates, (iii) was computed in accordance with the provisions of
the Class C Certificates, the Class C Trust Agreement and the Intercreditor
Agreement (a copy of which computation is attached hereto as Schedule I), and
(iv) has not been and is not the subject of a prior or contemporaneous Notice
of Borrowing under the Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class C
Cash Collateral Account and apply the same in accordance with the terms of
Section 3.6(d) of the Intercreditor Agreement, (b) no portion of such amount
shall be applied by the Borrower for any other purpose and (c) no portion of
such amount until so applied shall be commingled with other funds held by the
Borrower.
(5) The Borrower hereby requests that the Advance requested hereby be a
Base Rate Advance [and that such Base Rate Advance be converted into a LIBOR
Advance on the third Business Day following your receipt of this notice]*.
* Bracketed language may be included at Borrower's option.
II-1
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Non-Extension Advance as requested by this
Notice of Borrowing shall automatically and irrevocably terminate the
obligation of the Liquidity Provider to make further Advances under the
Liquidity Agreement; and (B) following the making by the Liquidity Provider
of the Non-Extension Advance requested by this Notice of Borrowing, the
Borrower shall not be entitled to request any further Advances under the
Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity but solely as
Subordination Agent, as Borrower
By:
-------------------------------
Name:
Title:
II-2
SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with Non-Extension Advance Notice
of Borrowing]
II-3
Annex III to
Revolving Credit Agreement
DOWNGRADE ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "Borrower"), hereby certifies to ABN AMRO BANK
N.V. (the "Liquidity Provider"), with reference to the Revolving Credit
Agreement (1998-1C) dated as of December 14, 1998, between the Borrower and
the Liquidity Provider (the "Liquidity Agreement"; the terms defined
therein and not otherwise defined herein being used herein as therein defined
or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Downgrade Advance by the Liquidity Provider to be used for the funding
of the Class C Cash Collateral Account in accordance with Section 3.6(c) of
the Intercreditor Agreement by reason of the downgrading of the short-term
unsecured debt rating of the Liquidity Provider issued by either Rating
Agency below the Threshold Rating, which Advance is requested to be made on
__________, ____.
(3) The amount of the Downgrade Advance requested hereby (i) is
$_______________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the Class C
Cash Collateral Account in accordance with Section 3.6(c) of the
Intercreditor Agreement, (ii) does not include any amount with respect to the
payment of the principal of, or premium on, the Class C Certificates, or
principal of, or interest or premium on, the Class A Certificates or the
Class B Certificates, (iii) was computed in accordance with the provisions of
the Class C Certificates, the Class C Trust Agreement and the Intercreditor
Agreement (a copy of which computation is attached hereto as Schedule I), and
(iv) has not been and is not the subject of a prior or contemporaneous Notice
of Borrowing under the Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class C
Cash Collateral Account and apply the same in accordance with the terms of
Section 3.6(c) of the Intercreditor Agreement, (b) no portion of such amount
shall be applied by the Borrower for any other purpose and (c) no portion of
such amount until so applied shall be commingled with other funds held by the
Borrower.
III-1
(5) The Borrower hereby requests that the Advance requested hereby be a
Base Rate Advance [and that such Base Rate Advance be converted into a LIBOR
Advance on the third Business Day following your receipt of this notice]*.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Downgrade Advance as requested by this
Notice of Borrowing shall automatically and irrevocably terminate the
obligation of the Liquidity Provider to make further Advances under the
Liquidity Agreement; and (B) following the making by the Liquidity Provider
of the Downgrade Advance requested by this Notice of Borrowing, the Borrower
shall not be entitled to request any further Advances under the Liquidity
Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST
COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:
------------------------------
Name:
Title:
* Bracketed language may be included at Borrower's option.
III-2
SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with Downgrade Advance Notice of
Borrowing]
III-3
Annex IV to
Revolving Credit Agreement
FINAL ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned borrower
(the "Borrower"), hereby certifies to ABN AMRO BANK N.V. (the "Liquidity
Provider"), with reference to the Revolving Credit Agreement (1998-1C) dated
as of December 14, 1998, between the Borrower and the Liquidity Provider (the
"Liquidity Agreement"; the terms defined therein and not otherwise defined
herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Final Advance by the Liquidity Provider to be used for the funding of
the Class C Cash Collateral Account in accordance with Section 3.6(i) of the
Intercreditor Agreement by reason of the receipt by the Borrower of a
Termination Notice from the Liquidity Provider with respect to the Liquidity
Agreement, which Advance is requested to be made on ____________, ____.
(3) The amount of the Final Advance requested hereby (i) is
$_________________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the Class C
Cash Collateral Account in accordance with Section 3.6(i) of the
Intercreditor Agreement, (ii) does not include any amount with respect to the
payment of principal of, or premium on, the Class C Certificates, or
principal of, or interest or premium on, the Class A Certificates or the
Class B Certificates, (iii) was computed in accordance with the provisions of
the Class C Certificates, the Class C Trust Agreement and the Intercreditor
Agreement (a copy of which computation is attached hereto as Schedule I), and
(iv) has not been and is not the subject of a prior or contemporaneous Notice
of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class C
Cash Collateral Account and apply the same in accordance with the terms of
Section 3.6(i) of the Intercreditor Agreement, (b) no portion of such amount
shall be applied by the Borrower for any other purpose and (c) no portion of
such amount until so applied shall be commingled with other funds held by the
Borrower.
IV-1
(5) The Borrower hereby requests that the Advance requested hereby be a
Base Rate Advance [and that such Base Rate Advance be converted into a LIBOR
Advance on the third Business Day following your receipt of this notice]*.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Final Advance as requested by this Notice of
Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity Agreement;
and (B) following the making by the Liquidity Provider of the Final Advance
requested by this Notice of Borrowing, the Borrower shall not be entitled to
request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:
----------------------------------
Name:
Title:
* Bracketed language may be included at Borrower's option.
IV-2
SCHEDULE I TO FINAL ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Final Advance Notice of
Borrowing]
IV-3
Annex V to
Revolving Credit Agreement
NOTICE OF TERMINATION
[Date]
State Street Bank and Trust Company,
as Subordination Agent, as Borrower
Two International Place, 4th Floor
Boston, MA 02110
Attention: Corporate Trust Administration
Revolving Credit Agreement dated as of December 14, 1998, between State
Street Bank and Trust Company, as Subordination Agent, as agent and
trustee for the US Airways Pass Through Trust, 1998-1C, as Borrower, and
ABN AMRO BANK, N.V. (the "Liquidity Agreement")
Ladies and Gentlemen:
You are hereby notified that pursuant to Section 6.01 of the Liquidity
Agreement, by reason of the occurrence of a Liquidity Event of Default and
the existence of a Performing Note Deficiency (each as defined therein), we
are giving this notice to you in order to cause (i) our obligations to make
Advances (as defined therein) under such Liquidity Agreement to terminate on
the fifth Business Day after the date on which you receive this notice and
(ii) you to request a Final Advance under the Liquidity Agreement pursuant to
Section 3.6(i) of the Intercreditor Agreement (as defined in the Liquidity
Agreement) as a consequence of your receipt of this notice.
V-1
THIS NOTICE IS THE "NOTICE OF TERMINATION" PROVIDED FOR UNDER THE
LIQUIDITY AGREEMENT. OUR OBLIGATIONS TO MAKE ADVANCES UNDER THE LIQUIDITY
AGREEMENT WILL TERMINATE ON THE FIFTH BUSINESS DAY AFTER THE DATE ON WHICH
YOU RECEIVE THIS NOTICE.
Very truly yours,
ABN AMRO BANK, N.V.,
Chicago Branch
as Liquidity Provider
By:
------------------------
Name:
Title:
cc: State Street Bank and Trust Company,
as Class C Trustee
V-2
Annex VI to
Revolving Credit Agreement
NOTICE OF REPLACEMENT SUBORDINATION AGENT
[Date]
Attention:
Revolving Credit Agreement dated as of December 14, 1998, between State
Street Bank and Trust Company, as Subordination Agent, as agent and
trustee for the US Airways Pass Through Trust, 1998-1C, as Borrower, and
ABN AMRO BANK N.V. (the "Liquidity Agreement")
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
-----------------------------------
[Name of Transferee]
-----------------------------------
[Address of Transferee]
all rights and obligations of the undersigned as Borrower under the Liquidity
Agreement referred to above. The transferee has succeeded the undersigned as
Subordination Agent under the Intercreditor Agreement referred to in the
first paragraph of the Liquidity Agreement, pursuant to the terms of Section
8.1 of the Intercreditor Agreement.
By this transfer, all rights of the undersigned as Borrower under the
Liquidity Agreement are transferred to the transferee and the transferee
shall hereafter have the sole rights and obligations as Borrower thereunder.
The undersigned shall pay any costs and expenses of such transfer, including,
but not limited to, transfer taxes or governmental charges.
VI-1
We ask that this transfer be effective as of _______________, ____.
STATE STREET BANK AND TRUST
COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
VI-2
EXHIBIT 4(a)(ix)
- -----------------------------------------------------------------------------
INTERCREDITOR AGREEMENT
Dated as of
December 14, 1998
AMONG
STATE STREET BANK AND TRUST COMPANY
not in its individual capacity
but solely as Trustee under the
US Airways Pass Through Trust 1998-1A,
US Airways Pass Through Trust 1998-1B
and
US Airways Pass Through Trust 1998-1C
ABN AMRO BANK N.V.,
acting through its Chicago Branch
as Class A Liquidity Provider,
as Class B Liquidity Provider,
and
as Class C Liquidity Provider
AND
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity except
as expressly set forth herein but
solely as Subordination Agent and Trustee
- ----------------------------------------------------------------------------
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions 2
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
SECTION 2.1. Agreement to Terms of Subordination; Payments from
Monies Received Only 21
SECTION 2.2. Trust Accounts 22
SECTION 2.3. Deposits to the Collection Account and Special
Payments Account 24
SECTION 2.4. Distributions of Special Payments 24
SECTION 2.5. Designated Representatives 26
SECTION 2.6. Controlling Party 27
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
SECTION 3.1. Written Notice of Distribution 29
SECTION 3.2. Distribution of Amounts on Deposit in the
Collection Account 31
SECTION 3.3. Distribution of Amounts on Deposit Following a
Triggering Event 32
SECTION 3.4. Other Payments 34
SECTION 3.5. Payments to the Trustees and the Liquidity Providers 35
SECTION 3.6. Liquidity Facilities 35
ARTICLE IV
EXERCISE OF REMEDIES
SECTION 4.1. Directions from the Controlling Party 42
SECTION 4.2. Remedies Cumulative 43
SECTION 4.3. Discontinuance of Proceedings 44
SECTION 4.4. Right of Certificateholders to Receive Payments
Not to Be Impaired 44
- i -
SECTION 4.5. Undertaking for Costs 44
ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
SECTION 5.1. Notice of Indenture Default or Triggering Event 44
SECTION 5.2. Indemnification 45
SECTION 5.3. No Duties Except as Specified in Intercreditor
Agreement 45
SECTION 5.4. Notice from the Liquidity Providers and Trustees 46
ARTICLE VI
THE SUBORDINATION AGENT
SECTION 6.1. Authorization; Acceptance of Trusts and Duties 46
SECTION 6.2. Absence of Duties 46
SECTION 6.3. No Representations or Warranties as to Documents 46
SECTION 6.4. No Segregation of Monies; No Interest 46
SECTION 6.5. Reliance; Agents; Advice of Counsel 47
SECTION 6.6. Capacity in Which Acting 47
SECTION 6.7. Compensation 47
SECTION 6.8. May Become Certificateholder 48
SECTION 6.9. Subordination Agent Required; Eligibility 48
SECTION 6.10. Money to Be Held in Trust 48
ARTICLE VII
INDEMNIFICATION OF SUBORDINATION AGENT
SECTION 7.1. Scope of Indemnification 48
ARTICLE VIII
SUCCESSOR SUBORDINATION AGENT
SECTION 8.1. Replacement of Subordination Agent; Appointment of
Successor 49
- ii -
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS
SECTION 9.1. Amendments, Waivers, etc. 50
SECTION 9.2. Subordination Agent Protected 51
SECTION 9.3. Effect of Supplemental Agreements 51
SECTION 9.4. Notice to Rating Agencies 51
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Termination of Intercreditor Agreement 52
SECTION 10.2. Intercreditor Agreement for Benefit of Trustees,
Liquidity Providers and Subordination Agent 52
SECTION 10.3. Notices 52
SECTION 10.4. Severability 53
SECTION 10.5. No Oral Modifications or Continuing Waivers 54
SECTION 10.6. Successors and Assigns 54
SECTION 10.7. Headings 54
SECTION 10.8. Counterpart Form 54
SECTION 10.9. Subordination 54
SECTION 10.10. Governing Law 55
SECTION 10.11. Submission to Jurisdiction; Waiver of Jury
Trial; Waiver of Immunity 55
- iii -
INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT dated as of December 14, 1998, among STATE
STREET BANK AND TRUST COMPANY, a Massachusetts trust company ("State
Street"), not in its individual capacity but solely as Trustee of each Trust
(each as defined below); ABN AMRO BANK N.V., a bank organized under the laws
of The Netherlands, acting through its Chicago Branch ("ABN AMRO"), as Class
A Liquidity Provider, Class B Liquidity Provider and Class C Liquidity
Provider; and STATE STREET BANK AND TRUST COMPANY, not in its individual
capacity except as expressly set forth herein, but solely as Subordination
Agent and trustee hereunder (in such capacity, together with any successor
appointed pursuant to Article VIII hereof, the "Subordination Agent").
WHEREAS, all capitalized terms used herein shall have the
respective meanings referred to in Article I hereof;
WHEREAS, pursuant to each Indenture (i) in the case of each
Aircraft that is owned by US Airways at the time such Indenture is entered
into (the "Owned Aircraft"), US Airways will issue on a recourse basis three
series of Equipment Notes to finance the purchase of such Aircraft, and (ii)
in the case of each Aircraft that is leased to US Airways pursuant to a
related Lease at the time such Indenture is entered into (the "Leased
Aircraft"), the related Owner Trustee will issue on a nonrecourse basis three
series of Equipment Notes to finance the purchase of such Aircraft;
WHEREAS, pursuant to the Financing Agreements, each Trust will
acquire Equipment Notes having an interest rate equal to the interest rate
applicable to the Certificates to be issued by such Trust;
WHEREAS, pursuant to each Trust Agreement, the Trust created
thereby proposes to issue a single class of Certificates (a "Class") bearing
the interest rate and having the final distribution date described in such
Trust Agreement on the terms and subject to the conditions set forth therein;
WHEREAS, pursuant to the Underwriting Agreement, the Underwriters
propose to purchase the Certificates issued by the Class A Trust and the
Class B Trust in the aggregate face amount set forth opposite the name of
such Trust on Schedule I thereto on the terms and subject to the conditions
set forth therein;
WHEREAS, pursuant to the Class C Purchase Agreement, Airbus
Industrie Financial Services ("AIFS") proposes to purchase all of the
Certificates issued by the Class C Trust on the terms and subject to the
conditions set forth therein;
WHEREAS, the Liquidity Provider proposes to enter into three
separate revolving credit agreements with the Subordination Agent, as agent
for the Trustee of each of the Class A
Trust, the Class B Trust and the Class C Trust, respectively, for the benefit
of the Certificateholders of such Trust; and
WHEREAS, it is a condition precedent to the obligations of the
Underwriters under the Underwriting Agreement that the Subordination Agent,
the Trustees and the Liquidity Providers agree to the terms of subordination
set forth in this Agreement in respect of each Class of Certificates, and the
Subordination Agent, the Trustees and the Liquidity Provider, by entering
into this Agreement, hereby acknowledge and agree to such terms of
subordination and the other provisions of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise
requires:
(1) the terms used herein that are defined in this Article have the
meanings assigned to them in this Article, and include the plural as well as
the singular;
(2) all references in this Agreement to designated "Articles",
"Sections" and other subdivisions are to the designated Articles, Sections
and other subdivisions of this Agreement;
(3) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision; and
(4) the term "including" shall mean "including without limitation".
"ABN AMRO" has the meaning assigned to such term in the recitals to
this Agreement.
"Acceleration" means, with respect to the amounts payable in
respect of the Equipment Notes issued under any Indenture, such amounts
becoming immediately due and payable by declaration or otherwise.
"Accelerate", "Accelerated" and "Accelerating" have meanings correlative to
the foregoing.
2
"Adjusted Expected Distributions" means, with respect to the
Certificates of any Trust on any Current Distribution Date, the sum of
(x) accrued and unpaid interest on such Certificates (excluding interest, if
any, payable with respect to the Deposits related to such Trust) and (y) the
greater of:
(A) the difference between (x) the Pool Balance of such
Certificates as of the immediately preceding Distribution Date (or, if the
Current Distribution Date is the first Distribution Date, the original
aggregate face amount of the Certificates of such Trust) and (y) the Pool
Balance of such Certificates as of the Current Distribution Date calculated
on the basis that (i) the principal of the Non-Performing Equipment Notes
held in such Trust has been paid in full and such payments have been
distributed to the holders of such Certificates, (ii) the principal of the
Performing Equipment Notes held in such Trust has been paid when due (but
without giving effect to any Acceleration of Performing Equipment Notes) and
such payments have been distributed to the holders of such Certificates and
(iii) the principal of any Equipment Notes formerly held in such Trust that
have been sold pursuant to the terms hereof has been paid in full and such
payments have been distributed to the holders of such Certificates, but
without giving effect to any reduction in the Pool Balance as a result of any
distribution attributable to Deposits occurring after the immediately
preceding Distribution Date (or, if the Current Distribution Date is the
first Distribution Date, occurring after the initial issuance of the
Certificates of such Trust), and
(B) the amount of the excess, if any, of (i) the Pool Balance of
such Class of Certificates as of the immediately preceding Distribution Date
(or, if the Current Distribution Date is the first Distribution Date, the
original aggregate face amount of the Certificates of such Trust), less the
amount of the Deposits for such Class of Certificates as of such preceding
Distribution Date (or, if the Current Distribution Date is the first
Distribution Date, the original aggregate amount of the Deposits for such
Class of Certificates) other than any portion of such Deposits thereafter
used to acquire Equipment Notes pursuant to the Note Purchase Agreement, over
(ii) the Aggregate LTV Collateral Amount for such Class of Certificates for
the Current Distribution Date;
provided that, until the date of the initial LTV Appraisals, clause (B) shall
not apply.
For purposes of calculating Adjusted Expected Distributions with
respect to the Certificates of any Trust, any premium paid on the Equipment
Notes held in such Trust that has not been distributed to the
Certificateholders of such Trust (other than such premium or a portion
thereof applied to the payment of interest on the Certificates of such Trust
or the reduction of the Pool Balance of such Trust) shall be added to the
amount of Adjusted Expected Distributions.
"Advance", with respect to any Liquidity Facility, means any
Advances as defined in such Liquidity Facility.
3
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control
with such Person. For the purposes of this definition, "control" means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person whether through the ownership of
voting securities or by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
"Aggregate LTV Collateral Amount" for any Class of Certificates for
any Distribution Date means the sum of the applicable LTV Collateral Amounts
for each Leased Aircraft and Owned Aircraft, minus the Pool Balance for each
Class of Certificates, if any, senior to such Class, after giving effect to
any distribution of principal on such Distribution Date with respect to such
senior Class or Classes.
"AIFS" has the meaning assigned to such term in the recitals to
this Agreement.
"Aircraft" means, with respect to each Indenture, the "Aircraft"
referred to therein.
"Appraisal" means a current fair market value appraisal (which may
be a "desktop" appraisal) performed by any Appraiser or any other nationally
recognized appraiser on the basis of an arm's-length transaction between an
informed and willing purchaser under no compulsion to buy and an informed and
willing seller under no compulsion to sell and both having knowledge of all
relevant facts.
"Appraised Current Market Value" of any Leased Aircraft or Owned
Aircraft means the lower of the average and the median of the three most
recent Appraisals of such Aircraft.
"Appraisers" means AVITAS, Inc., AvSolutions, Inc. and Morton Beyer
and Agnew, Inc.
"Available Amount" means, with respect to any Liquidity Facility on
any drawing date, subject to the proviso contained in the first sentence of
Section 3.6(g) hereof, an amount equal to (a) the Stated Amount of such
Liquidity Facility at such time, less (b) the aggregate amount of each
Interest Drawing honored by the Liquidity Provider under such Liquidity
Facility on or prior to such date which has not been reimbursed or reinstated
as of such date; provided that, following a Downgrade Drawing, a Non-
Extension Drawing or a Final Drawing under such Liquidity Facility, the
Available Amount of such Liquidity Facility shall be zero.
"Business Day" means any day other than a Saturday or Sunday or a
day on which commercial banks are required or authorized to close in
Pittsburgh, Pennsylvania, New York, New York, or, so long as any Certificate
is outstanding, the city and state in which any Trustee, the Subordination
Agent or any Loan Trustee maintains its Corporate Trust Office or receives
4
and disburses funds, and that, solely with respect to draws under any
Liquidity Facility, also is a "Business Day" as defined in such Liquidity
Facility.
"Cash Collateral Account" means the Class A Cash Collateral
Account, the Class B Cash Collateral Account or the Class C Cash Collateral
Account, as applicable.
"Certificate" means a Class A Certificate, a Class B Certificate or
a Class C Certificate, as applicable.
"Certificateholder" means any holder of one or more Certificates.
"Class" has the meaning assigned to such term in the preliminary
statements to this Agreement.
"Class A Cash Collateral Account" means an Eligible Deposit Account
in the name of the Subordination Agent maintained at an Eligible Institution,
which shall be the Subordination Agent if it shall so qualify, into which all
amounts drawn under the Class A Liquidity Facility pursuant to Section
3.6(c), 3.6(d) or 3.6(i) shall be deposited.
"Class A Certificateholder" means, at any time, any holder of one
or more Class A Certificates.
"Class A Certificates" means the certificates issued by the Class A
Trust, substantially in the form of Exhibit A to the Class A Trust Agreement,
and authenticated by the Class A Trustee, representing fractional undivided
interests in the Class A Trust, and any certificates issued in exchange
therefor or replacement thereof pursuant to the terms of the Class A Trust
Agreement.
"Class A Liquidity Facility" means, initially, the Revolving Credit
Agreement dated as of the date hereof, between the Subordination Agent, as
agent and trustee for the Class A Trustee, ABN AMRO and, from and after the
replacement of such agreement pursuant hereto, the Replacement Liquidity
Facility therefor, if any, in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Class A Liquidity Provider" means ABN AMRO, together with any
Replacement Liquidity Provider which has issued a Replacement Liquidity
Facility to replace the Class A Liquidity Facility pursuant to Section
3.6(e).
"Class A Trust" means the US Airways Pass Through Trust 1998-1A
created and administered pursuant to the Class A Trust Agreement.
"Class A Trust Agreement" means the Pass Through Trust Agreement
dated as of December 4, 1998, between US Airways and the Class A Trustee (the
"Basic Agreement"), as
5
supplemented by the Supplement No. 1998-1A thereto dated as of the date
hereof, governing the creation and administration of the US Airways Pass
Through Trust 1998-1A and the issuance of the Class A Certificates, as the
same may be amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"Class A Trustee" means State Street Bank and Trust Company, not in
its individual capacity except as expressly set forth in the Class A Trust
Agreement, but solely as trustee under the Class A Trust Agreement, together
with any successor trustee appointed pursuant thereto.
"Class B Cash Collateral Account" means an Eligible Deposit Account
in the name of the Subordination Agent maintained at an Eligible Institution,
which shall be the Subordination Agent if it shall so qualify, into which all
amounts drawn under the Class B Liquidity Facility pursuant to Section
3.6(c), 3.6(d) or 3.6(i) shall be deposited.
"Class B Certificateholder" means, at any time, any holder of one
or more Class B Certificates.
"Class B Certificates" means the certificates issued by the Class B
Trust, substantially in the form of Exhibit A to the Class B Trust Agreement,
and authenticated by the Class B Trustee, representing fractional undivided
interests in the Class B Trust, and any certificates issued in exchange
therefor or replacement thereof pursuant to the terms of the Class B Trust
Agreement.
"Class B Liquidity Facility" means, initially, the Revolving Credit
Agreement dated as of the date hereof, between the Subordination Agent, as
agent and trustee for the Class B Trustee, and ABN AMRO, and, from and after
the replacement of such Agreement pursuant hereto, the Replacement Liquidity
Facility therefor, if any, in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Class B Liquidity Provider" means ABN AMRO, together with any
Replacement Liquidity Provider which has issued a Replacement Liquidity
Facility to replace the Class B Liquidity Facility pursuant to Section
3.6(e).
"Class B Trust" means the US Airways Pass Through Trust 1998-1B
created and administered pursuant to the Class B Trust Agreement.
"Class B Trust Agreement" means the Basic Agreement, as
supplemented by the Supplement No. 1998-1B thereto dated as of the date
hereof, governing the creation and administration of the US Airways Pass
Through Trust 1998-1B and the issuance of the Class B Certificates, as the
same may be amended, supplemented or otherwise modified from time to time in
accordance with its terms.
6
"Class B Trustee" means State Street Bank and Trust Company, not in
its individual capacity except as expressly set forth in the Class B Trust
Agreement, but solely as trustee under the Class B Trust Agreement, together
with any successor trustee appointed pursuant thereto.
"Class C Cash Collateral Account" means an Eligible Deposit Account
in the name of the Subordination Agent maintained at an Eligible Institution,
which shall be the Subordination Agent if it shall so qualify, into which all
amounts drawn under the Class C Liquidity Facility pursuant to Section
3.6(c), 3.6(d) or 3.6(i) shall be deposited.
"Class C Certificateholder" means, at any time, any holder of one
or more Class C Certificates.
"Class C Certificates" means the certificates issued by the Class C
Trust, substantially in the form of Exhibit A to the Class C Trust Agreement,
and authenticated by the Class C Trustee, representing fractional undivided
interests in the Class C Trust, and any certificates issued in exchange
therefor or replacement thereof pursuant to the terms of the Class C Trust
Agreement.
"Class C Liquidity Facility" means, initially, the Revolving Credit
Agreement dated as of the date hereof, between the Subordination Agent, as
agent and trustee for the Class C Trustee, and ABN AMRO, and, from and after
the replacement of such Agreement pursuant hereto, the Replacement Liquidity
Facility therefor, if any, in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Class C Liquidity Provider" means ABN AMRO, together with any
Replacement Liquidity Provider which has issued a Replacement Liquidity
Facility to replace the Class C Liquidity Facility pursuant to Section
3.6(e).
"Class C Purchase Agreement" means the Purchase Agreement dated
_______, 1998 between US Airways and AIFS relating to the purchase of all of
the Class C Certificates by AIFS, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms.
"Class C Trust" means the US Airways Pass Through Trust 1998-1C
created and administered pursuant to the Class C Trust Agreement.
"Class C Trust Agreement" means the Basic Agreement, as
supplemented by the Supplement No. 1998-1C thereto dated as of the date
hereof, governing the creation and administration of the US Airways Pass
Through Trust 1998-1C and the issuance of the Class C Certificates, as the
same may be amended, supplemented or otherwise modified from time to time in
accordance with its terms.
7
"Class C Trustee" means State Street Bank and Trust Company, not in
its individual capacity except as expressly set forth in the Class C Trust
Agreement, but solely as trustee under the Class C Trust Agreement, together
with any successor trustee appointed pursuant thereto.
"Closing Date" means December 14, 1998.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time, and Treasury Regulations promulgated thereunder.
"Collection Account" means the Eligible Deposit Account established
by the Subordination Agent pursuant to Section 2.2 which the Subordination
Agent shall make deposits in and withdrawals from in accordance with this
Agreement.
"Controlling Party" means the Person entitled to act as such
pursuant to the terms of Section 2.6.
"Corporate Trust Office" means, with respect to any Trustee, the
Subordination Agent or any Loan Trustee, the office of such Person in the
city at which, at any particular time, its corporate trust business shall be
principally administered.
"Current Distribution Date" means a Distribution Date specified as
a reference date for calculating the Expected Distributions or the Adjusted
Expected Distributions with respect to the Certificates of any Trust as of
such Distribution Date.
"Delivery Period Expiry Date" means the earlier of (a) October 31,
1999 and (b) the date on which Equipment Notes with respect to all New
Aircraft (or Substitute Aircraft in lieu thereof) have been purchased by the
Trusts in accordance with the Note Purchase Agreement.
"Deposit Agreement" shall mean, with respect to any Class, the
Deposit Agreement pertaining to such Class dated the date hereof between the
Escrow Agent, and the Depositary, as the same may be amended, modified or
supplemented from time to time in accordance with the terms thereof.
"Depositary" means (i) with respect to the Class A Certificates and
the Class B Certificates, Credit Suisse First Boston, as depositary under the
Deposit Agreement relating to each such Class of Certificates and (ii) with
respect to the Class C Certificates, Citibank, N.A., as depositary under the
Deposit Agreement relating to such Class of Certificates.
"Deposits" with respect to any Class, shall have the meaning set
forth in the Deposit Agreement pertaining to such Class.
8
"Designated Representatives" means the Subordination Agent
Representatives, the Trustee Representatives and the LP Representatives
identified under Section 2.5.
"Distribution Date" means a Regular Distribution Date or a Special
Distribution Date.
"Dollars" means United States dollars.
"Downgrade Drawing" has the meaning assigned to such term in
Section 3.6(c).
"Downgraded Facility" has the meaning assigned to such term in
Section 3.6(c).
"Drawing" means an Interest Drawing, a Final Drawing, a Non-
Extension Drawing or a Downgrade Drawing, as the case may be.
"Eligible Deposit Account" means either (a) a segregated account
with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the
laws of the United States of America or any one of the states thereof or the
District of Columbia (or any U.S. branch of a foreign bank), having corporate
trust powers and acting as trustee for funds deposited in such account, so
long as any of the securities of such depository institution has a long-term
unsecured debt rating from each Rating Agency of at least A-3 or its
equivalent. An Eligible Deposit Account may be maintained with a Liquidity
Provider so long as such Liquidity Provider is an Eligible Institution;
provided that such Liquidity Provider shall have waived all rights of set-off
and counterclaim with respect to such account.
"Eligible Institution" means (a) the corporate trust department of
the Subordination Agent or any Trustee, as applicable, or (b) a depository
institution organized under the laws of the United States of America or any
one of the states thereof or the District of Columbia (or any U.S. branch of
a foreign bank), which has a long-term unsecured debt rating from each Rating
Agency of at least A-3 or its equivalent.
"Eligible Investments" means (a) investments in obligations of, or
guaranteed by, the United States Government having maturities no later than
90 days following the date of such investment, (b) investments in open market
commercial paper of any corporation incorporated under the laws of the United
States of America or any state thereof with a short-term unsecured debt
rating issued by Moody's and S&P of at least A-1 and P-1, respectively,
having maturities no later than 90 days following the date of such investment
or (c) investments in negotiable certificates of deposit, time deposits,
banker's acceptances, commercial paper or other direct obligations of, or
obligations guaranteed by, commercial banks organized under the laws of the
United States or of any political subdivision thereof (or any U.S. branch of
a foreign bank) with issuer ratings of at least B/C by Thomson Bankwatch,
having maturities no later than 90 days following the date of such
investment; provided, however, that (x) all Eligible Investments that
9
are bank obligations shall be denominated in U.S. dollars; and (y) the
aggregate amount of Eligible Investments at any one time that are bank
obligations issued by any one bank shall not be in excess of 5% of such
bank's capital surplus; provided further that (1) any investment of the types
described in clauses (a), (b) and (c) above may be made through a repurchase
agreement in commercially reasonable form with a bank or other financial
institution qualifying as an Eligible Institution so long as such investment
is held by a third party custodian also qualifying as an Eligible
Institution, and (2) all such investments set forth in clause (a), (b) or (c)
above mature no later than the Business Day immediately preceding the next
Regular Distribution Date; provided further, however, that in the case of any
Eligible Investment issued by a domestic branch of a foreign bank, the income
from such investment shall be from sources within the United States for
purposes of the Code.
"Equipment Notes" means, at any time, the Series A Equipment Notes,
the Series B Equipment Notes and the Series C Equipment Notes, collectively,
and in each case, any Equipment Notes issued in exchange therefor or
replacement thereof pursuant to the terms of the Indentures.
"Escrow Agent" means First Security Bank, National Association, as
escrow agent under each Escrow and Paying Agent Agreement, together with its
successors in such capacity.
"Escrow and Paying Agent Agreement" shall mean, with respect to any
Class, the Escrow and Paying Agent Agreement pertaining to such Class dated
the date hereof between the Escrow Agent, the Underwriters (in the case of
the Class A and Class B Certificates) or AIFS (in the case of the Class C
Certificates), the Trustee for such Class and the Paying Agent, as the same
may be amended, modified or supplemented from time to time in accordance with
the terms thereof.
"Expected Distributions" means, with respect to the Certificates of
any Trust on any Current Distribution Date, the sum of (x) accrued and unpaid
interest on such Certificates (excluding interest, if any, payable with
respect to the Deposits related to such Trust) and (y) the difference between
(A) the Pool Balance of such Certificates as of the immediately preceding
Distribution Date (or, if the Current Distribution Date is the first
Distribution Date, the original aggregate face amount of the Certificates of
such Trust) and (B) the Pool Balance of such Certificates as of the Current
Distribution Date calculated on the basis that (i) the principal of the
Equipment Notes held in such Trust has been paid when due (whether at stated
maturity or upon redemption, prepayment, purchase or Acceleration or
otherwise) and such payments have been distributed to the holders of such
Certificates and (ii) the principal of any Equipment Notes formerly held in
such Trust that have been sold pursuant to the terms hereof has been paid in
full and such payments have been distributed to the holders of such
Certificates, but without giving effect to any reduction in the Pool Balance
as a result of any distribution attributable to Deposits occurring after the
immediately preceding Distribution Date (or, if the Current Distribution Date
is the first Distribution Date, occurring after the initial issuance of the
Certificates of such Trust).
10
For purposes of calculating Expected Distributions with respect to the
Certificates of any Trust, any premium paid on the Equipment Notes held in
such Trust which has not been distributed to the Certificateholders of such
Trust (other than such premium or a portion thereof applied to the payment of
interest on the Certificates of such Trust or the reduction of the Pool
Balance of such Trust) shall be added to the amount of such Expected
Distributions.
"Expiry Date" with respect to any Liquidity Facility, shall have
the meaning set forth in such Liquidity Facility.
"Fee Letter" means, the Fee Letter between ABN AMRO and the
Subordination Agent with respect to the Liquidity Facilities and any fee
letter entered into between the Subordination Agent and any Replacement
Liquidity Provider.
"Final Distributions" means, with respect to the Certificates of
any Trust on any Distribution Date, the sum of (x) the aggregate amount of
all accrued and unpaid interest on such Certificates (excluding interest, if
any, payable with respect to the Deposits relating to such Trust) and (y) the
Pool Balance of such Certificates as of the immediately preceding
Distribution Date (less the amount of the Deposits for such Class of
Certificates as of such preceding Distribution Date other than any portion of
such Deposits thereafter used to acquire Equipment Notes pursuant to the Note
Purchase Agreement). For purposes of calculating Final Distributions with
respect to the Certificates of any Trust, any premium paid on the Equipment
Notes held in such Trust which has not been distributed to the
Certificateholders of such Trust (other than such premium or a portion
thereof applied to the payment of interest on the Certificates of such Trust
or the reduction of the Pool Balance of such Trust) shall be added to the
amount of such Final Distributions.
"Final Drawing" has the meaning assigned to such term in Section
3.6(i).
"Final Legal Distribution Date" means (i) with respect to the Class
A Certificates, July 30, 2019, (ii) with respect to the Class B Certificates,
July 30, 2019 and (iii) with respect to the Class C Certificates, January 30,
2014.
"Financing Agreement" means each of the Participation Agreements
and the Note Purchase Agreement.
"Indenture" means each of the Trust Indentures entered into by the
Loan Trustee, and the Owner Trustee or US Airways, pursuant to the Note
Purchase Agreement, in each case as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms.
"Indenture Default" means, with respect to any Indenture, any Event
of Default (as such term is defined in such Indenture) thereunder.
11
"Interest Drawing" has the meaning assigned to such term in Section
3.6(a).
"Interest Payment Date" means, with respect to any Liquidity
Facility each date on which interest is due and payable under Section
3.07(c), (d) or (e) of such Liquidity Facility on a Downgrade Drawing, Non-
Extension Drawing or Final Drawing thereunder.
"Investment Earnings" means investment earnings on funds on deposit
in the Trust Accounts net of losses and investment expenses of the
Subordination Agent in making such investments.
"Lease" means, with respect to each Indenture pertaining to a
Leased Aircraft, the "Lease" referred to therein.
"Leased Aircraft" has the meaning assigned to such term in the
preliminary statements of this Agreement.
"Lending Office" means, with respect to any Liquidity Facility, the
lending office of the Liquidity Provider thereunder, presently located at
Chicago, Illinois, or such other lending office as such Liquidity Provider
from time to time shall notify the applicable Trustee as its lending office
under any such Liquidity Facility, provided that such Liquidity Provider
shall not change its Lending Office to a Lending Office outside the United
States of America except in accordance with Section 3.01, 3.02 or 3.03 of any
such Liquidity Facility.
"Lien" means any mortgage, pledge, lien, charge, claim, disposition
of title, encumbrance, lease, sublease, sub-sublease or security interest of
any kind, including, without limitation, any thereof arising under any
conditional sales or other title retention agreement.
"Liquidity Event of Default" with respect to any Liquidity
Facility, has the meaning assigned to such term in such Liquidity Facility.
"Liquidity Expenses" means all Liquidity Obligations other than (i)
the principal amount of any Drawings under the Liquidity Facilities and (ii)
any interest accrued on any Liquidity Obligations.
"Liquidity Facility" means, at any time, the Class A Liquidity
Facility, the Class B Liquidity Facility or the Class C Liquidity Facility.
"Liquidity Obligations" means all principal, interest, fees and
other amounts owing to the Liquidity Providers under the Liquidity
Facilities, Section 9.1 of the Participation Agreements or the Fee Letter.
"Liquidity Provider" means, at any time, the Class A Liquidity
Provider, the Class B Liquidity Provider or the Class C Liquidity Provider,
as applicable.
12
"Loan Trustee" means, with respect to any Indenture, the loan
trustee thereunder.
"LP Incumbency Certificate" has the meaning assigned to such term
in Section 2.5(b).
"LP Representatives" has the meaning assigned to such term in
Section 2.5(b).
"LTV Appraisals" has the meaning assigned to such term in Section
4.1(a).
"LTV Collateral Amount" of any Leased Aircraft or Owned Aircraft
for any Class of Certificates means, as of any Distribution Date, the lesser
of (i) the LTV Ratio for such Class of Certificates multiplied by the
Appraised Current Market Value of such Aircraft (or with respect to any such
Aircraft which has suffered an Event of Loss under and as defined in the
relevant Lease (in the case of a Leased Aircraft) or Indenture (in the case
of an Owned Aircraft), the amount of the insurance proceeds paid to the
related Loan Trustee in respect thereof to the extent then held by such Loan
Trustee (and/or on deposit in the Special Payments Account) or payable to
such Loan Trustee in respect thereof) and (ii) the outstanding principal
amount of the Equipment Notes secured by such Aircraft after giving effect to
any principal payments of such Equipment Notes on or before such Distribution
Date.
"LTV Ratio" means for the Class A Certificates 40.5%, for the Class
B Certificates 51.0%, and for the Class C Certificates, 67.0%.
"Majority Liquidity Providers" means, at any time, Liquidity
Providers holding at least 66-2/3% of the aggregate outstanding Liquidity
Obligations at such time.
"Minimum Sale Price" means, with respect to any Aircraft or the
Equipment Notes issued in respect of such Aircraft, at any time, the lesser
of (a) 75% of the Appraised Current Market Value of such Aircraft and (b) the
aggregate outstanding principal amount of such Equipment Notes, plus accrued
and unpaid interest thereon.
"Moody's" means Moody's Investors Service, Inc.
"New Aircraft" shall have the meaning set forth in the Note
Purchase Agreement.
"Non-Controlling Party" means, at any time, any Trustee or
Liquidity Provider which is not the Controlling Party at such time.
"Non-Extended Facility" has the meaning assigned to such term in
Section 3.6(d).
"Non-Extension Drawing" has the meaning assigned to such term in
Section 3.6(d).
13
"Non-Performing Equipment Note" means an Equipment Note issued
pursuant to an Indenture that is not a Performing Equipment Note.
"Note Purchase Agreement" means the Note Purchase Agreement dated
as of the date hereof, among US Airways, each Trustee, the Escrow Agent, the
Subordination Agent and the Paying Agent.
"Officer's Certificate" of any Person means a certification signed
by a Responsible Officer of such Person.
"Operative Agreements" means this Agreement, the Liquidity
Facilities, the Indentures, the Trust Agreements, the Underwriting Agreement,
the Class C Purchase Agreement, the Financing Agreements, the Leases, the Fee
Letter, the Equipment Notes and the Certificates, together with all exhibits
and schedules included with any of the foregoing and each of the other
documents and instruments referred to in the definitions of "Operative
Documents" contained in the Leases or any Owned Aircraft Indenture.
"Outstanding" means, when used with respect to each Class of
Certificates, as of the date of determination, all Certificates of such Class
theretofore authenticated and delivered under the related Trust Agreement,
except:
(i) Certificates of such Class theretofore canceled by the
Registrar (as defined in such Trust Agreement) or delivered to the Trustee
thereunder or such Registrar for cancellation;
(ii) Certificates of such Class for which money in the full amount
required to make the final distribution with respect to such Certificates
pursuant to Section 11.01 of such Trust Agreement has been theretofore
deposited with the related Trustee in trust for the holders of such
Certificates as provided in Section 4.01 of such Trust Agreement pending
distribution of such money to such Certificateholders pursuant to such final
distribution payment; and
(iii) Certificates of such Class in exchange for or in lieu of
which other Certificates have been authenticated and delivered pursuant to
such Trust Agreement;
provided, however, that in determining whether the holders of the requisite
Outstanding amount of such Certificates have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, any
Certificates owned by US Airways or any of its Affiliates shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether such Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only
Certificates that such Trustee knows to be so owned shall be so disregarded.
Certificates so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the applicable
Trustee the pledgee's
14
right so to act with respect to such Certificates and that the pledgee is not
US Airways or any of its Affiliates.
"Overdue Scheduled Payment" means any Scheduled Payment which is
not in fact received by the Subordination Agent within five days after the
Scheduled Payment Date relating thereto.
"Owned Aircraft" has the meaning assigned to such term in the
preliminary statements of this Agreement.
"Owner Trustee" means, with respect to any Indenture pertaining to
a Leased Aircraft, the Owner Trustee (as defined therein) not in its
individual capacity but solely as trustee under the related owner trust
agreement, together with any successor trustee appointed pursuant to such
owner trust agreement.
"Participation Agreement" means, with respect to each Indenture,
the "Participation Agreement" referred to therein.
"Payee" has the meaning assigned to such term in Section 2.4(e).
"Paying Agent" means State Street Bank and Trust Company, as paying
agent under each Escrow and Paying Agent Agreement, together with its
successors in such capacity.
"Performing Equipment Note" means an Equipment Note issued pursuant
to an Indenture with respect to which no payment default has occurred and is
continuing (without giving effect to any Acceleration); provided that in the
event of a bankruptcy proceeding involving US Airways under Title 11 of the
United States Code (the "Bankruptcy Code"), (i) any payment default existing
during the 60-day period under Section 1110(a)(1)(A) of the Bankruptcy Code
(or such longer period as may apply under Section 1110(b) of the Bankruptcy
Code) (the "Section 1110 Period") shall not be taken into consideration,
unless during the Section 1110 Period the trustee in such proceeding or US
Airways refuses to assume or agree to perform its obligations under the Lease
related to such Equipment Note (in the case of a Leased Aircraft) or under
the Indenture related to such Equipment Note (in the case of an Owned
Aircraft) and (ii) any payment default occurring after the date of the order
of relief in such proceeding shall not be taken into consideration if such
payment default is cured under Section 1110(a)(1)(B) of the Bankruptcy Code
before the later of 30 days after the date of such default or the expiration
of the Section 1110 Period.
"Performing Note Deficiency" means any time that less than 65% of
the then aggregate outstanding principal amount of all Equipment Notes are
Performing Equipment Notes.
15
"Person" means any individual, corporation, partnership, joint
venture, association, limited liability company, joint-stock company, trust,
trustee, unincorporated organization or government or any agency or political
subdivision thereof.
"Pool Balance" means, with respect to each Trust or the
Certificates issued by any Trust, as of any date, (i) the original aggregate
face amount of the Certificates of such Trust less (ii) the aggregate amount
of all payments made in respect of the Certificates of such Trust or in
respect of Deposits relating to such Trust other than payments made in
respect of interest or premium thereon or reimbursement of any costs and
expenses in connection therewith. The Pool Balance for each Trust or for the
Certificates issued by any Trust as of any Distribution Date shall be
computed after giving effect to any special distribution with respect to
unused Deposits, payment of principal of the Equipment Notes or payment with
respect to other Trust Property held in such Trust and the distribution
thereof to be made on that date.
"Proceeding" means any suit in equity, action at law or other
judicial or administrative proceeding.
"PTC Event of Default" means, with respect to each Trust Agreement,
the failure to pay within 10 Business Days of the due date thereof: (i) the
outstanding Pool Balance of the applicable Class of Certificates on the Final
Legal Distribution Date for such Class or (ii) interest due on such
Certificates on any Distribution Date (unless the Subordination Agent shall
have made an Interest Drawing, or a withdrawal from the Cash Collateral
Account, with respect thereto in an aggregate amount sufficient to pay such
interest and shall have distributed such amount to the Trustee entitled
thereto).
"Rating Agencies" means, collectively, at any time, each nationally
recognized rating agency which shall have been requested to rate the
Certificates and which shall then be rating the Certificates. The initial
Rating Agencies will be Moody's and Standard & Poor's.
"Ratings Confirmation" means, with respect to any action proposed
to be taken, a written confirmation from each of the Rating Agencies that
such action would not result in (i) a reduction of the rating for any Class
of Certificates below the then current rating for such Class of Certificates
or (ii) a withdrawal or suspension of the rating of any Class of
Certificates.
"Regular Distribution Dates" means each January 30, and July 30,
commencing on January 30, 1999; provided, however, that, if any such day
shall not be a Business Day, the related distribution shall be made on the
next succeeding Business Day without additional interest.
"Replacement Liquidity Facility" means, for any Liquidity Facility,
an irrevocable revolving credit agreement in substantially the form of the
replaced Liquidity Facility, including reinstatement provisions, or in such
other form (which may include a letter of credit) as shall permit the Rating
Agencies to confirm in writing their respective ratings then in effect for
the
16
Certificates (before downgrading of such ratings, if any, as a result of the
downgrading of the applicable Liquidity Provider), in a face amount (or in an
aggregate face amount) equal to the amount of interest payable on the
Certificates of such Trust (at the Stated Interest Rate for such Trust, and
without regard to expected future principal payments) on the three Regular
Distribution Dates following the date of replacement of such Liquidity
Facility and issued by a Person (or Persons) having unsecured short-term debt
ratings issued by both Rating Agencies which are equal to or higher than the
Threshold Rating. Without limitation of the form that a Replacement
Liquidity Facility otherwise may have pursuant to the preceding sentence, a
Replacement Liquidity Facility for any Class of Certificates may have a
stated expiration date earlier than 15 days after the Final Maturity Date of
such Class of Certificates so long as such Replacement Liquidity Facility
provides for a Non-Extension Drawing as contemplated by Section 3.6(d)
hereof.
"Replacement Liquidity Provider" means a Person who issues a
Replacement Liquidity Facility.
"Required Amount" means, with respect to each Liquidity Facility,
or the Cash Collateral Account, for any Class, for any day, the sum of the
aggregate amount of interest, calculated at the rate per annum equal to the
Stated Interest Rate for the related Class of Certificates, that would be
payable on such Class of Certificates on each of the three successive Regular
Distribution Dates immediately following such day or, if such day is a
Regular Distribution Date, on such day and the succeeding two Regular
Distribution Dates, in each case calculated on the basis of the Pool Balance
of such Class of Certificates on such date and without regard to expected
future payments of principal on such Class of Certificates.
"Responsible Officer" means (i) with respect to the Subordination
Agent and each of the Trustees, any officer in the corporate trust
administration department of the Subordination Agent or such Trustee or any
other officer customarily performing functions similar to those performed by
the Persons who at the time shall be such officers, respectively, or to whom
any corporate trust matter is referred because of his knowledge of and
familiarity with a particular subject, and (ii) with respect to each
Liquidity Provider, any authorized officer of such Liquidity Provider.
"Scheduled Payment" means, with respect to any Equipment Note, (i)
any payment of principal or interest on such Equipment Note (other than an
Overdue Scheduled Payment) due from the obligor thereon or (ii) any payment
of interest on the corresponding Class of Certificates with funds drawn under
any Liquidity Facility, which payment represents the installment of principal
at the stated maturity of such installment of principal on such Equipment
Note, the payment of regularly scheduled interest accrued on the unpaid
principal amount of such Equipment Note, or both; provided that any payment
of principal of, premium, if any, or interest resulting from the redemption
or purchase of any Equipment Note shall not constitute a Scheduled Payment.
17
"Scheduled Payment Date" means, with respect to any Scheduled
Payment, the date on which such Scheduled Payment is scheduled to be made.
"Series A Equipment Notes" means the 6.85% Series A Equipment Notes
issued pursuant to each Indenture by the related Owner Trustee or US Airways,
as the case may be, and authenticated by the Loan Trustee thereunder, and any
such Equipment Notes issued in exchange therefor or replacement thereof
pursuant to the terms of such Indenture.
"Series B Equipment Notes" means the 7.35% Series B Equipment Notes
issued pursuant to each Indenture by the related Owner Trustee or US Airways,
as the case may be, and authenticated by the Loan Trustee thereunder, and any
such Equipment Notes issued in exchange therefor or replacement thereof
pursuant to the terms of such Indenture.
"Series C Equipment Notes" means the 6.82% Series C Equipment Notes
issued pursuant to each Indenture by the related Owner Trustee or US Airways,
as the case may be, and authenticated by the Loan Trustee thereunder, and any
such Equipment Notes issued in exchange therefor or replacement thereof
pursuant to the terms of such Indenture.
"Special Distribution Date" means, with respect to any Special
Payment, the date chosen by the Subordination Agent pursuant to Section
2.4(a) for the distribution of such Special Payment in accordance with this
Agreement.
"Special Payment" means any payment (other than a Scheduled
Payment) in respect of, or any proceeds of, any Equipment Note or Trust
Indenture Estate (as defined in each Indenture).
"Special Payments Account" means the Eligible Deposit Account
created pursuant to Section 2.2 as a sub-account to the Collection Account.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc.
"State Street" has the meaning assigned to such terms in the
preliminary statements to this Agreement.
"Stated Amount" with respect to any Liquidity Facility, means the
Maximum Commitment (as defined in such Liquidity Facility) of the applicable
Liquidity Provider thereunder.
"Stated Expiration Date" has the meaning specified in Section
3.6(d).
18
"Stated Interest Rate" means (i) with respect to the Class A
Certificates, 6.85% per annum, (ii) with respect to the Class B Certificates,
7.35% per annum, and (iii) with respect to the Class C Certificates, 6.82%
per annum.
"Subordination Agent" has the meaning assigned to it in the
preliminary statements to this Agreement.
"Subordination Agent Incumbency Certificate" has the meaning
assigned to such term in Section 2.5(a).
"Subordination Agent Representatives" has the meaning assigned to
such term in Section 2.5(a).
"Substitute Aircraft" shall have the meaning set forth in the Note
Purchase Agreement.
"Tax" and "Taxes" mean any and all taxes, fees, levies, duties,
tariffs, imposts, and other charges of any kind (together with any and all
interest, penalties, loss, damage, liability, expense, additions to tax and
additional amounts or costs incurred or imposed with respect thereto) imposed
or otherwise assessed by the United States of America or by any state, local
or foreign government (or any subdivision or agency thereof) or other taxing
authority, including, without limitation: taxes or other charges on or with
respect to income, franchises, windfall or other profits, gross receipts,
property, sales, use, capital stock, payroll, employment, social security,
workers' compensation, unemployment compensation, or net worth and similar
charges; taxes or other charges in the nature of excise, withholding, ad
valorem, stamp, transfer, value added, taxes on goods and services, gains
taxes, license, registration and documentation fees, customs duties, tariffs,
and similar charges.
"Tax Letter" means the Tax Letter dated December 14, 1998 between
ABN AMRO and US Airways with respect to the Liquidity Facilities, and all tax
letters entered into between US Airways and any Replacement Liquidity
Provider.
"Termination Notice" with respect to any Liquidity Facility has the
meaning assigned to such term in such Liquidity Facility.
"Threshold Rating" means the short-term unsecured debt rating of P-
1 by Moody's and A-1+ by Standard & Poor's, in the case of the Class A
Liquidity Provider, and the short-term unsecured debt rating of P-1 by
Moody's and A-1 by Standard & Poor's, in the case of the Class B Liquidity
Provider and the Class C Liquidity Provider.
"Treasury Regulations" means regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to
specific provisions of proposed
19
or temporary regulations shall include analogous provisions of final Treasury
Regulations or other successor Treasury Regulations.
"Triggering Event" means (x) the occurrence of an Indenture Default
under all of the Indentures resulting in a PTC Event of Default with respect
to the most senior Class of Certificates then Outstanding, (y) the
Acceleration of all of the outstanding Equipment Notes (provided that, with
respect to the period prior to the Delivery Period Expiry Date, such
Equipment Notes have an aggregate principal balance in excess of
$300,000,000) or (z) the occurrence of a US Airways Bankruptcy Event.
"Trust" means any of the Class A Trust, the Class B Trust or the
Class C Trust.
"Trust Accounts" has the meaning assigned to such term in Section
2.2(a).
"Trust Agreement" means any of the Class A Trust Agreement, the
Class B Trust Agreement or the Class C Trust Agreement.
"Trust Property" with respect to any Trust, has the meaning set
forth in the Trust Agreement for such Trust.
"Trustee" means any of the Class A Trustee, the Class B Trustee or
the Class C Trustee.
"Trustee Incumbency Certificate" has the meaning assigned to such
term in Section 2.5(a).
"Trustee Representatives" has the meaning assigned to such term in
Section 2.5(a).
"Underwriters" means Morgan Stanley & Co. Incorporated, Credit
Suisse First Boston Corporation, Lehman Brothers Inc., and Salomon Brothers
Inc.
"Underwriting Agreement" means the Underwriting Agreement dated
December 4, 1998 among the Underwriters and US Airways, relating to the
purchase of the Class A Certificates and the Class B Certificates by the
Underwriters, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with its terms.
"US Airways" means US Airways, Inc., a Delaware corporation, and
its successors and assigns.
"US Airways Bankruptcy Event" means the occurrence and continuation
of any of the following:
20
(a) US Airways shall consent to the appointment of or the taking of
possession by a receiver, trustee or liquidator of itself or of a substantial
part of its property, or US Airways shall admit in writing its inability to
pay its debts generally as they come due, or does not pay its debts generally
as they become due or shall make a general assignment for the benefit of
creditors, or US Airways shall file a voluntary petition in bankruptcy or a
voluntary petition or an answer seeking reorganization, liquidation or other
relief in a case under any bankruptcy laws or other insolvency laws (as in
effect at such time) or an answer admitting the material allegations of a
petition filed against US Airways in any such case, or US Airways shall seek
relief by voluntary petition, answer or consent, under the provisions of any
other bankruptcy or other similar law providing for the reorganization or
winding-up of corporations (as in effect at such time) or US Airways shall
seek an agreement, composition, extension or adjustment with its creditors
under such laws, or US Airways's board of directors shall adopt a resolution
authorizing corporate action in furtherance of any of the foregoing; or
(b) an order, judgment or decree shall be entered by any court of
competent jurisdiction appointing, without the consent of US Airways, a
receiver, trustee or liquidator of US Airways or of any substantial part of
its property, or any substantial part of the property of US Airways shall be
sequestered, or granting any other relief in respect of US Airways as a
debtor under any bankruptcy laws or other insolvency laws (as in effect at
such time), and any such order, judgment or decree of appointment or
sequestration shall remain in force undismissed, unstayed and unvacated for a
period of 60 days after the date of entry thereof; or
(c) a petition against US Airways in a case under any bankruptcy
laws or other insolvency laws (as in effect at such time) is filed and not
withdrawn or dismissed within 60 days thereafter, or if, under the provisions
of any law providing for reorganization or winding-up of corporations which
may apply to US Airways, any court of competent jurisdiction assumes
jurisdiction, custody or control of US Airways or of any substantial part of
its property and such jurisdiction, custody or control remains in force
unrelinquished, unstayed and unterminated for a period of 60 days.
"US Airways Provisions" has the meaning specified in Section
9.1(a).
"Written Notice" means, from the Subordination Agent, any Trustee
or Liquidity Provider, a written instrument executed by the Designated
Representative of such Person. An invoice delivered by a Liquidity Provider
pursuant to Section 3.1 in accordance with its normal invoicing procedures
shall constitute Written Notice under such Section.
21
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
SECTION 2.1. Agreement to Terms of Subordination; Payments from
Monies Received Only. (a) Each Trustee hereby acknowledges and agrees to
the terms of subordination set forth in this Agreement in respect of each
Class of Certificates and agrees to enforce such provisions and cause all
payments in respect of the Equipment Notes and the Liquidity Facilities to be
applied in accordance with the terms of this Agreement. In addition, each
Trustee hereby agrees to cause the Equipment Notes purchased by the related
Trust to be registered in the name of the Subordination Agent or its nominee,
as agent and trustee for such Trustee, to be held in trust by the
Subordination Agent solely for the purpose of facilitating the enforcement of
the subordination and other provisions of this Agreement.
(b) Except as otherwise expressly provided in the next succeeding
sentence of this Section 2.1, all payments to be made by the Subordination
Agent hereunder shall be made only from amounts received by it that
constitute Scheduled Payments, Special Payments, payments under Section 6(c)
of the Participation Agreements or payments under Section 7 of the Note
Purchase Agreement, and only to the extent that the Subordination Agent shall
have received sufficient income or proceeds therefrom to enable it to make
such payments in accordance with the terms hereof. Each of the Trustees and
the Subordination Agent hereby agrees and, as provided in each Trust
Agreement, each Certificateholder, by its acceptance of a Certificate, and
each Liquidity Provider, by entering into the Liquidity Facility to which it
is a party, has agreed to look solely to such amounts to the extent available
for distribution to it as provided in this Agreement and to the relevant
Deposits and that none of the Trustees, Owner Trustees, Loan Trustees, Owner
Participants nor the Subordination Agent is personally liable to any of them
for any amounts payable or any liability under this Agreement, any Trust
Agreement, any Liquidity Facility or such Certificate, except (in the case of
the Subordination Agent) as expressly provided herein or (in the case of the
Trustees) as expressly provided in each Trust Agreement or (in the case of
the Owner Trustees and the Loan Trustees) as expressly provided in any
Operative Agreement.
SECTION 2.2. Trust Accounts. (a) Upon the execution of this
Agreement, the Subordination Agent shall establish and maintain in its name
(i) the Collection Account as an Eligible Deposit Account, bearing a
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Trustees, the Certificateholders and the
Liquidity Providers, and (ii) as a sub-account in the Collection Account, the
Special Payments Account as an Eligible Deposit Account, bearing a
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Trustees, the Certificateholders and the
Liquidity Providers. The Subordination Agent shall establish and maintain
the Cash Collateral Accounts pursuant to and under the circumstances set
forth in Section 3.6(f) hereof. Upon such establishment and maintenance
under Section 3.6(f) hereof, the Cash Collateral Accounts shall, together
with the Collection Account, constitute the "Trust Accounts" hereunder.
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(b) Funds on deposit in the Trust Accounts shall be invested and
reinvested by the Subordination Agent in Eligible Investments selected by the
Subordination Agent if such investments are reasonably available and have
maturities no later than the earlier of (i) 90 days following the date of
such investment and (ii) the Business Day immediately preceding the Regular
Distribution Date or the date of the related distribution pursuant to Section
2.4 hereof, as the case may be, next following the date of such investment;
(or, in the case of any amount on deposit in the Cash Collateral Account with
respect to any Liquidity Facility (with respect to such Liquidity Facility,
the "Relevant Amount"), (A) in the case of a portion of the Relevant Amount
equal to the amount scheduled to be paid to the Liquidity Provider with
respect to such Liquidity Facility on the Regular Distribution Date next
following the date of such investment in accordance with clause (iv), (v) or
(vi) of Section 3.6(f), the Business Day immediately preceding such Regular
Distribution Date, or (B) in the case of a portion of the Relevant Amount
equal to the Relevant Amount minus the amount described in clause (A) above,
the Business Day immediately preceding the scheduled Interest Payment Date
with respect to such Liquidity Facility next following the date of such
investment); provided, however, that following the making of a Downgrade
Drawing or a Non-Extension Drawing under any Liquidity Facility, the
Subordination Agent shall invest and reinvest such amounts in Eligible
Investments at the direction of US Airways (or, if and to the extent so
specified to the Subordination Agent by US Airways with respect to any
Liquidity Facility, the Liquidity Provider with respect to such Liquidity
Facility); provided further, however, that upon the occurrence and during the
continuation of a Triggering Event, the Subordination Agent shall invest and
reinvest such amounts in accordance with the written instructions of the
Controlling Party. Unless otherwise expressly provided in this Agreement
(including, without limitation, with respect to Investment Earnings on
deposit in the Cash Collateral Accounts, Section 3.6(f) hereof), any
Investment Earnings shall be deposited in the Collection Account when
received by the Subordination Agent and shall be applied by the Subordination
Agent in the same manner as the other amounts on deposit in the Collection
Account are to be applied and any losses shall be charged against the
principal amount invested, in each case net of the Subordination Agent's
reasonable fees and expenses in making such investments. The Subordination
Agent shall not be liable for any loss resulting from any investment,
reinvestment or liquidation required to be made under this Agreement other
than by reason of its willful misconduct or gross negligence. Eligible
Investments and any other investment required to be made hereunder shall be
held to their maturities except that any such investment may be sold (without
regard to its maturity) by the Subordination Agent without instructions
whenever such sale is necessary to make a distribution required under this
Agreement. Uninvested funds held hereunder shall not earn or accrue
interest.
(c) The Subordination Agent shall possess all right, title and
interest in all funds on deposit from time to time in the Trust Accounts and
in all proceeds thereof (including all income thereon, except as otherwise
expressly provided herein with respect to Investment Earnings). The Trust
Accounts shall be held in trust by the Subordination Agent under the sole
dominion and control of the Subordination Agent for the benefit of the
Trustees, the Certificateholders and the Liquidity Providers, as the case may
be. If, at any time, any of the
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Trust Accounts ceases to be an Eligible Deposit Account, the Subordination
Agent shall within 10 Business Days (or such longer period, not to exceed 30
calendar days, to which each Rating Agency may consent) establish a new
Collection Account, Special Payments Account or Cash Collateral Account, as
the case may be, as an Eligible Deposit Account and shall transfer any cash
and/or any investments to such new Collection Account, Special Payments
Account or Cash Collateral Account, as the case may be. So long as State
Street is an Eligible Institution, the Trust Accounts shall be maintained
with it as Eligible Deposit Accounts.
SECTION 2.3. Deposits to the Collection Account and Special
Payments Account. (a) The Subordination Agent shall, upon receipt thereof,
deposit in the Collection Account all Scheduled Payments received by it.
(b) The Subordination Agent shall, on each date when one or more
Special Payments are made to the Subordination Agent as holder of the
Equipment Notes, deposit in the Special Payments Account the aggregate amount
of such Special Payments.
SECTION 2.4. Distributions of Special Payments. (a) Notice of
Special Payment. Except as provided in Section 2.4(e) below, upon receipt by
the Subordination Agent, as registered holder of the Equipment Notes, of any
notice of a Special Payment (or, in the absence of any such notice, upon
receipt by the Subordination Agent of a Special Payment), the Subordination
Agent shall promptly give notice thereof to each Trustee and the Liquidity
Providers. The Subordination Agent shall promptly calculate the amount of
the redemption or purchase of Equipment Notes or the amount of any Overdue
Scheduled Payment, as the case may be, comprising such Special Payment under
the applicable Indenture or Indentures and shall promptly send to each
Trustee a Written Notice of such amount and the amount allocable to each
Trust. Such Written Notice shall also set the distribution date for such
Special Payment (a "Special Distribution Date"), which shall be the Business
Day which immediately follows the later to occur of (x) the 15th day after
the date of such Written Notice or (y) the date the Subordination Agent has
received or expects to receive such Special Payment. Amounts on deposit in
the Special Payments Account shall be distributed in accordance with
Sections 2.4(b) and 2.4(c) hereof, as applicable.
(b) Redemptions and Purchases of Equipment Notes. (i) So long as
no Triggering Event shall have occurred (whether or not continuing), the
Subordination Agent shall make distributions pursuant to this Section 2.4(b)
of amounts on deposit in the Special Payments Account on account of the
redemption, purchase (including, without limitation, a purchase resulting
from a sale of the Equipment Notes permitted by Article IV hereof) or
prepayment of all of the Equipment Notes issued pursuant to an Indenture on
the Special Distribution Date for such Special Payment in the following order
of priority:
first, such amount as shall be required to pay (A) all accrued and
unpaid Liquidity Expenses then in arrears plus (B) the product of (x)
the aggregate amount of all accrued and unpaid Liquidity Expenses not in
arrears to such Special Payment Date multiplied by
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(y) a fraction, the numerator of which is the aggregate outstanding
principal amount of Equipment Notes being redeemed, purchased or prepaid
on such Special Payment Date and the denominator of which is the
aggregate outstanding principal amount of all Equipment Notes, shall be
distributed to the Liquidity Providers pari passu on the basis of the
amount of Liquidity Expenses owed to each Liquidity Provider;
second, such amount as shall be required to pay (A) all accrued and
unpaid interest then in arrears on all Liquidity Obligations (including
interest accrued and unpaid on any Interest Drawing or any Applied
Provider Advance (as defined in any Liquidity Facility)) plus (B) the
product of (x) the aggregate amount of all accrued and unpaid interest
on all Liquidity Obligations not in arrears to such Special Payment Date
(at the rate provided in the applicable Liquidity Facility) multiplied
by (y) a fraction, the numerator of which is the aggregate outstanding
principal amount of Equipment Notes being redeemed, purchased or prepaid
on such Special Payment Date and the denominator of which is the
aggregate outstanding principal amount of all Equipment Notes, shall be
distributed to the Liquidity Providers pari passu on the basis of the
amount of such Liquidity Obligations owed to each Liquidity Provider;
third, such amount as shall be required (A) if any Cash Collateral
Account had been previously funded as provided in Section 3.6(f), to
fund such Cash Collateral Account up to its Required Amount shall be
deposited in such Account, (B) if any Liquidity Facility shall become a
Downgraded Facility or a Non-Extended Facility at a time when
unreimbursed Interest Drawings under such Liquidity Facility have
reduced the Available Amount thereunder to zero, to deposit into the
related Cash Collateral Account an amount equal to such Account's
Required Amount shall be deposited in such Account, and (C) if, with
respect to any particular Liquidity Facility, neither subclause (A) nor
subclause (B) of this clause "third" are applicable, to pay or reimburse
the Liquidity Provider in respect of such Liquidity Facility in an
amount equal to the amount of any unreimbursed Interest Drawings under
such Liquidity Facility shall be distributed to such Liquidity Provider,
pari passu on the basis of the amounts of all such deficiencies and/or
unreimbursed Interest Drawings;
fourth, if, with respect to any particular Liquidity Facility, any
amounts are to be distributed pursuant to either subclause (A) or (B) of
clause "third" above, then the Liquidity Provider with respect to such
Liquidity Facility shall be paid the excess of (x) the aggregate
outstanding amount of unreimbursed Advances (whether or not then due)
under such Liquidity Facility over (y) the Required Amount for the
relevant Class, pari passu on the basis of such amounts in respect of
each Liquidity Provider;
fifth, such amount as shall be required to pay in full Expected
Distributions to the holders of Class A Certificates on such Special
Distribution Date shall be distributed to the Class A Trustee;
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sixth, such amount as shall be required to pay in full Expected
Distributions to the holders of Class B Certificates on such Special
Distribution Date shall be distributed to the Class B Trustee;
seventh, such amount as shall be required to pay in full Expected
Distributions to the holders of Class C Certificates on such Special
Distribution Date shall be distributed to the Class C Trustee; and
eighth, the balance, if any, of such Special Payment shall be
transferred to the Collection Account for distribution in accordance
with Section 3.2 hereof.
For the purposes of this Section 2.4(b), clause (x) of the definition of
"Expected Distributions" shall be deemed to read as follows: "(x) accrued,
due and unpaid interest on such Certificates together with (without
duplication) accrued and unpaid interest on a portion of such Certificates
equal to the outstanding principal amount of Equipment Notes being redeemed,
purchased or prepaid (immediately prior to such redemption, purchase or
prepayment) (excluding interest, if any, payable with respect to the Deposits
related to such Trust)".
(ii) Upon the occurrence of a Triggering Event (whether or not
continuing), the Subordination Agent shall make distributions pursuant to
this Section 2.4(b) of amounts on deposit in the Special Payments Account on
account of the redemption or purchase of all of the Equipment Notes issued
pursuant to an Indenture on the Special Distribution Date for such Special
Payment in accordance with Section 3.3 hereof.
(c) Other Special Payments. Except as provided in clause (e)
below, any amounts on deposit in the Special Payments Account other than in
respect of amounts to be distributed pursuant to Section 2.4(b) shall be
distributed on the Special Distribution Date therefor in accordance with
Article III hereof.
(d) Investment of Amounts in Special Payments Account. Any amounts
on deposit in the Special Payments Account prior to the distribution thereof
pursuant to Section 2.4(b) or (c) shall be invested in accordance with
Section 2.2(b). Investment Earnings on such investments shall be distributed
in accordance with Section 2.4(b) or (c), as the case may be.
(e) Certain Payments. The Subordination Agent will distribute
promptly upon receipt thereof (i) any indemnity payment received by it from
the Owner Participant, the Owner Trustee or US Airways in respect of any
Trustee, any Liquidity Provider, any Paying Agent, any Depositary or any
Escrow Agent (collectively, the "Payees") and (ii) any compensation
(including, without limitation, any fees payable to any Liquidity Provider
under Section 2.03 of any Liquidity Facility) received by it from the Owner
Participant, the Owner Trustee or US Airways under any Operative Agreement in
respect of any Payee, directly to the Payee entitled thereto.
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SECTION 2.5. Designated Representatives. (a) With the delivery
of this Agreement, the Subordination Agent shall furnish to each Liquidity
Provider and each Trustee, and from time to time thereafter may furnish to
each Liquidity Provider and each Trustee, at the Subordination Agent's
discretion, or upon any Liquidity Provider's or Trustee's request (which
request shall not be made more than one time in any 12-month period), a
certificate (a "Subordination Agent Incumbency Certificate") of a Responsible
Officer of the Subordination Agent certifying as to the incumbency and
specimen signatures of the officers of the Subordination Agent and the
attorney-in-fact and agents of the Subordination Agent (the "Subordination
Agent Representatives") authorized to give Written Notices on behalf of the
Subordination Agent hereunder. Until each Liquidity Provider and Trustee
receives a subsequent Subordination Agent Incumbency Certificate, it shall be
entitled to rely on the last Subordination Agent Incumbency Certificate
delivered to it hereunder.
(b) With the delivery of this Agreement, each Trustee shall furnish
to the Subordination Agent, and from time to time thereafter may furnish to
the Subordination Agent, at such Trustee's discretion, or upon the
Subordination Agent's request (which request shall not be made more than one
time in any 12-month period), a certificate (a "Trustee Incumbency
Certificate") of a Responsible Officer of such Trustee certifying as to the
incumbency and specimen signatures of the officers of such Trustee and the
attorney-in-fact and agents of such Trustee (the "Trustee Representatives")
authorized to give Written Notices on behalf of such Trustee hereunder.
Until the Subordination Agent receives a subsequent Trustee Incumbency
Certificate, it shall be entitled to rely on the last Trustee Incumbency
Certificate delivered to it hereunder.
(c) With the delivery of this Agreement, each Liquidity Provider
shall furnish to the Subordination Agent, and from time to time thereafter
may furnish to the Subordination Agent, at such Liquidity Provider's
discretion, or upon the Subordination Agent's request (which request shall
not be made more than one time in any 12-month period), a certificate (an "LP
Incumbency Certificate") of any Responsible Officer of such Liquidity
Provider certifying as to the incumbency and specimen signatures of any
officer, attorney-in-fact, agent or other designated representative of such
Liquidity Provider (the "LP Representatives" and, together with the
Subordination Agent Representatives and the Trustee Representatives, the
"Designated Representatives") authorized to give Written Notices on behalf of
such Liquidity Provider hereunder. Until the Subordination Agent receives a
subsequent LP Incumbency Certificate, it shall be entitled to rely on the
last LP Incumbency Certificate delivered to it hereunder.
SECTION 2.6. Controlling Party. (a) The Trustees and the
Liquidity Providers hereby agree that, with respect to any Indenture at any
given time, the Loan Trustee thereunder will be directed (i) in taking, or
refraining from taking, any action under such Indenture or with respect to
the Equipment Notes issued thereunder, so long as no Indenture Default has
occurred and is continuing thereunder, by the holders of at least a majority
of the outstanding principal amount of such Equipment Notes (provided that,
for so long as the Subordination Agent is the registered holder of the
Equipment Notes, the Subordination Agent shall act with respect to this
27
clause (i) in accordance with the directions of the Trustees (in the case of
each such Trustee, with respect to the Equipment Notes issued under such
Indenture and held as Trust Property of such Trust) constituting, in the
aggregate, directions with respect to such principal amount of Equipment
Notes), and (ii) after the occurrence and during the continuance of an
Indenture Default thereunder (which, in the case of an Indenture pertaining
to a Leased Aircraft, has not been cured by the applicable Owner Trustee or
the applicable Owner Participant, if applicable, pursuant to Section 4.03 of
such Indenture), in taking, or refraining from taking, any action under such
Indenture or with respect to such Equipment Notes, including exercising
remedies thereunder (including Accelerating the Equipment Notes issued
thereunder or foreclosing the Lien on the Aircraft securing such Equipment
Notes), by the Controlling Party.
(b) The Person who shall be the "Controlling Party" with respect to
any Indenture shall be: (x) the Class A Trustee; (y) upon payment of Final
Distributions to the holders of Class A Certificates, the Class B Trustee;
and (z) upon payment of Final Distributions to the holders of Class B
Certificates, the Class C Trustee. For purposes of giving effect to the
foregoing, the Trustees (other than the Controlling Party) irrevocably agree
(and the Certificateholders (other than the Certificateholders represented by
the Controlling Party) shall be deemed to agree by virtue of their purchase
of Certificates) that the Subordination Agent, as record holder of the
Equipment Notes, shall exercise its voting rights in respect of the Equipment
Notes as directed by the Controlling Party and any vote so exercised shall be
binding upon the Trustees and all Certificateholders.
The Subordination Agent shall give written notice to all of the
other parties to this Agreement promptly upon a change in the identity of the
Controlling Party. Each of the parties hereto agrees that it shall not
exercise any of the rights of the Controlling Party at such time as it is not
the Controlling Party hereunder; provided, however, that nothing herein
contained shall prevent or prohibit any Non-Controlling Party from exercising
such rights as shall be specifically granted to such Non-Controlling Party
hereunder and under the other Operative Agreements.
(c) Notwithstanding the foregoing, at any time after 18 months from
the earliest to occur of (i) the date on which the entire Available Amount
under any Liquidity Facility shall have been drawn (for any reason other than
a Downgrade Drawing or a Non-Extension Drawing) and remain unreimbursed, (ii)
the date on which the entire amount of any Downgrade Drawing or Non-Extension
Drawing has been withdrawn from a Cash Collateral Account to pay interest on
the related Class of Certificates and remains unreimbursed and (iii) the date
on which all Equipment Notes shall have been Accelerated (provided that with
respect to the period prior to the Delivery Period Expiry Date, such
Equipment Notes have an aggregate outstanding principal balance in excess of
$300,000,000), the Liquidity Providers with a majority of unreimbursed
Liquidity Obligations shall have the right to elect, by Written Notice to the
Subordination Agent and each of the Trustees, to become the Controlling Party
hereunder with respect to any Indenture at any time from and including the
last day of such 18-month period.
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(d) The exercise of remedies by the Controlling Party under this
Agreement shall be expressly limited by Section 4.1(a)(ii) hereof.
(e) The Controlling Party shall not be entitled to require or
obligate any Non-Controlling Party to provide funds necessary to exercise any
right or remedy hereunder.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
SECTION 3.1. Written Notice of Distribution. (a) No later than
3:00 P.M. (New York City time) on the Business Day immediately preceding each
Regular Distribution Date (or Special Distribution Date for purposes of
Section 2.4(b) hereof, as the case may be), each of the following Persons
shall deliver to the Subordination Agent a Written Notice setting forth the
following information as at the close of business on such Business Day:
(i) With respect to the Class A Certificates, the Class A Trustee
shall separately set forth the amounts to be paid in accordance with clause
"fifth" of Section 3.2 or 2.4(b), as the case may be, hereof;
(ii) With respect to the Class B Certificates, the Class B Trustee
shall separately set forth the amounts to be paid in accordance with clause
"sixth" of Section 3.2 or 2.4(b), as the case may be, hereof;
(iii) With respect to the Class C Certificates, the Class C Trustee
shall separately set forth the amounts to be paid in accordance with clause
"seventh" of Section 3.2 or 2.4(b), as the case may be, hereof;
(iv) With respect to each Liquidity Facility, the Liquidity
Provider thereunder shall separately set forth the amounts to be paid in
accordance with clauses "first", "second", "third" and "fourth" of Section
3.2 or 2.4(b), as the case may be, hereof; and
(v) Each Trustee shall set forth the amounts to be paid in
accordance with clause "eighth" of Section 3.2 hereof.
The notices required under this Section 3.1(a) may be in the form of a
schedule or similar document provided to the Subordination Agent by the
parties referenced therein or by any one of them, which schedule or similar
document may state that, unless there has been a prepayment of the
Certificates, such schedule or similar document is to remain in effect until
any substitute notice or amendment shall be given to the Subordination Agent
by the party providing such notice.
29
(b) Following the occurrence of a Triggering Event, the
Subordination Agent shall request the following information from the
following Persons, and each of the following Persons shall, upon the request
of the Subordination Agent, deliver a Written Notice to the Subordination
Agent setting forth for such Person the following information:
(i) With respect to the Class A Certificates, the Class A Trustee
shall separately set forth the amounts to be paid in accordance with clauses
"first" (to reimburse payments made by the Class A Certificateholders
pursuant to subclause (iii) of clause "first" of Section 3.3 hereof) and
"seventh" of Section 3.3 hereof;
(ii) With respect to the Class B Certificates, the Class B Trustee
shall separately set forth the amounts to be paid in accordance with clauses
"first" (to reimburse payments made by the Class B Certificateholders
pursuant to subclause (iii) of clause "first" of Section 3.3 hereof) and
"eighth" of Section 3.3 hereof;
(iii) With respect to the Class C Certificates, the Class C Trustee
shall separately set forth the amounts to be paid in accordance with clauses
"first" (to reimburse payments made by the Class C Certificateholders
pursuant to subclause (iii) of clause "first" of Section 3.3 hereof) and
"ninth" of Section 3.3 hereof;
(iv) With respect to each Liquidity Facility, the Liquidity
Provider thereunder shall separately set forth the amounts to be paid to it
in accordance with subclause (iii) of clause "first" of Section 3.3 hereof
and clauses "second", "third", "fourth" and "fifth" of Section 3.3 hereof;
and
(v) Each Trustee shall set forth the amounts to be paid in
accordance with clause "sixth" of Section 3.3 hereof.
(c) At such time as a Trustee or a Liquidity Provider shall have
received all amounts owing to it (and, in the case of a Trustee, the
Certificateholders for which it is acting) pursuant to Section 2.4, 3.2 or
3.3 hereof, as applicable, and, in the case of a Liquidity Provider, its
commitment under the related Liquidity Facility shall have terminated or
expired, such Person shall, by a Written Notice, so inform the Subordination
Agent and each other party to this Agreement.
(d) As provided in Section 6.5 hereof, the Subordination Agent
shall be fully protected in relying on any of the information set forth in a
Written Notice provided by any Trustee or any Liquidity Provider pursuant to
paragraphs (a) through (c) above and shall have no independent obligation to
verify, calculate or recalculate any amount set forth in any Written Notice
delivered in accordance with such paragraphs.
(e) Any Written Notice delivered by a Trustee or a Liquidity
Provider, as applicable, pursuant to Section 3.1(a), 3.1(b) or 3.1(c) hereof,
if made prior to 10:00 A.M. (New
30
York City time) shall be effective on the date delivered (or if delivered
later shall be effective as of the next Business Day). Subject to the terms
of this Agreement, the Subordination Agent shall as promptly as practicable
comply with any such instructions; provided, however, that any transfer of
funds pursuant to any instruction received after 10:00 A.M. (New York City
time) on any Business Day may be made on the next succeeding Business Day.
(f) In the event the Subordination Agent shall not receive from any
Person any information set forth in paragraph (a) or (b) above which is
required to enable the Subordination Agent to make a distribution to such
Person pursuant to Section 3.2 or 3.3 hereof, the Subordination Agent shall
request such information and, failing to receive any such information, the
Subordination Agent shall not make such distribution(s) to such Person. In
such event, the Subordination Agent shall make distributions pursuant to
clauses "first" through "ninth" of Section 3.2 and clauses "first" through
"ninth" of Section 3.3 to the extent it shall have sufficient information to
enable it to make such distributions, and shall continue to hold any funds
remaining, after making such distributions, until the Subordination Agent
shall receive all necessary information to enable it to distribute any funds
so withheld.
(g) On such dates (but not more frequently than monthly) as any
Liquidity Provider or any Trustee shall request, but in any event
automatically at the end of each calendar quarter, the Subordination Agent
shall send to such party a written statement reflecting all amounts on
deposit with the Subordination Agent pursuant to Section 3.1(f) hereof.
SECTION 3.2. Distribution of Amounts on Deposit in the Collection
Account. Except as otherwise provided in Sections 2.4, 3.1(f), 3.3, 3.4 and
3.6(b), amounts on deposit in the Collection Account (or, in the case of any
amount described in Section 2.4(c), on deposit in the Special Payments
Account) shall be promptly distributed on each Regular Distribution Date (or,
in the case of any amount described in Section 2.4(c), on the Special
Distribution Date thereof) in the following order of priority and in
accordance with the information provided to the Subordination Agent pursuant
to Section 3.1(a) hereof:
first, such amount as shall be required to pay all accrued and
unpaid Liquidity Expenses owed to each Liquidity Provider shall be
distributed to the Liquidity Providers pari passu on the basis of the
amount of Liquidity Expenses owed to each Liquidity Provider;
second, such amount as shall be required to pay in full the
aggregate amount of interest accrued on all Liquidity Obligations (at
the rate, or in the amount, provided in the applicable Liquidity
Facility) and unpaid shall be distributed to the Liquidity Providers
pari passu on the basis of the amount of such Liquidity Obligations owed
to each Liquidity Provider;
third, such amount as shall be required (A) if any Cash Collateral
Account had been previously funded as provided in Section 3.6(f), to
fund such Account up to its
31
Required Amount shall be deposited in such Account, (B) if any Liquidity
Facility shall become a Downgraded Facility or a Non-Extended Facility
at a time when unreimbursed Interest Drawings under such Liquidity
Facility have reduced the Available Amount thereunder to zero, to
deposit into the related Cash Collateral Account an amount equal to such
Account's Required Amount shall be deposited in such Cash Collateral
Account, and (C) if, with respect to any particular Liquidity Facility,
neither subclause (A) nor subclause (B) of this clause "third" is
applicable, to pay or reimburse the Liquidity Provider in respect of
such Liquidity Facility in an amount equal to the amount of all
Liquidity Obligations then due under such Liquidity Facility (other than
amounts payable pursuant to clause "first" or "second" of this Section
3.2) shall be distributed to such Liquidity Provider, pari passu on the
basis of the amounts of all such deficiencies and/or unreimbursed
Liquidity Obligations;
fourth, if, with respect to any particular Liquidity Facility, any
amounts are to be distributed pursuant to either subclause (A) or (B) of
clause "third" above, then the Liquidity Provider with respect to such
Liquidity Facility shall be paid the excess of (x) the aggregate
outstanding amount of unreimbursed Advances (whether or not then due)
under such Liquidity Facility over (y) the Required Amount for the
relevant Class, pari passu on the basis of such amounts in respect of
each Liquidity Provider;
fifth, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class A Certificates on such
Distribution Date shall be distributed to the Class A Trustee;
sixth, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class B Certificates on such
Distribution Date shall be distributed to the Class B Trustee;
seventh, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class C Certificates on such
Distribution Date shall be distributed to the Class C Trustee;
eighth, such amount as shall be required to pay in full the
aggregate unpaid amount of fees and expenses payable as of such
Distribution Date to the Subordination Agent and each Trustee pursuant
to the terms of this Agreement and the Trust Agreements, as the case may
be, shall be distributed to the Subordination Agent and such Trustee;
and
ninth, the balance, if any, of any such amount remaining thereafter
shall be held in the Collection Account for later distribution in
accordance with this Article III.
SECTION 3.3. Distribution of Amounts on Deposit Following a
Triggering Event. (a) Except as otherwise provided in Sections 3.1(f) and
3.6(b) hereof, upon the
32
occurrence of a Triggering Event and at all times thereafter, all funds in
the Collection Account or the Special Payments Account shall be promptly
distributed by the Subordination Agent in the following order of priority:
first, such amount as shall be required to reimburse (i) the
Subordination Agent for any out-of-pocket costs and expenses actually
incurred by it (to the extent not previously reimbursed) in the
protection of, or the realization of the value of, the Equipment Notes
or any Trust Indenture Estate, shall be applied by the Subordination
Agent in reimbursement of such costs and expenses, (ii) each Trustee for
any amounts of the nature described in clause (i) above actually
incurred by it under the applicable Trust Agreement (to the extent not
previously reimbursed), shall be distributed to such Trustee, and (iii)
any Liquidity Provider or Certificateholder for payments, if any, made
by it to the Subordination Agent or any Trustee in respect of amounts
described in clause (i) above, shall be distributed to such Liquidity
Provider or to the applicable Trustee for the account of such
Certificateholder, in each such case, pari passu on the basis of all
amounts described in clauses (i) through (iii) above;
second, such amount remaining as shall be required to pay all
accrued and unpaid Liquidity Expenses shall be distributed to each
Liquidity Provider pari passu on the basis of the amount of Liquidity
Expenses owed to each Liquidity Provider;
third, such amount remaining as shall be required to pay accrued
and unpaid interest on the Liquidity Obligations as provided in the
Liquidity Facilities shall be distributed to each Liquidity Provider
pari passu on the basis of the amount of such accrued and unpaid
interest owed to each Liquidity Provider;
fourth, such amount remaining as shall be required (A) if any Cash
Collateral Account had been previously funded as provided in Section
3.6(f), unless (i) a Performing Note Deficiency exists and a Liquidity
Event of Default shall have occurred and be continuing with respect to
the relevant Liquidity Facility or (ii) a Final Drawing shall have
occurred with respect to such Liquidity Facility, to fund such Account
up to its Required Amount (less the amount of any repayments of Interest
Drawings under such Liquidity Facility while subclause (A)(i) above is
applicable) shall be deposited in such Account, (B) if any Liquidity
Facility shall become a Downgraded Facility or a Non-Extended Facility
at a time when unreimbursed Interest Drawings under such Liquidity
Facility have reduced the Available Amount thereunder to zero, unless a
Performing Note Deficiency exists and a Liquidity Event of Default shall
have occurred and be continuing with respect to the relevant Liquidity
Facility or (ii) a Final Drawing shall have occurred with respect to
such Liquidity Facility, to deposit into the related Cash Collateral
Account an amount equal to such Account's Required Amount (less the
amount of any repayments of Interest Drawings under such Liquidity
Facility while subclause (B)(i) above is applicable) shall be deposited
in such Cash Collateral Account, and (C) if, with respect to any
particular Liquidity Facility, neither subclause (A) nor
33
subclause (B) of this clause "fourth" are applicable, to pay in full the
outstanding amount of all Liquidity Obligations then due under such Liquidity
Facility (other than amounts payable pursuant to clause "second" or "third"
of this Section 3.3) shall be distributed to such Liquidity Provider, pari
passu on the basis of the amounts of all such deficiencies and/or
unreimbursed Liquidity Obligations;
fifth, if, with respect to any particular Liquidity Facility, any
amounts are to be distributed pursuant to either subclause (A) or (B) of
clause "fourth" above, then the Liquidity Provider with respect to such
Liquidity Facility shall be paid the excess of (x) the aggregate
outstanding amount of unreimbursed Advances (whether or not then due)
under such Liquidity Facility over (y) the Required Amount for the
relevant Class (less the amount of any repayments of Interest Drawings
under such Liquidity Facility while subclause (A)(i) or (B)(i), as the
case may be, of clause "fourth" above is applicable), pari passu on the
basis of such amounts in respect of each Liquidity Provider;
sixth, such amount as shall be required to reimburse or pay (i) the
Subordination Agent for any Tax (other than Taxes imposed on
compensation paid hereunder), expense, fee, charge or other loss
incurred by or any other amount payable to the Subordination Agent
in connection with the transactions contemplated hereby (to the extent
not previously reimbursed), shall be applied by the Subordination Agent
in reimbursement of such amount, (ii) each Trustee for any Tax (other
than Taxes imposed on compensation paid under the applicable Trust
Agreement), expense, fee, charge, loss or any other amount payable to
such Trustee under the applicable Trust Agreements (to the extent not
previously reimbursed), shall be distributed to such Trustee, and (iii)
each Certificateholder for payments, if any, made by it pursuant to
Section 5.2 hereof in respect of amounts described in clause (i) above,
shall be distributed to the applicable Trustee for the account of such
Certificateholder, in each such case, pari passu on the basis of all
amounts described in clauses (i) through (iii) above;
seventh, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class A Certificates shall be
distributed to the Class A Trustee;
eighth, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class B Certificates shall be
distributed to the Class B Trustee; and
ninth, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class C Certificates shall be
distributed to the Class C Trustee.
SECTION 3.4. Other Payments. (a) Any payments received by the
Subordination Agent for which no provision as to the application thereof is
made in this
34
Agreement shall be distributed by the Subordination Agent (i) in the order of
priority specified in Section 3.3 hereof and (ii) to the extent received or
realized at any time after the Final Distributions for each Class of
Certificates have been made, in the manner provided in clause "first" of
Section 3.3 hereof.
(b) On any Interest Payment Date under each Liquidity Facility
which is not a Distribution Date, the Subordination Agent shall pay to the
Liquidity Provider under such Liquidity Facility from, and to the extent of,
amounts on deposit in the Collection Account, an amount equal to the amount
of interest then due and payable to such Liquidity Provider under such
Liquidity Facility.
(c) Except as otherwise provided in Section 3.3 hereof, if the
Subordination Agent receives any Scheduled Payment after the Scheduled
Payment Date relating thereto, but prior to such payment becoming an Overdue
Scheduled Payment, then the Subordination Agent shall deposit such Scheduled
Payment in the Collection Account and promptly distribute such Scheduled
Payment in accordance with the priority of distributions set forth in Section
3.2 hereof; provided that, for the purposes of this Section 3.4(c) only, each
reference in clause "eighth" of Section 3.2 to "Distribution Date" shall be
deemed to mean the actual date of payment of such Scheduled Payment and each
reference in clause "fifth", "sixth" or "seventh" of Section 3.2 to
"Distribution Date" shall be deemed to refer to such Scheduled Payment Date.
SECTION 3.5. Payments to the Trustees and the Liquidity Providers.
Any amounts distributed hereunder to any Liquidity Provider shall be paid to
such Liquidity Provider by wire transfer of funds to the address such
Liquidity Provider shall provide to the Subordination Agent. The
Subordination Agent shall provide a Written Notice of any such transfer to
the applicable Liquidity Provider, as the case may be, at the time of such
transfer. Any amounts distributed hereunder by the Subordination Agent to
any Trustee which shall not be the same institution as the Subordination
Agent shall be paid to such Trustee by wire transfer funds at the address
such Trustee shall provide to the Subordination Agent.
SECTION 3.6. Liquidity Facilities. (a) Interest Drawings. If on
any Distribution Date, after giving effect to the subordination provisions of
this Agreement, the Subordination Agent shall not have sufficient funds for
the payment of any amounts due and owing in respect of accrued interest on
the Class A Certificates, the Class B Certificates or the Class C
Certificates (at the Stated Interest Rate for such Class of Certificates),
then, prior to 1:00 p.m.(New York City time) on such Distribution Date, the
Subordination Agent shall request a drawing (each such drawing, an "Interest
Drawing") under the Liquidity Facility with respect to such Class of
Certificates in an amount equal to the lesser of (i) the amount of such
accrued interest (at the Stated Interest Rate for such Class of Certificates)
and (ii) the Available Amount under such Liquidity Facility, and shall pay
such amount to the Trustee with respect to such Class of Certificates in
payment of such accrued interest.
35
(b) Application of Interest Drawings. Notwithstanding anything to
the contrary contained in this Agreement, (i) all payments received by the
Subordination Agent in respect of an Interest Drawing under the Class A
Liquidity Facility and all amounts withdrawn by the Subordination Agent from
the Class A Cash Collateral Account, and payable in each case to the Class A
Certificateholders, shall be promptly distributed to the Class A Trustee,
(ii) all payments received by the Subordination Agent in respect of an
Interest Drawing under the Class B Liquidity Facility and all amounts
withdrawn by the Subordination Agent from the Class B Cash Collateral
Account, and payable in each case to the Class B Certificateholders, shall be
promptly distributed to the Class B Trustee, and (iii) all payments received
by the Subordination Agent in respect of an Interest Drawing under the Class
C Liquidity Facility and all amounts withdrawn by the Subordination Agent
from the Class C Cash Collateral Account, and payable in each case to the
Class C Certificateholders, shall be promptly distributed to the Class C
Trustee.
(c) Downgrade Drawings. If at any time the short-term unsecured
debt rating of any Liquidity Provider issued by either Rating Agency is lower
than the applicable Threshold Rating, within 10 days after receiving notice
of such downgrading (but not later than the expiration date of the Liquidity
Facility issued by the downgraded Liquidity Provider (the "Downgraded
Facility")), such Liquidity Provider or US Airways may arrange for a
Replacement Liquidity Provider to issue and deliver a Replacement Liquidity
Facility to the Subordination Agent. If a Downgraded Facility has not been
replaced in accordance with the terms of this paragraph, the Subordination
Agent shall, on such 10th day (or if such 10th day is not a Business Day, on
the next succeeding Business Day) (or, if earlier, the expiration date of
such Downgraded Facility), request a drawing in accordance with and to the
extent permitted by such Downgraded Facility (such drawing, a "Downgrade
Drawing") of all available and undrawn amounts thereunder. Amounts drawn
pursuant to a Downgrade Drawing shall be maintained and invested as provided
in Section 3.6(f) hereof. The Liquidity Provider may also arrange for a
Replacement Liquidity Provider to issue and deliver a Replacement Liquidity
Facility at any time after such Downgrade Drawing so long as such Downgrade
Drawing has not been reimbursed in full to the Liquidity Provider.
(d) Non-Extension Drawings. If any Liquidity Facility with respect
to any Class of Certificates is scheduled to expire on a date (the "Stated
Expiration Date") prior to the date that is 15 days after the Final Legal
Distribution Date for such Class of Certificates, then, no earlier than the
60th day and no later than the 40th day prior to the then Stated Expiration
Date, the Subordination Agent shall request that such Liquidity Provider
extend the Stated Expiration Date for a period of 364 days after the Stated
Expiration Date (unless the obligations of such Liquidity Provider thereunder
are earlier terminated in accordance with such Liquidity Facility). The
Liquidity Provider shall advise the Borrower, no earlier than 40 days and no
later than 25 days prior to such Stated Expiration Date, whether, in its sole
discretion, it agrees to so extend the Stated Expiration Date. If, on or
before such 25th day, such Liquidity Facility shall not have been so extended
or replaced in accordance with Section 3.6(e), or if the Liquidity Provider
fails irrevocably and unconditionally to advise the Borrower on or before the
25th day prior to the Stated Expiration Date then in effect that such Stated
Expiration Date shall be so extended, the
36
Subordination Agent shall, on such 25th day (or as soon as possible
thereafter), in accordance with and to the extent permitted by the terms of
the expiring Liquidity Facility (a "Non-Extended Facility"), request a
drawing under such expiring Liquidity Facility (such drawing, a "Non-
Extension Drawing") of all available and undrawn amounts thereunder. Amounts
drawn pursuant to a Non-Extension Drawing shall be maintained and invested in
accordance with Section 3.6(f) hereof.
(e) Issuance of Replacement Liquidity Facility. (i) At any time,
US Airways may, at its option, with cause or without cause, arrange for a
Replacement Liquidity Facility to replace any Liquidity Facility for any
Class of Certificates (including any Replacement Liquidity Facility provided
pursuant to Section 3.6(e)(ii) hereof); provided, however, that ABN AMRO
shall not be replaced by US Airways as a Liquidity Provider with respect to
any Class of Certificates prior to the fifth anniversary of the Closing Date
unless (A) there shall have become due to the initial Liquidity Provider, or
the initial Liquidity Provider shall have demanded, amounts pursuant to
Section 3.01, 3.02 or 3.03 of any Liquidity Facility or pursuant to the Tax
Letter and the replacement of the initial Liquidity Provider would reduce or
eliminate the obligation to pay such amounts or US Airways determines in good
faith that there is a substantial likelihood that the initial Liquidity
Provider will have the right to claim any such amounts (unless the initial
Liquidity Provider waives, in writing, any right it may have to claim such
amounts), which determination shall be set forth in a certificate delivered
by US Airways to the initial Liquidity Provider setting forth the basis for
such determination and accompanied by an opinion of outside counsel selected
by US Airways and reasonably acceptable to the initial Liquidity Provider
verifying the legal conclusions, if any, of such certificate relating to such
basis, provided that, in the case of any likely claim for such amounts based
upon any proposed, or proposed change in, law, rule, regulation,
interpretation, directive, requirement, request or administrative practice,
such opinion may assume the adoption or promulgation of such proposed matter,
(B) it shall become unlawful or impossible for the initial Liquidity Provider
(or its Lending Office) to maintain or fund its LIBOR Advances as described
in Section 3.10 of any Liquidity Facility, (C) the short-term unsecured debt
rating of the initial Liquidity Provider is downgraded by Standard & Poor's
from A-1+ to A-1 and there is a resulting downgrade in the rating by any
Rating Agency of any Class of Certificates, (D) a Downgrade Drawing or a Non-
Extension Drawing shall have occurred under any Liquidity Facility or (E) the
initial Liquidity Provider shall have breached any of its payment (including,
without limitation, funding) obligations under any Liquidity Facility. If
such Replacement Liquidity Facility is provided at any time after a Downgrade
Drawing or Non-Extension Drawing has been made, all funds on deposit in the
relevant Cash Collateral Account will be returned to the Liquidity Provider
being replaced.
(ii) If any Liquidity Provider shall determine not to extend any of
its Liquidity Facility in accordance with Section 3.6(d), then such
Liquidity Provider may, at its option, arrange for a Replacement
Liquidity Facility to replace such Liquidity Facility during the period
no earlier than 40 days and no later than 25 days prior to the then
effective Stated Expiration Date of such Liquidity Facility.
37
(iii) No Replacement Liquidity Facility arranged by US Airways or a
Liquidity Provider in accordance with clause (i) or (ii) above,
respectively, shall become effective and no such Replacement Liquidity
Facility shall be deemed a "Liquidity Facility" under the Operative
Agreements (in each case other than insofar as necessary to permit the
repayment of amounts owed to the replaced Liquidity Provider), unless
and until (A) each of the conditions referred to in clause (iv) below
shall have been satisfied, (B) if such Replacement Liquidity Facility
shall materially adversely affect the rights, remedies, interests or
obligations of the Class A Certificateholders, the Class B
Certificateholders or the Class C Certificateholders under any of the
Operative Agreements, the applicable Trustee shall have consented, in
writing, to the execution and issuance of such Replacement Liquidity
Facility and (C) in the case of a Replacement Liquidity Facility
arranged by a Liquidity Provider under Section 3.6(e)(ii), such
Replacement Liquidity Facility is acceptable to US Airways.
(iv) In connection with the issuance of each Replacement Liquidity
Facility, the Subordination Agent shall (x) prior to the issuance of
such Replacement Liquidity Facility, obtain written confirmation from
each Rating Agency that such Replacement Liquidity Facility will not
cause a reduction of any rating then in effect for any Class of
Certificates by such Rating Agency (without regard to any downgrading of
any rating of any Liquidity Provider being replaced pursuant to Section
3.6(c) hereof), (y) pay all Liquidity Obligations then owing to the
replaced Liquidity Provider (which payment shall be made first from
available funds in the Cash Collateral Account as described in clause
(v) of Section 3.6(f) hereof, and thereafter from any other available
source, including, without limitation, a drawing under the Replacement
Liquidity Facility) and (z) cause the issuer of the Replacement
Liquidity Facility to deliver the Replacement Liquidity Facility to the
Subordination Agent, together with a legal opinion opining that such
Replacement Liquidity Facility is an enforceable obligation of such
Replacement Liquidity Provider.
(v) Upon satisfaction of the conditions set forth in clauses (iii)
and (iv) of this Section 3.6(e), (w) the replaced Liquidity Facility
shall terminate, (x) the Subordination Agent shall, if and to the extent
so requested by US Airways or the Liquidity Provider being replaced,
execute and deliver any certificate or other instrument required in
order to terminate the replaced Liquidity Facility, shall surrender the
replaced Liquidity Facility to the Liquidity Provider being replaced and
shall execute and deliver the Replacement Liquidity Facility and any
associated Fee Letter, (y) each of the parties hereto shall enter into
any amendments to this Agreement necessary to give effect to (1) the
replacement of the applicable Liquidity Provider with the applicable
Replacement Liquidity Provider and (2) the replacement of the applicable
Liquidity Facility with the applicable Replacement Liquidity Facility
and (z) the applicable Replacement Liquidity Provider shall be deemed to
be a Liquidity Provider with the rights and obligations of a Liquidity
Provider hereunder and under the other Operative Agreements and such
Replacement Liquidity
38
Facility shall be deemed to be a Liquidity Facility hereunder and under
the other Operative Agreements.
(f) Cash Collateral Accounts; Withdrawals; Investments. In the
event the Subordination Agent shall draw all available amounts under the
Class A Liquidity Facility, the Class B Liquidity Facility or the Class C
Liquidity Facility pursuant to Section 3.6(c), 3.6(d) or 3.6(i) hereof, or in
the event amounts are to be deposited in the Cash Collateral Account pursuant
to subclause (B) of clause "third" of Section 2.4(b), subclause (B) of clause
"third" of Section 3.2 or subclause (B) of clause "fourth" of Section 3.3,
amounts so drawn or to be deposited, as the case may be, shall be deposited
by the Subordination Agent in the Class A Cash Collateral Account, the Class
B Cash Collateral Account or the Class C Cash Collateral Account,
respectively. All amounts on deposit in each Cash Collateral Account shall
be invested and reinvested in Eligible Investments in accordance with
Section 2.2(b) hereof. Investment Earnings on amounts on deposit in the Cash
Collateral Account with respect to each Liquidity Facility shall be deposited
in the Collection Account on each Interest Payment Date under such Liquidity
Facility and applied on such Interest Payment Date in accordance with Section
3.2, 3.3 or 3.4 (as applicable). The Subordination Agent shall deliver a
written statement to US Airways and the Liquidity Provider one day prior to
each Interest Payment Date setting forth the aggregate amount of Investment
Earnings held in the Cash Collateral Accounts as of such date. In addition,
from and after the date funds are so deposited, the Subordination Agent shall
make withdrawals from such account as follows:
(i) on each Distribution Date, the Subordination Agent shall,
to the extent it shall not have received funds to pay accrued and unpaid
interest due and owing on the Class A Certificates (at the Stated
Interest Rate for the Class A Certificates) from any other source,
withdraw from the Class A Cash Collateral Account, and pay to the Class
A Trustee, an amount equal to the lesser of (x) an amount necessary to
pay accrued and unpaid interest (at the Stated Interest Rate for the
Class A Certificates) on such Class A Certificates and (y) the amount on
deposit in the Class A Cash Collateral Account;
(ii) on each Distribution Date, the Subordination Agent shall,
to the extent it shall not have received funds to pay accrued and unpaid
interest due and owing on the Class B Certificates (at the Stated
Interest Rate for the Class B Certificates) from any other source,
withdraw from the Class B Cash Collateral Account, and pay to the Class
B Trustee, an amount equal to the lesser of (x) an amount necessary to
pay accrued and unpaid interest (at the Stated Interest Rate for the
Class B Certificates) on such Class B Certificates and (y) the amount on
deposit in the Class B Cash Collateral Account;
(iii) on each Distribution Date, the Subordination Agent shall,
to the extent it shall not have received funds to pay accrued and unpaid
interest due and owing on the Class C Certificates (at the Stated
Interest Rate for the Class C Certificates) from any other source,
withdraw from the Class C Cash Collateral Account, and pay to the Class
C Trustee, an amount equal to the lesser of (x) an amount necessary to
pay accrued and
39
unpaid interest (at the Stated Interest Rate for the Class C
Certificates) on such Class C Certificates and (y) the amount on
deposit in the Class C Cash Collateral Account;
(iv) 0n each date on which the Pool Balance of the Class A Trust
shall have been reduced by payments made to the Class A
Certificateholders pursuant to Section 2.4, 3.2 or 3.3 hereof or
pursuant to Section 2.03 of the Escrow and Paying Agent Agreement for
such Class, the Subordination Agent shall withdraw from the Class A Cash
Collateral Account such amount as is necessary so that, after giving
effect to the reduction of the Pool Balance on such date (including any
such reduction resulting from a prior withdrawal of amounts on deposit
in the Class A Cash Collateral Account on such date), an amount equal to
the sum of the Required Amount (with respect to the Class A Liquidity
Facility) plus Investment Earnings on deposit in such Cash Collateral
Account will be on deposit in the Class A Cash Collateral Account and
shall first, pay such amount to the relevant Class A Liquidity Provider
until the Liquidity Obligations (with respect to the Class A
Certificates) owing to such Liquidity Provider shall have been paid in
full, and second, deposit any remaining amount in the Collection
Account;
(v) on each date on which the Pool Balance of the Class B Trust
shall have been reduced by payments made to the Class B
Certificateholders pursuant to Section 2.4, 3.2 or 3.3 hereof or
pursuant to Section 2.03 of the Escrow and Paying Agent Agreement for
such Class, the Subordination Agent shall withdraw from the Class B Cash
Collateral Account such amount as is necessary so that, after giving
effect to the reduction of the Pool Balance on such date (including any
such reduction resulting from a prior withdrawal of amounts on deposit
in the Class B Cash Collateral Account on such date), an amount equal to
the sum of the Required Amount (with respect to the Class B Liquidity
Facility) plus Investment Earnings on deposit in such Cash Collateral
Account will be on deposit in the Class B Cash Collateral Account and
shall first, pay such amount to the relevant Class B Liquidity Provider
until the Liquidity Obligations (with respect to the Class B
Certificates) owing to such Liquidity Provider shall have been paid in
full, and second, deposit any remaining amount in the Collection
Account;
(vi) on each date on which the Pool Balance of the Class C Trust
shall have been reduced by payments made to the Class C
Certificateholders pursuant to Section 2.4, 3.2 or 3.3 hereof or
pursuant to Section 2.03 of the Escrow and Paying Agent Agreement for
such Class, the Subordination Agent shall withdraw from the Class C Cash
Collateral Account such amount as is necessary so that, after giving
effect to the reduction of the Pool Balance on such date (including any
such reduction resulting from a prior withdrawal of amounts on deposit
in the Class C Cash Collateral Account on such date), an amount equal to
the sum of the Required Amount (with respect to the Class C Liquidity
Facility) plus Investment Earnings on deposit in such Cash Collateral
Account will be on deposit in the Class C Cash Collateral Account and
shall first, pay such amount to the relevant Class C Liquidity Provider
until the Liquidity Obligations (with
40
respect to the Class C Certificates) owing to such Liquidity Provider shall
have been paid in full, and second, deposit any remaining amount in the
Collection Account;
(vii) if a Replacement Liquidity Facility for any Class of
Certificates shall be delivered to the Subordination Agent following the
date on which funds have been deposited into the Cash Collateral Account
for such Class of Certificates, the Subordination Agent shall withdraw
all amounts on deposit in such Cash Collateral Account and shall pay
such amounts to the replaced Liquidity Provider until all Liquidity
Obligations owed to such Person shall have been paid in full, and shall
deposit any remaining amount in the Collection Account; and
(viii) following the payment of Final Distributions with respect to
any Class of Certificates, on the date on which the Subordination Agent
shall have been notified by the Liquidity Provider for such Class of
Certificates that the Liquidity Obligations owed to such Liquidity
Provider have been paid in full, the Subordination Agent shall withdraw
all amounts on deposit in the Cash Collateral Account in respect of such
Class of Certificates and shall deposit such amount in the Collection
Account.
(g) Reinstatement. With respect to any Interest Drawing under the
Liquidity Facility for any Trust, upon the reimbursement of the applicable
Liquidity Provider for all or any part of the amount of such Interest
Drawing, together with any accrued interest thereon, the Available Amount of
such Liquidity Facility shall be reinstated by an amount equal to the amount
of such Interest Drawing so reimbursed to the applicable Liquidity Provider
but not to exceed the Stated Amount for such Liquidity Facility; provided,
however, that such Liquidity Facility shall not be so reinstated in part or
in full at any time if (x) both a Performing Note Deficiency exists and a
Liquidity Event of Default shall have occurred and be continuing with respect
to the relevant Liquidity Facility or (y) a Final Drawing shall have occurred
with respect to such Liquidity Facility. In the event that, with respect to
any particular Liquidity Facility (i) funds are withdrawn from any Cash
Collateral Account pursuant to clause (i) or (ii) of Section 3.6(f) hereof or
(ii) such Liquidity Facility shall become a Downgraded Facility or a Non-
Extended Facility at a time when unreimbursed Interest Drawings under such
Liquidity Facility have reduced the Available Amount thereunder to zero, then
funds received by the Subordination Agent at any time other than (x) any time
when a Liquidity Event of Default shall have occurred and be continuing with
respect to such Liquidity Facility and a Performing Note Deficiency exists or
(y) any time after a Final Drawing shall have occurred with respect to such
Liquidity Facility shall be deposited in such Cash Collateral Account as and
to the extent provided in clause "third" of Section 2.4(b), clause "third" of
Section 3.2 or clause "fourth" of Section 3.3, as applicable, and applied in
accordance with Section 3.6(f) hereof.
(h) Reimbursement. The amount of each drawing under the Liquidity
Facilities shall be due and payable, together with interest thereon, on the
dates and at the rates, respectively, provided in the Liquidity Facilities.
41
(i) Final Drawing. Upon receipt from a Liquidity Provider of a
Termination Notice with respect to any Liquidity Facility, the Subordination
Agent shall, not later than the date specified in such Termination Notice, in
accordance with and to the extent permitted by the terms of such Liquidity
Facility, request a drawing under such Liquidity Facility of all available
and undrawn amounts thereunder (a "Final Drawing"). Amounts drawn pursuant
to a Final Drawing shall be maintained and invested in accordance with
Section 3.6(f) hereof.
(j) Reduction of Stated Amount. Promptly following each date on
which the Required Amount of the Liquidity Facility for a Class of
Certificates is reduced as a result of a reduction in the Pool Balance with
respect to such Certificates, the Subordination Agent shall, if any such
Liquidity Facility provides for reductions of the Stated Amount of such
Liquidity Facility and if such reductions are not automatic, request such
Liquidity Provider for such Class of Certificates to reduce such Stated
Amount to an amount equal to the Required Amount with respect to such
Liquidity Facility (as calculated by the Subordination Agent after giving
effect to such payment). Each such request shall be made in accordance with
the provisions of the applicable Liquidity Facility.
(k) Relation to Subordination Provisions. Interest Drawings under
the Liquidity Facilities and withdrawals from the Cash Collateral Accounts,
in each case, in respect of interest on the Certificates of any Class, will
be distributed to the Trustee for such Class of Certificates, notwithstanding
Sections 3.2, 3.3 and 3.6(h) hereof.
ARTICLE IV
EXERCISE OF REMEDIES
SECTION 4.1. Directions from the Controlling Party. (a) (i)
Following the occurrence and during the continuation of an Indenture Default
under any Indenture, the Controlling Party shall direct the Subordination
Agent, which in turn shall direct the Loan Trustee under such Indenture, in
the exercise of remedies available to the holders of the Equipment Notes
issued pursuant to such Indenture, including, without limitation, the ability
to vote all such Equipment Notes in favor of Accelerating such Equipment
Notes in accordance with the provisions of such Indenture. Subject to the
Owner Trustees' and the Owner Participants' rights, if any, set forth in the
Indentures with respect to Leased Aircraft to purchase the Equipment Notes
and the provisions of the next paragraph, if the Equipment Notes issued
pursuant to any Indenture have been Accelerated following an Indenture
Default with respect thereto, the Controlling Party may sell, assign,
contract to sell or otherwise dispose of and deliver all (but not less than
all) of such Equipment Notes to any Person at public or private sale, at any
location at the option of the Controlling Party, all upon such terms and
conditions as it may reasonably deem advisable in accordance with applicable
law.
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(ii) Subject to the Owner Trustees' and the Owner Participants'
rights, if any, set forth in the Indentures with respect to Leased
Aircraft to purchase the Equipment Notes, and notwithstanding the
foregoing, so long as any Certificates remain Outstanding, during the
period ending on the date which is nine months after the earlier of (x)
the Acceleration of the Equipment Notes issued pursuant to any Indenture
or (y) the occurrence of a US Airways Bankruptcy Event, without the
consent of each Trustee, (A) no Aircraft subject to the Lien of such
Indenture or such Equipment Notes may be sold if the net proceeds from
such sale would be less than the Minimum Sale Price for such Aircraft or
such Equipment Notes, and (B) with respect to any Leased Aircraft, the
amount and payment dates of rentals payable by US Airways under the
Lease for such Aircraft may not be adjusted, if, as a result of such
adjustment, the discounted present value of all such rentals would be
less than 75% of the discounted present value of the rentals payable by
US Airways under such Lease before giving effect to such adjustment, in
each case, using the weighted average interest rate of the Equipment
Notes issued pursuant to such Indenture as the discount rate.
(iii) At the request of the Controlling Party, the Subordination
Agent may from time to time during the continuance of an Indenture
Default (and before the occurrence of a Triggering Event) commission LTV
Appraisals with respect to the Aircraft subject to such Indenture.
(iv) After a Triggering Event occurs and any Equipment Note becomes
a Non-Performing Equipment Note, the Subordination Agent shall obtain
Appraisals with respect to all of the Aircraft (the "LTV Appraisals") as soon
as practicable and additional LTV Appraisals on or prior to each anniversary
of the date of such initial LTV Appraisals; provided that if the Controlling
Party reasonably objects to the appraised value of the Aircraft shown in such
LTV Appraisals, the Controlling Party shall have the right to obtain or cause
to be obtained substitute any LTV Appraisals (including any LTV Appraisals
based upon physical inspection of the Aircraft).
(b) The Controlling Party shall take such actions as it may
reasonably deem most effectual to complete the sale or other disposition of
such Aircraft or Equipment Notes. In addition, in lieu of any sale,
assignment, contract to sell or other disposition, the Controlling Party may
maintain possession of such Equipment Notes and continue to apply monies
received in respect of such Equipment Notes in accordance with Article III
hereof. In addition, in lieu of such sale, assignment, contract to sell or
other disposition, or in lieu of such maintenance of possession, the
Controlling Party may, subject to the terms and conditions of the related
Indenture, instruct the Loan Trustee under such Indenture to foreclose on the
Lien on the related Aircraft.
SECTION 4.2. Remedies Cumulative. Each and every right, power and
remedy given to the Trustees, the Liquidity Providers, the Controlling Party
or the Subordination Agent specifically or otherwise in this Agreement shall
be cumulative and shall be in addition to every
43
other right, power and remedy herein specifically given or now or hereafter
existing at law, in equity or by statute, and each and every right, power and
remedy whether specifically herein given or otherwise existing may, subject
always to the terms and conditions hereof, be exercised from time to time and
as often and in such order as may be deemed expedient by any Trustee, any
Liquidity Provider, the Controlling Party or the Subordination Agent, as
appropriate, and the exercise or the beginning of the exercise of any power
or remedy shall not be construed to be a waiver of the right to exercise at
the same time or thereafter any other right, power or remedy. No delay or
omission by any Trustee, any Liquidity Provider, the Controlling Party or the
Subordination Agent in the exercise of any right, remedy or power or in the
pursuit of any remedy shall impair any such right, power or remedy or be
construed to be a waiver of any default or to be an acquiescence therein.
SECTION 4.3. Discontinuance of Proceedings. In case any party to
this Agreement (including the Controlling Party in such capacity) shall have
instituted any Proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, entry or otherwise, and such Proceeding shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to the Person instituting such Proceeding, then and in every such
case each such party shall, subject to any determination in such Proceeding,
be restored to its former position and rights hereunder, and all rights,
remedies and powers of such party shall continue as if no such Proceeding had
been instituted.
SECTION 4.4. Right of Certificateholders to Receive Payments Not
to Be Impaired. Anything in this Agreement to the contrary notwithstanding
but subject to each Trust Agreement, the right of any Certificateholder or
any Liquidity Provider, respectively, to receive payments hereunder
(including without limitation pursuant to Section 2.4, 3.2 or 3.3 hereof)
when due, or to institute suit for the enforcement of any such payment on or
after the applicable Distribution Date, shall not be impaired or affected
without the consent of such Certificateholder or such Liquidity Provider,
respectively.
SECTION 4.5. Undertaking for Costs. In any Proceeding for the
enforcement of any right or remedy under this Agreement or in any Proceeding
against any Controlling Party or the Subordination Agent for any action taken
or omitted by it as Controlling Party or Subordination Agent, as the case may
be, a court in its discretion may require the filing by any party litigant in
the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees
and expenses, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party
litigant. The provisions of this Section do not apply to a suit instituted
by the Subordination Agent, a Liquidity Provider or a Trustee or a suit by
Certificateholders holding more than 10% of the original principal amount of
any Class of Certificates.
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ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
SECTION 5.1. Notice of Indenture Default or Triggering Event.
(a) In the event the Subordination Agent shall have actual knowledge of the
occurrence of an Indenture Default or a Triggering Event, as promptly as
practicable, and in any event within 10 days after obtaining knowledge
thereof, the Subordination Agent shall transmit by mail or courier to the
Rating Agencies, the Liquidity Providers and the Trustees notice of such
Indenture Default or Triggering Event, unless such Indenture Default or
Triggering Event shall have been cured or waived. For all purposes of this
Agreement, in the absence of actual knowledge on the part of a Responsible
Officer, the Subordination Agent shall not be deemed to have knowledge of any
Indenture Default or Triggering Event unless notified in writing by one or
more Trustees, one or more Liquidity Providers or one or more
Certificateholders.
(b) Other Notices. The Subordination Agent will furnish to each
Liquidity Provider and Trustee, promptly upon receipt thereof, duplicates or
copies of all reports, notices, requests, demands, certificates, financial
statements and other instruments furnished to the Subordination Agent as
registered holder of the Equipment Notes or otherwise in its capacity as
Subordination Agent to the extent the same shall not have been otherwise
directly distributed to such Liquidity Provider or Trustee, as applicable,
pursuant to the express provision of any other Operative Agreement.
SECTION 5.2. Indemnification. The Subordination Agent shall not
be required to take any action or refrain from taking any action under
Section 5.1 (other than the first sentence thereof) or Article IV hereof
unless the Subordination Agent shall have been indemnified (to the extent and
in the manner reasonably satisfactory to the Subordination Agent) against any
liability, cost or expense (including counsel fees and expenses) which may be
incurred in connection therewith. The Subordination Agent shall not be under
any obligation to take any action under this Agreement and nothing contained
in this Agreement shall require the Subordination Agent to expend or risk its
own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder or in the exercise of any of its rights or powers
if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it. The Subordination Agent shall not be required to take any
action under Section 5.1 (other than the first sentence thereof) or Article
IV hereof, nor shall any other provision of this Agreement be deemed to
impose a duty on the Subordination Agent to take any action, if the
Subordination Agent shall have been advised by counsel that such action is
contrary to the terms hereof or is otherwise contrary to law.
SECTION 5.3. No Duties Except as Specified in Intercreditor
Agreement. The Subordination Agent shall not have any duty or obligation to
take or refrain from taking any action under, or in connection with, this
Agreement, except as expressly provided by the terms of
45
this Agreement; and no implied duties or obligations shall be read into this
Agreement against the Subordination Agent. The Subordination Agent agrees
that it will, in its individual capacity and at its own cost and expense (but
without any right of indemnity in respect of any such cost or expense under
Section 7.1 hereof) promptly take such action as may be necessary to duly
discharge all Liens on any of the Trust Accounts or any monies deposited
therein which result from claims against it in its individual capacity not
related to its activities hereunder or any other Operative Agreement.
SECTION 5.4. Notice from the Liquidity Providers and Trustees. If
any Liquidity Provider or Trustee has notice of an Indenture Default or a
Triggering Event, such Person shall promptly give notice thereof to all other
Liquidity Providers and Trustees and to the Subordination Agent, provided,
however, that no such Person shall have any liability hereunder as a result
of its failure to deliver any such notice.
ARTICLE VI
THE SUBORDINATION AGENT
SECTION 6.1. Authorization; Acceptance of Trusts and Duties. Each
of the Class A Trustee, the Class B Trustee and the Class C Trustee hereby
designates and appoints the Subordination Agent as the agent and trustee of
such Trustee under the applicable Liquidity Facility and authorizes the
Subordination Agent to enter into the applicable Liquidity Facility as agent
and trustee for such Trustee. Each of the Liquidity Providers and the
Trustees hereby designates and appoints the Subordination Agent as the
Subordination Agent under this Agreement. State Street hereby accepts the
duties hereby created and applicable to it as the Subordination Agent and
agrees to perform the same but only upon the terms of this Agreement and
agrees to receive and disburse all monies received by it in accordance with
the terms hereof. The Subordination Agent shall not be answerable or
accountable under any circumstances, except (a) for its own willful
misconduct or gross negligence (or ordinary negligence in the handling of
funds), (b) as provided in Section 2.2 hereof and (c) for liabilities that
may result from the material inaccuracy of any representation or warranty of
the Subordination Agent made in its individual capacity in any Operative
Agreement. The Subordination Agent shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Subordination
Agent, unless it is proved that the Subordination Agent was negligent in
ascertaining the pertinent facts.
SECTION 6.2. Absence of Duties. The Subordination Agent shall
have no duty to see to any recording or filing of this Agreement or any other
document, or to see to the maintenance of any such recording or filing.
SECTION 6.3. No Representations or Warranties as to Documents.
The Subordination Agent in its individual capacity does not make nor shall be
deemed to have made
46
any representation or warranty as to the validity, legality or enforceability
of this Agreement or any other Operative Agreement or as to the correctness
of any statement contained in any thereof, except for the representations and
warranties of the Subordination Agent, made in its individual capacity, under
any Operative Agreement to which it is a party. The Certificateholders, the
Trustees and the Liquidity Providers make no representation or warranty
hereunder whatsoever.
SECTION 6.4. No Segregation of Monies; No Interest. Any monies
paid to or retained by the Subordination Agent pursuant to any provision
hereof and not then required to be distributed to any Trustee or any
Liquidity Provider as provided in Articles II and III hereof or deposited
into one or more Trust Accounts need not be segregated in any manner except
to the extent required by such Articles II and III and by law, and the
Subordination Agent shall not (except as otherwise provided in Section 2.2
hereof) be liable for any interest thereon; provided, however, that any
payments received or applied hereunder by the Subordination Agent shall be
accounted for by the Subordination Agent so that any portion thereof paid or
applied pursuant hereto shall be identifiable as to the source thereof.
SECTION 6.5. Reliance; Agents; Advice of Counsel. The
Subordination Agent shall not incur liability to anyone in acting upon any
signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond or other document or paper believed by it
to be genuine and believed by it to be signed by the proper party or parties.
As to the Pool Balance of any Trust as of any date, the Subordination Agent
may for all purposes hereof rely on a certificate signed by any Responsible
Officer of the applicable Trustee, and such certificate shall constitute full
protection to the Subordination Agent for any action taken or omitted to be
taken by it in good faith in reliance thereon. As to any fact or matter
relating to the Liquidity Providers or the Trustees the manner of
ascertainment of which is not specifically described herein, the
Subordination Agent may for all purposes hereof rely on a certificate, signed
by any Responsible Officer of the applicable Liquidity Provider or Trustee,
as the case may be, as to such fact or matter, and such certificate shall
constitute full protection to the Subordination Agent for any action taken or
omitted to be taken by it in good faith in reliance thereon. The
Subordination Agent shall assume, and shall be fully protected in assuming,
that each of the Liquidity Providers and each of the Trustees are authorized
to enter into this Agreement and to take all action to be taken by them
pursuant to the provisions hereof, and shall not inquire into the
authorization of each of the Liquidity Providers and each of the Trustees
with respect thereto. In the administration of the trusts hereunder, the
Subordination Agent may execute any of the trusts or powers hereof and
perform its powers and duties hereunder directly or through agents or
attorneys and may consult with counsel, accountants and other skilled persons
to be selected and retained by it, and the Subordination Agent shall not be
liable for the acts or omissions of any agent appointed with due care or for
anything done, suffered or omitted in good faith by it in accordance with the
advice or written opinion of any such counsel, accountants or other skilled
persons.
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SECTION 6.6. Capacity in Which Acting. The Subordination Agent
acts hereunder solely as agent and trustee herein and not in its individual
capacity, except as otherwise expressly provided in the Operative Agreements.
SECTION 6.7. Compensation. The Subordination Agent shall be
entitled to reasonable compensation, including expenses and disbursements,
for all services rendered hereunder and shall have a priority claim to the
extent set forth in Article III hereof on all monies collected hereunder for
the payment of such compensation, to the extent that such compensation shall
not be paid by others. The Subordination Agent agrees that it shall have no
right against any Trustee or Liquidity Provider for any fee as compensation
for its services as agent under this Agreement. The provisions of this
Section 6.7 shall survive the termination of this Agreement.
SECTION 6.8. May Become Certificateholder. The institution acting
as Subordination Agent hereunder may become a Certificateholder and have all
rights and benefits of a Certificateholder to the same extent as if it were
not the institution acting as the Subordination Agent.
SECTION 6.9. Subordination Agent Required; Eligibility. There
shall at all times be a Subordination Agent hereunder which shall be a
corporation organized and doing business under the laws of the United States
of America or of any State or the District of Columbia having a combined
capital and surplus of at least $100,000,000 (or the obligations of which,
whether now in existence or hereafter incurred, are fully and unconditionally
guaranteed by a corporation organized and doing business under the laws of
the United States of America, any State thereof or of the District of
Columbia and having a combined capital and surplus of at least $100,000,000),
if there is such an institution willing and able to perform the duties of the
Subordination Agent hereunder upon reasonable or customary terms. Such
corporation shall be a citizen of the United States and shall be authorized
under the laws of the United States or any State thereof or of the District
of Columbia to exercise corporate trust powers and shall be subject to
supervision or examination by federal, state or District of Columbia
authorities. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of any of the aforesaid
supervising or examining authorities, then, for the purposes of this Section
6.9, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published.
In case at any time the Subordination Agent shall cease to be
eligible in accordance with the provisions of this Section, the Subordination
Agent shall resign immediately in the manner and with the effect specified in
Section 8.1.
SECTION 6.10. Money to Be Held in Trust. All Equipment Notes,
monies and other property deposited with or held by the Subordination Agent
pursuant to this Agreement shall be held in trust for the benefit of the
parties entitled to such Equipment Notes, monies and other property. All
such Equipment Notes, monies or other property shall be held in the Trust
Department of the institution acting as Subordination Agent hereunder.
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ARTICLE VII
INDEMNIFICATION OF SUBORDINATION AGENT
SECTION 7.1. Scope of Indemnification. The Subordination Agent
shall be indemnified hereunder to the extent and in the manner described in
Section 6(c) of the Participation Agreements and Section 7 of the Note
Purchase Agreement. The indemnities contained in such Sections of such
agreements shall survive the termination of this Agreement.
ARTICLE VIII
SUCCESSOR SUBORDINATION AGENT
SECTION 8.1. Replacement of Subordination Agent; Appointment of
Successor. The Subordination Agent may resign at any time by so notifying
the Trustees and the Liquidity Providers. The Controlling Party may remove
the Subordination Agent for cause by so notifying the Subordination Agent and
may appoint a successor Subordination Agent. The Controlling Party shall
remove the Subordination Agent if:
(1) the Subordination Agent fails to comply with Section 6.9
hereof;
(2) the Subordination Agent is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Subordination Agent or its property; or
(4) the Subordination Agent otherwise becomes incapable of acting.
If the Subordination Agent resigns or is removed or if a vacancy
exists in the office of Subordination Agent for any reason (the Subordination
Agent in such event being referred to herein as the retiring Subordination
Agent), the Controlling Party shall promptly appoint a successor
Subordination Agent.
A successor Subordination Agent shall deliver (x) a written
acceptance of its appointment as Subordination Agent hereunder to the
retiring Subordination Agent and (y) a written assumption of its obligations
hereunder and under each Liquidity Facility to each party hereto, upon which
the resignation or removal of the retiring Subordination Agent shall become
effective, and the successor Subordination Agent shall have all the rights,
powers and duties of the Subordination Agent under this Agreement. The
successor Subordination Agent shall mail a notice of its succession to the
Liquidity Providers and the Trustees. The retiring Subordination
49
Agent shall promptly transfer its rights under each of the Liquidity
Facilities and all of the property held by it as Subordination Agent to the
successor Subordination Agent.
If a successor Subordination Agent does not take office within 60
days after the retiring Subordination Agent resigns or is removed, the
retiring Subordination Agent or one or more of the Trustees may petition any
court of competent jurisdiction for the appointment of a successor
Subordination Agent.
If the Subordination Agent fails to comply with Section 6.9 hereof
(to the extent applicable), one or more of the Trustees or one or more of the
Liquidity Providers may petition any court of competent jurisdiction for the
removal of the Subordination Agent and the appointment of a successor
Subordination Agent.
Notwithstanding the foregoing, no resignation or removal of the
Subordination Agent shall be effective unless and until a successor has been
appointed. No appointment of a successor Subordination Agent shall be
effective unless and until the Rating Agencies shall have delivered a Ratings
Confirmation.
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS
SECTION 9.1. Amendments, Waivers, etc. (a) This Agreement may not
be supplemented, amended or modified without the consent of each Trustee
(acting, except in the case of any amendment pursuant to Section 3.6(e)(v)(y)
hereof, with the consent of holders of Certificates of the related Class
evidencing interests in the related Trust aggregating not less than a
majority in interest in such Trust or as otherwise authorized pursuant to the
relevant Trust Agreement), the Subordination Agent and each Liquidity
Provider; provided, however, that this Agreement may be supplemented, amended
or modified without the consent of (x) any Trustee if such supplement,
amendment or modification (i) is in accordance with Section 9.1(c) hereof or
(ii) cures an ambiguity or inconsistency or does not materially adversely
affect such Trustee or the holders of the related Class of Certificates and
(y) any Liquidity Provider if such supplement, amendment or modification is
in accordance with Section 9.1 hereof; provided further, however, that, if
such supplement, amendment or modification (A) would (x) directly or
indirectly modify or supersede, or otherwise conflict with, Section 2.2(b),
Section 3.6(e), Section 3.6(f)(other than the last sentence thereof), or the
second sentence of Section 10.6 (collectively, together with this proviso and
Section 9.1, the "US Airways Provisions") or (y) otherwise adversely affect
the interests of a potential Replacement Liquidity Provider or of US Airways
with respect to its ability to replace any Liquidity Facility or with respect
to its payment obligations under any Financing Agreement, Leased or Owned
Aircraft Indenture or (B) is made pursuant to Section 9.1(c), then such
supplement, amendment or modification shall not be effective without the
additional written consent of US Airways. Notwithstanding the foregoing,
without the consent
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of each Certificateholder and each Liquidity Provider, no supplement,
amendment or modification of this Agreement may (i) reduce the percentage of
the interest in any Trust evidenced by the Certificates issued by such Trust
necessary to consent to modify or amend any provision of this Agreement or to
waive compliance therewith or (ii), except as provided in Section 9.1(c),
modify Section 2.4, 3.2 or 3.3 hereof, relating to the distribution of monies
received by the Subordination Agent hereunder from the Equipment Notes or
pursuant to the Liquidity Facilities. Nothing contained in this Section
shall require the consent of a Trustee at any time following the payment of
Final Distributions with respect to the related Class of Certificates.
(b) In the event that the Subordination Agent, as the registered
holder of any Equipment Notes, receives a request for its consent to any
amendment, modification, consent or waiver under such Equipment Notes, the
Indenture pursuant to which such Equipment Notes were issued, or the related
Lease, Participation Agreement or other related document, (i) if no Indenture
Default shall have occurred and be continuing with respect to such Indenture,
the Subordination Agent shall request directions with respect to each Series
of such Equipment Notes from the Trustee of the Trust which holds such
Equipment Notes and shall vote or consent in accordance with the directions
of such Trustee and (ii) if any Indenture Default (which, in the case of any
Indenture pertaining to a Leased Aircraft, has not been cured by the
applicable Owner Trustee or the applicable Owner Participant, if applicable,
pursuant to Section 4.03 of such Indenture) shall have occurred and be
continuing with respect to such Indenture, the Subordination Agent will
exercise its voting rights as directed by the Controlling Party, subject to
Sections 4.1 and 4.4 hereof; provided that no such amendment, modification or
waiver shall, without the consent of each Liquidity Provider, reduce the
amount of rent, supplemental rent or stipulated loss values payable by US
Airways under any Lease or reduce the amount of principal or interest payable
by US Airways under any Equipment Note issued under any Indenture in respect
of an Owned Aircraft.
SECTION 9.2. Subordination Agent Protected. If, in the reasonable
opinion of the institution acting as the Subordination Agent hereunder, any
document required to be executed pursuant to the terms of Section 9.1 affects
any right, duty, immunity or indemnity with respect to it under this
Agreement or any Liquidity Facility, the Subordination Agent may in its
discretion decline to execute such document.
SECTION 9.3. Effect of Supplemental Agreements. Upon the
execution of any amendment, consent or supplement hereto pursuant to the
provisions hereof, this Agreement shall be and be deemed to be and shall be
modified and amended in accordance therewith and the respective rights,
limitations of rights, obligations, duties and immunities under this
Agreement of the parties hereto and beneficiaries hereof shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental agreement shall be and be deemed to be and shall be part of the
terms and conditions of this Agreement for any and all purposes. In
executing or accepting any supplemental agreement permitted by this Article
IX, the Subordination Agent
51
shall be entitled to receive, and shall be fully protected in relying upon,
an opinion of counsel stating that the execution of such supplemental
agreement is authorized or permitted by this Agreement.
SECTION 9.4. Notice to Rating Agencies. Promptly following its
receipt of each amendment, consent, modification, supplement or waiver
contemplated by this Article IX, the Subordination Agent shall send a copy
thereof to each Rating Agency.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Termination of Intercreditor Agreement. Following
payment of Final Distributions with respect to each Class of Certificates and
the payment in full of all Liquidity Obligations to the Liquidity Providers
and provided that there shall then be no other amounts due to the
Certificateholders, the Trustees, the Liquidity Providers and the
Subordination Agent hereunder or under the Trust Agreements, and that the
commitment of the Liquidity Providers under the Liquidity Facilities shall
have expired or been terminated, this Agreement and the trusts created hereby
shall terminate and this Agreement shall be of no further force or effect.
Except as aforesaid or otherwise provided, this Agreement and the trusts
created hereby shall continue in full force and effect in accordance with the
terms hereof.
SECTION 10.2. Intercreditor Agreement for Benefit of Trustees,
Liquidity Providers and Subordination Agent. Subject to the second sentence
of Section 10.6 and the provisions of Section 4.4, nothing in this Agreement,
whether express or implied, shall be construed to give to any Person other
than the Trustees, the Liquidity Providers and the Subordination Agent any
legal or equitable right, remedy or claim under or in respect of this
Agreement.
SECTION 10.3. Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices, requests, demands,
authorizations, directions, consents, waivers or documents provided or
permitted by this Agreement to be made, given, furnished or filed shall be in
writing, mailed by certified mail, postage prepaid, or by confirmed telecopy
and
52
(i) if to the Subordination Agent, addressed to at its office at:
STATE STREET BANK AND TRUST COMPANY
Two International Place, 4th Floor
Boston, MA 02110
Attention: Corporate Trust Department
Telephone: (617) 664-5340
Telecopy: (617) 664-5151
(ii) if to any Trustee, addressed to it at its office at:
STATE STREET BANK AND TRUST COMPANY
Two International Place, 4th Floor
Boston, MA 02110
Attention: Corporate Trust Department
Telephone: (617) 664-5340
Telecopy: (617) 664-5151
(iii) if to the Liquidity Provider, addressed to it at its office
at:
ABN AMRO Bank N.V.
135 South LaSalle Street, #660
Chicago, IL 60674-9135
Attention: Claudia Heldring
Telephone: (312) 904-2900
Telecopy: (312) 606-8428
with a copy to:
ABN AMRO Bank N.V.
135 South LaSalle Street, #625
Chicago, IL 60674-9135
Attention: Loan Administration
Telephone: (312) 904-2961
Telecopy: (312) 904-1288
Whenever any notice in writing is required to be given by any Trustee or
Liquidity Provider or the Subordination Agent to any of the other of them,
such notice shall be deemed given and such requirement satisfied when such
notice is received. Any party hereto may change the address to
53
which notices to such party will be sent by giving notice of such change to
the other parties to this Agreement.
SECTION 10.4. Severability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 10.5. No Oral Modifications or Continuing Waivers. No
terms or provisions of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
or other Person against whom enforcement of the change, waiver, discharge or
termination is sought and any other party or other Person whose consent is
required pursuant to this Agreement and any waiver of the terms hereof shall
be effective only in the specific instance and for the specific purpose
given.
SECTION 10.6. Successors and Assigns. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit
of, each of the parties hereto and the successors and assigns of each, all as
herein provided. In addition, the US Airways Provisions shall inure to the
benefit of US Airways and its successors and assigns, and (without limitation
of the foregoing) US Airways is hereby constituted, and agreed to be, an
express third party beneficiary of the US Airways Provisions.
SECTION 10.7. Headings. The headings of the various Articles and
Sections herein and in the table of contents hereto are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
SECTION 10.8. Counterpart Form. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same agreement.
SECTION 10.9. Subordination. (a) As between the Liquidity
Providers, on the one hand, and the Trustees and the Certificateholders, on
the other hand, this Agreement shall be a subordination agreement for
purposes of Section 510 of the United States Bankruptcy Code, as amended from
time to time.
(b) Notwithstanding the provisions of this Agreement, if prior to
the payment in full to the Liquidity Providers of all Liquidity Obligations
then due and payable, any party hereto shall have received any payment or
distribution in respect of Equipment Notes or any other amount under the
Indentures or other Operative Agreements which, had the subordination
provisions of this Agreement been properly applied to such payment,
distribution or other amount, would not have been distributed to such Person,
then such payment, distribution or other
54
amount shall be received and held in trust by such Person and paid over or
delivered to the Subordination Agent for application as provided herein.
(c) If any Trustee, any Liquidity Provider or the Subordination
Agent receives any payment in respect of any obligations owing hereunder (or,
in the case of the Liquidity Providers, in respect of the Liquidity
Obligations), which is subsequently invalidated, declared preferential, set
aside and/or required to be repaid to a trustee, receiver or other party,
then, to the extent of such payment, such obligations (or, in the case of the
Liquidity Providers, such Liquidity Obligations) intended to be satisfied
shall be revived and continue in full force and effect as if such payment had
not been received.
(d) The Trustees (on behalf of themselves and the holders of
Certificates), the Liquidity Providers and the Subordination Agent confirm
that the payment priorities specified in Sections 2.4, 3.2 and 3.3 shall
apply in all circumstances, notwithstanding the fact that the obligations
owed to the Trustees and the holders of Certificates are secured by certain
assets and the Liquidity Obligations may not be so secured. The Trustees
expressly agree (on behalf of themselves and the holders of Certificates) not
to assert priority over the holders of Liquidity Obligations due to their
status as secured creditors in any bankruptcy, insolvency or other legal
proceeding.
(e) Each of the Trustees (on behalf of themselves and the holders
of Certificates), the Liquidity Providers and the Subordination Agent may
take any of the following actions without impairing its rights under this
Agreement:
(i) obtain a Lien on any property to secure any amounts owing to
it hereunder, including, in the case of the Liquidity Providers, the
Liquidity Obligations,
(ii) obtain the primary or secondary obligation of any other
obligor with respect to any amounts owing to it hereunder, including, in
the case of the Liquidity Providers, any of the Liquidity Obligations,
(iii) renew, extend, increase, alter or exchange any amounts owing
to it hereunder, including, in the case of the Liquidity Providers, any
of the Liquidity Obligations, or release or compromise any obligation of
any obligor with respect thereto,
(iv) refrain from exercising any right or remedy, or delay in
exercising such right or remedy, which it may have, or
(v)take any other action which might discharge a subordinated
party or a surety under applicable law;
55
provided, however, that the taking of any such actions by any of the
Trustees, the Liquidity Providers or the Subordination Agent shall not
prejudice the rights or adversely affect the obligations of any other party
under this Agreement.
SECTION 10.10. Governing Law. THIS AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE.
SECTION 10.11. Submission to Jurisdiction; Waiver of Jury Trial;
Waiver of Immunity. (a) Each of the parties hereto hereby irrevocably and
unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any other Operative Agreement,
or for recognition and enforcement of any judgment in respect hereof or
thereof, to the nonexclusive general jurisdiction of the courts of the
State of New York, the courts of the United States of America for the
Southern District of New York, and the appellate courts from any
thereof;
(ii) consents that any such action or proceeding may be brought
in such courts, and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form and mail), postage
prepaid, to each party hereto at its address set forth in Section 10.3
hereof, or at such other address of which the other parties shall have
been notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction.
(b) EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING
ESTABLISHED, including, without limitation, contract claims, tort claims,
breach of duty claims and all other common law and statutory claims. Each of
the parties warrants and represents that it has reviewed this waiver with its
legal counsel, and that it knowingly and voluntarily waives its jury trial
rights following consultation with such legal counsel. THIS WAIVER IS
IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS
WAIVER SHALL APPLY TO ANY
56
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT.
(c) The Liquidity Provider hereby waives any immunity it may have
from the jurisdiction of the courts of the United States of America or of any
State and waives any immunity any of its properties located in the United
States of America may have from attachment or execution upon a judgment
entered by any such court under the United States Foreign Sovereign
Immunities Act of 1976 or any similar successor legislation.
57
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective officers thereunto duly authorized,
as of the day and year first above written.
STATE STREET BANK AND TRUST COMPANY
not in its individual capacity but solely as
Trustee for each of the Trusts
By
-----------------------------
Name:
Title:
ABN AMRO BANK N.V., acting through its Chicago
Branch, as Class A Liquidity Provider,
Class B Liquidity Provider and
Class C Liquidity Provider
By
------------------------------
Name:
Title:
By
Name:
Title:
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity except
as expressly set forth herein but
solely as Subordination Agent and trustee
By
------------------------------
Name:
Title:
58
EXHIBIT 4(a)(x)
ESCROW AND PAYING AGENT AGREEMENT
(Class A)
Dated as of December 14, 1998
among
FIRST SECURITY BANK, NATIONAL ASSOCIATION
as Escrow Agent
MORGAN STANLEY & CO. INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
LEHMAN BROTHERS INC.
and
SALOMON SMITH BARNEY INC.
as Underwriters
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity,
but solely as Pass Through Trustee
for and on behalf of
US Airways Pass Through Trust 1998-1A
as Pass Through Trustee
and
STATE STREET BANK AND TRUST COMPANY
as Paying Agent
TABLE OF CONTENTS
-----------------
Page
----
SECTION 1. Escrow Agent 2
Section 1.1 Appointment of Escrow Agent 2
Section 1.2 Instruction, Etc. 3
Section 1.3 Initial Escrow Amount; Issuance of Escrow Receipts 4
Section 1.4 Payments to Receiptholders 5
Section 1.5 Mutilated, Destroyed, Lost or Stolen Escrow Receipt 5
Section 1.6 Additional Escrow Amounts 6
Section 1.7 Resignation or Removal of Escrow Agent 6
Section 1.8 Persons Deemed Owners 6
Section 1.9 Further Assurances 7
SECTION 2. Paying Agent 7
Section 2.1 Appointment of Paying Agent 7
Section 2.2 Establishment of Paying Agent Account 7
Section 2.3 Payments from Paying Agent Account 8
Section 2.4 Withholding Taxes 9
Section 2.5 Resignation or Removal of Paying Agent 9
Section 2.6 Notice of Final Withdrawal 9
SECTION 3. Payments 10
SECTION 4. Other Actions 10
SECTION 5. Representations And Warranties of The Escrow Agent 11
SECTION 6. Representations And Warranties of The Paying Agent 12
SECTION 7. Indemnification 13
SECTION 8. Amendment, Etc 13
SECTION 9. Notices 14
SECTION 10. Transfer 15
ii
SECTION 11. Entire Agreement 15
SECTION 12. Governing Law 15
SECTION 13. WAIVER OF JURY TRIAL RIGHT 15
SECTION 14. Counterparts 15
EXHIBITS
--------
Exhibit A Escrow Receipt
Exhibit B Withdrawal Certificate
iii
This ESCROW AND PAYING AGENT AGREEMENT (Class A) dated as of December
14, 1998 (as amended, modified or supplemented from time to time, this
"Agreement") among First Security Bank, National Association, a national
banking association, as Escrow Agent (in such capacity, together with its
successors in such capacity, the "Escrow Agent"); Morgan Stanley & Co.
Incorporated, Credit Suisse First Boston Corporation, Lehman Brothers Inc.
and Salomon Smith Barney Inc., as Underwriters of the Certificates referred
to below (the "Underwriters" and together with their respective transferees
and assigns as registered owners of the Certificates, the "Investors") under
the Underwriting Agreement referred to below; State Street Bank and Trust
Company, a Massachusetts trust company, not in its individual capacity except
as otherwise expressly provided herein, but solely as trustee (in such
capacity, together with its successors in such capacity, the "Pass Through
Trustee") under the Pass Through Trust Agreement referred to below; and State
Street Bank and Trust Company, a Massachusetts trust company, as paying agent
hereunder (in such capacity, together with its successors in such capacity,
the "Paying Agent").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, US Airways, Inc. ("US Airways") and the Pass Through Trustee
have entered into a Trust Supplement, dated as of the date hereof (the "Trust
Supplement"), to the Pass Through Trust Agreement, dated as of December 4,
1998 (together, as amended, modified or supplemented from time to time in
accordance with the terms thereof, the "Pass Through Trust Agreement")
relating to US Airways Pass Through Trust 1998-1A (the "Pass Through Trust")
pursuant to which the US Airways Pass Through Trust, Series 1998-1A
Certificates referred to therein (the "Certificates") are being issued;
WHEREAS, US Airways and the Underwriters have entered into an
Underwriting Agreement dated as of December 4, 1998 (as amended, modified or
supplemented from time to time in accordance with the terms thereof, the
"Underwriting Agreement") pursuant to which the Pass Through Trustee will
issue and sell the Certificates to the Underwriters;
WHEREAS, US Airways, the Pass Through Trustee, certain other pass
through trustees and certain other persons concurrently herewith are entering
into the Note Purchase Agreement, dated as of the date hereof (the "Note
Purchase Agreement"), pursuant to which the Pass Through Trustee has agreed
to acquire from time to time on or prior to the Delivery Period Termination
Date (as defined in the Note Purchase Agreement) equipment notes (the
"Equipment Notes") issued to finance the acquisition
of aircraft by US Airways, as lessee or as owner, utilizing a portion of the
proceeds from the sale of the Certificates (the "Net Proceeds");
WHEREAS, the Underwriters and the Pass Through Trustee intend that the
Net Proceeds be held in escrow by the Escrow Agent on behalf of the
Investors, subject to withdrawal upon request by the Pass Through Trustee and
satisfaction of the conditions set forth in the Note Purchase Agreement for
the purpose of purchasing Equipment Notes, and that pending such withdrawal
the Net Proceeds be deposited on behalf of the Escrow Agent with Credit
Suisse First Boston, acting through its New York branch, as Depositary (the
"Depositary") under the Deposit Agreement, dated as of the date hereof
between the Depositary and the Escrow Agent relating to the Pass Through
Trust (as amended, modified or supplemented from time to time in accordance
with the terms thereof, the "Deposit Agreement") pursuant to which, among
other things, the Depositary will pay interest for distribution to the
Investors and establish accounts from which the Escrow Agent shall make
withdrawals upon request of and proper certification by the Pass Through
Trustee;
WHEREAS, the Escrow Agent wishes to appoint the Paying Agent to pay
amounts required to be distributed to the Investors in accordance with this
Agreement; and
WHEREAS, capitalized terms used but not defined herein shall have the
respective meanings set forth or incorporated by reference in the Pass
Through Trust Agreement.
NOW, THEREFORE, in consideration of the obligations contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. Escrow Agent.
Section 1.1 Appointment of Escrow Agent. Each of the Underwriters, for
and on behalf of each of the Investors, hereby irrevocably appoints,
authorizes and directs the Escrow Agent to act as escrow agent and fiduciary
hereunder and under the Deposit Agreement for such specific purposes and with
such powers as are specifically delegated to the Escrow Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto. Any and all money received and held by the Escrow Agent under this
Agreement or the Deposit Agreement shall be held in escrow by the Escrow
Agent in accordance with the terms of this Agreement. This
2
Agreement is irrevocable and the Investors' rights with respect to any monies
received and held in escrow by the Escrow Agent under this Agreement or the
Deposit Agreement shall only be as provided under the terms and conditions of
this Agreement and the Deposit Agreement. The Escrow Agent (which term as
used in this sentence shall include reference to its affiliates and its own
and its affiliates' officers, directors, employees and agents):
(a) shall have no duties or responsibilities except those
expressly set forth in this Agreement;
(b) shall not be responsible to the Pass Through Trustee or the
Investors for any recitals, statements, representations or warranties of any
person other then itself contained in this Agreement or the Deposit Agreement
or for the failure by the Pass Through Trustee, the Investors or any other
person or entity (other than the Escrow Agent) to perform any of its
obligations hereunder (whether or not the Escrow Agent shall have any
knowledge thereof); and
(c) shall not be responsible for any action taken or omitted to be
taken by it hereunder or provided for herein or in connection herewith,
except for its own willful misconduct or gross negligence (or simple
negligence in connection with the handling of funds).
Section 1.2 Instruction, Etc. The Underwriters, for and on behalf of
each of the Investors, hereby irrevocably instruct the Escrow Agent, and the
Escrow Agent agrees: (a) to enter into the Deposit Agreement; (b) to appoint
the Paying Agent as provided in this Agreement; (c) upon receipt at any time
and from time to time prior to the Termination Date (as defined below) of a
certificate substantially in the form of Exhibit B hereto (a "Withdrawal
Certificate") executed by the Pass Through Trustee, together with an attached
Notice of Purchase Withdrawal in substantially the form of Exhibit A to the
Deposit Agreement duly completed by the Pass Through Trustee (the "Applicable
Notice of Purchase Withdrawal" and the withdrawal to which it relates, a
"Purchase Withdrawal"), immediately to execute the Applicable Notice of
Purchase Withdrawal as Escrow Agent and transmit it to the Depositary by
facsimile transmission in accordance with the Deposit Agreement; provided
that, upon the request of the Pass Through Trustee after such transmission,
the Escrow Agent shall cancel such Applicable Notice of Purchase Withdrawal;
and (d) if there are any undrawn Deposits (as defined in the Deposit
Agreement) on the "Termination Date", which shall mean the earlier of (i)
October 31, 1999 and (ii) the day on which the Escrow Agent receives notice
from the Pass Through Trustee that the Pass Through Trustee's obligation to
purchase
3
Equipment Notes under the Note Purchase Agreement has terminated, to give
notice to the Depositary (with a copy to the Paying Agent) substantially in
the form of Exhibit B to the Deposit Agreement requesting a withdrawal of all
of the remaining Deposits, together with accrued and unpaid interest on such
Deposits to the date of withdrawal, on the 15th day after the date that such
notice of withdrawal is given to the Depositary (or, if not a Business Day,
on the next succeeding Business Day) (a "Final Withdrawal"), provided that if
the day scheduled for the Final Withdrawal in accordance with the foregoing
is within ten (10) days before or after a Regular Distribution Date, then the
Escrow Agent shall request that such requested Final Withdrawal be made on
such Regular Distribution Date (the date of such requested withdrawal, the
"Final Withdrawal Date"). If for any reason the Escrow Agent shall have
failed to give the Final Withdrawal Notice to the Depositary on or before
November 1, 1999, and there are unwithdrawn Deposits on such date, the Final
Withdrawal Date shall be deemed to be November 16, 1999.
Section 1.3 Initial Escrow Amount; Issuance of Escrow Receipts. The
Escrow Agent hereby directs the Underwriters to, and the Underwriters hereby
acknowledge that on the date hereof they shall, irrevocably deliver to the
Depositary on behalf of the Escrow Agent, an amount in U.S. dollars
("Dollars") and immediately available funds equal to $291,181,330 for deposit
on behalf of the Escrow Agent with the Depositary in accordance with Section
2.1 of the Deposit Agreement. The Underwriters hereby instruct the Escrow
Agent, upon receipt of such sum from the Underwriters, to confirm such
receipt by executing and delivering to the Pass Through Trustee an Escrow
Receipt in the form of Exhibit A hereto (an "Escrow Receipt"), (a) to be
affixed by the Pass Through Trustee to each Certificate and (b) to evidence
the same percentage interest ("Escrow Interest") in the Account Amounts (as
defined below) as the Fractional Undivided Interest in the Pass Through Trust
evidenced by the Certificate to which it is to be affixed. The Escrow Agent
shall provide to the Pass Through Trustee for attachment to each Certificate
newly issued under and in accordance with the Pass Through Trust Agreement an
executed Escrow Receipt as the Pass Through Trustee may from time to time
request of the Escrow Agent. Each Escrow Receipt shall be registered by the
Escrow Agent in a register (the "Register") maintained by the Escrow Agent in
the same name and same manner as the Certificate to which it is attached and
may not thereafter be detached from such Certificate to which it is to be
affixed prior to the distribution of the Final Withdrawal (the "Final
Distribution"). After the Final Distribution, no additional Escrow Receipts
shall be issued and the Pass Through Trustee shall request the return to the
Escrow Agent for cancellation of all outstanding Escrow Receipts.
4
Section 1.4 Payments to Receiptholders. All payments and distributions
made to holders of an Escrow Receipt (collectively "Receiptholders") in
respect of the Escrow Receipt shall be made only from amounts deposited in
the Paying Agent Account (as defined below) ("Account Amounts"). Each
Receiptholder, by its acceptance of an Escrow Receipt, agrees that (a) it
will look solely to the Account Amounts for any payment or distribution due
to such Receiptholder pursuant to the terms of the Escrow Receipt and this
Agreement and (b) it will have no recourse to US Airways, the Pass Through
Trustee, the Paying Agent or the Escrow Agent, except as expressly provided
herein or in the Pass Through Trust Agreement. No Receiptholder shall have
any right to vote or in any manner otherwise control the operation and
management of the Paying Agent Account or the obligations of the parties
hereto, nor shall anything set forth herein, or contained in the terms of the
Escrow Receipt, be construed so as to constitute the Receiptholders from time
to time as partners or members of an association.
Section 1.5 Mutilated, Destroyed, Lost or Stolen Escrow Receipt. If
(a) any mutilated Escrow Receipt is surrendered to the Escrow Agent or the
Escrow Agent receives evidence to its satisfaction of the destruction, loss
or theft of any Escrow Receipt and (b) there is delivered to the Escrow Agent
and the Pass Through Trustee such security, indemnity or bond, as may be
required by them to hold each of them harmless, then, absent notice to the
Escrow Agent or the Pass Through Trustee that such destroyed, lost or stolen
Escrow Receipt has been acquired by a bona fide purchaser, and provided that
the requirements of Section 8-405 of the Uniform Commercial Code in effect in
any applicable jurisdiction are met, the Escrow Agent shall execute,
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Escrow Receipt, a new Escrow Receipt or Escrow
Receipts and of like Escrow Interest in the Account Amounts and bearing a
number not contemporaneously outstanding.
In connection with the issuance of any new Escrow Receipt under this
Section 1.5, the Escrow Agent may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Pass
Through Trustee and the Escrow Agent) connected therewith.
Any duplicate Escrow Receipt issued pursuant to this Section 1.5 shall
constitute conclusive evidence of the appropriate Escrow Interest in the
Account Amounts, as if originally issued, whether or not the lost, stolen or
destroyed Escrow Receipt shall be found at any time.
5
The provisions of this Section 1.5 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Escrow
Receipts.
Section 1.6 Additional Escrow Amounts. On the date of any Purchase
Withdrawal, the Pass Through Trustee may re-deposit with the Depositary some
or all of the amounts so withdrawn in accordance with Section 2.4 of the
Deposit Agreement.
Section 1.7 Resignation or Removal of Escrow Agent. Subject to the
appointment and acceptance of a successor Escrow Agent as provided below, the
Escrow Agent may resign at any time by giving thirty (30) days' prior written
notice thereof to the Investors, but may not otherwise be removed except for
cause by the written consent of the Investors with respect to Investors
representing Escrow Interests aggregating not less than a majority in
interest in the Account Amounts (an "Action of Investors"). Upon any such
resignation or removal, the Investors, by an Action of Investors, shall have
the right to appoint a successor Escrow Agent. If no successor Escrow Agent
shall have been so appointed and shall have accepted such appointment within
thirty (30) days after the retiring Escrow Agent's giving of notice of
resignation or the removal of the retiring Escrow Agent, then the retiring
Escrow Agent may appoint a successor Escrow Agent. Any successor Escrow
Agent shall be a bank which has an office in the United States with a
combined capital and surplus of at least $100,000,000. Upon the acceptance
of any appointment as Escrow Agent hereunder by a successor Escrow Agent,
such successor Escrow Agent shall enter into such documents as the Pass
Through Trustee shall require and shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Escrow Agent, and the retiring Escrow Agent shall be discharged from its
duties and obligations hereunder. No resignation or removal of the Escrow
Agent shall be effective unless a written confirmation shall have been
obtained from each of Moody's Investors Service, Inc. and Standard & Poor's
Rating Services, a division of The McGraw-Hill Companies, Inc., that the
replacement of the Escrow Agent with the successor Escrow Agent will not
result in (a) a reduction of the rating for the Certificates below the then
current rating for the Certificates or (b) a withdrawal or suspension of the
rating of the Certificates.
Section 1.8 Persons Deemed Owners. Prior to due presentment of a
Certificate for registration of transfer, the Escrow Agent and the Paying
Agent may treat the Person in whose name any Escrow Receipt is registered (as
of the day of determination) as the owner of such Escrow Receipt for the
purpose of receiving distributions pursuant to this Agreement and for all
other purposes whatsoever, and neither the Escrow Agent nor the Paying Agent
shall be affected by any notice to the contrary.
6
Section 1.9 Further Assurances. The Escrow Agent agrees to take such
actions, and execute such other documents, as may be reasonably requested by
the Pass Through Trustee in order to effectuate the purposes of this
Agreement and the performance by the Escrow Agent of its obligations
hereunder.
SECTION 2. Paying Agent.
Section 2.1 Appointment of Paying Agent. The Escrow Agent hereby
irrevocably appoints and authorizes the Paying Agent to act as its paying
agent hereunder, for the benefit of the Investors, for such specific purposes
and with such powers as are specifically delegated to the Paying Agent by the
terms of this Agreement, together with such other powers as are reasonably
incidental thereto. Any and all money received and held by the Paying Agent
under this Agreement or the Deposit Agreement shall be held in the Paying
Agent Account for the benefit of the Investors. The Paying Agent (which term
as used in this sentence shall include reference to its affiliates and its
own and its affiliates' officers, directors, employees and agents):
(a) shall have no duties or responsibilities except those
expressly set forth in this Agreement, and shall not by reason of this
Agreement be a trustee for the Escrow Agent;
(b) shall not be responsible to the Escrow Agent for any recitals,
statements, representations or warranties of any person other then itself
contained in this Agreement or for the failure by the Escrow Agent or any
other person or entity (other than the Paying Agent) to perform any of its
obligations hereunder (whether or not the Paying Agent shall have any
knowledge thereof); and
(c) shall not be responsible for any action taken or omitted to be
taken by it hereunder or provided for herein or in connection herewith,
except for its own willful misconduct or gross negligence (or simple
negligence in connection with the handling of funds).
Section 2.2 Establishment of Paying Agent Account. The Paying Agent
shall establish a deposit account (the "Paying Agent Account") at State
Street Bank and Trust Company in the name of the Escrow Agent. It is
expressly understood by the parties hereto that the Paying Agent is acting as
the paying agent of the Escrow Agent hereunder and that no amounts on deposit
in the Paying Agent Account constitute part of the Trust Property.
7
Section 2.3 Payments from Paying Agent Account. The Escrow Agent
hereby irrevocably instructs the Paying Agent, and the Paying Agent agrees to
act, as follows:
(a) On each Interest Payment Date (as defined in the Deposit
Agreement) or as soon thereafter as the Paying Agent has confirmed receipt in
the Paying Agent Account from the Depositary of any amount in respect of
accrued interest on the Deposits, the Paying Agent shall distribute out of
the Paying Agent Account the entire amount deposited therein by the
Depositary. There shall be so distributed to each Receiptholder of record on
the 15th day (whether or not a Business Day) preceding such Interest Payment
Date by check mailed to such Receiptholder, at the address appearing in the
Register, such Receiptholder's pro rata share (based on the Escrow Interest
in the Account Amounts held by such Receiptholder) of the total amount of
interest deposited by the Depositary in the Paying Agent Account on such
date, except that, with respect to Escrow Receipts registered on the Record
Date in the name of The Depository Trust Company, a New York corporation
("DTC"), such distribution shall be made by wire transfer in immediately
available funds to the account designated by DTC.
(b) Upon the confirmation by the Paying Agent of receipt in the
Paying Agent Account from the Depositary of any amount in respect of the
Final Withdrawal, the Paying Agent shall forthwith distribute the entire
amount of the Final Withdrawal deposited therein by the Depositary. There
shall be so distributed to each Receiptholder of record on the 15th day
(whether or not a Business Day) preceding the Final Withdrawal Date by check
mailed to such Receiptholder, at the address appearing in the Register, such
Receiptholder's pro rata share (based on the Escrow Interest in the Account
Amounts held by such Receiptholder) of the total amount in the Paying Agent
Account on account of such Final Withdrawal, except that, with respect to
Escrow Receipts registered on the Record Date in the name of DTC, such
distribution shall be made by wire transfer in immediately available funds to
the account designated by DTC.
(c) If any payment of interest or principal in respect of the Final
Withdrawal is not received by the Paying Agent within five (5) days of the
applicable date when due, then it shall be distributed to Receiptholders
after actual receipt by the Paying Agent on the same basis as a Special
Payment is distributed under the Pass Through Trust Agreement.
8
(d) The Paying Agent shall include with any check mailed pursuant
to this Section any notice required to be distributed under the Pass Through
Trust Agreement that is furnished to the Paying Agent by the Pass Through
Trustee.
Section 2.4 Withholding Taxes. The Paying Agent shall exclude and
withhold from each distribution of accrued interest on the Deposits (as
defined in the Deposit Agreement) and any amount in respect of the Final
Withdrawal any and all withholding taxes applicable thereto as required by
law. The Paying Agent agrees to act as such withholding agent and, in
connection therewith, whenever any present or future taxes or similar charges
are required to be withheld with respect to any amounts payable in respect of
the Deposits (as defined in the Deposit Agreement) or the escrow amounts, to
withhold such amounts and timely pay the same to the appropriate authority in
the name of and on behalf of the Receiptholders, that it will file any
necessary withholding tax returns or statements when due, and that, as
promptly as possible after the payment thereof, it will deliver to each such
Receiptholder appropriate documentation showing the payment thereof, together
with such additional documentary evidence as such Receiptholder may
reasonably request from time to time. The Paying Agent agrees to file any
other information reports as it may be required to file under United States
law.
Section 2.5 Resignation or Removal of Paying Agent. Subject to the
appointment and acceptance of a successor Paying Agent as provided below, the
Paying Agent may resign at any time by giving thirty (30) days' prior written
notice thereof to the Escrow Agent, but may not otherwise be removed except
for cause by the Escrow Agent. Upon any such resignation or removal, the
Escrow Agent shall have the right to appoint a successor Paying Agent. If no
successor Paying Agent shall have been so appointed and shall have accepted
such appointment within thirty (30) days after the retiring Paying Agent's
giving of notice of resignation or the removal of the retiring Paying Agent,
then the retiring Paying Agent may appoint a successor Paying Agent. Any
Successor Paying Agent shall be a bank which has an office in the United
States with a combined capital and surplus of at least US$100,000,000. Upon
the acceptance of any appointment as Paying Agent hereunder by a successor
Paying Agent, such successor Paying Agent shall enter into such documents as
the Escrow Agent shall require and shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Paying Agent, and the retiring Paying Agent shall be discharged from its
duties and obligations hereunder.
Section 2.6 Notice of Final Withdrawal. Promptly after receipt by the
Paying Agent of notice that the Escrow Agent has requested a Final Withdrawal
or that a Final Withdrawal will be made, the Paying Agent shall cause notice
of the distribution
9
of the Final Withdrawal to be mailed to each of the Receiptholders at its
address as it appears in the Register. Such notice shall be mailed not less
than fifteen (15) days prior to the Final Withdrawal Date. Such notice shall
set forth:
(a) the Final Withdrawal Date and the date for determining
Receiptholders of record who shall be entitled to receive distributions in
respect of the Final Withdrawal;
(b) the amount of the payment in respect of the Final Withdrawal
for each $1,000 face amount Certificate (based on information provided by the
Pass Through Trustee) and the amount thereof constituting unused Deposits (as
defined in the Deposit Agreement) and interest thereon; and
(c) if the Final Withdrawal Date is the same date as a Regular
Distribution Date, the total amount to be received on such date for each
$1,000 face amount Certificate (based on information provided by the Pass
Through Trustee).
Such mailing may include any notice required to be given to
Certificateholders in connection with such distribution pursuant to the Pass
Through Trust Agreement.
SECTION 3. Payments. If, notwithstanding the instructions in Article
IV of the Deposit Agreement that all amounts payable to the Escrow Agent
under the Deposit Agreement be paid by the Depositary directly to the Paying
Agent or the Pass Through Trustee (depending on the circumstances), the
Escrow Agent receives any payment thereunder, then the Escrow Agent shall
forthwith pay such amount in Dollars and in immediately available funds by
wire transfer to (a) in the case of a payment of accrued interest on the
Deposits (as defined in the Deposit Agreement) or any Final Withdrawal,
directly to the Paying Agent Account and (b) in the case of any Purchase
Withdrawal, directly to the Pass Through Trustee or its designee as specified
and in the manner provided in the Applicable Notice of Purchase Withdrawal.
The Escrow Agent hereby waives any and all rights of set-off, combination of
accounts, right of retention or similar right (whether arising under
applicable law, contract or otherwise) it may have against amounts payable to
the Paying Agent howsoever arising.
SECTION 4. Other Actions. The Escrow Agent shall take such other
actions under or in respect of the Deposit Agreement (including, without
limitation, the enforcement of the obligations of the Depositary thereunder)
as the Investors, by an Action of Investors, may from time to time request.
10
SECTION 5. Representations And Warranties of The Escrow Agent. The
Escrow Agent represents and warrants to US Airways, the Investors, the Paying
Agent and the Pass Through Trustee as follows:
(a) it is a national banking association duly organized and
validly existing in good standing under the laws of the United States of
America;
(b) it has full power, authority and legal right to conduct its
business and operations as currently conducted and to enter into and perform
its obligations under this Agreement and the Deposit Agreement;
(c) the execution, delivery and performance of each of this
Agreement and the Deposit Agreement have been duly authorized by all
necessary corporate action on the part of it and do not require any
stockholder approval, or approval or consent of any trustee or holder of any
indebtedness or obligations of it, and each such document has been duly
executed and delivered by it and constitutes its legal, valid and binding
obligations enforceable against it in accordance with the terms hereof or
thereof except as such enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws or equitable
principles of general application to or affecting the enforcement of
creditors' rights generally (regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(d) no authorization, consent or approval of or other action by,
and no notice to or filing with, any United States federal or state
governmental authority or regulatory body is required for the execution,
delivery or performance by it of this Agreement or the Deposit Agreement;
(e) neither the execution, delivery or performance by it of this
Agreement or the Deposit Agreement, nor compliance with the terms and
provisions hereof or thereof, conflicts or will conflict with or results or
will result in a breach or violation of any of the terms, conditions or
provisions of, or will require any consent or approval under, any law,
governmental rule or regulation or the charter documents, as amended, or
bylaws, as amended, of it or any similar instrument binding on it or any
order, writ, injunction or decree of any court or governmental authority
against it or by which it or any of its properties is bound or any indenture,
mortgage or contract or other agreement or instrument to which it is a party
or by which it or any of its properties is bound, or constitutes or will
constitute a default thereunder or results or will result in the imposition
of any lien upon any of its properties; and
11
(f) there are no pending or, to its knowledge, threatened actions,
suits, investigations or proceedings (whether or not purportedly on behalf of
it) against or affecting it or any of its property before or by any court or
administrative agency which, if adversely determined, (A) would adversely
affect the ability of it to perform its obligations under this Agreement or
the Deposit Agreement or (B) would call into question or challenge the
validity of this Agreement or the Deposit Agreement or the enforceability
hereof or thereof in accordance with the terms hereof or thereof, nor is the
Escrow Agent in default with respect to any order of any court, governmental
authority, arbitration board or administrative agency so as to adversely
affect its ability to perform its obligations under this Agreement or the
Deposit Agreement.
SECTION 6. Representations And Warranties of The Paying Agent. The
Paying Agent represents and warrants to US Airways, the Investors, the Escrow
Agent and the Pass Through Trustee as follows:
(a) it is a trust company duly organized and validly existing in
good standing under the laws of the Commonwealth of Massachusetts;
(b) it has full power, authority and legal right to conduct its
business and operations as currently conducted and to enter into and perform
its obligations under this Agreement;
(c) the execution, delivery and performance of this Agreement has
been duly authorized by all necessary corporate action on the part of it and
does not require any stockholder approval, or approval or consent of any
trustee or holder of any indebtedness or obligations of it, and such document
has been duly executed and delivered by it and constitutes its legal, valid
and binding obligations enforceable against it in accordance with the terms
hereof except as such enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws or equitable
principles of general application to or affecting the enforcement of
creditors' rights generally (regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(d) no authorization, consent or approval of or other action by,
and no notice to or filing with, any United States federal or state
governmental authority or regulatory body is required for the execution,
delivery or performance by it of this Agreement;
12
(e) neither the execution, delivery or performance by it of this
Agreement, nor compliance with the terms and provisions hereof, conflicts or
will conflict with or results or will result in a breach or violation of any
of the terms, conditions or provisions of, or will require any consent or
approval under, any law, governmental rule or regulation or the charter
documents, as amended, or bylaws, as amended, of it or any similar instrument
binding on it or any order, writ, injunction or decree of any court or
governmental authority against it or by which it or any of its properties is
bound or any indenture, mortgage or contract or other agreement or instrument
to which it is a party or by which it or any of its properties is bound, or
constitutes or will constitute a default thereunder or results or will result
in the imposition of any lien upon any of its properties; and
(f) there are no pending or, to its knowledge, threatened actions,
suits, investigations or proceedings (whether or not purportedly on behalf of
it) against or affecting it or any of its property before or by any court or
administrative agency which, if adversely determined, (A) would adversely
affect the ability of it to perform its obligations under this Agreement or
(B) would call into question or challenge the validity of this Agreement or
the enforceability hereof in accordance with the terms hereof, nor is the
Paying Agent in default with respect to any order of any court, governmental
authority, arbitration board or administrative agency so as to adversely
affect its ability to perform its obligations under this Agreement.
SECTION 7. Indemnification. Except for actions expressly required of
the Escrow Agent or the Paying Agent hereunder, each of the Escrow Agent and
the Paying Agent shall in all cases be fully justified in failing or refusing
to act hereunder unless it shall have been indemnified by the party
requesting such action in a manner reasonably satisfactory to it against any
and all liability and expense which may be incurred by it by reason of taking
or continuing to take any such action. In the event US Airways requests any
amendment to any Operative Document (as defined in the Note Purchase
Agreement), the Pass Through Trustee agrees to pay all reasonable fees and
expenses (including, without limitation, fees and disbursements of counsel)
of the Escrow Agent and the Paying Agent in connection therewith.
SECTION 8. Amendment, Etc. Upon request of the Pass Through Trustee
and approval by an Action of Investors, the Escrow Agent shall enter into an
amendment to this Agreement, so long as such amendment does not adversely
affect the rights or obligations of the Escrow Agent or the Paying Agent,
provided that upon request of the Pass Through Trustee and without any
consent of the Investors, the
13
Escrow Agent shall enter into an amendment to this Agreement for any of the
following purposes:
(a) to correct or supplement any provision in this Agreement which
may be defective or inconsistent with any other provision herein or to cure
any ambiguity or correct any mistake or to modify any other provision with
respect to matters or questions arising under this Agreement, provided that
any such action shall not materially adversely affect the interests of the
Investors; or
(b) to comply with any requirement of the SEC, applicable law,
rules or regulations of any exchange or quotation system on which the
Certificates are listed or any regulatory body; or
(c) to evidence and provide for the acceptance of appointment
under this Agreement of a successor Escrow Agent, successor Paying Agent or
successor Pass Through Trustee.
SECTION 9. Notices. Unless otherwise expressly provided herein, any
notice or other communication under this Agreement shall be in writing
(including by facsimile) and shall be deemed to be given and effective upon
receipt thereof. All notices shall be sent to (a) in the case of the
Investors, as their respective addresses shall appear in the Register, (b) in
the case of the Escrow Agent, First Security Bank, National Association, 79
South Main Street, Salt Lake City, UT 84111, Attention: Corporate Trust
Services (Telecopier: (801) 246-5053), (c) in the case of the Pass Through
Trustee, State Street Bank and Trust Company, 2 International Place, 4th
Floor, Boston, MA 02110, Attention: Corporate Trust Administration
(Telecopier: (617) 664-5151) or (d) in the case of the Paying Agent, State
Street Bank and Trust Company, 2 International Place, 4th Floor, Boston, MA
02110, Attention: Corporate Trust Administration (Telecopier: (617) 664-
5151), in each case with a copy to US Airways, US Airways, Inc., 2345 Crystal
Drive, Arlington, VA 22227, Attention: Treasurer (Telecopier: (703) 872-
5936) (or at such other address as any such party may specify from time to
time in a written notice to the other parties). On or prior to the execution
of this Agreement, the Pass Through Trustee has delivered to the Escrow Agent
a certificate containing specimen signatures of the representatives of the
Pass Through Trustee who are authorized to give notices and instructions with
respect to this Agreement. The Escrow Agent may conclusively rely on such
certificate until the Escrow Agent receives written notice from the Pass
Through Trustee to the contrary.
14
SECTION 10. Transfer. No party hereto shall be entitled to assign or
otherwise transfer this Agreement (or any interest herein) other than (in the
case of the Escrow Agent) to a successor escrow agent under Section 1.7
hereof or (in the case of the Paying Agent) to a successor paying agent under
Section 2.5 hereof, and any purported assignment in violation thereof shall
be void. This Agreement shall be binding upon the parties hereto and their
respective successors and (in the case of the Escrow Agent and the Paying
Agent) their respective permitted assigns.
SECTION 11. Entire Agreement. This Agreement sets forth all of the
promises, covenants, agreements, conditions and understandings among the
Escrow Agent, the Paying Agent, the Underwriters and the Pass Through Trustee
with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements and undertakings, inducements or conditions,
express or implied, oral or written.
SECTION 12. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
SECTION 13. WAIVER OF JURY TRIAL RIGHT. EACH OF THE ESCROW AGENT, THE
PAYING AGENT, THE INVESTORS AND THE PASS THROUGH TRUSTEE ACKNOWLEDGES AND
ACCEPTS THAT IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT SUCH PARTY IRREVOCABLY WAIVES ITS RIGHT TO A TRIAL BY JURY.
SECTION 14. Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one instrument.
15
IN WITNESS WHEREOF, the Escrow Agent, the Paying Agent, the Underwriters
and the Pass Through Trustee have caused this Escrow and Paying Agent
Agreement (Class A) to be duly executed as of the day and year first above
written.
STATE STREET BANK AND TRUST COMPANY, not in its individual capacity, but
solely as Pass Through Trustee for and on behalf of US Airways Pass Through
Trust 1998-1A
By
------------------------------
Name:
Title:
STATE STREET BANK AND TRUST COMPANY as Paying Agent
By
------------------------------
Name:
Title:
FIRST SECURITY BANK, NATIONAL ASSOCIATION, as Escrow Agent
By:
------------------------------
Name:
Title:
MORGAN STANLEY & CO. INCORPORATED, CREDIT SUISSE FIRST BOSTON CORPORATION and
SALOMON SMITH BARNEY INC., as Underwriters
By: MORGAN STANLEY & CO. INCORPORATED
By
------------------------------
Name:
Title:
EXHIBIT A
------- -
US Airways 1998-1A Escrow Receipt
No.
--
This Escrow Receipt evidences a fractional undivided interest in amounts
("Account Amounts") from time to time deposited into a certain paying agent
account (the "Paying Agent Account") described in the Escrow and Paying Agent
Agreement (Class A) dated as of December 14, 1998 (as amended, modified or
supplemented from time to time, the "Escrow and Paying Agent Agreement")
among First Security Bank, National Association, a national banking
association, as Escrow Agent (in such capacity, together with its successors
in such capacity, the "Escrow Agent"), Morgan Stanley & Co. Incorporated,
Credit Suisse First Boston Corporation, Lehman Brothers Inc. and Salomon
Smith Barney Inc., as Underwriters, State Street Bank and Trust Company, as
Pass Through Trustee (in such capacity, together with its successors in such
capacity, the "Pass Through Trustee") and State Street Bank and Trust Company
as paying agent (in such capacity, together with its successors in such
capacity, the "Paying Agent"). Capitalized terms not defined herein shall
have the meanings assigned to them in the Escrow and Paying Agent Agreement.
This Escrow Receipt is issued under and is subject to the terms,
provisions and conditions of the Escrow and Paying Agent Agreement. By virtue
of its acceptance hereof the holder of this Escrow Receipt assents and agrees
to be bound by the provisions of the Escrow and Paying Agent Agreement and
this Escrow Receipt.
This Escrow Receipt represents a fractional undivided interest in
amounts deposited from time to time in the Paying Agent Account, and grants
or represents no rights, benefits or interests of any kind in respect of any
assets or property other than such amounts. This Escrow Receipt evidences the
same percentage interest in the Account Amounts as the Fractional Undivided
Interest in the Pass Through Trust evidenced by the Certificate to which this
Escrow Receipt is affixed.
All payments and distributions made to Receiptholders in respect of the
Escrow Receipt shall be made only from Account Amounts deposited in the
Paying Agent Account. The holder of this Escrow Receipt, by its acceptance of
this Escrow Receipt, agrees that it will look solely to the Account Amounts
for any payment or distribution due to it pursuant to this Escrow Receipt and
that it will not have any
A-1
recourse to US Airways, the Pass Through Trustee, the Paying Agent or the
Escrow Agent, except as expressly provided herein or in the Pass Through
Trust Agreement. No Receiptholder of this Escrow Receipt shall have any
right to vote or in any manner otherwise control the operation and management
of the Paying Agent Account, nor shall anything set forth herein, or
contained in the terms of this Escrow Receipt, be construed so as to
constitute the Receiptholders from time to time as partners or members of an
association.
This Escrow Receipt may not be assigned or transferred except in
connection with the assignment or transfer of the Certificate to which this
Escrow Receipt is affixed. After payment to the holder hereof of its Escrow
Interest in the Final Distribution, upon the request of the Pass Through
Trustee, the holder hereof will return this Escrow Receipt to the Pass
Through Trustee.
The Paying Agent may treat the person in whose name the Certificate to
which this Escrow Receipt is attached as the owner hereof for all purposes,
and the Paying Agent shall not be affected by any notice to the contrary.
THIS ESCROW RECEIPT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Escrow Agent has caused this Escrow Receipt to
be duly executed.
Dated: December , 1998
---
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, as Escrow Agent
By
---------------------------
Name:
Title:
A-2
EXHIBIT B
------- -
Withdrawal Certificate
(Class A)
First Security Bank, National Association,
as Escrow Agent
79 South Main Street
Salt Lake City, UT 84111
Attention: Corporate Trust Services
Telecopier: (801) 246-5053
Ladies and Gentlemen:
Reference is made to the Escrow and Paying Agent Agreement, dated as of
December 14, 1998 (the "Agreement"). We hereby certify to you that the
conditions to the obligations of the undersigned to execute a Participation
Agreement pursuant to the Note Purchase Agreement have been satisfied.
Pursuant to Section 1.2(c) of the Agreement, please execute the attached
Notice of Withdrawal and immediately transmit by facsimile to the Depositary,
at (212) 325-8319.
Very truly yours,
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity but
solely as Pass Through Trustee
By
----------------------------------
Name:
Title:
Dated: ,
---------- ---
B-1
NOTICE OF PURCHASE WITHDRAWAL
------ -- -------- ----------
CREDIT SUISSE FIRST BOSTON
New York Branch
11 Madison Avenue
New York, NY 10010
Attention: Robert Finney and Jennifer Toth
Telecopier: (212) 325-8319
Ladies and Gentlemen:
Reference is made to the Deposit Agreement (Class A) dated as of
December 14, 1998 (the "Deposit Agreement") between First Security Bank,
National Association, as Escrow Agent, and Credit Suisse First Boston, New
York Branch, as Depositary (the "Depositary").
In accordance with Section 2.3(a) of the Deposit Agreement, the
undersigned hereby requests the withdrawal of the entire amount of the
Deposit, $ __________, Account No. ____________.
The undersigned hereby directs the Depositary to pay the proceeds of the
Deposit to _______________, Account No. __________, Reference: __________
on _______________, _____, upon the telephonic request of a representative
of the Pass Through Trustee.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
as Escrow Agent
By
---------------------------
Name:
Title:
Dated: ,
----------- ----
B-2
EXHIBIT 4(a)(xi)
ESCROW AND PAYING AGENT AGREEMENT
(Class B)
Dated as of December 14, 1998
among
FIRST SECURITY BANK, NATIONAL ASSOCIATION
as Escrow Agent
MORGAN STANLEY & CO. INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
LEHMAN BROTHERS INC.
and
SALOMON SMITH BARNEY INC.
as Underwriters
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity,
but solely as Pass Through Trustee
for and on behalf of
US Airways Pass Through Trust 1998-1B
as Pass Through Trustee
and
STATE STREET BANK AND TRUST COMPANY
as Paying Agent
TABLE OF CONTENTS
-----------------
Page
----
SECTION 1. Escrow Agent 2
Section 1.1 Appointment of Escrow Agent 2
Section 1.2 Instruction, Etc. 3
Section 1.3 Initial Escrow Amount; Issuance of Escrow Receipts 4
Section 1.4 Payments to Receiptholders 5
Section 1.5 Mutilated, Destroyed, Lost or Stolen Escrow Receipt 5
Section 1.6 Additional Escrow Amounts 6
Section 1.7 Resignation or Removal of Escrow Agent 6
Section 1.8 Persons Deemed Owners 6
Section 1.9 Further Assurances 7
SECTION 2. Paying Agent 7
Section 2.1 Appointment of Paying Agent 7
Section 2.2 Establishment of Paying Agent Account 7
Section 2.3 Payments from Paying Agent Account 8
Section 2.4 Withholding Taxes 9
Section 2.5 Resignation or Removal of Paying Agent 9
Section 2.6 Notice of Final Withdrawal 9
SECTION 3. Payments 10
SECTION 4. Other Actions 10
SECTION 5. Representations And Warranties of The Escrow Agent 11
SECTION 6. Representations And Warranties of The Paying Agent 12
SECTION 7. Indemnification 13
SECTION 8. Amendment, Etc 13
SECTION 9. Notices 14
SECTION 10. Transfer 15
ii
SECTION 11. Entire Agreement 15
SECTION 12. Governing Law 15
SECTION 13. WAIVER OF JURY TRIAL RIGHT 15
SECTION 14. Counterparts 15
EXHIBITS
--------
Exhibit A Escrow Receipt
Exhibit B Withdrawal Certificate
iii
This ESCROW AND PAYING AGENT AGREEMENT (Class B) dated as of December
14, 1998 (as amended, modified or supplemented from time to time, this
"Agreement") among First Security Bank, National Association, a national
banking association, as Escrow Agent (in such capacity, together with its
successors in such capacity, the "Escrow Agent"); Morgan Stanley & Co.
Incorporated, Credit Suisse First Boston Corporation, Lehman Brothers Inc.
and Salomon Smith Barney Inc., as Underwriters of the Certificates referred
to below (the "Underwriters" and together with their respective transferees
and assigns as registered owners of the Certificates, the "Investors") under
the Underwriting Agreement referred to below; State Street Bank and Trust
Company, a Massachusetts trust company, not in its individual capacity except
as otherwise expressly provided herein, but solely as trustee (in such
capacity, together with its successors in such capacity, the "Pass Through
Trustee") under the Pass Through Trust Agreement referred to below; and State
Street Bank and Trust Company, a Massachusetts trust company, as paying agent
hereunder (in such capacity, together with its successors in such capacity,
the "Paying Agent").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, US Airways, Inc. ("US Airways") and the Pass Through Trustee
have entered into a Trust Supplement, dated as of the date hereof (the "Trust
Supplement"), to the Pass Through Trust Agreement, dated as of December 4,
1998 (together, as amended, modified or supplemented from time to time in
accordance with the terms thereof, the "Pass Through Trust Agreement")
relating to US Airways Pass Through Trust 1998-1B (the "Pass Through Trust")
pursuant to which the US Airways Pass Through Trust, Series 1998-1B
Certificates referred to therein (the "Certificates") are being issued;
WHEREAS, US Airways and the Underwriters have entered into an
Underwriting Agreement dated as of December 4, 1998 (as amended, modified or
supplemented from time to time in accordance with the terms thereof, the
"Underwriting Agreement") pursuant to which the Pass Through Trustee will
issue and sell the Certificates to the Underwriters;
WHEREAS, US Airways, the Pass Through Trustee, certain other pass
through trustees and certain other persons concurrently herewith are entering
into the Note Purchase Agreement, dated as of the date hereof (the "Note
Purchase Agreement"), pursuant to which the Pass Through Trustee has agreed
to acquire from time to time on or prior to the Delivery Period Termination
Date (as defined in the Note Purchase Agreement) equipment notes (the
"Equipment Notes") issued to finance the acquisition
of aircraft by US Airways, as lessee or as owner, utilizing a portion of the
proceeds from the sale of the Certificates (the "Net Proceeds");
WHEREAS, the Underwriters and the Pass Through Trustee intend that the
Net Proceeds be held in escrow by the Escrow Agent on behalf of the
Investors, subject to withdrawal upon request by the Pass Through Trustee and
satisfaction of the conditions set forth in the Note Purchase Agreement for
the purpose of purchasing Equipment Notes, and that pending such withdrawal
the Net Proceeds be deposited on behalf of the Escrow Agent with Credit
Suisse First Boston, acting through its New York branch, as Depositary (the
"Depositary") under the Deposit Agreement, dated as of the date hereof
between the Depositary and the Escrow Agent relating to the Pass Through
Trust (as amended, modified or supplemented from time to time in accordance
with the terms thereof, the "Deposit Agreement") pursuant to which, among
other things, the Depositary will pay interest for distribution to the
Investors and establish accounts from which the Escrow Agent shall make
withdrawals upon request of and proper certification by the Pass Through
Trustee;
WHEREAS, the Escrow Agent wishes to appoint the Paying Agent to pay
amounts required to be distributed to the Investors in accordance with this
Agreement; and
WHEREAS, capitalized terms used but not defined herein shall have the
respective meanings set forth or incorporated by reference in the Pass
Through Trust Agreement.
NOW, THEREFORE, in consideration of the obligations contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. Escrow Agent.
Section 1.1 Appointment of Escrow Agent. Each of the Underwriters, for
and on behalf of each of the Investors, hereby irrevocably appoints,
authorizes and directs the Escrow Agent to act as escrow agent and fiduciary
hereunder and under the Deposit Agreement for such specific purposes and with
such powers as are specifically delegated to the Escrow Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto. Any and all money received and held by the Escrow Agent under this
Agreement or the Deposit Agreement shall be held in escrow by the Escrow
Agent in accordance with the terms of this Agreement. This
2
Agreement is irrevocable and the Investors' rights with respect to any monies
received and held in escrow by the Escrow Agent under this Agreement or the
Deposit Agreement shall only be as provided under the terms and conditions of
this Agreement and the Deposit Agreement. The Escrow Agent (which term as
used in this sentence shall include reference to its affiliates and its own
and its affiliates' officers, directors, employees and agents):
(a) shall have no duties or responsibilities except those
expressly set forth in this Agreement;
(b) shall not be responsible to the Pass Through Trustee or the
Investors for any recitals, statements, representations or warranties of any
person other then itself contained in this Agreement or the Deposit Agreement
or for the failure by the Pass Through Trustee, the Investors or any other
person or entity (other than the Escrow Agent) to perform any of its
obligations hereunder (whether or not the Escrow Agent shall have any
knowledge thereof); and
(c) shall not be responsible for any action taken or omitted to be
taken by it hereunder or provided for herein or in connection herewith,
except for its own willful misconduct or gross negligence (or simple
negligence in connection with the handling of funds).
Section 1.2 Instruction, Etc. The Underwriters, for and on behalf of
each of the Investors, hereby irrevocably instruct the Escrow Agent, and the
Escrow Agent agrees: (a) to enter into the Deposit Agreement; (b) to appoint
the Paying Agent as provided in this Agreement; (c) upon receipt at any time
and from time to time prior to the Termination Date (as defined below) of a
certificate substantially in the form of Exhibit B hereto (a "Withdrawal
Certificate") executed by the Pass Through Trustee, together with an attached
Notice of Purchase Withdrawal in substantially the form of Exhibit A to the
Deposit Agreement duly completed by the Pass Through Trustee (the "Applicable
Notice of Purchase Withdrawal" and the withdrawal to which it relates, a
"Purchase Withdrawal"), immediately to execute the Applicable Notice of
Purchase Withdrawal as Escrow Agent and transmit it to the Depositary by
facsimile transmission in accordance with the Deposit Agreement; provided
that, upon the request of the Pass Through Trustee after such transmission,
the Escrow Agent shall cancel such Applicable Notice of Purchase Withdrawal;
and (d) if there are any undrawn Deposits (as defined in the Deposit
Agreement) on the "Termination Date", which shall mean the earlier of (i)
October 31, 1999 and (ii) the day on which the Escrow Agent receives notice
from the Pass Through Trustee that the Pass Through Trustee's obligation to
purchase
3
Equipment Notes under the Note Purchase Agreement has terminated, to give
notice to the Depositary (with a copy to the Paying Agent) substantially in
the form of Exhibit B to the Deposit Agreement requesting a withdrawal of all
of the remaining Deposits, together with accrued and unpaid interest on such
Deposits to the date of withdrawal, on the 15th day after the date that such
notice of withdrawal is given to the Depositary (or, if not a Business Day,
on the next succeeding Business Day) (a "Final Withdrawal"), provided that if
the day scheduled for the Final Withdrawal in accordance with the foregoing
is within ten (10) days before or after a Regular Distribution Date, then the
Escrow Agent shall request that such requested Final Withdrawal be made on
such Regular Distribution Date (the date of such requested withdrawal, the
"Final Withdrawal Date"). If for any reason the Escrow Agent shall have
failed to give the Final Withdrawal Notice to the Depositary on or before
November 1, 1999, and there are unwithdrawn Deposits on such date, the Final
Withdrawal Date shall be deemed to be November 16, 1999.
Section 1.3 Initial Escrow Amount; Issuance of Escrow Receipts. The
Escrow Agent hereby directs the Underwriters to, and the Underwriters hereby
acknowledge that on the date hereof they shall, irrevocably deliver to the
Depositary on behalf of the Escrow Agent, an amount in U.S. dollars
("Dollars") and immediately available funds equal to $64,114,059 for deposit
on behalf of the Escrow Agent with the Depositary in accordance with Section
2.1 of the Deposit Agreement. The Underwriters hereby instruct the Escrow
Agent, upon receipt of such sum from the Underwriters, to confirm such
receipt by executing and delivering to the Pass Through Trustee an Escrow
Receipt in the form of Exhibit A hereto (an "Escrow Receipt"), (a) to be
affixed by the Pass Through Trustee to each Certificate and (b) to evidence
the same percentage interest ("Escrow Interest") in the Account Amounts (as
defined below) as the Fractional Undivided Interest in the Pass Through Trust
evidenced by the Certificate to which it is to be affixed. The Escrow Agent
shall provide to the Pass Through Trustee for attachment to each Certificate
newly issued under and in accordance with the Pass Through Trust Agreement an
executed Escrow Receipt as the Pass Through Trustee may from time to time
request of the Escrow Agent. Each Escrow Receipt shall be registered by the
Escrow Agent in a register (the "Register") maintained by the Escrow Agent in
the same name and same manner as the Certificate to which it is attached and
may not thereafter be detached from such Certificate to which it is to be
affixed prior to the distribution of the Final Withdrawal (the "Final
Distribution"). After the Final Distribution, no additional Escrow Receipts
shall be issued and the Pass Through Trustee shall request the return to the
Escrow Agent for cancellation of all outstanding Escrow Receipts.
4
Section 1.4 Payments to Receiptholders. All payments and distributions
made to holders of an Escrow Receipt (collectively "Receiptholders") in
respect of the Escrow Receipt shall be made only from amounts deposited in
the Paying Agent Account (as defined below) ("Account Amounts"). Each
Receiptholder, by its acceptance of an Escrow Receipt, agrees that (a) it
will look solely to the Account Amounts for any payment or distribution due
to such Receiptholder pursuant to the terms of the Escrow Receipt and this
Agreement and (b) it will have no recourse to US Airways, the Pass Through
Trustee, the Paying Agent or the Escrow Agent, except as expressly provided
herein or in the Pass Through Trust Agreement. No Receiptholder shall have
any right to vote or in any manner otherwise control the operation and
management of the Paying Agent Account or the obligations of the parties
hereto, nor shall anything set forth herein, or contained in the terms of the
Escrow Receipt, be construed so as to constitute the Receiptholders from time
to time as partners or members of an association.
Section 1.5 Mutilated, Destroyed, Lost or Stolen Escrow Receipt. If
(a) any mutilated Escrow Receipt is surrendered to the Escrow Agent or the
Escrow Agent receives evidence to its satisfaction of the destruction, loss
or theft of any Escrow Receipt and (b) there is delivered to the Escrow Agent
and the Pass Through Trustee such security, indemnity or bond, as may be
required by them to hold each of them harmless, then, absent notice to the
Escrow Agent or the Pass Through Trustee that such destroyed, lost or stolen
Escrow Receipt has been acquired by a bona fide purchaser, and provided that
the requirements of Section 8-405 of the Uniform Commercial Code in effect in
any applicable jurisdiction are met, the Escrow Agent shall execute,
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Escrow Receipt, a new Escrow Receipt or Escrow
Receipts and of like Escrow Interest in the Account Amounts and bearing a
number not contemporaneously outstanding.
In connection with the issuance of any new Escrow Receipt under this
Section 1.5, the Escrow Agent may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Pass
Through Trustee and the Escrow Agent) connected therewith.
Any duplicate Escrow Receipt issued pursuant to this Section 1.5 shall
constitute conclusive evidence of the appropriate Escrow Interest in the
Account Amounts, as if originally issued, whether or not the lost, stolen or
destroyed Escrow Receipt shall be found at any time.
5
The provisions of this Section 1.5 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Escrow
Receipts.
Section 1.6 Additional Escrow Amounts. On the date of any Purchase
Withdrawal, the Pass Through Trustee may re-deposit with the Depositary some
or all of the amounts so withdrawn in accordance with Section 2.4 of the
Deposit Agreement.
Section 1.7 Resignation or Removal of Escrow Agent. Subject to the
appointment and acceptance of a successor Escrow Agent as provided below, the
Escrow Agent may resign at any time by giving thirty (30) days' prior written
notice thereof to the Investors, but may not otherwise be removed except for
cause by the written consent of the Investors with respect to Investors
representing Escrow Interests aggregating not less than a majority in
interest in the Account Amounts (an "Action of Investors"). Upon any such
resignation or removal, the Investors, by an Action of Investors, shall have
the right to appoint a successor Escrow Agent. If no successor Escrow Agent
shall have been so appointed and shall have accepted such appointment within
thirty (30) days after the retiring Escrow Agent's giving of notice of
resignation or the removal of the retiring Escrow Agent, then the retiring
Escrow Agent may appoint a successor Escrow Agent. Any successor Escrow
Agent shall be a bank which has an office in the United States with a
combined capital and surplus of at least $100,000,000. Upon the acceptance
of any appointment as Escrow Agent hereunder by a successor Escrow Agent,
such successor Escrow Agent shall enter into such documents as the Pass
Through Trustee shall require and shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Escrow Agent, and the retiring Escrow Agent shall be discharged from its
duties and obligations hereunder. No resignation or removal of the Escrow
Agent shall be effective unless a written confirmation shall have been
obtained from each of Moody's Investors Service, Inc. and Standard & Poor's
Rating Services, a division of The McGraw-Hill Companies, Inc., that the
replacement of the Escrow Agent with the successor Escrow Agent will not
result in (a) a reduction of the rating for the Certificates below the then
current rating for the Certificates or (b) a withdrawal or suspension of the
rating of the Certificates.
Section 1.8 Persons Deemed Owners. Prior to due presentment of a
Certificate for registration of transfer, the Escrow Agent and the Paying
Agent may treat the Person in whose name any Escrow Receipt is registered (as
of the day of determination) as the owner of such Escrow Receipt for the
purpose of receiving distributions pursuant to this Agreement and for all
other purposes whatsoever, and neither the Escrow Agent nor the Paying Agent
shall be affected by any notice to the contrary.
6
Section 1.9 Further Assurances. The Escrow Agent agrees to take such
actions, and execute such other documents, as may be reasonably requested by
the Pass Through Trustee in order to effectuate the purposes of this
Agreement and the performance by the Escrow Agent of its obligations
hereunder.
Section 2. Paying Agent.
Section 2.1 Appointment of Paying Agent. The Escrow Agent hereby
irrevocably appoints and authorizes the Paying Agent to act as its paying
agent hereunder, for the benefit of the Investors, for such specific purposes
and with such powers as are specifically delegated to the Paying Agent by the
terms of this Agreement, together with such other powers as are reasonably
incidental thereto. Any and all money received and held by the Paying Agent
under this Agreement or the Deposit Agreement shall be held in the Paying
Agent Account for the benefit of the Investors. The Paying Agent (which term
as used in this sentence shall include reference to its affiliates and its
own and its affiliates' officers, directors, employees and agents):
(a) shall have no duties or responsibilities except those
expressly set forth in this Agreement, and shall not by reason of this
Agreement be a trustee for the Escrow Agent;
(b) shall not be responsible to the Escrow Agent for any recitals,
statements, representations or warranties of any person other then itself
contained in this Agreement or for the failure by the Escrow Agent or any
other person or entity (other than the Paying Agent) to perform any of its
obligations hereunder (whether or not the Paying Agent shall have any
knowledge thereof); and
(c) shall not be responsible for any action taken or omitted to be
taken by it hereunder or provided for herein or in connection herewith,
except for its own willful misconduct or gross negligence (or simple
negligence in connection with the handling of funds).
Section 2.2 Establishment of Paying Agent Account. The Paying Agent
shall establish a deposit account (the "Paying Agent Account") at State
Street Bank and Trust Company in the name of the Escrow Agent. It is
expressly understood by the parties hereto that the Paying Agent is acting as
the paying agent of the Escrow Agent hereunder and that no amounts on deposit
in the Paying Agent Account constitute part of the Trust Property.
7
Section 2.3 Payments from Paying Agent Account. The Escrow Agent
hereby irrevocably instructs the Paying Agent, and the Paying Agent agrees to
act, as follows:
(a) On each Interest Payment Date (as defined in the Deposit
Agreement) or as soon thereafter as the Paying Agent has confirmed receipt in
the Paying Agent Account from the Depositary of any amount in respect of
accrued interest on the Deposits, the Paying Agent shall distribute out of
the Paying Agent Account the entire amount deposited therein by the
Depositary. There shall be so distributed to each Receiptholder of record on
the 15th day (whether or not a Business Day) preceding such Interest Payment
Date by check mailed to such Receiptholder, at the address appearing in the
Register, such Receiptholder's pro rata share (based on the Escrow Interest
in the Account Amounts held by such Receiptholder) of the total amount of
interest deposited by the Depositary in the Paying Agent Account on such
date, except that, with respect to Escrow Receipts registered on the Record
Date in the name of The Depository Trust Company, a New York corporation
("DTC"), such distribution shall be made by wire transfer in immediately
available funds to the account designated by DTC.
(b) Upon the confirmation by the Paying Agent of receipt in the
Paying Agent Account from the Depositary of any amount in respect of the
Final Withdrawal, the Paying Agent shall forthwith distribute the entire
amount of the Final Withdrawal deposited therein by the Depositary. There
shall be so distributed to each Receiptholder of record on the 15th day
(whether or not a Business Day) preceding the Final Withdrawal Date by check
mailed to such Receiptholder, at the address appearing in the Register, such
Receiptholder's pro rata share (based on the Escrow Interest in the Account
Amounts held by such Receiptholder) of the total amount in the Paying Agent
Account on account of such Final Withdrawal, except that, with respect to
Escrow Receipts registered on the Record Date in the name of DTC, such
distribution shall be made by wire transfer in immediately available funds to
the account designated by DTC.
(c) If any payment of interest or principal in respect of the
Final Withdrawal is not received by the Paying Agent within five (5) days of
the applicable date when due, then it shall be distributed to Receiptholders
after actual receipt by the Paying Agent on the same basis as a Special
Payment is distributed under the Pass Through Trust Agreement.
8
(d) The Paying Agent shall include with any check mailed pursuant
to this Section any notice required to be distributed under the Pass Through
Trust Agreement that is furnished to the Paying Agent by the Pass Through
Trustee.
Section 2.4 Withholding Taxes. The Paying Agent shall exclude and
withhold from each distribution of accrued interest on the Deposits (as
defined in the Deposit Agreement) and any amount in respect of the Final
Withdrawal any and all withholding taxes applicable thereto as required by
law. The Paying Agent agrees to act as such withholding agent and, in
connection therewith, whenever any present or future taxes or similar charges
are required to be withheld with respect to any amounts payable in respect of
the Deposits (as defined in the Deposit Agreement) or the escrow amounts, to
withhold such amounts and timely pay the same to the appropriate authority in
the name of and on behalf of the Receiptholders, that it will file any
necessary withholding tax returns or statements when due, and that, as
promptly as possible after the payment thereof, it will deliver to each such
Receiptholder appropriate documentation showing the payment thereof, together
with such additional documentary evidence as such Receiptholder may
reasonably request from time to time. The Paying Agent agrees to file any
other information reports as it may be required to file under United States
law.
Section 2.5 Resignation or Removal of Paying Agent. Subject to the
appointment and acceptance of a successor Paying Agent as provided below, the
Paying Agent may resign at any time by giving thirty (30) days' prior written
notice thereof to the Escrow Agent, but may not otherwise be removed except
for cause by the Escrow Agent. Upon any such resignation or removal, the
Escrow Agent shall have the right to appoint a successor Paying Agent. If no
successor Paying Agent shall have been so appointed and shall have accepted
such appointment within thirty (30) days after the retiring Paying Agent's
giving of notice of resignation or the removal of the retiring Paying Agent,
then the retiring Paying Agent may appoint a successor Paying Agent. Any
Successor Paying Agent shall be a bank which has an office in the United
States with a combined capital and surplus of at least US$100,000,000. Upon
the acceptance of any appointment as Paying Agent hereunder by a successor
Paying Agent, such successor Paying Agent shall enter into such documents as
the Escrow Agent shall require and shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Paying Agent, and the retiring Paying Agent shall be discharged from its
duties and obligations hereunder.
Section 2.6 Notice of Final Withdrawal. Promptly after receipt by the
Paying Agent of notice that the Escrow Agent has requested a Final Withdrawal
or that a Final Withdrawal will be made, the Paying Agent shall cause notice
of the distribution
9
of the Final Withdrawal to be mailed to each of the Receiptholders at its
address as it appears in the Register. Such notice shall be mailed not less
than fifteen (15) days prior to the Final Withdrawal Date. Such notice shall
set forth:
(a) the Final Withdrawal Date and the date for determining
Receiptholders of record who shall be entitled to receive distributions in
respect of the Final Withdrawal;
(b) the amount of the payment in respect of the Final Withdrawal
for each $1,000 face amount Certificate (based on information provided by the
Pass Through Trustee) and the amount thereof constituting unused Deposits (as
defined in the Deposit Agreement) and interest thereon; and
(c) if the Final Withdrawal Date is the same date as a Regular
Distribution Date, the total amount to be received on such date for each
$1,000 face amount Certificate (based on information provided by the Pass
Through Trustee).
Such mailing may include any notice required to be given to
Certificateholders in connection with such distribution pursuant to the Pass
Through Trust Agreement.
Section 3. Payments. If, notwithstanding the instructions in Article
IV of the Deposit Agreement that all amounts payable to the Escrow Agent
under the Deposit Agreement be paid by the Depositary directly to the Paying
Agent or the Pass Through Trustee (depending on the circumstances), the
Escrow Agent receives any payment thereunder, then the Escrow Agent shall
forthwith pay such amount in Dollars and in immediately available funds by
wire transfer to (a) in the case of a payment of accrued interest on the
Deposits (as defined in the Deposit Agreement) or any Final Withdrawal,
directly to the Paying Agent Account and (b) in the case of any Purchase
Withdrawal, directly to the Pass Through Trustee or its designee as specified
and in the manner provided in the Applicable Notice of Purchase Withdrawal.
The Escrow Agent hereby waives any and all rights of set-off, combination of
accounts, right of retention or similar right (whether arising under
applicable law, contract or otherwise) it may have against amounts payable to
the Paying Agent howsoever arising.
Section 4. Other Actions. The Escrow Agent shall take such other
actions under or in respect of the Deposit Agreement (including, without
limitation, the enforcement of the obligations of the Depositary thereunder)
as the Investors, by an Action of Investors, may from time to time request.
10
Section 5. Representations And Warranties of The Escrow Agent. The
Escrow Agent represents and warrants to US Airways, the Investors, the Paying
Agent and the Pass Through Trustee as follows:
(a) it is a national banking association duly organized and
validly existing in good standing under the laws of the United States of
America;
(b) it has full power, authority and legal right to conduct its
business and operations as currently conducted and to enter into and perform
its obligations under this Agreement and the Deposit Agreement;
(c) the execution, delivery and performance of each of this
Agreement and the Deposit Agreement have been duly authorized by all
necessary corporate action on the part of it and do not require any
stockholder approval, or approval or consent of any trustee or holder of any
indebtedness or obligations of it, and each such document has been duly
executed and delivered by it and constitutes its legal, valid and binding
obligations enforceable against it in accordance with the terms hereof or
thereof except as such enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws or equitable
principles of general application to or affecting the enforcement of
creditors' rights generally (regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(d) no authorization, consent or approval of or other action by,
and no notice to or filing with, any United States federal or state
governmental authority or regulatory body is required for the execution,
delivery or performance by it of this Agreement or the Deposit Agreement;
(e) neither the execution, delivery or performance by it of this
Agreement or the Deposit Agreement, nor compliance with the terms and
provisions hereof or thereof, conflicts or will conflict with or results or
will result in a breach or violation of any of the terms, conditions or
provisions of, or will require any consent or approval under, any law,
governmental rule or regulation or the charter documents, as amended, or
bylaws, as amended, of it or any similar instrument binding on it or any
order, writ, injunction or decree of any court or governmental authority
against it or by which it or any of its properties is bound or any indenture,
mortgage or contract or other agreement or instrument to which it is a party
or by which it or any of its properties is bound, or constitutes or will
constitute a default thereunder or results or will result in the imposition
of any lien upon any of its properties; and
11
(f) there are no pending or, to its knowledge, threatened actions,
suits, investigations or proceedings (whether or not purportedly on behalf of
it) against or affecting it or any of its property before or by any court or
administrative agency which, if adversely determined, (A) would adversely
affect the ability of it to perform its obligations under this Agreement or
the Deposit Agreement or (B) would call into question or challenge the
validity of this Agreement or the Deposit Agreement or the enforceability
hereof or thereof in accordance with the terms hereof or thereof, nor is the
Escrow Agent in default with respect to any order of any court, governmental
authority, arbitration board or administrative agency so as to adversely
affect its ability to perform its obligations under this Agreement or the
Deposit Agreement.
Section 6. Representations And Warranties of The Paying Agent. The
Paying Agent represents and warrants to US Airways, the Investors, the Escrow
Agent and the Pass Through Trustee as follows:
(a) it is a trust company duly organized and validly existing in
good standing under the laws of the Commonwealth of Massachusetts;
(b) it has full power, authority and legal right to conduct its
business and operations as currently conducted and to enter into and perform
its obligations under this Agreement;
(c) the execution, delivery and performance of this Agreement has
been duly authorized by all necessary corporate action on the part of it and
does not require any stockholder approval, or approval or consent of any
trustee or holder of any indebtedness or obligations of it, and such document
has been duly executed and delivered by it and constitutes its legal, valid
and binding obligations enforceable against it in accordance with the terms
hereof except as such enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws or equitable
principles of general application to or affecting the enforcement of
creditors' rights generally (regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(d) no authorization, consent or approval of or other action by,
and no notice to or filing with, any United States federal or state
governmental authority or regulatory body is required for the execution,
delivery or performance by it of this Agreement;
12
(e) neither the execution, delivery or performance by it of this
Agreement, nor compliance with the terms and provisions hereof, conflicts or
will conflict with or results or will result in a breach or violation of any
of the terms, conditions or provisions of, or will require any consent or
approval under, any law, governmental rule or regulation or the charter
documents, as amended, or bylaws, as amended, of it or any similar instrument
binding on it or any order, writ, injunction or decree of any court or
governmental authority against it or by which it or any of its properties is
bound or any indenture, mortgage or contract or other agreement or instrument
to which it is a party or by which it or any of its properties is bound, or
constitutes or will constitute a default thereunder or results or will result
in the imposition of any lien upon any of its properties; and
(f) there are no pending or, to its knowledge, threatened actions,
suits, investigations or proceedings (whether or not purportedly on behalf of
it) against or affecting it or any of its property before or by any court or
administrative agency which, if adversely determined, (A) would adversely
affect the ability of it to perform its obligations under this Agreement or
(B) would call into question or challenge the validity of this Agreement or
the enforceability hereof in accordance with the terms hereof, nor is the
Paying Agent in default with respect to any order of any court, governmental
authority, arbitration board or administrative agency so as to adversely
affect its ability to perform its obligations under this Agreement.
Section 7. Indemnification. Except for actions expressly required of
the Escrow Agent or the Paying Agent hereunder, each of the Escrow Agent and
the Paying Agent shall in all cases be fully justified in failing or refusing
to act hereunder unless it shall have been indemnified by the party
requesting such action in a manner reasonably satisfactory to it against any
and all liability and expense which may be incurred by it by reason of taking
or continuing to take any such action. In the event US Airways requests any
amendment to any Operative Document (as defined in the Note Purchase
Agreement), the Pass Through Trustee agrees to pay all reasonable fees and
expenses (including, without limitation, fees and disbursements of counsel)
of the Escrow Agent and the Paying Agent in connection therewith.
Section 8. Amendment, Etc. Upon request of the Pass Through Trustee
and approval by an Action of Investors, the Escrow Agent shall enter into an
amendment to this Agreement, so long as such amendment does not adversely
affect the rights or obligations of the Escrow Agent or the Paying Agent,
provided that upon request of the Pass Through Trustee and without any
consent of the Investors, the
13
Escrow Agent shall enter into an amendment to this Agreement for any of the
following purposes:
(a) to correct or supplement any provision in this Agreement which
may be defective or inconsistent with any other provision herein or to cure
any ambiguity or correct any mistake or to modify any other provision with
respect to matters or questions arising under this Agreement, provided that
any such action shall not materially adversely affect the interests of the
Investors; or
(b) to comply with any requirement of the SEC, applicable law,
rules or regulations of any exchange or quotation system on which the
Certificates are listed or any regulatory body; or
(c) to evidence and provide for the acceptance of appointment
under this Agreement of a successor Escrow Agent, successor Paying Agent or
successor Pass Through Trustee.
Section 9. Notices. Unless otherwise expressly provided herein, any
notice or other communication under this Agreement shall be in writing
(including by facsimile) and shall be deemed to be given and effective upon
receipt thereof. All notices shall be sent to (a) in the case of the
Investors, as their respective addresses shall appear in the Register, (b) in
the case of the Escrow Agent, First Security Bank, National Association, 79
South Main Street, Salt Lake City, UT 84111, Attention: Corporate Trust
Services (Telecopier: (801) 246-5053), (c) in the case of the Pass Through
Trustee, State Street Bank and Trust Company, 2 International Place, 4th
Floor, Boston, MA 02110, Attention: Corporate Trust Administration
(Telecopier: (617) 664-5151) or (d) in the case of the Paying Agent, State
Street Bank and Trust Company, 2 International Place, 4th Floor, Boston, MA
02110, Attention: Corporate Trust Administration (Telecopier: (617) 664-
5151), in each case with a copy to US Airways, US Airways, Inc., 2345 Crystal
Drive, Arlington, VA 22227, Attention: Treasurer (Telecopier: (703) 872-
5936) (or at such other address as any such party may specify from time to
time in a written notice to the other parties). On or prior to the execution
of this Agreement, the Pass Through Trustee has delivered to the Escrow Agent
a certificate containing specimen signatures of the representatives of the
Pass Through Trustee who are authorized to give notices and instructions with
respect to this Agreement. The Escrow Agent may conclusively rely on such
certificate until the Escrow Agent receives written notice from the Pass
Through Trustee to the contrary.
14
Section 10. Transfer. No party hereto shall be entitled to assign or
otherwise transfer this Agreement (or any interest herein) other than (in the
case of the Escrow Agent) to a successor escrow agent under Section 1.7
hereof or (in the case of the Paying Agent) to a successor paying agent under
Section 2.5 hereof, and any purported assignment in violation thereof shall
be void. This Agreement shall be binding upon the parties hereto and their
respective successors and (in the case of the Escrow Agent and the Paying
Agent) their respective permitted assigns.
Section 11. Entire Agreement. This Agreement sets forth all of the
promises, covenants, agreements, conditions and understandings among the
Escrow Agent, the Paying Agent, the Underwriters and the Pass Through Trustee
with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements and undertakings, inducements or conditions,
express or implied, oral or written.
Section 12. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
Section 13. WAIVER OF JURY TRIAL RIGHT. EACH OF THE ESCROW AGENT, THE
PAYING AGENT, THE INVESTORS AND THE PASS THROUGH TRUSTEE ACKNOWLEDGES AND
ACCEPTS THAT IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT SUCH PARTY IRREVOCABLY WAIVES ITS RIGHT TO A TRIAL BY JURY.
Section 14. Counterparts. This Agreement may be executed in one or
more counterparts, all of which taken together shall constitute one
instrument.
15
IN WITNESS WHEREOF, the Escrow Agent, the Paying Agent, the Underwriters
and the Pass Through Trustee have caused this Escrow and Paying Agent
Agreement (Class B) to be duly executed as of the day and year first above
written.
STATE STREET BANK AND TRUST COMPANY, not in its individual capacity, but
solely as Pass Through Trustee for and on behalf of US Airways Pass Through
Trust 1998-1B
By ______________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY as Paying Agent
By ______________
Name:
Title:
FIRST SECURITY BANK, NATIONAL ASSOCIATION, as Escrow Agent
By ______________
Name:
Title:
MORGAN STANLEY & CO. INCORPORATED, CREDIT SUISSE FIRST BOSTON CORPORATION and
SALOMON SMITH BARNEY INC., as Underwriters
By: MORGAN STANLEY & CO. INCORPORATED
By ______________
Name:
Title:
EXHIBIT A
---------
US Airways 1998-1B Escrow Receipt
No. __
This Escrow Receipt evidences a fractional undivided interest in amounts
("Account Amounts") from time to time deposited into a certain paying agent
account (the "Paying Agent Account") described in the Escrow and Paying Agent
Agreement (Class B) dated as of December 14, 1998 (as amended, modified or
supplemented from time to time, the "Escrow and Paying Agent Agreement")
among First Security Bank, National Association, a national banking
association, as Escrow Agent (in such capacity, together with its successors
in such capacity, the "Escrow Agent"), Morgan Stanley & Co. Incorporated,
Credit Suisse First Boston Corporation, Lehman Brothers Inc. and Salomon
Smith Barney Inc., as Underwriters, State Street Bank and Trust Company, as
Pass Through Trustee (in such capacity, together with its successors in such
capacity, the "Pass Through Trustee") and State Street Bank and Trust Company
as paying agent (in such capacity, together with its successors in such
capacity, the "Paying Agent"). Capitalized terms not defined herein shall
have the meanings assigned to them in the Escrow and Paying Agent Agreement.
This Escrow Receipt is issued under and is subject to the terms,
provisions and conditions of the Escrow and Paying Agent Agreement. By virtue
of its acceptance hereof the holder of this Escrow Receipt assents and agrees
to be bound by the provisions of the Escrow and Paying Agent Agreement and
this Escrow Receipt.
This Escrow Receipt represents a fractional undivided interest in
amounts deposited from time to time in the Paying Agent Account, and grants
or represents no rights, benefits or interests of any kind in respect of any
assets or property other than such amounts. This Escrow Receipt evidences the
same percentage interest in the Account Amounts as the Fractional Undivided
Interest in the Pass Through Trust evidenced by the Certificate to which this
Escrow Receipt is affixed.
All payments and distributions made to Receiptholders in respect of the
Escrow Receipt shall be made only from Account Amounts deposited in the
Paying Agent Account. The holder of this Escrow Receipt, by its acceptance of
this Escrow Receipt, agrees that it will look solely to the Account Amounts
for any payment or distribution due to it pursuant to this Escrow Receipt and
that it will not have any
A-1
recourse to US Airways, the Pass Through Trustee, the Paying Agent or the
Escrow Agent, except as expressly provided herein or in the Pass Through
Trust Agreement. No Receiptholder of this Escrow Receipt shall have any
right to vote or in any manner otherwise control the operation and management
of the Paying Agent Account, nor shall anything set forth herein, or
contained in the terms of this Escrow Receipt, be construed so as to
constitute the Receiptholders from time to time as partners or members of an
association.
This Escrow Receipt may not be assigned or transferred except in
connection with the assignment or transfer of the Certificate to which this
Escrow Receipt is affixed. After payment to the holder hereof of its Escrow
Interest in the Final Distribution, upon the request of the Pass Through
Trustee, the holder hereof will return this Escrow Receipt to the Pass
Through Trustee.
The Paying Agent may treat the person in whose name the Certificate to
which this Escrow Receipt is attached as the owner hereof for all purposes,
and the Paying Agent shall not be affected by any notice to the contrary.
THIS ESCROW RECEIPT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Escrow Agent has caused this Escrow Receipt to
be duly executed.
Dated: December __, 1998
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, as Escrow Agent
By ______________________
Name:
Title:
A-2
EXHIBIT B
---------
Withdrawal Certificate
(Class B)
First Security Bank, National Association,
as Escrow Agent
79 South Main Street
Salt Lake City, UT 84111
Attention: Corporate Trust Services
Telecopier: (801) 246-5053
Ladies and Gentlemen:
Reference is made to the Escrow and Paying Agent Agreement, dated as of
December 14, 1998 (the "Agreement"). We hereby certify to you that the
conditions to the obligations of the undersigned to execute a Participation
Agreement pursuant to the Note Purchase Agreement have been satisfied.
Pursuant to Section 1.2(c) of the Agreement, please execute the attached
Notice of Withdrawal and immediately transmit by facsimile to the Depositary,
at (212) 325-8319.
Very truly yours,
STATE STREET BANK AND TRUST
COMPANY, not in its individual
capacity but solely as Pass Through
Trustee
By ______________________
Name:
Title:
Dated: __________, ___
B-1
NOTICE OF PURCHASE WITHDRAWAL
-----------------------------
CREDIT SUISSE FIRST BOSTON
New York Branch
11 Madison Avenue
New York, NY 10010
Attention: Robert Finney and Jennifer Toth
Telecopier: (212) 325-8319
Ladies and Gentlemen:
Reference is made to the Deposit Agreement (Class B) dated as of
December 14, 1998 (the "Deposit Agreement") between First Security Bank,
National Association, as Escrow Agent, and Credit Suisse First Boston, New
York Branch, as Depositary (the "Depositary").
In accordance with Section 2.3(a) of the Deposit Agreement, the
undersigned hereby requests the withdrawal of the entire amount of the
Deposit, $__________, Account No. __________.
The undersigned hereby directs the Depositary to pay the proceeds of the
Deposit to _______________, Account No. __________, Reference: __________ on
_______________, _____, upon the telephonic request of a representative of
the Pass Through Trustee.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
as Escrow Agent
By ______________________
Name:
Title:
Dated:___________, ____
B-2
EXHIBIT 4(a)(xii)
- -------------------------------------------------------------------------
NOTE PURCHASE AGREEMENT
Dated as of December 14, 1998
Among
US AIRWAYS, INC.,
STATE STREET BANK AND TRUST COMPANY
as Pass Through Trustee under each of the
Pass Through Trust Agreements
STATE STREET BANK AND TRUST COMPANY
as Subordination Agent
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Escrow Agent
and
STATE STREET BANK AND TRUST COMPANY,
as Paying Agent
- -------------------------------------------------------------------------
INDEX TO NOTE PURCHASE AGREEMENT
Page
SECTION 1. Definitions.............................................4
SECTION 2. Financing of New Aircraft...............................4
SECTION 3. Conditions Precedent....................................8
SECTION 4. Representations and Warranties..........................9
SECTION 5. Covenants..............................................14
SECTION 6. Notices................................................15
SECTION 7. Expenses...............................................16
SECTION 8. Further Assurances.....................................17
SECTION 9. Miscellaneous..........................................17
SECTION 10. Governing Law..........................................18
SCHEDULES
Schedule I New Aircraft and Scheduled Closing Months
Schedule II Trust Supplements
Schedule III Deposit Agreements
Schedule IV Escrow and Paying Agent Agreements
Schedule V Mandatory Document Terms
Schedule VI Mandatory Economic Terms
Schedule VII Aggregate Amortization Schedule
ANNEX
Annex A Definitions
EXHIBITS
Exhibit A-1 Form of Leased Aircraft Participation Agreement
Exhibit A-2 Form of Lease
Exhibit A-3 Form of Leased Aircraft Indenture
Exhibit A-4 Form of Aircraft Purchase Agreement Assignment
Exhibit A-5 Form of Leased Aircraft Trust Agreement
Exhibit B Form of Closing Notice
Exhibit C-1 Form of Owned Aircraft Participation Agreement
Exhibit C-2 Form of Owned Aircraft Indenture
NOTE PURCHASE AGREEMENT
This NOTE PURCHASE AGREEMENT, dated as of December 14, 1998,
among (i) US Airways, Inc., a Delaware corporation (the "Company"), (ii)
State Street Bank and Trust Company, a Massachusetts trust company, not in
its individual capacity except as otherwise expressly provided herein, but
solely as trustee (in such capacity together with its successors in such
capacity, the "Pass Through Trustee") under each of the three separate Pass
Through Trust Agreements (as defined below), (iii) State Street Bank and
Trust Company, a Massachusetts trust company, as subordination agent and
trustee (in such capacity together with its successors in such capacity,
the "Subordination Agent") under the Intercreditor Agreement (as defined
below), (iv) First Security Bank, National Association, a national banking
association, as Escrow Agent (in such capacity together with its successors
in such capacity, the "Escrow Agent"), under each of the Escrow and Paying
Agent Agreements (as defined below) and (v) State Street Bank and Trust
Company, a Massachusetts trust company, as Paying Agent (in such capacity
together with its successors in such capacity, the "Paying Agent") under
each of the Escrow and Paying Agent Agreements.
W I T N E S S E T H:
WHEREAS, US Airways Group, Inc. has obtained commitments from
the Seller pursuant to the Aircraft Purchase Agreement for the delivery of
the twenty-three (23) aircraft listed in Schedule I hereto (together with
any aircraft substituted therefor in accordance with the Aircraft Purchase
Agreement prior to the delivery thereof, the "New Aircraft");
WHEREAS, pursuant to the Basic Pass Through Trust Agreement and
each of the Trust Supplements set forth in Schedule II hereto, and
concurrently with the execution and delivery of this Agreement, separate
grantor trusts (collectively, the "Pass Through Trusts" and, individually,
a "Pass Through Trust") have been created to facilitate certain of the
transactions contemplated hereby, including, without limitation, the
issuance and sale of pass through certificates pursuant thereto
(collectively, the "Certificates") to provide for a portion of the
financing of the Aircraft;
WHEREAS, the Company has entered into the Underwriting
Agreement dated as of December 4, 1998 (the "Underwriting Agreement") with
the several underwriters (the "Underwriters") named therein, which provides
that the Company will cause the Pass Through Trustee of each of the Class A
Trust and the Class B Trust to issue and sell the Class A Certificates and
the Class B Certificates to the Underwriters;
WHEREAS, the Company has entered into a Class C Trust
Certificate Purchase Agreement, dated as of December 14, 1998 (the "Class C
Purchase Agree ment") with Airbus Industrie Financial Services ("AIFS")
which provides that the Company will cause the Trustee of the Class C Trust
to issue and sell Class C Certificates to AIFS;
WHEREAS, concurrently with the execution and delivery of this
Agreement, (i) the Escrow Agents and the Depositaries entered into the
Deposit Agreements set forth in Schedule III hereto (the "Deposit
Agreements") whereby the applicable Escrow Agent agreed to direct the
Underwriters and AIFS to make certain deposits referred to therein on the
Issuance Date (the "Initial Deposits") and to permit the applicable Pass
Through Trustee to make additional deposits from time to time thereafter
(the Initial Deposits together with such additional deposits are
collectively referred to as the "Deposits") and (ii) the Pass Through
Trustees, the Underwriters, AIFS, the Paying Agents and the Escrow Agents
entered into the Escrow and Paying Agent Agreements set forth in Schedule
IV hereto (the "Escrow and Paying Agent Agreements") whereby, among other
things, (a) the Underwriters and AIFS agreed to deliver an amount equal to
the amount of the Initial Deposits to the applicable Depositary on behalf
of the applicable Escrow Agent and (b) the applicable Escrow Agent, upon
the applicable Depositary receiving such amount, has agreed to deliver
escrow receipts to be affixed to each Certificate;
WHEREAS, the Company will determine whether to enter into a
leveraged lease transaction as lessee with respect to such New Aircraft (a
"Leased Aircraft") or to issue secured equipment notes in order to finance
such New Aircraft (an "Owned Aircraft") and will give to the Pass Through
Trustee a Closing Notice (as defined below) specifying its election;
WHEREAS, upon receipt of a Closing Notice with respect to a New
Aircraft, subject to the terms and conditions of this Agreement, the
applicable Pass Through Trustees will enter into the applicable Financing
Agreements relating to such New Aircraft;
WHEREAS, on the Closing Date under the applicable Financing
Agreements, each Pass Through Trustee will fund its purchase of Equipment
Notes with the proceeds of one or more Deposits withdrawn by the applicable
Escrow Agent under the related Deposit Agreement bearing the same interest
rate as the Certificates issued by such Pass Through Trust; and
WHEREAS, concurrently with the execution and delivery of this
Agreement, (i) ABN AMRO BANK N.V., a bank organized under the laws of the
Netherlands, acting through its Chicago branch (the "Liquidity Provider"),
has entered into three (3) revolving credit agreements (each, a "Liquidity
Facility"), one each for the benefit of the Certificate Holders of each
Pass Through Trust, with the Subordination Agent, as agent for the Pass
Through Trustee on behalf of each such Pass Through Trust and (ii) the Pass
Through Trustee, the Liquidity Provider and the Subordination Agent have
entered into the Intercreditor Agreement, dated as of the date hereof (the
"Intercreditor Agreement").
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual agreements herein contained and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
the parties hereto agree as follows:
Section 1. Definitions. Capitalized terms used but not
defined herein shall have the respective meanings set forth or incorporated
by reference in Annex A.
Section 2. Financing of New Aircraft. (a) The Company confirms
that US Airways Group, Inc. has entered into the Aircraft Purchase
Agreement with the Seller pursuant to which US Airways Group, Inc. has
agreed to purchase, and the Seller has agreed to deliver, the New Aircraft
in the months specified in Schedule I hereto, all on and subject to terms
and conditions specified in the Aircraft Purchase Agreement. US Airways
Group, Inc. has, or prior to the scheduled delivery date for the New
Aircraft will, assign the right to purchase the New Aircraft to the
Company. The Company agrees to finance the New Aircraft in the manner
provided herein, all on and subject to the terms and conditions hereof and
of the relevant Financing Agreements.
(b) In furtherance of the foregoing, the Company agrees
to give the parties hereto, each Depositary and each of the Rating Agencies
not less than two (2) Business Day's prior notice (a "Closing Notice") of
the scheduled closing date (the "Scheduled Closing Date") (or, in the case
of a Substitute Closing Notice under Section 2(f) or (g) hereof, one (1)
Business Day's prior notice of a financing in respect of each New Aircraft,
which notice shall:
(i) specify whether the Company has
elected to treat such New Aircraft as a Leased Aircraft or an Owned
Aircraft;
(ii) specify the Scheduled Closing Date on
which the financing therefor in the manner provided herein
shall be consummated;
(iii) instruct the Pass Through Trustees to
instruct each Escrow Agent to provide a Notice of Purchase Withdrawal
to the Depositary with respect to the Equipment Notes to be issued in
connection with the financing of such New Aircraft;
(iv) instruct the Pass Through Trustees to
enter into the Participation Agreement included in the Financing
Agreements with respect to such Aircraft in such form and at such a
time on or before the Scheduled Closing Date specified in such
Closing Notice and to perform its obligations thereunder;
(v) specify the aggregate principal amount of
each series of Equipment Notes to be issued, and purchased by the
Pass Through Trustees, in connection with the financing of such New
Aircraft on such Scheduled Closing Date (which shall in all respects
comply with the Mandatory Economic Terms); and
(vi) if such New Aircraft is to be a Leased
Aircraft, certify that the related Owner Participant (A) is not an
Affiliate of the Company and (B) based on the representations of such
Owner Participant, is either (1) a Qualified Owner Participant or (2)
any other person the obligations of which under the Owner Participant
Documents (as defined in the applicable Participation Agreement) are
guaranteed by a Qualified Owner Participant.
Notwithstanding the foregoing, in the event the Scheduled Closing Date for
any Aircraft to be financed pursuant to the terms hereof is on or within 3
business days following the date of issuance of the Certificates, the
Closing Notice therefor may be delivered to the parties hereto on such
Scheduled Closing Date.
(c) Upon receipt of a Closing Notice, the Pass Through
Trustees shall, and shall cause the Subordination Agent to, enter into and
perform their obligations under the Participation Agreement specified in
such Closing Notice, provided, however, that such Participation Agreement
and the other Financing Agreements to be entered into pursuant to such
Participation Agreement shall be in the forms thereof annexed hereto in all
material respects with such changes therein as shall have been requested by
the related Owner Participant (in the case of Lease Financing Agreements),
agreed to by the Company and, if modified in any material respect, as to
which Rating Agency Confirmation shall have been obtained from each Rating
Agency by the Company (to be delivered by the Company to the applicable
Pass Through Trustee on or before the relevant Closing Date, it being
understood that if Rating Agency Confirmation shall have been received with
respect to any Financing Agreements and such Financing Agreements are
utilized for subsequent New Aircraft (or Substitute Aircraft) without
material modifications, no additional Rating Agency Confirmation shall be
required); provided, however, that the relevant Financing Agreements as
executed and delivered shall not vary the Mandatory Economic Terms and
shall contain the Mandatory Document Terms (as such Mandatory Document
Terms may be modified in accordance with Schedule V hereto).
Notwithstanding the foregoing, if any Financing Agreement annexed hereto
shall not have been reviewed by either Rating Agency prior to the Issuance
Date, then, prior to the use thereof in connection with the financing of
any Aircraft hereunder, the Company shall obtain from each Rating Agency a
confirmation that the use of such Financing Agreement would not result in
(A) a reduction of the rating for any Class of Certificates below the then
current rating for such Class of Certificates or (B) a withdrawal or
suspension of the rating of any Class of Certificates.
(d) With respect to each New Aircraft, the Company shall
cause State Street Bank and Trust Company (or such other person that meets
the eligibility requirements to act as loan trustee under the Leased
Aircraft Indenture or Owned Aircraft Indenture) to execute as Loan Trustee
the Financing Agreements relating to such Aircraft to which such Loan
Trustee is intended to be a party, and shall concurrently therewith execute
such Financing Agreements to which the Company is intended to be a party
and perform its respective obligations thereunder. Upon the request of
either Rating Agency, the Company shall deliver or cause to be delivered to
each Rating Agency a true and complete copy of each Financing Agreement
relating to the financing of each New Aircraft together with a true and
complete set of the closing documentation (including legal opinions)
delivered to the related Loan Trustee, Subordination Agent and Pass Through
Trustee under the related Participation Agreement.
(e) If after giving any Closing Notice, there shall be a
delay in the delivery of a New Aircraft, or if on the Scheduled Closing
Date of a New Aircraft the financing thereof in the manner contemplated
hereby shall not be consummated for whatever reason, the Company shall give
the parties hereto prompt notice thereof. Concurrently with the giving of
such notice of postponement or subsequently, the Company shall give the
parties hereto a substitute Closing Notice specifying the date (the
"Substitute Closing Date") to which the applicable financing shall have
been re-scheduled (which shall be a Business Day before the Cut-Off Date on
which the Escrow Agents shall be entitled to withdraw one or more Deposits
under each of the applicable Deposit Agreements to enable each applicable
Pass Through Trustee to fund its purchase of the related Equipment Notes).
Upon receipt of any such notice of postponement, each applicable Pass
Through Trustee shall comply with its obligations under Section 5.01 of
each of the Trust Supplements and thereafter the financing of the relevant
New Aircraft shall take place on the Substitute Closing Date therefor (all
on and subject to the terms and conditions of the relevant Financing
Agreements) unless further postponed as provided herein.
(f) Anything in this Section 2 to the contrary
notwithstanding, the Company shall have the right at any time on or before
the Scheduled Closing Date of any New Aircraft, and subsequent to its
giving a Closing Notice therefor, to postpone the Scheduled Closing Date of
such New Aircraft so as to enable the Company to change its election to
treat such New Aircraft as a Leased Aircraft or an Owned Aircraft by
written notice of such postponement to the other parties hereto. The
Company shall subsequently give the parties hereto a substitute Closing
Notice complying with the provisions of Section 2(b) hereof and specifying
the new Closing Date for such postponed New Aircraft (which shall be a
Business Day occurring before the Cut-Off Date and on which the Escrow
Agents shall be entitled to withdraw Deposits under each of the applicable
Deposit Agreements sufficient to enable each applicable Pass Through
Trustee to fund its purchase of the related Equipment Notes). In addition,
the Company shall have the further right, anything in this Section 2 to the
contrary notwithstanding, to accept delivery of a New Aircraft under the
Aircraft Purchase Agreement on the Closing Date thereof by utilization of
bridge financing of such New Aircraft and promptly thereafter give the
parties hereto a Closing Notice specifying a Closing Date not later than
thirty (30) days after the Closing Date of such New Aircraft and no later
than the Cut-Off Date and otherwise complying with the provisions of
Section 2(b) hereof. All other terms and conditions of this Note Purchase
Agreement shall apply to the financing of any such New Aircraft on the
re-scheduled Closing Date therefor except the re-scheduled Closing Date
shall be deemed the Closing Date of such New Aircraft for all purposes of
this Section 2.
(g) If the delivery date for any New Aircraft under the
Aircraft Purchase Agreement is delayed for more than 30 days beyond the
month scheduled for delivery or beyond the Cut-Off Date, the Company may
identify for delivery a substitute aircraft therefor meeting the following
conditions (together with the substitute aircraft referred to in the next
sentence, a "Substitute Aircraft"): (i) a Substitute Aircraft must be an
Airbus Model A319 or A320 aircraft delivered by the Seller to the Company
after the date of this Agreement, (ii) the Substitute Aircraft must have
been manufactured after October 1, 1998 and (iii) the Company shall be
obligated to obtain Rating Agency Confirmation in respect of the
replacement of any New Aircraft by Substitute Aircraft. Upon the
satisfaction of the conditions set forth above with respect to a Substitute
Aircraft, the New Aircraft to be replaced shall cease to be subject to this
Agreement and all rights and obligations of the parties hereto concerning
such New Aircraft shall cease, and such Substitute Aircraft shall become
and thereafter be subject to the terms and conditions of this Agreement to
the same extent as such New Aircraft.
(h) The Company shall have no liability for the failure
of the Pass Through Trustees to purchase Equipment Notes with respect to
any New Aircraft or Substitute Aircraft, other than the Company's
obligation, if any, to pay the Deposit Make-Whole Amount pursuant to
Section 5(a)(i) of this Agreement.
(i) The parties agree that if, in connection with the
delivery of a New Aircraft or Substitute Aircraft, any Owner Participant
who is to be a party to any Lease Financing Agreements shall not be a
"citizen of the United States" within the meaning of 49 U.S.C. ss.
40102(a)(15), then the applicable Lease Financing Agreements shall be
modified, consistent with the Mandatory Document Terms (as such Mandatory
Document Terms may be modified in accordance with Schedule V hereto), to
require such Owner Participant to enter into a voting trust, voting powers
or similar arrangement satisfactory to the Company that (A) enables such
New Aircraft or Substitute Aircraft to be registered in the United States
and (B) complies with the FAA regulations issued under the Act applicable
thereto.
(j) Anything herein to the contrary notwithstanding, the
Company shall not have the right, and shall not be entitled, at any time to
request the issuance of Equipment Notes of any series to any Pass Through
Trustee in an aggregate principal amount in excess of the amount of the
Deposits then available for withdrawal by the Escrow Agent under and in
accordance with the provisions of the related Deposit Agreement.
Section 3. Conditions Precedent. The obligation of the Pass
Through Trustees to enter into, and to cause the Subordination Agent to
enter into, any Participation Agreement as directed pursuant to a Closing
Notice and to perform its obligations under such Participation Agreement is
subject to satisfaction of the following conditions:
(a) no Triggering Event shall have occurred;
(b) the Company shall have delivered a certificate to
each such Pass Through Trustee and each Liquidity Provider stating that (i)
such Participation Agreement and the other Financing Agreements to be
entered into pursuant to such Participation Agreement do not vary the
Mandatory Economic Terms and contain the Mandatory Document Terms (as such
Mandatory Document Terms may be modified in accordance with Schedule V
hereto) and (ii) any substantive modification of such Financing Agreements
from the forms thereof attached to this Agreement do not materially and
adversely affect the Certificate Holders, and such certification shall be
true and correct;
(c) if required by Section 2(c) and in place of the
statement in clause (ii) of Section 3(b) above, Rating Agency Confirmation
from each Rating Agency; and
(d) in the case of the Class C Trust, on any Closing Date
that occurs at a time when AIFS is the record or beneficial owner of any
Class C Certificate, the Class C Trustee shall have received a certificate
signed by the Chief Financial Officer, Treasurer or Assistant Treasurer of
the Company, to the effect that (i) all of the conditions precedent set
forth in Section 6 the Aircraft Financing Letter Agreement have been
satisfied, (ii) no "Termination Event" has occurred under Section 7 of the
Aircraft Financing Letter Agreement and (iii) the terms and conditions of
such Participation Agreement and the related Operative Documents comply
with the provisions of Section 13 of the Purchase Agreement.
Anything herein to the contrary notwithstanding, the obligation
of each Pass Through Trustee to purchase Equipment Notes shall terminate on
the Cut-Off Date. In addition, the obligation of the Pass Through Trustee
of the Class C Trust to purchase Equipment Notes shall terminate on the
date on which a "Termination Event" under the Aircraft Financing Letter
Agreement occurs, if on such date AIFS is the record or beneficial owner of
any Class C Trust Certificate.
Section 4. Representations and Warranties.
(a) The Company represents and warrants on the date
hereof and on each Closing Date that:
(i) the Company is duly incorporated, validly
existing and in good standing under the laws of the State of Delaware
and is a "citizen of the United States" as defined in 49 U.S.C. ss.
40102(a)(15), and has the full corporate power, authority and legal
right under the laws of the State of Delaware to execute and deliver
this Agreement and each Financing Agreement to which it will be a
party and to carry out the obligations of the Company under this
Agreement and each Financing Agreement to which it will be a party;
(ii) the execution and delivery by the
Company of this Agreement and the performance by the Company of its
obligations under this Agreement have been duly authorized by the
Company and will not violate its Certificate of Incorporation or
by-laws or the provisions of any indenture, mortgage, contract or
other agreement to which it is a party or by which it is bound;
(iii) this Agreement constitutes the legal, valid
and binding obligation of the Company, enforceable against it in
accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally and by
general principles of equity, whether considered in a proceeding at
law or in equity; and
(iv)if a certificate is required to be delivered
under Section 3(d), the statements contained therein are true
and correct.
(b) State Street Bank and Trust Company represents and
warrants on the date hereof and on each Closing Date that:
(i) State Street Bank and Trust Company is
duly incorporated, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts and is a "citizen of the
United States" as defined in 49 U.S.C. ss. 40102(a)(15), and has the
full corporate power, authority and legal right under the laws of the
Commonwealth of Massachusetts and the United States pertaining to its
banking, trust and fiduciary powers to execute and deliver this
Agreement and each Financing Agreement to which it will be a party
and to carry out the obligations of State Street Bank and Trust
Company, in its capacity as Subordination Agent, Pass Through Trustee
or Paying Agent, as the case may be, under this Agreement and each
Financing Agreement to which it will be a party;
(ii) the execution and delivery by State Street
Bank and Trust Company, in its capacity as Subordination Agent, Pass
Through Trustee or Paying Agent, as the case may be, of this
Agreement and the performance by State Street Bank and Trust Company,
in its capacity as Subordination Agent, Pass Through Trustee or Paying
Agent, as the case may be, of its obligations under this Agreement
have been duly authorized by State Street Bank and Trust Company, in
its capacity as Subordination Agent, Pass Through Trustee or Paying
Agent, as the case may be, and will not violate its articles of
association or by-laws or the provisions of any indenture, mortgage,
contract or other agreement to which it is a party or by which it is
bound; and
(iii) this Agreement constitutes the legal, valid
and binding obligation of State Street Bank and Trust Company, in its
capacity as Subordination Agent, Pass Through Trustee or Paying Agent,
as the case may be, enforceable against it in accordance with its
terms, except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
rights of creditors generally and by general principles of equity,
whether consid ered in a proceeding at law or in equity.
(c) The Pass Through Trustee hereby confirms to each of
the other parties hereto that its representations and warranties set forth
in Section 7.15 of the Basic Pass Through Trust Agreement and Section 5.04
of each Trust Supplement are true and correct as of the date hereof.
(d) The Subordination Agent represents and warrants that:
(i) the Subordination Agent is duly incorpo
rated, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts, and has the full corporate power,
authority and legal right under the laws of the Commonwealth of
Massachusetts and the United States pertaining to its banking, trust
and fiduciary powers to execute and deliver this Agreement and each
Financing Agreement to which it is or will be a party and to perform
its obligations under this Agreement and each Financing Agreement to
which it is or will be a party;
(ii) this Agreement has been duly authorized,
executed and delivered by the Subordination Agent; this Agreement
constitutes the legal, valid and binding obligations of the
Subordination Agent enforceable against it in accordance with its
terms, except as the same may be limited by applicable bankruptcy,
insolvency reorganization, moratorium or similar laws affecting the
rights of creditors generally and by general principles of equity,
whether considered in a proceeding at law or in equity;
(iii) none of the execution, delivery and
performance by the Subordination Agent of this Agreement contravenes
any law, rule or regulation of the Commonwealth of Massachusetts or
any United States governmental authority or agency regulating the
Subordination Agent's banking, trust or fiduciary powers or any
judgment or order applicable to or binding on the Subordination Agent
and do not contravene the Subordination Agent's articles of
association or by-laws or result in any breach of, or constitute a
default under, any agreement or instrument to which the Subordination
Agent is a party or by which it or any of its properties may be
bound;
(iv) neither the execution and delivery by the
Subordination Agent of this Agreement nor the consummation by the
Subordination Agent of any of the transactions contemplated hereby
requires the consent or approval of, the giving of notice to, the
registra tion with, or the taking of any other action with respect
to, any Massa chusetts governmental authority or agency or any
federal governmental authority or agency regulating the Subordination
Agent's banking, trust or fiduciary powers;
(v) there are no Taxes payable by the
Subordination Agent imposed by the Commonwealth of Massachusetts or
any political subdivision or taxing authority thereof in connection
with the execution, delivery and performance by the Subordination
Agent of this Agreement (other than franchise or other taxes based on
or measured by any fees or compensation received by the Subordination
Agent for services rendered in connection with the transactions
contemplated by the Intercreditor Agreement or any of the Liquidity
Facilities), and there are no Taxes payable by the Subordination
Agent imposed by the Common wealth of Massachusetts or any political
subdivision thereof in connection with the acquisition, possession or
ownership by the Subordination Agent of any of the Equipment Notes
(other than franchise or other taxes based on or measured by any fees
or compensation received by the Subordina tion Agent for services
rendered in connection with the transactions contemplated by the
Intercreditor Agreement or any of the Liquidity Facilities); and
(vi) there are no pending or threatened actions
or proceedings against the Subordination Agent before any court or
administrative agency which individually or in the aggregate, if
deter mined adversely to it, would materially adversely affect the
ability of the Subordination Agent to perform its obligations under
this Agreement.
(e) The Escrow Agent represents and warrants that:
(i) the Escrow Agent is a national banking
association duly incorporated, validly existing and in good standing
under the laws of the United States and has the full corporate power,
authority and legal right under the laws of the United States
pertaining to its banking, trust and fiduciary powers to execute and
deliver this Agree ment, each Deposit Agreement and each Escrow and
Paying Agent Agreement (collectively, the "Escrow Agent Agreements")
and to carry out the obligations of the Escrow Agent under each of
the Escrow Agent Agreements;
(ii) the execution and delivery by the Escrow
Agent of each of the Escrow Agent Agreements and the performance by
the Escrow Agent of its obligations hereunder and thereunder have
been duly authorized by the Escrow Agent and will not violate its
articles of association or by-laws or the provisions of any
indenture, mortgage, contract or other agreement to which it is a
party or by which it is bound; and
(iii) each of the Escrow Agent Agreements
constitutes the legal, valid and binding obligations of the Escrow
Agent enforceable against it in accordance with its terms, except as
the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general principles of equity, whether
considered in a proceeding at law or in equity.
(f) The Paying Agent represents and warrants that:
(i) the Paying Agent is duly incorporated,
validly existing and in good standing under the laws of the Common
wealth of Massachusetts and has the full corporate power, authority
and legal right under the laws of the United States pertaining to its
banking, trust and fiduciary powers to execute and deliver this Agreement
and each Escrow and Paying Agent Agreement (collectively, the "Paying
Agent Agreements") and to carry out the obligations of the Paying
Agent under each of the Paying Agent Agreements;
(ii) the execution and delivery by the Paying
Agent of each of the Paying Agent Agreements and the performance by
the Paying Agent of its obligations hereunder and thereunder have
been duly authorized by the Paying Agent and will not violate its
articles of association or by-laws or the provisions of any
indenture, mortgage, contract or other agreement to which it is a
party or by which it is bound; and
(iii) each of the Paying Agent Agreements
constitutes the legal, valid and binding obligations of the Paying
Agent enforceable against it in accordance with its terms, except as
the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general principles of equity, whether
considered in a proceeding at law or in equity.
Section 5. Covenants. (a) The Company covenants with
each of the other parties hereto that:
(i) on the date that the Depositary is
obligated to pay the amount of the Final Withdrawal to the Paying
Agent pursuant to a Deposit Agreement relating to any Trust, the
Company shall pay to the Pass Through Trustee of such Trust no later
than 1:00 p.m. (New York time) an amount equal to the Deposit
Make-Whole Amount, if any, required to be paid in respect of such
Final Withdrawal amount;
(ii) subject to Section 5(a)(iv) of this
Agreement, the Company shall at all times maintain its corporate
existence and shall not wind up, liquidate or dissolve or take any
action, or fail to take any action, that would have the effect of any
of the foregoing;
(ii) the Company shall at all times remain a
U.S. Air Carrier (as defined in the Financing Agreements) and shall at
all times be otherwise certificated and registered to the extent
necessary to entitle (i) in the case of Leased Aircraft, the Owner
Trustee (and the Indenture Trustee as assignee of the Owner Trustee's
rights under each Lease) to the rights afforded to lessors of
aircraft equipment under Section 1110 and (ii) in the case of Owned
Aircraft, the Indenture Trustee to the rights afforded to secured
parties of aircraft equipment under Section 1110;
(iv)Section 7(v) of each Participation
Agreement is hereby incorporated by reference herein; and
(v) on any date the Company is obligated to
pay to the Pass Through Trustee on behalf of the Class C Trust a
Class C Special Indemnity Payment pursuant to the Participation
Agreement, the Company shall pay to the Pass Through Trustee on behalf
of the Class C Trust the amount which has accrued during such Lease
Period (as defined in the Participation Agreement) in accordance with
the following sentence and which remains unpaid on such date (such
amount, the "Class C Special Deposit Payment"). The Class C Special
Deposit Payment shall accrue during each Lease Period at a daily rate
equal to the Multiplier, in effect from time to time during such
Lease Period, multiplied by the aggregate principal amount of the
Deposit on such date divided by 360. The Pass Through Trustee agrees
that it will accept and receive the Class C Special Deposit Payment
on behalf of the Class C Trust and that it will distribute the Class
C Special Deposit Payment in accordance with the Class C Trust.
(b) State Street Bank and Trust Company, in its individual
capacity, covenants with each of the other parties to this Agreement that
it will, immediately upon obtaining knowledge of any facts that would cast
doubt upon its continuing status as a "citizen of the United States" as
defined in 49 U.S.C. ss. 40102(a)(15) and promptly upon public disclosure
of negotiations in respect of any transaction which would or might
adversely affect such status, notify in writing all parties hereto of all
relevant matters in connection therewith. Upon State Street Bank and Trust
Company giving any such notice, State Street Bank and Trust Company shall,
subject to Section 8.02 of any Indenture then entered into, resign as
Trustee in respect of such Indenture.
Section 6. Notices. Unless otherwise specifically
provided herein, all notices required or permitted by the terms of this
Agreement shall be in English and in writing, and any such notice shall
become effective upon being delivered personally or,
if promptly confirmed by mail, when dispatched by facsimile or other
written telecommu nication, addressed to such party hereto at its address
or facsimile number set forth below the signature of such party at the foot
of this Agreement.
Section 7. Expenses. (a) The Company agrees to pay to the
Subordination Agent when due an amount or amounts equal to the fees payable
to the Liquidity Provider under Section 2.03 of each Liquidity Facility and
the related Fee Letter (as defined in the Intercreditor Agreement)
multiplied by a fraction the numerator of which shall be the then
outstanding aggregate amount of the Deposits under the Deposit Agreements
and the denominator of which shall be the sum of (x) the then outstanding
aggregate principal amount of the Series A Equipment Notes, Series B
Equipment Notes and Series C Equipment Notes issued under all of the
Indentures and (y) the then outstanding aggregate amount of the Deposits
under the Deposit Agree ments.
(b) So long as no Equipment Notes have been issued in
respect of any Aircraft, the Company agrees to pay (i) to the Subordination
Agent when due (A) the amount equal to interest on any Downgrade Advance
(other than Applied Downgrade Advance) payable under Section 3.07 of each
Liquidity Facility minus Investment Earnings while such Downgrade Advance
shall be outstanding, (B) the amount equal to interest on any Non-Extension
Advance (other than an Applied Non- Extension Advance) payable under
Section 3.07 of each Liquidity Facility minus Investment Earnings while
such Non-Extension Advance shall be outstanding, (C) any other amounts owed
to the Liquidity Provider by the Subordination Agent as borrower under each
Liquidity Facility (other than amounts due as repayment of advances
thereunder or as interest on such advances, except to the extent payable
pursuant to clause (A) or (B)), (ii) all compensation and reimbursement of
expenses, disbursements and advances payable by the Company under the Pass
Through Trust Agreements, (iii) all compensation and reimbursement of
expenses and disbursements payable to the Subordination Agent under the
Intercreditor Agreement except with respect to any income or franchise
taxes incurred by the Subordination Agent in connection with the
transactions contemplated by the Intercreditor Agreement and (iv) in the
event the Company requests any amendment to any Operative Document, all
reasonable fees and expenses (including, without limitation, fees and
disbursements of counsel) of the Escrow Agent and/or the Paying Agent in
connection therewith. For purposes of this Section 7(b), the terms "Applied
Non-Extension Advance," "Downgrade Advance", "Investment Earnings" and
"Non-Extension Advance" shall have the meanings specified in each Liquidity
Facility.
Section 8. Further Assurances. Each party hereto shall duly
execute, acknowledge and deliver, or shall cause to be executed,
acknowledged and delivered, all such further agreements, instruments,
certificates or documents, and shall do and cause to be done such further
acts and things, in any case, as any other party hereto shall reasonably
request in connection with its administration of, or to carry out more
effectually the purposes of, or to better assure and confirm unto it the
rights and benefits to be provided under, this Agreement.
Section 9. Miscellaneous. (a) Provided that the transactions
contemplated hereby have been consummated, and except as otherwise provided
for herein, the representations, warranties and agreements herein of the
Company, the Subordination Agent, the Escrow Agent, the Paying Agent and
the Pass Through Trustee, and the Company's, the Subordination Agent's, the
Escrow Agent's, the Paying Agent's and the Pass Through Trustee's
obligations under any and all thereof, shall survive the expiration or
other termination of this Agreement and the other agreements referred to
herein.
(b) This Agreement may be executed in any number of
counterparts (and each of the parties hereto shall not be required to
execute the same counterpart). Each counterpart of this Agreement,
including a signature page executed by each of the parties hereto, shall be
an original counterpart of this Agreement, but all of such counterparts
together shall constitute one instrument. Neither this Agreement nor any of
the terms hereof may be terminated, amended, supplemented, waived or
modified orally, but only by an instrument in writing signed by the party
against which the enforcement of the termination, amendment, supplement,
waiver or modification is sought. The index preceding this Agreement and
the headings of the various Sections of this Agreement are for convenience
of reference only and shall not modify, define, expand or limit any of the
terms or provisions hereof. The terms of this Agreement shall be binding
upon, and shall inure to the benefit of, the Company and its successors and
permitted assigns, the Pass Through Trustee and its successors as Pass
Through Trustee (and any additional trustee appointed) under any of the
Pass Through Trust Agreements, the Escrow Agent and its successors as
Escrow Agent under the Escrow and Paying Agent Agreements, the Paying Agent
and its successors as Paying Agent under the Escrow and Paying Agent
Agreement and the Subordination Agent and its successors as Subordination
Agent under the Intercreditor Agreement.
(c) This Agreement is not intended to, and shall not,
provide any person not a party hereto (other than the Underwriters, AIFS
and each of the beneficiaries of Section 7 hereof) with any rights of any
nature whatsoever against any of the parties hereto, and no person not a
party hereto (other than the Underwriters, AIFS and each of the
beneficiaries of Section 7 hereof) shall have any right, power or privilege
in respect of, or have any benefit or interest arising out of, this
Agreement.
Section 10.Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.
[This space intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Note
Purchase Agreement to be duly executed by their respective officers
thereunto duly authorized as of the day and year first above written.
US AIRWAYS, INC.
By:
Name:
Title:
Address: 2345 Crystal Drive,
Arlington, VA 22227
Attention: Treasurer
Facsimile: 703-872-5936
STATE STREET BANK AND TRUST COM PANY, not in
its individual capacity, except as otherwise
provided herein, but solely as Pass Through
Trustee
By:
Name:
Title:
Address: 2 International Place, 4th
Floor
Boston, MA 02110
AttentionCorporate Trust
Administration
Facsimile617-664-5151
19
<PAGE>
STATE STREET BANK AND TRUST COM PANY, not in
its individual capacity, except as otherwise
provided herein, but solely as Subordi nation
Agent
By:
Name:
Title:
Address: 2 International Place, 4th
Floor
Boston, MA 02110
AttentionCorporate Trust
Administration
Facsimile617-664-5151
FIRST SECURITY BANK, NATIONAL ASSO
CIATION, as Escrow Agent
By:
Name:
Title:
Address: 79 South Main Street
Salt Lake City, UT 84111
AttentionCorporate Trust Department
Facsimile801-246-5053
20
<PAGE>
STATE STREET BANK AND TRUST COM
PANY, as Paying Agent
By:
Name:
Title:
Address: 2 International Place, 4th
Floor
Boston, MA 02110
AttentionCorporate Trust
Administration
Facsimile617-664-5151
21
<PAGE>
SCHEDULE I to
NOTE PURCHASE AGREEMENT
NEW AIRCRAFT AND SCHEDULED CLOSING MONTHS
New Aircraft Expected Manufacturer's Scheduled
Type Registration Number Serial Number Delivery Months
Airbus A319 N700UW 0885 October 15, 1998
Airbus A319 N701UW 0890 October 20, 1998
Airbus A319 N702UW 0896 November 2, 1998
Airbus A319 N703UW 0904 November 10, 1998
Airbus A319 N704US 0922 December 1998
Airbus A319 N705UW 0929 December 1998
Airbus A320 N101UW 0936 January 1999
Airbus A319 N706US 0946 January 1999
Airbus A319 N707UW 0949 January 1999
Airbus A319 N708UW 0972 February 1999
Airbus A319 N709UW 0997 March 1999
Airbus A320 N102UW 0844 May 1999
Airbus A320 N103US 0861 May 1999
Airbus A319 N710UW 1019 May 1999
Airbus A320 N104UW 0863 June 1999
Airbus A320 N105UW 0868 June 1999
Airbus A319 N711UW 1033 June 1999
Airbus A319 N712US 1038 June 1999
Airbus A320 N106US 1044 July 1999
Airbus A319 N713UW 1040 July 1999
Airbus A319 N714US 1046 July 1999
Airbus A319 N715UW 1051 July 1999
Airbus A319 N716UW 1055 July 1999
Sch. I-1
<PAGE>
SCHEDULE II to
NOTE PURCHASE AGREEMENT
TRUST SUPPLEMENTS
Trust Supplement dated as of the Issuance Date between
the Company
and the Pass Through Trustee in respect of US Airways Pass Through
Trust, Series
1998-1A.
Trust Supplement dated as of the Issuance Date between
the Company
and the Pass Through Trustee in respect of US Airways Pass Through
Trust, Series
1998-1B.
Trust Supplement dated as of the Issuance Date between
the Company
and the Pass Through Trustee in respect of US Airways Pass Through
Trust, Series
1998-1C.
Sch. II-2
<PAGE>
SCHEDULE III to
NOTE PURCHASE AGREEMENT
DEPOSIT AGREEMENTS
Deposit Agreement (Class A) dated as of the Issuance
Date between
Credit Suisse First Boston, New York Branch and the Escrow Agent.
Deposit Agreement (Class B) dated as of the Issuance
Date between
Credit Suisse First Boston, New York Branch and the Escrow Agent.
Deposit Agreement (Class C) dated as of the Issuance
Date between
Citibank, N.A. and the Escrow Agent.
Sch. III-1
<PAGE>
SCHEDULE IV to
NOTE PURCHASE AGREEMENT
ESCROW AND PAYING AGENT AGREEMENTS
Escrow and Paying Agent Agreement (Class A) dated as of
the Issuance
Date among the Escrow Agent, the Underwriters, the Pass Through
Trustee and the
Paying Agent.
Escrow and Paying Agent Agreement (Class B) dated as of
the Issuance
Date among the Escrow Agent, the Underwriters, the Pass Through
Trustee and the
Paying Agent.
Escrow and Paying Agent Agreement (Class C) dated as of
the Issuance
Date among the Escrow Agent, AIFS, the Pass Through Trustee and the
Paying Agent.
Sch. IV-1
<PAGE>
SCHEDULE V to
NOTE PURCHASE AGREEMENT
MANDATORY DOCUMENT TERMS
The terms "Trust Indenture Form," "Lease Form" and
"Participation Agreement Form" shall have the respective meanings specified
in Schedule VI to the Note Purchase Agreement.
1. May not modify in any material adverse respect as regards
the interests of the Note Holders, the Subordination Agent, the Liquidity
Provider or the Indenture Trustee, the Granting Clause of the Trust
Indenture Form so as to deprive the Note Holders of a first priority
security interest in and mortgage lien on the Aircraft, the rights of US
Airways under the Aircraft Purchase Agreement to the extent assigned under
the Indenture and in the case of a Leased Aircraft Indenture, the Lease or
to eliminate any of the obligations intended to be secured thereby or
otherwise modify in any material adverse respect as regards the interests
of the Note Holders, the Subordina tion Agent, the Liquidity Provider or
the Indenture Trustee the provisions of Article II or III or Sections 4.02,
4.03, 4.04, 5.02, 5.06, 9.01, 10.04, 10.11 or 10.12 of the Trust Indenture
Form for the Leased Aircraft or Article II or III or Sections 4.02, 4.03,
4.04, 5.02, 5.06, 10.01, 11.04, 11.11 or 11.12 of the Trust Indenture Form
for the Owned Aircraft.
2. May not modify in any material adverse respect as regards
the interests of the Note Holders, the Subordination Agent, the Liquidity
Provider or the Indenture Trustee the provisions of Section 3(c)(v), the
proviso to the first sentence of Section 3(e), 7(a)(1)(A), clause (6) of
the final paragraph of Section 10(a), 18, 21, the penultimate sentence of
Section 25 or Section 27 of the Lease Form or otherwise modify the terms of
the Lease Form so as to deprive the Indenture Trustee of rights expressly
granted to the "Indenture Trustee" therein.
3. May not modify in any material adverse respect as regards
the interests of the Note Holders, the Subordination Agent, the Liquidity
Provider or the Indenture Trustee the provisions of Section 4(a)(ix)(1),
4(a)(ix)(2), 4(a)(ix)(3), 4(a)(xi) to the extent such section requires
special counsel for the Lessee to deliver an opinion relating to Section
1110 of the Bankruptcy Code, Section 7(c), 7(h), the second sentence of
Section 7(n), 7(q), 7(z), 14(f) or 14(h) of the Participation Agreement
Form so as to eliminate the requirement to deliver to the Loan Participant
or the Indenture Trustee, as the case may be, the legal opinions to be
provided to such Persons thereunder (recognizing that the lawyers rendering
such opinions may be changed) or of the provisions of Section 7(d)(II)(E)
of the Participation Agreement Form as regards the rights of the Indenture
Trustee thereunder or otherwise modify the terms of the Participation
Agreement Form to deprive the Trustees, the Subordination Agent, the
Liquidity Provider or the Indenture Trustee of any indemnity or right of
reimbursement in its favor for Expenses or Taxes.
<PAGE>
4. May not modify, in any material adverse respect as regards
the interests of the Note Holders, the Subordination Agent, the Liquidity
Provider or the Indenture Trustee, the definition of "Make-Whole Amount" in
Annex A to the Participation Agreement Form.
Notwithstanding the foregoing, any such Mandatory Document Term
may be modified to correct or supplement any such provision which may be
defective or to cure any ambiguity or correct any mistake, provided,
however, that any such action shall not materially adversely affect the
interests of the Note Holders, the Subordination Agent, the Liquidity
Provider, the Indenture Trustee or the Certificate Holders.
<PAGE>
SCHEDULE VI to
NOTE PURCHASE AGREEMENT
MANDATORY ECONOMIC TERMS
EQUIPMENT NOTES
Obligor: US Airways, Inc. or an Owner Trust
Maximum Principal Amount:
The principal amount of the Series A Equipment Notes and Series
B Equipment Notes issued with respect to an Aircraft shall equal the
principal amount of Series A Equipment Notes and Series B Equipment Notes
indicated for each such Aircraft as set forth in the Prospectus Supplement
in "Prospectus Supplement Summary- -Equipment Notes and the Aircraft" under
the column "Principal Amount of Series A Equipment Notes" and "Principal
Amount of Series B Equipment Notes," respectively.
The maximum principal amount of the Series C Equipment Notes
issued with respect to an Aircraft shall not exceed the principal amount of
Series C Equipment Notes indicated for each Aircraft as set forth in
"Prospectus
Supplement Summary--
Equipment Notes and Aircraft" under the column "Maximum Principal
Amount of Series
C Equipment Notes."
Initial Loan to Aircraft Value (with the value of any Aircraft
for these purposes equal to the value (the "Assumed Appraised Value") for
such Aircraft set forth in the Prospectus Supplement in "Prospectus
Supplement Summary--Equipment Notes and the Aircraft" under the column
"Appraised Base Value"):
Series A: not in excess of 40.5%
Series B: not in excess of 51.0%
Series C: not in excess of 67.0%
The Loan to Aircraft Value for each series of Equipment Notes
issued in respect of each Aircraft (computed as of the date of the issuance
thereof on the basis of the Assumed Appraised Value of such Aircraft and
the Depreciation Assumption (as defined in the Prospectus Supplement in
"Description of the Equipment Notes - Loan to Value Ratios of Equipment
Notes")) will not exceed as of any Regular Distribution Date thereafter
(assuming no default in the payment of the Equipment Notes) 40.5% in the
case of the Series A Equipment Notes, 51.0% in the case of the Series B
Equipment Notes and 69.5% in the case of the Series C Equipment Notes.
Sch. VI-1
<PAGE>
Initial Average Life (in years) of the Series A Equipment Notes, the Series
B Equipment Notes and the Series C Equipment Notes on any Aircraft will not
extend beyond 13.5 years, 12.5 years and 13.5 years, respectively, from the
Issuance
Date.
AVERAGE LIFE (IN YEARS)
As of the Delivery Period Termination Date, the average life of
the Class A Certificates, the Class B Certificates and the Class C
Certificates shall not be more than, respectively, 13.0 years, 11.0 years
and 12.5 years, respectively, from the Issuance Date (computed without
regard to the acceleration of any Equipment Notes and after giving effect
to any special distribution on the Certificates thereafter required in
respect of unused Deposits).
FINAL EXPECTED DISTRIBUTION DATE
Series A Certificates: January 30, 2018
Series B Certificates: January 30, 2018
Series C Certificates: July 30, 2014
Past Due Rate: Debt Rate plus 2% per annum.
Payment Dates: January 30 and July 30, commencing January 30, 1999
Make-Whole Amounts: As provided in Article II of the form of Leased Aircraft
Indenture marked as Exhibit A-3 of the Note Purchase Agreement (the "Leased
Aircraft Indenture Form") or the form of Owned Aircraft Indenture marked as
Exhibit C-2 of the Note Purchase Agreement (the "Owned Aircraft Indenture
Form").
Redemption and Purchase: As provided in Article II of the Trust Indenture Form.
The original aggregate principal amount of all of the Equipment Notes of
each Series shall not exceed the original aggregate face amount of the
Certificates issued by the
corresponding Trust.
The interest rate applicable to each Series of Equipment Notes must be
equal to the rate applicable to the Certificates issued by the
corresponding Trust.
LEASE
Term: The Basic Lease Term shall expire by its terms on
or after final maturity date of the related Series
A, Series B or Series C Equipment Notes.
Lease Period Dates: January 30, 1999 and each succeeding January
30 and
July 30, to and including the last such date
in the Term.
Sch. VI-2
<PAGE>
Minimum Rent: Basic Rent due and payable on each Lease
Period Date
shall be at least sufficient to pay in full, as of
such Lease Period Date (assuming timely payment of
the related Equipment Notes prior to such Date),
the aggregate principal amount of scheduled
installments due on the related Equipment Notes
outstanding on such Lease Period Date, together
with accrued and unpaid interest thereon.
Termination Value: At all times equal to or greater than the
then outstanding
principal amount of the related Equipment
Notes together
with accrued interest thereon.
All-risk hull insurance:Not less than Termination Value,
subject to Lessee's right to self-insure on terms
no more favorable to Lessee in any material respect
than those set forth in
Section 2(d) of Exhibit H to the Lease Form.
Minimum Liability
Insurance Amount: As set forth in Exhibit H to the Lease Form.
Past Due Rate: As set forth in Exhibit B to the Lease Form.
PARTICIPATION AGREEMENT
Indenture Trustee, Subordination Agent, Liquidity Provider, Pass
Through Trustees, Escrow Agents and Note Holders shall be indemnified
against Expenses and Taxes in a manner no less favorable to the Loan
Trustees, the Subordination Agent, the Liquidity Provider, the Trustees,
the Escrow Agents and the Note Holders than that set forth in Section 6 of
the form of the Participation Agreement (the "Participation Form") marked
as Exhibit A-1 to the Note Purchase Agreement for the Leased Aircraft or as
Exhibit C-1 to the Note Purchase Agreement for the Owned Aircraft.
Sch. VI-3
<PAGE>
SCHEDULE VII to
NOTE PURCHASE AGREEMENT
AGGREGATE AMORTIZATION SCHEDULE
[INSERT TABLE]
Schedule VII-1
<PAGE>
ANNEX A to
NOTE PURCHASE AGREEMENT
DEFINITIONS
"Act" means 49 U.S.C. ss.ss. 40101-46507.
"Affiliate" means, with respect to any person, any other person
directly or indirectly controlling, controlled by or under common control
with such person. For purposes of this definition, "control" means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such person, whether through the ownership of
voting securities or by contract or otherwise and "controlling,"
"controlled by" and "under common control with" have correlative meanings.
"AIFS" has the meaning set forth in the fourth recital
to the Note
Purchase Agreement.
"Aircraft Financing Letter Agreement" means the Aircraft
Financing Letter Agreement, dated as of October 31, 1997 between AVSA,
S.A.R.L., the
Company and US Airways Group, Inc..
"Aircraft Purchase Agreement" means the Purchase Agreement
dated as of October 31, 1997, between US Airways Group, Inc. and the Seller
(including all exhibits thereto, together with all letter agreements
entered into that by their terms constitute part of any such Purchase
Agreement).
"Aircraft Purchase Agreement Assignment" means a
Purchase Agreement
substantially in the form of Exhibit A-4-I to the Note Purchase
Agreement.
"Assumed Amortization Schedule" means Schedule VII to
the Note
Purchase Agreement.
"Average Life Date" means, for any Equipment Note, the date
which follows the time of determination by a period equal to the Remaining
Weighted Average
Life of such Equipment Note.
"Bankruptcy Code" means the United States Bankruptcy
Code, 11 U.S.C.
ss.ss. 101 et seq.
"Basic Pass Through Trust Agreement" means the Pass Through
Trust Agreement, dated as of December 4, 1998, between the Company and Pass
Through Trustee, as such agreement may be supplemented, amended or
modified, but does not include any Trust Supplement.
Annex A-1
<PAGE>
"Business Day" means any day, other than a Saturday, Sunday or
other day on which commercial banks are authorized or required by law to
close in New York, New York, Pittsburgh, Pennsylvania, Boston,
Massachusetts or Salt
Lake City, Utah.
"Certificate" has the meaning set forth in the second
recital to the Note
Purchase Agreement.
"Certificate Holder" means the Person in whose name a
Certificate is
registered in the Register.
"Class" means the class of Certificates issued by each
Pass Through
Trust.
"Class A Certificates" means the Class A Certificates issued by
the US Airways Pass Through Trust, Series 1998-1A.
"Class B Certificates" means the Class B Certificates issued by
the US Airways Pass Through Trust, Series 1998-1B.
"Class C Certificates" means the Class C Certificates issued by
the US Airways Pass Through Trust, Series 1998-1C.
"Class C Purchase Agreement" has the meaning set forth
in the fourth
recital to the Note Purchase Agreement.
"Class A Trust" means the US Airways Pass Through Trust, Series
1998- 1A formed pursuant to the Basic Pass Through Trust Agreement and
Class A Trust Supplement.
"Class B Trust" means the US Airways Pass Through Trust, Series
1998- 1B formed pursuant to the Basic Pass Through Trust Agreement and
Class B Trust Supplement.
"Class C Special Deposit Payment" has the meaning set
forth in Section
5(a) hereof.
"Class C Special Indemnity Payment" has the meaning set
forth in each
Participation Agreement.
"Class C Trust" means the US Airways Pass Through Trust, Series
1998- 1C formed pursuant to the Basic Pass Through Trust Agreement and
Class C Trust Supplement.
"Closing Date" means the Business Day on which a closing occurs
under the Financing Agreements.
Annex A-2
<PAGE>
"Company" means US Airways, Inc., a Delaware
corporation.
"Cut-Off Date" means the earlier of (a) the day after
the Delivery Period
Termination Date and (b) the date on which a Triggering Event
occurs.
"Delivery Period Termination Date" means the earlier of (a)
October 31, 1999 and (b) the date on which Equipment Notes issued with
respect to all of the New Aircraft (or Substitute Aircraft in lieu thereof)
have been purchased by the Pass Through Trustees in accordance with the
Note Purchase Agreement.
"Deposit" has the meaning set forth in the fifth recital
to the Note
Purchase Agreement.
"Deposit Agreement" has the meaning set forth in the
fifth recital to the
Note Purchase Agreement.
"Deposit Make-Whole Premium" means, with respect to the
distribution of unused Deposits to holders of any Class of Certificates, as
of any date of determina tion, an amount equal to the excess, if any, of
(a) the present value of the excess of (i) the scheduled payment of
principal and interest to maturity of the Equipment Notes, assuming the
maximum principal amount thereof (the "Maximum Amount") minus the
Non-Premium Amount and, in the case of the Class C Certificates, the Par
Redemption Amount (without duplication), were issued, on each remaining
Regular Distribution Date for such Class under the Assumed Amortization
Schedule over (ii) the scheduled payment of principal and interest to
maturity of the Equipment Notes actually acquired by the Trustee for such
Class on each such Regular Distribution Date, such present value computed
by discounting such excess on a semiannual basis on each Regular
Distribution Date (assuming a 360-day year of twelve 30-day months) using a
discount rate equal to the Treasury Yield plus 225 basis points in the case
of the Class A Certificates, 275 basis points in the case of the Class B
Certificates and 222 basis points in the case of Class C Certificates over
(b) the amount of such unused Deposits to be distributed to the holders of
such Certificates, minus the Non-Premium Amount and, in the case of the
Class C Certificates, the Par Redemption Amount (without duplication) plus
accrued and unpaid interest on such net amount to but excluding the date of
determination from and including the preceding Regular Distribution Date
(or if such date of determination precedes the first Regular Distribution
Date, the Issuance Date).
"Depositary" means (a) with respect to Deposits made by the
Underwrit ers on behalf of the Escrow Agent, Credit Suisse First Boston,
New York Branch, a banking institution organized under the laws of
Switzerland acting through its New York Branch and (b) with respect to
Deposits made by AIFS on behalf of the Escrow Agent, Citibank, N.A., a
national banking association.
"Equipment Notes" means and includes any equipment notes issued
under any Indenture in the form specified in Section 2.01 thereof (as such
form may be varied
Annex A-3
<PAGE>
pursuant to the terms of such Indenture) and any Equipment Note issued
under any Indenture in exchange for or replacement of any other Equipment
Note.
"Escrow Agent" has the meaning set forth in the first
paragraph of the
Note Purchase Agreement.
"Escrow and Paying Agent Agreement" has the meaning set
forth in the
fifth recital to the Note Purchase Agreement.
"FAA" means the Federal Aviation Administration of the
United States.
"Final Withdrawal" with respect to each Escrow and Paying Agent
Agreement, has the meaning set forth in Section 1.2 thereof.
"Financing Agreements" means, collectively, the Lease
Financing
Agreements and the Owner Financing Agreements.
"Government Entity" means (a) any federal, state, provincial or
similar government, and any body, board, department, commission, court,
tribunal, authority, agency or other instrumentality of any such government
or otherwise exercising any executive, legislative, judicial,
administrative or regulatory functions of such government or (b) any other
government entity having jurisdiction over any matter contemplated by the
Operative Documents or relating to the observance or performance of the
obligations of any of the parties to the Operative Documents.
"H.15(519)" means the weekly statistical release designated as
such, or any successor publication, published by the Board of Governors of
the Federal Reserve
System.
"Indentures" means, collectively, the Leased Aircraft
Indentures and the
Owned Aircraft Indentures.
"Intercreditor Agreement" has the meaning set forth in
the ninth recital
to the Note Purchase Agreement.
"Issuance Date" means the date of the original issuance
of the Certifi
cates.
"Law" means (a) any constitution, treaty, statute, law, decree,
regulation, order, rule or directive of any Government Entity, and (b) any
judicial or administrative interpretation or application of, or decision
under, any of the foregoing.
"Lease" means a Lease Agreement substantially in the
form of Exhibit A-
2 to the Note Purchase Agreement.
Annex A-4
<PAGE>
"Lease Financing Agreements" means, collectively, the Aircraft
Purchase Agreement Assignment, the Leased Aircraft Participation Agreement,
the Lease, the Leased Aircraft Indenture, the Equipment Notes issued under
the Leased Aircraft Indenture and the Trust Agreement relating to the
financing of a Leased Aircraft.
"Lease Period" has the meaning set forth in the
Participation Agreement.
"Leased Aircraft" means a New Aircraft subject to a
Lease.
"Leased Aircraft Indenture" means a Trust Indenture and
Security
Agreement substantially in the form of Exhibit A-3 to the Note
Purchase Agreement.
"Leased Aircraft Participation Agreement" means a
Participation
Agreement substantially in the form of Exhibit A-1 to the Note Purchase
Agreement.
"Liquidity Facility" has the meaning set forth in the
ninth recital to the
Note Purchase Agreement.
"Liquidity Provider" has the meaning set forth in the
ninth recital to the
Note Purchase Agreement.
"Loan Trustee" means the "Indenture Trustee" as defined
in the Financing
Agreements.
"Mandatory Document Terms" means the terms set forth on
Schedule V
to the Note Purchase Agreement.
"Mandatory Economic Terms" means the terms set forth on
Schedule VI
to the Note Purchase Agreement.
"Manufacturer" means Airbus Industrie, a "Groupement
d'Interet
Economique" established under "Ordonnance" No. 67-821 dated
September 23, 1967,
of the Republic of France.
"Multiplier" has the meaning set forth in each
Participation Agreement.
"New Aircraft" has the meaning set forth in the first
recital to the Note
Purchase Agreement.
"Non-Premium Amount" means the amount equal to unused Deposits
to be distributed due to the failure of an Aircraft to be delivered prior
to the Delivery Period Termination Date due to any reason not occasioned by
US Airways'
fault or negligence.
Deposits comprising Non-Premium Amounts will not be treated as unused
Deposits in determining whether the unused Deposits exceed the Par
Redemption
Amount.
Annex A-5
<PAGE>
"Note Purchase Agreement" means the Note Purchase
Agreement to which this Annex A is attached.
"Notice of Purchase Withdrawal" with respect to each Deposit
Agreement, has the meaning set forth in Section 2.3 thereof.
"Operative Documents" means, collectively, the Pass Through
Trust Agreements, the Escrow and Paying Agent Agreements, the Deposit
Agreements, the Liquidity Facilities, the Intercreditor Agreement, the
Trust Agreements, the Equipment Notes, the Certificates and the Financing
Agreements.
"Owned Aircraft" means a New Aircraft subject to an
Owned Aircraft
Indenture.
"Owned Aircraft Indenture" means a Trust Indenture and
Security
Agreement substantially in the form of Exhibit C-2 to the Note
Purchase Agreement.
"Owned Aircraft Participation Agreement" means a
Participation
Agreement substantially in the form of Exhibit C-1 to the Note Purchase
Agreement.
"Owner Financing Agreements" means, collectively, the
Owned Aircraft
Participation Agreement, the Owned Aircraft Indenture and the
Equipment Notes issued
thereunder.
"Owner Participant" means, with respect to any Leased Aircraft,
the Person named as the Owner Participant in the Participation Agreement
with respect to
such Leased Aircraft.
"Owner Trust" means with respect to any Leased Aircraft, the
trust created by the "Trust Agreement" referred to in the Leased Aircraft
Indenture related
thereto.
"Owner Trustee" means with respect to any Leased Aircraft, the
"Owner Trustee" party to the "Trust Agreement" referred to in the Leased
Aircraft Indenture
related thereto.
"Par Redemption Amount" means (x) in the case where the unused
Deposits are returned due to the fault or negligence of US Airways, $0 and
(y) in all
other cases $15,000,000.
"Participation Agreements" means, collectively, the
Leased Aircraft
Participation Agreements and the Owned Aircraft Participation
Agreements.
"Pass Through Trust" has the meaning set forth in the
second recital to
the Note Purchase Agreement.
Annex A-6
<PAGE>
"Pass Through Trust Agreement" means each of the three separate
Trust Supplements, together in each case with the Basic Pass Through Trust
Agreement, each dated as of the Issuance Date, by and between the Lessee
and Pass
Through Trustee.
"Pass Through Trustee" has the meaning set forth in the
first paragraph
of the Note Purchase Agreement.
"Paying Agent" has the meaning set forth in the first
paragraph of the
Note Purchase Agreement.
"Person" means any individual, firm, partnership, joint
venture, trust, trustee, Government Entity, organization, association,
corporation, government agency, committee, department, authority and other
body, corporate or incorporate, whether having distinct legal status or
not, or any member of any of the same.
"Qualified Owner Participant" has the meaning set forth
in Annex A to
the Participation Agreement.
"Rating Agencies" means, collectively, at any time, each
nationally recognized rating agency which shall have been requested to rate
the Certificates and which shall then be rating the Certificates. The
initial Rating Agencies will be Moody's Investors Service, Inc. and
Standard & Poor's Ratings Services, a division of McGraw- Hill Inc.
"Rating Agency Confirmation" means, with respect to any
Financing Agreement that has been modified in any material respect from the
forms thereof attached to the Note Purchase Agreement or with respect to
Substitute Aircraft, a written confirmation from each of the Rating
Agencies that the use of such Financing Agreement with such modifications
or the substituting of such Substitute Aircraft for a New Aircraft,
whichever of the foregoing shall in a particular case require Rating Agency
Confirmation, would not result in (i) a reduction of the rating for any
Class of Certificates below the then current rating for such Class of
Certificates or (ii) a withdrawal or suspension of the rating of any Class
of Certificates.
"Register" means the register maintained pursuant to Sections
3.04 and 7.12 of the Basic Pass Through Trust Agreement with respect to
each Pass Through
Trust.
"Regular Distribution Dates" shall mean January 30 and
July 30 of each year, commencing January 30, 1999.
"Remaining Weighted Average Life" means, on a given date with
respect to any Equipment Note, the number of days equal to the quotient
obtained by dividing (a) the sum of each of the products obtained by
multiplying (i) the amount of each then remaining scheduled payment of
principal of such Equipment Note, including the
Annex A-7
<PAGE>
payment due on the maturity of such Equipment Note by (ii) the number of
days from and including such determination date to but excluding the date
on which such payment of principal is scheduled to be made, by (b) the then
outstanding principal amount of such Equipment Note.
"Section 1110" means 11 U.S.C. ss. 1110 of the Bankruptcy
Code or any
successor or analogous Section of the federal bankruptcy Law in
effect from time to
time.
"Seller" means AVSA, S.A.R.L., a societe a responsabilite
limitee organized and existing under the laws of the Republic of France.
"Series A Equipment Notes" means Equipment Notes issued under
an Indenture and designated as "Series A" thereunder.
"Series B Equipment Notes" means Equipment Notes issued under
an Indenture and designated as "Series B" thereunder.
"Series C Equipment Notes" means Equipment Notes issued under
an Indenture and designated as "Series C" thereunder.
"Subordination Agent" has the meaning set forth in the
first paragraph of
the Note Purchase Agreement.
"Substitute Aircraft" has the meaning set forth in
Section 2(g) of the Note
Purchase Agreement.
"Substitute Closing Date" has the meaning set forth in
Section 2(e) of the
Note Purchase Agreement.
"Taxes" means all license, recording, documentary, registration
and other similar fees and all taxes, levies, imposts, duties, charges,
assessments or withholdings of any nature whatsoever imposed by any Taxing
Authority, together with any penalties, additions to tax, fines or interest
thereon or additions thereto.
"Taxing Authority" means any federal, state or local government
or other taxing authority in the United States, any foreign government or
any political subdivision or taxing authority thereof, any international
taxing authority or any territory or possession of the United States or any
taxing authority thereof.
"Treasury Yield" means, as of any date of determination, with
respect to any Equipment Note (utilizing the Assumed Amortization Schedule
applicable thereto), the interest rate (expressed as a decimal and, in the
case of United States Treasury bills, converted to a bond equivalent yield)
determined to be the per annum rate equal to the semi-annual yield to
maturity for United States Treasury securities maturing on the
Annex A-8
<PAGE>
Average Life Date of such Equipment Note and trading in the public
securities markets either as determined by interpolation between the most
recent weekly average yield to maturity for two series of United States
Treasury securities, trading in the public securities markets, (A) one
maturing as close as possible to, but earlier than, the Average Life Date
of such Equipment Note and (B) the other maturing as close as possible to,
but later than, the Average Life Date of such Equipment Note, in each case
as published in the most recent H.15(519) or, if a weekly average yield to
maturity for United States Treasury securities maturing on the Average Life
Date of such Equipment Note is reported on the most recent H.15(519), such
weekly average yield to maturity as published in such H.15(519).
"Triggering Event" has the meaning assigned to such term
in the
Intercreditor Agreement.
"Trust Agreement" means a Trust Agreement substantially
in the form of
Exhibit A-5 to the Note Purchase Agreement.
"Trust Supplement" means an agreement supplemental to the Basic
Pass Through Trust Agreement pursuant to which (i) a separate trust is
created for the benefit of the holders of the Certificates of a class, (ii)
the issuance of the Certificates of such class representing fractional
undivided interests in such trust is authorized and (iii) the terms of the
Certificates of such class are established.
"Underwriters" has the meaning set forth in the fourth
recital to the Note
Purchase Agreement.
Annex A-9
<PAGE>
EXHIBIT A-1
NOTE PURCHASE AGREEMENT
FORM OF LEASED AIRCRAFT PARTICIPATION AGREEMENT
Exh. A-1-1
<PAGE>
EXHIBIT A-2 to
NOTE PURCHASE AGREEMENT
FORM OF LEASE
Exh. A-2-1
<PAGE>
EXHIBIT A-3 to
NOTE PURCHASE AGREEMENT
FORM OF LEASED AIRCRAFT INDENTURE
Exh. A-3-1
<PAGE>
EXHIBIT A-4-I to
NOTE PURCHASE AGREEMENT
FORM OF AIRCRAFT PURCHASE AGREEMENT ASSIGNMENT
Exh. A-4-I-1
<PAGE>
EXHIBIT A-5 to
NOTE PURCHASE AGREEMENT
FORM OF LEASED AIRCRAFT TRUST AGREEMENT
Exh. A-4-I-2
<PAGE>
EXHIBIT B to
NOTE PURCHASE AGREEMENT
FORM OF CLOSING NOTICE
Exh. B-1
<PAGE>
EXHIBIT B
Closing Notice
Dated as of __________
To each of the addressees listed
in Schedule A hereto
Re: Closing Notice in Accordance with Note Purchase
Agreement
Referred to below
Gentlemen:
Reference is made to the Note Purchase Agreement, dated as of
December 14, 1998 among US Airways, Inc. (the "Company"), State Street Bank
and Trust Company, as Pass Through Trustee under each of the Pass Through
Trust Agreements (as defined therein) (the "Pass Through Trustee"), State
Street Bank and Trust Company, as Subordination Agent (the "Subordination
Agent"), First Security Bank, National Association, as Escrow Agent (the
"Escrow Agent") and State Street Bank and Trust Company, as Paying Agent
(the "Paying Agent") (as in effect from time to time, the "Note Purchase
Agreement"). Unless otherwise defined herein, capitalized terms used herein
shall have the meanings set forth in the Note Purchase Agreement or, to the
extent not defined therein, the Intercreditor Agreement.
Pursuant to Sections 2(b) of the Note Purchase Agreement, the
undersigned hereby notifies you, in respect of the Airbus __________
aircraft with manufacturer's serial number __________ (the "Aircraft"), of
the following:
1. The Company has elected to treat the Aircraft as
[a Leased
Aircraft] [an Owned Aircraft];
2. The Scheduled Closing Date of the Aircraft is __________;
and
3. The aggregate amount of each series of Equipment Notes to be
issued, and purchased by the respective Pass Through Trustees, on the
Closing Date, in connection with the financing of such Aircraft is as
follows: The Class A Trustee shall purchase Series A Equipment Notes in the
amount of $__________, the Class B Trustee shall purchase Series B
Equipment Notes in the amount of $__________ and the Class C Trustee shall
purchase Series C Equipment Notes in the amount of
$--------.
The Company hereby instructs the Class A Trustee to (i) execute
a Withdrawal Certificate in the form of Annex A hereto dated as of
__________ and attach thereto a Notice of Purchase Withdrawal dated such
date completed as set forth
Exh. B-2
<PAGE>
on Exhibit A hereto and (ii) deliver such Withdrawal Certificate and
Notice of Purchase
Withdrawal to the applicable Escrow Agent.
The Company hereby instructs the Class B Trustee to (i) execute
a Withdrawal Certificate in the form of Annex A hereto dated as of
__________ and attach thereto a Notice of Purchase Withdrawal dated such
date completed as set forth on Exhibit B hereto and (ii) deliver such
Withdrawal Certificate and Notice of Purchase Withdrawal to the applicable
Escrow Agent.
The Company hereby instructs the Class C Trustee to (i) execute
a Withdrawal Certificate in the form of Annex A hereto dated as of
__________ and attach thereto a Notice of Purchase Withdrawal dated such
date completed as set forth on Exhibit C hereto and (ii) deliver such
Withdrawal Certificate and Notice of Purchase Withdrawal to the applicable
Escrow Agent.
The Company hereby instructs each Pass Through Trustee to (i)
purchase Equipment Notes of a series and in an amount set forth opposite
such Pass Through Trustee in clause (3) above with a portion of the
proceeds of the withdrawals of Deposits referred to in the applicable
Notice of Purchase Withdrawal referred to above and (ii) redeposit with the
Depositary the excess, if any, of the amount so withdrawn over the purchase
price of such Equipment Notes.
The Company hereby instructs each Pass Through Trustee to (a)
enter into the Participation Agreement dated as of __________ among the
Company, as Lessee, the Subordination Agent, the Pass Through Trustee,
State Street Bank and Trust Company, as Indenture Trustee and Loan
Participant, First Security Bank, National Association, as Owner Trustee
and __________, as Owner Participant, (b) perform its obligations
thereunder and (c) deliver such certificates, documents and legal opinions
relating to such Pass Through Trustee as required thereby.
Exh. B-3
<PAGE>
The Company hereby certifies that the Owner Participant with
respect to the Aircraft is not an Affiliate of the Company.
Yours faithfully,
US Airways, Inc.
By:
Name:
Title:
Exh. B-4
<PAGE>
SCHEDULE A
State Street Bank and Trust Company, as
Pass Through Trustee, Subordination
Agent and Paying Agent
2 International Place, 4th Floor
Boston, MA 02110
Attention: Corporate Trust Administration
Facsimile: (617) 664-5151
First Security Bank, National Association,
as Escrow Agent
79 South Main Street
Salt Lake City, UT 84111
Attention: Corporate Trust Department
Facsimile: (801) 246-5053
Standard & Poor's Ratings Services
26 Broadway, 14th Floor
New York, New York 10004
Attention: Philip Baggaley
Facsimile: (212) 412-0540
Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
Attention: Monica Rodriguez
Facsimile: (212) 553-4600
Sch. A-1
<PAGE>
Annex A
WITHDRAWAL CERTIFICATE
First Security Bank, National Association,
as Escrow Agent
79 South Main Street
Salt Lake City, UT 84111
Attention: Corporate Trust Services
Telecopier: (801) 246-5053
Ladies and Gentlemen:
Reference is made to the Escrow and Paying Agent Agreement,
dated as of December 14, 1998 (the "Agreement"). We hereby certify to you
that the conditions to the obligations of the undersigned to execute a
Participation Agreement pursuant to the Note Purchase Agreement have been
satisfied. Pursuant to Section 1.2(c) of the Agreement, please execute the
attached Notice of Withdrawal and immediately transmit by facsimile to the
Depositary, at __________.
Capitalized terms used herein but not defined herein shall have
the meanings set forth in the Agreement.
Very truly yours,
STATE STREET BANK AND TRUST COM PANY, not in
its individual capacity by solely as Pass
Through Trustee
By:
Name:
Title:
Dated: As of __________
Annex A-1
<PAGE>
Exhibit A
NOTICE OF PURCHASE WITHDRAWAL
CREDIT SUISSE FIRST BOSTON New York Branch 11 Madison Avenue New York, NY
10010
Attention: Robert Finney and Jennifer Toth
Telecopier: (212) 325-8319
Ladies and Gentlemen:
Reference is made to the Deposit Agreement (Class A) dated
as of December
14, 1998 (the "Deposit Agreement") between First Security Bank,
National Association,
as Escrow Agent, and Credit Suisse First Boston, New York Branch, as
Depositary (the
"Depositary").
In accordance with Section 2.3(a) of the Deposit Agreement, the
undersigned hereby requests the withdrawal of the entire amount of the
Deposit,
$----------,
Account No. __________.
The undersigned hereby directs the Depositary to pay the
proceeds of the
Deposit to _______________, Account No. __________, Reference:
__________ on
_______________, _____, upon the telephonic request of a
representative of the Pass
Through Trustee.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
as Escrow Agent
By
Name:
Title:
Dated:___________, ____
Exh. A-1
<PAGE>
Exhibit B
NOTICE OF PURCHASE WITHDRAWAL
CREDIT SUISSE FIRST BOSTON New York Branch 11 Madison Avenue New York, NY
10010
Attention: Robert Finney and Jennifer Toth
Telecopier: (212) 325-8319
Ladies and Gentlemen:
Reference is made to the Deposit Agreement (Class B) dated
as of December
14, 1998 (the "Deposit Agreement") between First Security Bank,
National Association,
as Escrow Agent, and Credit Suisse First Boston, New York Branch, as
Depositary (the
"Depositary").
In accordance with Section 2.3(a) of the Deposit Agreement, the
undersigned hereby requests the withdrawal of the entire amount of the
Deposit,
$----------,
Account No. __________.
The undersigned hereby directs the Depositary to pay the
proceeds of the
Deposit to _______________, Account No. __________, Reference:
__________ on
_______________, _____, upon the telephonic request of a
representative of the Pass
Through Trustee.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
as Escrow Agent
By
Name:
Title:
Dated:___________, ____
Exh. B-1
<PAGE>
Exhibit C
NOTICE OF PURCHASE WITHDRAWAL
CITIBANK, N.A.
450 Mamaroneck Avenue, 3rd Floor
Harrison, NY 10528
Attention: Tara Ramnarine
Telecopier: 914-899-7163
Ladies and Gentlemen:
Reference is made to the Deposit Agreement (Class C) dated
as of December
14, 1998 (the "Deposit Agreement") between First Security Bank,
National Association,
as Escrow Agent, and Citibank, N.A., as Depositary (the
"Depositary").
In accordance with Section 2.3(a) of the Deposit Agreement, the
undersigned hereby requests the withdrawal of the entire amount of the
Deposit,
$----------,
Account No. __________.
The undersigned hereby directs the Depositary to pay the
proceeds of the
Deposit to _______________, Account No. __________, Reference:
__________ on
_______________, _____, upon the telephonic request of a
representative of the Pass
Through Trustee.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
as Escrow Agent
By
Name:
Title:
Dated:___________, ____
Exh. C-1
<PAGE>
EXHIBIT C-1 to
NOTE PURCHASE AGREEMENT
FORM OF OWNED AIRCRAFT PARTICIPATION AGREEMENT
[FILED SEPARATELY]
Exh. C-1-1
<PAGE>
EXHIBIT C-2 to
NOTE PURCHASE AGREEMENT
FORM OF OWNED AIRCRAFT INDENTURE
[FILED SEPARATELY]
Exh. C-2-1
<PAGE>
EXHIBIT 4(a)(xiii)
Participation Agreement
N7__UW
=============================================================================
PARTICIPATION AGREEMENT
(US Airways, Inc. Trust No. N7__UW)
Dated as of
_________ __, 199_
Among
US AIRWAYS, INC.,
Lessee,
[__________________],
Owner Participant,
STATE STREET BANK AND TRUST COMPANY
not in its individual capacity except
as expressly provided herein, but solely as
Pass Through Trustee under each of the
Pass Through Trust Agreements,
Subordination Agent and Indenture Trustee
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity
except as expressly provided herein,
but solely as Owner Trustee,
-------------------------
One Airbus A319 Aircraft
U.S. Registration No. N7__UW
=============================================================================
INDEX TO PARTICIPATION AGREEMENT
Page
----
SECTION 1. DEFINITIONS AND CONSTRUCTION. . . . . . . . . . . . . 2
SECTION 2. PARTICIPATIONS IN LESSOR'S COST OF THE AIRCRAFT . . . 3
(a) Participation by Pass Through Trustees
on the Delivery Date; Issuance of
Equipment Notes . . . . . . . . . . . . . . . . 3
(b) Payment of Owner Participant's Commitment . . . 3
(c) Lessee's Notice of Delivery Date . . . . . . . . 4
(d) Default by Pass Through Trustee or Owner
Participant . . . . . . . . . . . . . . . . . . 4
(e) Closing . . . . . . . . . . . . . . . . . . . . 4
(f) Postponement of Scheduled Closing Date . . . . 4
SECTION 3. INSTRUCTIONS TO THE OWNER TRUSTEE . . . . . . . . . 6
SECTION 4. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . 6
(a) Conditions Precedent to the Participations
in the Aircraft . . . . . . . . . . . . . . . . 6
(b) Conditions Precedent to the Obligations
of Lessee . . . . . . . . . . . . . . . . . . . 16
SECTION 5. EXTENT OF INTEREST OF CERTIFICATE HOLDERS . . . . . 18
SECTION 6. REPRESENTATIONS AND WARRANTIES OF LESSEE;
INDEMNITIES . . . . . . . . . . . . . . . . . . . . 18
(a) Representations and Warranties . . . . . . . . 18
(b) General Tax Indemnity . . . . . . . . . . . . . 22
(i) Indemnity . . . . . . . . . . . . . . . 22
(ii) Exclusions from General Tax Indemnity . 23
(iii) Payments. . . . . . . . . . . . . . . . 26
(iv) Contests. . . . . . . . . . . . . . . 28
(v) Refund. . . . . . . . . . . . . . . . . 31
(vi) Tax Filing. . . . . . . . . . . . 31
(vii) Forms. . . . . . . . . . . . . 32
(viii) Non-Parties . . . . . . . . . . 32
(ix) Subrogation. . . . . . . . . . . . . . . 32
(x) Foreign Tax On Loan Payments. . . . 32
(xi) Income Tax . . . . . . . . . . . . 33
(c) General Indemnity . . . . . . . . . . . . . . . 33
(d) Special Indemnity . . . . . . . . . . . . . . . 39
SECTION 7. REPRESENTATIONS, WARRANTIES AND COVENANTS.. . . . . 38
(a) Covenants Regarding Citizenship. . . . . . . . 38
(b) Location of Records . . . . . . . . . . . . . . 39
(c) Securities Act . . . . . . . . . . . . . . . . 39
(d) Reregistration . . . . . . . . . . . . . . . . 39
(e) Owner Participant Representations and
Warranties . . . . . . . . . . . . . . . . . . 42
(f) Lessor Liens . . . . . . . . . . . . . . . . . 44
(g) Quiet Enjoyment . . . . . . . . . . . . . . . . 44
(h) Equipment Notes Acquired for Investment . . . . 44
(i) . . . . . . . . . . . . . . . . . . . . . . . . 44
(j) Representations, Warranties and Covenants
of Indenture Trustee . . . . . . . . . . . . . 45
(k) Owner Participant Transfers . . . . . . . . . . 46
(l) Reserved . . . . . . . . . . . . . . . . . . . 48
(m) Compliance with Trust Indenture . . . . . . . . 48
(n) [ERISA Matters . . . . . . . . . . . . . . . . 48
(o) Confidentiality of Purchase Agreement . . . . . 49
(p) Margin Regulations . . . . . . . . . . . . . . 49
(q) Loan Participant Liens . . . . . . . . . . . . 49
(r) Indenture Trustee Liens . . . . . . . . . . . . 50
(s) Representations and Warranties of Owner
Trustee . . . . . . . . . . . . . . . . . . . . 50
(t) Owner Participant Obligations on Lease
Termination . . . . . . . . . . . . . . . . . . 54
(u) Transfer of Title; Assumption of Equipment
Notes . . . . . . . . . . . . . . . . . . . . 54
(v) Lessee Merger Covenant . . . . . . . . . . . . 55
(w) Further Assurances . . . . . . . . . . . . . . 56
(x) Rent Adjustments . . . . . . . . . . . . . . . 57
(y) Owner Participant Costs on Return . . . . . . . 57
(z) Transfer of Equipment Notes . . . . . . . . . . 57
(aa) Representations and Warranties of Pass
Through Trustee . . . . . . . . . . . . . . . . 57
(bb) Representations and Warranties of
Subordination Agent . . . . . . . . . . . . . . 60
SECTION 8. RELIANCE OF LIQUIDITY PROVIDER . . . . . . . . . . 62
SECTION 9. OTHER DOCUMENTS . . . . . . . . . . . . . . . . . . 62
SECTION 10. CERTAIN COVENANTS OF LESSEE . . . . . . . . . . . . 63
(a) Further Assurances . . . . . . . . . . . . . . 63
(b) Filings . . . . . . . . . . . . . . . . . . . . 63
SECTION 11. OWNER FOR FEDERAL TAX PURPOSES . . . . . . . . . . . 64
SECTION 12. NOTICES; CONSENT TO JURISDICTION . . . . . . . . . 64
(a) Notices . . . . . . . . . . . . . . . . . . . . 64
(b) Consent to Jurisdiction . . . . . . . . . . . . 64
SECTION 13. CHANGE OF SITUS OF OWNER TRUST . . . . . . . . . . 65
SECTION 14. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . 66
(a) Consents Under Lease . . . . . . . . . . . . . 66
(b) Survival . . . . . . . . . . . . . . . . . . . 66
(c) Counterparts . . . . . . . . . . . . . . . . . 66
(d) Amendments and Waivers . . . . . . . . . . . . 67
(e) Successors and Assigns . . . . . . . . . . . . 67
(f) Governing Law . . . . . . . . . . . . . . . . . 67
(g) Trust Capacity . . . . . . . . . . . . . . . . 67
(h) Section 1110 . . . . . . . . . . . . . . . . . 68
SECTION 15. EXPENSES. . . . . . . . . . . . . . . . . . . . . . 68
(a) Invoices And Payment . . . . . . . . . . . . . 68
(b) Payment of Other Expenses. . . . . . . . . . . 68
SECTION 16. REFINANCINGS . . . . . . . . . . . . . . . . . . . . 69
(a) Refinancing Generally . . . . . . . . . . . . 69
(b) Limitation on Redemption . . . . . . . . . . . 72
ANNEXES
ANNEX A - Definitions
SCHEDULES
SCHEDULE I - Names and Addresses
SCHEDULE II - Commitments
SCHEDULE III - Pass Through Trust Agreement and Pass Through Trust
Supplements
EXHIBITS
Exhibit A - Schedule of Countries Authorized for Reregistration
Exhibit B-1 - Form of Opinion of Skadden, Arps, Slate, Meagher & Flom
(Illinois), special counsel for Lessee
Exhibit B-2 - Form of Opinion of Skadden, Arps, Slate, Meagher & Flom LLP,
special counsel for Lessee
Exhibit B-3 - Form of Opinion of Lessee's Legal Department
Exhibit C-1 - Form of Opinion of , special counsel for
the Manufacturer and the Seller
Exhibit C-2 - Form of Opinion of Manufacturer's Legal Department
Exhibit D - Form of Opinion of Ray, Quinney & Nebeker, special counsel
for the Owner Trustee
Exhibit E-1 - Form of Opinion of ______________, special counsel for the
Owner Participant
Exhibit E-2 - Form of Opinion of Owner Participant's in-house counsel
Exhibit F - Form of Opinion of Crowe & Dunlevy, P.C., special FAA Counsel
Exhibit G - Form of Opinion of Bingham Dana LLP, special counsel for the
Indenture Trustee
Exhibit H - Form of Opinion of Bingham Dana LLP, special counsel for the
Pass Through Trustee
Exhibit I - Form of Opinion of Bingham Dana LLP, special counsel for the
Subordination Agent
PARTICIPATION AGREEMENT
(US Airways, Inc. Trust No. N7__UW)
THIS PARTICIPATION AGREEMENT (US Airways, Inc. Trust No. N7__UW)
dated as of _______ ___, 199_ (as amended, supplemented or otherwise
modified from time to time, this "Agreement") among (i) US AIRWAYS, INC., a
Delaware corporation (together with its successors and permitted assigns,
the "Lessee", (ii) [_______________], a ______________ (together with its
successors and permitted assigns, the "Owner Participant"), (iii) STATE
STREET BANK AND TRUST COMPANY, a Massachusetts trust company, as pass
through trustee under each of three separate Pass Through Trust Agreements
(in such capacity, together with its successors and permitted assigns, the
"Pass Through Trustee"), subordination agent and trustee under the
Intercreditor Agreement (in such capacity, together with its successors and
permitted assigns, the "Subordination Agent"), and Indenture Trustee under
the Trust Indenture (in such capacity, together with any successor
indenture trustee, the "Indenture Trustee"), and (iv) FIRST SECURITY BANK,
NATIONAL ASSOCIATION, a national banking association, not in its individual
capacity except as expressly provided herein, but solely as Owner Trustee
under the Trust Agreement (herein, in such latter capacity, together with
any successor owner trustee, called the "Owner Trustee");
W I T N E S S E T H:
WHEREAS, prior to the execution and delivery of this Agreement,
the Owner Participant is entering into the Trust Agreement with the Owner
Trustee, pursuant to which Trust Agreement the Owner Trustee agrees, among
other things, to hold the Trust Estate for the use and benefit of the Owner
Participant;
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Indenture Trustee and the Owner Trustee are entering into
the Trust Indenture pursuant to which the Owner Trustee will issue to the
Loan Participants Equipment Notes in three series, which Equipment Notes
are to be secured by the mortgage and security interests created by the
Owner Trustee in favor of the Indenture Trustee;
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Owner Trustee will execute and deliver a Trust and Indenture
Supplement covering the Aircraft, supplementing the Trust Agreement and the
Trust Indenture;
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Owner Trustee and Lessee have entered into the Lease
whereby, subject to the terms and conditions set forth therein, the Owner
Trustee agrees to lease to Lessee, and Lessee agrees to lease from the
Owner Trustee the Aircraft on the Delivery Date;
WHEREAS, on the Delivery Date for the Aircraft, the Lessee will
deliver a Lease Supplement covering the Aircraft;
WHEREAS, pursuant to the Note Purchase Agreement, the Pass
Through Trustee will purchase from the Owner Trustee on the Delivery Date,
on behalf of each Pass Through Trust, all of the Equipment Notes bearing
the same interest rate as the Certificates issued by such Pass Through
Trust;
WHEREAS, prior to the execution and delivery of this Agreement,
(i) the Liquidity Provider entered into three separate Liquidity
Facilities, one for the benefit of the holders of Certificates of each of
the Class A Pass Through Trust, the Class B Pass Through Trust and the
Class C Pass Through Trust (each referenced on Schedule III hereto), with
the Subordination Agent, as agent for the Pass Through Trustee on behalf of
each such Pass Through Trust; and (ii) the Pass Through Trustee, the
Liquidity Provider and the Subordination Agent have entered into the
Intercreditor Agreement;
WHEREAS, the Equipment Notes will be held by the Subordination
Agent pursuant to the Intercreditor Agreement on behalf of the Pass Through
Trusts;
WHEREAS, the acquisition of the Aircraft by Lessee from the
Seller and the aforementioned sale and leaseback transaction are integrally
related and constitute a series of events designed to provide financing for
such Aircraft and a means of providing the Aircraft to the Lessee for use
in its business.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS AND CONSTRUCTION.
Capitalized terms used but not defined herein shall have the
respective meanings set forth or incorporated by reference, and shall be
construed and interpreted in the manner described, in Annex A.
SECTION 2. PARTICIPATIONS IN LESSOR'S COST OF THE AIRCRAFT.
(a) Participation by Pass Through Trustees on the Delivery Date;
Issuance of Equipment Notes. Subject to the terms and conditions of this
Agreement, the Pass Through Trustee for each Pass Through Trust agrees to
make a non-recourse (except as provided herein) secured loan to the Owner
Trustee on the Delivery Date to finance, in part, the Owner Trustee's
payment of Lessor's Cost for the Aircraft by paying to the Owner Trustee
the aggregate purchase price of the Equipment Notes being issued to such
Pass Through Trustee as set forth on Schedule II opposite the name of such
Pass Through Trust. The Pass Through Trustees shall make such payments to
the Owner Trustee on a date to be designated pursuant to Section 2(c) but
in no event later than __________________, by transferring to the account
of the Owner Trustee at State Street Bank and Trust Company, 225 Franklin
Street, Boston, Massachusetts 02110, ABA No. 011-00-0028, Account No. 9903-
990-1, Reference: US Airways, Inc. 1998-1 EETC/US Airways, Inc. Trust No.
N7__UW), not later than 9:30 a.m., New York City time, on the Delivery Date
in immediately available funds in Dollars, the amount set forth opposite
the name of such Pass Through Trust on Schedule II hereto.
Upon the occurrence of the above transfers by the Pass Through
Trustee for each Pass Through Trust to the Owner Trustee, the Owner
Trustee, at the direction of the Owner Participant, shall issue, pursuant
to Article II of the Trust Indenture, to the Subordination Agent on behalf
of the Pass Through Trustee for each of the Pass Through Trusts, Equipment
Notes of the maturity and aggregate principal amount, bearing the interest
rate and for the purchase price set forth on Schedule II opposite the name
of such Pass Through Trust.
(b) Payment of Owner Participant's Commitment. Subject to the
terms and conditions of this Agreement, the Owner Participant agrees with
the Lessee and only with the Lessee on behalf of the Owner Trustee, subject
to the terms and conditions of this Agreement, to make the amount of its
Commitment as set forth on Schedule II available for and on account of the
Owner Trustee on the Delivery Date specified in the Delivery Notice
pursuant to Section 2(c) by wire transfer of such amount in immediately
available funds, to the Owner Trustee for deposit in its account at State
Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts
02110, ABA No. 011-00-0028, Account No. 9903-990-1, Reference: US Airways
1998-1 EETC/US Airways, Inc. Trust No. N7__UW, not later than 9:30 a.m.,
New York City time. The amount of the Owner Participant's Commitment shall
be held for the account of the Owner Participant by the Owner Trustee until
released by the Owner Participant or its special counsel at closing or
until returned to the Owner Participant in accordance with Section 2(f).
(c) Lessee's Notice of Delivery Date. The Lessee agrees to give
the Owner Participant, the Indenture Trustee, the Owner Trustee, the Pass
Through Trustee and the Subordination Agent at least three (3) Business
Days written or facsimile notice prior to the Delivery Date, which notice
shall specify the Lessor's Cost for the Aircraft, the estimated amount of
the Owner Participant's Commitment, the Delivery Date for the Aircraft, the
serial number of the Airframe and each Engine, and the United States
registration number for the Aircraft.
(d) Default by Pass Through Trustee or Owner Participant. In
case any of the Pass Through Trustee or the Owner Participant shall default
in its obligation under the provisions of this Section 2, no other such
party shall have any obligation to make any portion of such defaulted
amount available or to increase the amount of its Commitment and the
obligation of such nondefaulting party shall remain subject to the terms
and conditions set forth in this Agreement.
(e) Closing. The closing of the transactions referred to in
this Agreement shall take place commencing at 9:30 a.m. local time, on the
Delivery Date, at the offices of Skadden, Arps, Slate, Meagher & Flom LLP
in Washington, D.C., except that the Trust Indenture, the Trust Supplement,
the Lease and the Lease Supplement shall be delivered at the offices of
Skadden, Arps, Slate, Meagher & Flom LLP in New York, New York.
(f) Postponement of Scheduled Closing Date.
(i) If for any reason whatsoever the closing of the
transactions contemplated hereby is not consummated on the Delivery
Date provided for pursuant to Section 2(c) (the "Scheduled Delivery
Date"), the closing shall be deemed adjourned to the next Business
Day or to such other Business Day on or prior to _______________ as
Lessee shall specify by written notice to the Pass Through Trustee,
the Owner Participant, the Owner Trustee and the Indenture Trustee, in
which case the Owner Participant will keep its funds available, and
the Pass Through Trustee shall comply with its obligations under
Section 8.01 of each applicable Pass Through Trust Supplement.
(ii) If the closing fails to occur on the Scheduled Delivery
Date, the Owner Trustee shall promptly return to each Participant that
makes funds available to it in accordance with this Section 2 such
funds, together with interest or income earned thereon.
(iii) If the closing fails to occur on the Scheduled Delivery
Date and funds are not returned to each Participant that made funds
available as provided by clause (ii) above, the Owner Trustee shall,
if so instructed by Lessee, use reasonable efforts to invest, at the
risk of Lessee, the funds received by it from Participants in Cash
Equivalents. Any such obligations purchased by the Owner Trustee,
whether directly or through a repurchase agreement, shall be held in
trust by the Owner Trustee for the benefit of the respective
Participants that provided such funds, and not as part of the Trust
Estate or the Trust Indenture Estate.
(iv) If the closing fails to occur on the Scheduled Delivery
Date, unless the Owner Trustee returns all funds to the Participants
by 2:00 p.m., New York City time, on the Scheduled Delivery Date,
Lessee shall reimburse each Participant that has made funds available
pursuant to this Section 2 for the loss of the use of its funds an
amount equal to the excess, if any, of (x) interest at the Debt Rate
on the amount of such funds for the period from and including the
Scheduled Delivery Date to but excluding the actual Delivery Date or,
if earlier, the day on which such Participant's funds are returned if
such return is made by 2:00 p.m., New York City time (or to but
excluding the next following Business Day if such return is not made
by such time) over (y) any amount paid to such Participant in respect
of interest or income earned by the Owner Trustee pursuant to clause
(iii) above.
(v) On the Delivery Date or on the date funds are required to be
returned to Participants pursuant to clause (ii) above, Lessee shall
reimburse the Owner Trustee, for the benefit of Participants that
provided funds which are invested by the Owner Trustee pursuant to
this subsection (f), for any losses incurred on such investments.
All income and profits on the investment of such funds shall be for
the respective accounts of such Participants, and the Owner Trustee
shall not be liable for failure to invest such funds or for any losses
incurred on such investments, except for its own negligence or willful
misconduct.
SECTION 3. INSTRUCTIONS TO THE OWNER TRUSTEE.
The Owner Participant agrees that its releasing the amount
of its Commitment for the Aircraft to the account of the Owner Trustee in
accordance with the terms of Section 2 and its instructions to the Owner
Trustee to release such funds shall constitute, without further act,
authorization and direction by the Owner Participant to the Owner Trustee:
(i) to purchase the Aircraft from Lessee and to pay to Lessee
the Lessor's Cost for the Aircraft;
(ii) to the extent not previously accomplished by a prior
authorization, to authorize a representative or representatives of the
Owner Trustee (who shall be an employee or employees, or an agent or
agents, of Lessee designated by Lessee) to accept delivery of the
Aircraft on the Delivery Date pursuant to the Acceptance Certificate;
(iii) to accept from Lessee the Bill of Sale and the FAA Bill
of Sale for the Aircraft referred to in Section 4(a)(v)(8) and
4(a)(v)(9);
(iv) to execute an Aircraft Registration Application, the Lease
Supplement and the Trust Supplement, in each case covering the
Aircraft;
(v) to borrow from the Pass Through Trustee and issue the
Equipment Notes as provided in Section 2(a); and
(vi) to take such other action as may be required to be taken by
the Owner Trustee on the Delivery Date by the terms of any Operative
Document.
SECTION 4. CONDITIONS PRECEDENT.
(a) Conditions Precedent to the Participations in the Aircraft.
It is agreed that the obligations of the Owner Trustee, the Owner
Participant, the Indenture Trustee, the Subordination Agent and the Pass
Through Trustee on behalf of each Pass Through Trust to participate in the
transactions contemplated hereby on the Delivery Date are subject to the
fulfillment to the satisfaction of each party (or waiver by such party),
prior to or on the Delivery Date of the following conditions precedent,
except that paragraphs (iii) and (v)(5), (xxi), (xxii) and (xxiii) shall
not be a condition precedent to the obligations of the Pass Through
Trustee, and paragraphs (iv), (vii) (insofar as it relates certificates and
documents to be delivered by the Owner Participant) and (xiv) shall not be
a condition precedent to the obligation of the Owner Participant and
paragraph (xxv) shall not be a condition precedent to the obligations of
the Subordination Agent:
(i) At least three (3) Business Days prior to the Delivery Date,
each of the parties hereto shall have received the Delivery Notice
pursuant to Section 2(c).
(ii) On the Delivery Date, no change shall have occurred after
the date of the execution and delivery of this Agreement in applicable
law or regulations or guidelines or interpretations thereof by
appropriate regulatory authorities which would make it a violation of
law or regulations or guidelines for the Pass Through Trustee or the
Owner Participant to make its Commitment available in accordance with
Section 2.
(iii) In the case of the Owner Participant, the Pass Through
Trustees shall have made available the amount of their Commitments for
the Aircraft in accordance with Section 2.
(iv) In the case of the Pass Through Trustees, the Owner
Participant shall have made available the amount of its Commitment for
the Aircraft in accordance with Section 2.
(v) The following documents shall have been duly authorized,
executed and delivered by the respective party or parties thereto,
shall each be satisfactory in form and substance to the Owner Trustee,
the Owner Participant, the Indenture Trustee, the Pass Through Trustee
and the Subordination Agent and shall be in full force and effect and
executed counterparts shall have been delivered to the Owner Trustee,
the Owner Participant, the Indenture Trustee, the Pass Through Trustee
and the Subordination Agent, or their respective counsel, provided
that only the Subordination Agent on behalf of each Pass Through
Trustee shall receive an executed original of such Pass Through
Trustee's respective Equipment Note and provided, further, that an
excerpted copy of the Purchase Agreement shall only be delivered to
and retained by the Owner Trustee (but the Indenture Trustee shall
also retain an excerpted copy of the Purchase Agreement which may be
inspected by the Owner Participant and its counsel prior to the
Delivery Date and subsequent to the Delivery Date may be inspected and
reviewed by the Indenture Trustee if and only if there shall occur and
be continuing an Indenture Event of Default), the chattel paper
counterpart of the Lease and the Lease Supplement covering the
Aircraft dated the Delivery Date shall be delivered to the Indenture
Trustee, the Tax Indemnity Agreement need only be satisfactory to the
Owner Participant and Lessee and shall only be delivered to Lessee and
the Owner Participant and their respective counsel:
(1) an excerpted copy of the Purchase Agreement
(insofar as it relates to the Aircraft);
(2) the Purchase Agreement Assignment;
(3) the Lease;
(4) a Lease Supplement covering the Aircraft dated the
Delivery Date;
(5) the Tax Indemnity Agreement;
(6) the Trust Agreement;
(7) a Trust Indenture and Trust Supplement covering
the Aircraft dated the Delivery Date;
(8) the Bill of Sale;
(9) the FAA Bill of Sale;
(10) an acceptance certificate covering the Aircraft in
the form agreed to by the Owner Participant and Lessee
(herein called the "Acceptance Certificate") duly completed
and executed by the Owner Trustee or its agent, which may be
a representative of Lessee, and by such representative on
behalf of Lessee;
(11) the Trust Indenture;
(12) the Equipment Notes; and
(13) the Consent and Agreement.
In addition, the Pass Through Trustee and the Owner Participant
each shall have received executed counterparts or conformed copies of
the following documents:
(1) each of the Pass Through Trust Agreements;
(2) the Intercreditor Agreement; and
(3) the Liquidity Facility for each of the Class A,
Class B and Class C Pass Through Trusts.
(vi) A Uniform Commercial Code financing statement or statements
covering all the security interests created by or pursuant to the
Granting Clause of the Trust Indenture that are not covered by the
recording system established by the Transportation Code shall have
been executed and delivered by the Owner Trustee, and arrangements
satisfactory to the Owner Participant and the Indenture Trustee shall
have been made for the filing of such financing statement or
statements in all places necessary or advisable, and any additional
Uniform Commercial Code financing statements deemed advisable by the
Owner Participant or the Pass Through Trustee shall have been executed
and delivered by Lessee or the Owner Trustee and arrangements
satisfactory to the Owner Participant and the Indenture Trustee shall
have been made for the filing of such financing statements.
(vii) The Owner Trustee, the Owner Participant, the Indenture
Trustee, Pass Through Trustee and the Subordination Agent shall have
received the following, in each case in form and substance
satisfactory to it (except it shall not be a condition to the
obligation of any such party that it receive a certificate or other
document required to be delivered by it):
(A) (1) an incumbency certificate of Lessee as to the
person or persons authorized to execute and deliver the
Operative Documents to which the Lessee is a party and any
other documents to be executed on behalf of Lessee in
connection with the transactions contemplated hereby and the
signatures of such person or persons;
(2) a copy of the resolutions of the board of
directors of Lessee or Lessee's executive committee,
certified by the Secretary or an Assistant Secretary of
Lessee, duly authorizing the transactions contemplated
hereby and the execution and delivery of each of the
documents required to be executed and delivered on behalf of
Lessee in connection with the transactions contemplated
hereby; and
(3) a copy of the certificate of incorporation of
Lessee, certified by the Secretary of State of
, a copy of the by-laws of Lessee certified by the
Secretary or Assistant Secretary of Lessee, and a
certificate or other evidence from the Secretary of State of
the State of , dated as of a date
shortly prior to the closing, as to the due incorporation
and good standing of Lessee in such state.
(B) (1) an incumbency certificate of the Indenture Trustee
as to the person or persons authorized to execute and
deliver the Operative Documents to which the Indenture
Trustee is a party and any other documents to be executed on
behalf of the Indenture Trustee in connection with the
transactions contemplated hereby and the signatures of such
person or persons;
(2) a copy of the resolutions of the board of
directors of the Indenture Trustee, certified by the
Secretary or an Assistant Secretary of the Indenture
Trustee, duly authorizing the transactions contemplated
hereby and the execution and delivery of each of the
documents required to be executed and delivered on behalf of
the Indenture Trustee in connection with the transactions
contemplated hereby;
(3) a copy of the articles of association of the
Indenture Trustee certified by the Massachusetts
Commissioner of Banks, a copy of the by-laws of the
Indenture Trustee certified by the Secretary or an Assistant
Secretary of the Indenture Trustee, and a certificate or
other evidence from the Massachusetts Commissioner of Banks,
dated as of a date shortly prior to closing, as to the due
incorporation and good standing of the Indenture Trustee in
such state; and
(4) a certificate signed by an authorized officer of
the Indenture Trustee, dated the Delivery Date, certifying
that the representations and warranties contained herein of
the Indenture Trustee are correct in all material respects
as though made on and as of the Delivery Date, except to the
extent that such representations and warranties relate
solely to an earlier date (in which case such
representations and warranties are correct on and as of such
earlier date).
(C) (1) an incumbency certificate of the Owner Trustee as
to the person or persons authorized to execute and deliver
the Operative Documents to which the Owner Trustee is a
party and any other documents to be executed on behalf of
the Owner Trustee in connection with the transactions
contemplated hereby and the signatures of such person or
persons;
(2) a copy of the resolutions of the board of
directors of the Owner Trustee, certified by the Secretary
or an Assistant Secretary of the Owner Trustee, duly
authorizing the transactions contemplated hereby and the
execution and delivery of each of the documents required to
be executed and delivered on behalf of the Owner Trustee in
connection with the transactions contemplated hereby;
(3) a copy of the articles of association of the Owner
Trustee certified by the Comptroller of the Currency, a copy
of the by-laws of the Owner Trustee certified by the
Secretary or an Assistant Secretary of the Owner Trustee and
a certificate or other evidence from the Comptroller of the
Currency, dated as of a date shortly prior to closing, as to
the good standing of the Owner Trustee; and
(4) a certificate signed by an authorized officer of
the Owner Trustee, dated the Delivery Date, certifying that
the representations and warranties contained herein of the
Owner Trustee (in its individual capacity and as trustee)
are correct in all material respects as though made on and
as of the Delivery Date, except to the extent that such
representations and warranties relate solely to an earlier
date (in which case such representations and warranties are
correct on and as of such earlier date).
(D) (1) an incumbency certificate of the Owner Participant
as to the person or persons authorized to execute and
deliver the Operative Documents to which the Owner
Participant is a party and any other documents to be
executed on behalf of the Owner Participant in connection
with the transactions contemplated hereby and the signatures
of such person or persons;
(2) a copy of the resolutions of the board of
directors of the Owner Participant, certified by the
Secretary or an Assistant Secretary of the Owner
Participant, duly authorizing the transactions contemplated
hereby and the execution and delivery of each of the
documents required to be executed and delivered on behalf of
the Owner Participant in connection with the transactions
contemplated hereby have been duly authorized;
(3) a copy of the certificate of incorporation of the
Owner Participant certified by the Secretary of State of the
State of __________, a copy of the by-laws of the Owner
Participant, each certified by the Secretary or an Assistant
Secretary of the Owner Participant, and a certificate or
other evidence from the Secretary of State of the State of
____________, dated as of a date shortly prior to closing,
as to the due incorporation and good standing of the Owner
Participant in such state; and
(4) a certificate signed by an authorized officer of
the Owner Participant, dated the Delivery Date, certifying
that the representations and warranties contained herein of
the Owner Participant are correct in all material respects
as though made on and as of the Delivery Date, except to the
extent that such representations and warranties relate
solely to an earlier date (in which case such
representations and warranties are correct on and as of such
earlier date).
(viii) All appropriate action required to have been taken
prior to the Delivery Date in connection with the transactions
contemplated by this Agreement shall have been taken by the Federal
Aviation Administration, or any governmental or political agency,
subdivision or instrumentality of the United States, and all orders,
permits, waivers, authorizations, exemptions and approvals of such
entities required to be in effect on the Delivery Date in connection
with the transactions contemplated by this Agreement shall have been
issued, and all such orders, permits, waivers, authorizations,
exemptions and approvals shall be in full force and effect on the
Delivery Date.
(ix) The Owner Trustee, the Owner Participant, the Indenture
Trustee, the Pass Through Trustee and the Subordination Agent shall
have received a certificate signed by an authorized officer of Lessee
to the effect that:
(1) the Aircraft has been duly certified by the
Federal Aviation Administration as to type and has a current
certificate of airworthiness;
(2) the FAA Bill of Sale, the Lease, the Lease
Supplement, the Trust Indenture and the Trust Supplement
covering the Aircraft shall have been duly filed for
recordation (or shall be in the process of being so duly
filed for recordation) with the Federal Aviation
Administration, and the Trust Agreement shall have been
filed (or shall be in the process of being so filed) with
the Federal Aviation Administration;
(3) application for registration of the Aircraft in
the name of the Owner Trustee (together with any required
affidavits) has been duly made with the Federal Aviation
Administration; and
(4) the representations and warranties contained
herein of Lessee are correct in all material respects as
though made on and as of the Delivery Date, except to the
extent that such representations and warranties relate
solely to an earlier date (in which case such
representations and warranties were correct on and as of
such earlier date).
(x) [Reserved.]
(xi) The Owner Trustee, the Owner Participant, the Indenture
Trustee, the Pass Through Trustee and the Subordination Agent shall
have received, addressed to each such party, and reasonably
satisfactory as to scope and substance to each addressee thereof,
opinions dated the Delivery Date substantially in the form of Exhibit
B-1 hereto from Skadden, Arps, Slate, Meagher & Flom (Illinois),
special counsel for Lessee, and an opinion dated the Delivery Date
substantially in the form of Exhibit B-2 hereto from Lessee's legal
department, and the Owner Participant shall have received, addressed
to such party and reasonably satisfactory as to scope and substance to
the Owner Participant, an opinion of Skadden, Arps, Slate, Meagher &
Flom LLP, special counsel for Lessee, dated the Delivery Date
substantially in the form of Exhibit B-2 hereto.
(xii) The Pass Through Trustee and the Owner Participant
shall have received, addressed to the Pass Through Trustee, the
Indenture Trustee, the Owner Participant, the Owner Trustee and Lessee
and reasonably satisfactory as to scope and substance to the Pass
Through Trustee, the Owner Participant and Lessee, an opinion dated
the Delivery Date substantially in the form of Exhibit C hereto from
, special counsel to the Manufacturer and
the Seller, and an opinion dated the Delivery Date substantially in
the form of Exhibit C-2 hereto from Manufacturer's legal department,
with respect to the Manufacturer Documents, with respect to the
Manufacturer Documents.
(xiii) The Owner Participant, the Indenture Trustee, the Pass
Through Trustee and the Subordination Agent shall have received,
addressed to each such party, and reasonably satisfactory as to scope
and substance to each addressee thereof, an opinion dated the Delivery
Date substantially in the form of Exhibit D hereto from Ray, Quinney &
Nebeker, special counsel for the Owner Trustee.
(xiv) The Owner Trustee, the Indenture Trustee, the Pass
Through Trustee and the Subordination Agent shall have received,
addressed to each such party, and reasonably satisfactory as to scope
and substance to each addressee thereof, an opinion dated the Delivery
Date substantially in the form of Exhibit E-1 hereto from
________________, special counsel for the Owner Participant, and an
opinion dated the Delivery Date substantially in the form of Exhibit
E-2 hereto from the Owner Participant's in-house counsel.
(xv) The Owner Trustee, the Owner Participant, the Indenture
Trustee, the Pass Through Trustee and the Subordination Agent shall
have received, addressed to each such party, and reasonably
satisfactory as to scope and substance to each addressee thereof, an
opinion dated the Delivery Date substantially in the form of Exhibit F
hereto from Crowe & Dunlevy, P.C., special FAA counsel.
(xvi) The Owner Trustee, the Owner Participant, the Pass
Through Trustee and the Subordination Agent shall have received,
addressed to each such party, and reasonably satisfactory as to scope
and substance to each addressee thereof, an opinion dated the Delivery
Date substantially in the form of Exhibit G from Bingham Dana LLP,
special counsel for the Indenture Trustee.
(xvii) [Reserved.]
(xviii) The Owner Trustee, the Owner Participant, the Indenture
Trustee, the Pass Through Trustee and the Subordination Agent shall
have received an independent insurance broker's report, in form and
substance satisfactory to the Owner Participant, as to the due
compliance with the terms of Section 11 of the Lease relating to
insurance with respect to the Aircraft.
(xix) The Owner Participant shall have received an appraisal
dated the Delivery Date from ______________ in form and substance
satisfactory to it.
(xx) No action or proceeding shall have been instituted nor shall
governmental action be threatened before any court or governmental
agency, nor shall any order, judgment or decree have been issued or
proposed to be issued by any court or governmental agency at the time
of the Delivery Date to set aside, restrain, enjoin or prevent the
completion and consummation of this Agreement or the transactions
contemplated hereby.
(xxi) The Owner Participant shall have received from
____________________, special tax counsel to the Owner Participant, a
favorable opinion, in form and substance satisfactory to the Owner
Participant, with respect to certain Federal income tax aspects of the
transaction contemplated by the Operative Documents.
(xxii) There shall have been, since the date hereof, no
amendment, modification, addition, or change in or to the provisions
of the Code, the regulations promulgated under the Code (including
temporary regulations), Internal Revenue Service Revenue Procedures or
Revenue Rulings, or other administrative interpretations, applicable
judicial precedents or Executive Orders of the President of the United
States, all as in effect on the date hereof, the effect of which might
preclude the Owner Participant from obtaining any of the anticipated
income tax benefits with respect to the Aircraft.
(xxiii) The Owner Trustee, the Owner Participant, the Indenture
Trustee and the Subordination Agent, shall have received (A) a
certificate signed by an authorized officer of the Pass Through
Trustee, dated the Delivery Date, certifying that the representations
and warranties contained herein of the Pass Through Trustee are
correct as though made on and as of the Delivery Date, except to the
extent that such representations and warranties relate solely to an
earlier date (in which case such representations and warranties are
correct on and as of such earlier date), (B) an opinion dated the
Delivery Date substantially in the form of Exhibit H hereto addressed
to each such party of Bingham Dana LLP, special counsel for the Pass
Through Trustee, and reasonably satisfactory as to scope and substance
to each addressee thereof, and (C) such other documents and evidence
with respect to the Pass Through Trustee as it may reasonably request
in order to establish the due consummation of the transactions
contemplated by this Agreement, the taking of all necessary corporate
action in connection therewith and compliance with the conditions
herein set forth.
(xxiv) No Lease Event of Default has occurred and is
continuing and no Event of Loss has occurred with respect to the
Airframe or any Engine.
(xxv) The Owner Trustee, the Owner Participant, the Indenture
Trustee and the Pass Through Trustee shall have received, addressed to
each such party, and reasonably satisfactory as to scope and
substance, to each addressee thereof, an opinion dated the Delivery
Date substantially in the form of Exhibit I from Bingham Dana LLP,
special counsel for the Subordination Agent.
Promptly upon the registration of the Aircraft and the recording of
the Trust Indenture, the Lease, the Lease Supplement covering the Aircraft
and the Trust Supplement covering the Aircraft pursuant to the
Transportation Code, Lessee will cause Crowe & Dunlevy, P.C., special FAA
counsel in Oklahoma City, Oklahoma, to deliver to the Pass Through Trustee,
the Indenture Trustee, the Owner Participant, the Owner Trustee and Lessee
an opinion as to the due and valid registration of the Aircraft in the name
of the Owner Trustee, the due recording of the FAA Bill of Sale, the Trust
Indenture, such Lease Supplement, such Trust Supplement and the Lease and
the filing of the Trust Agreement and the lack of filing of any intervening
documents with respect to the Aircraft.
(b) Conditions Precedent to the Obligations of Lessee. It is
agreed that (A) the obligations of Lessee to sell the Aircraft to the Owner
Trustee and to accept delivery of the Aircraft under the Lease on the
Delivery Date, and (B) the obligations of Lessee to enter into the other
Operative Documents on the Delivery Date are all subject to the fulfillment
to the satisfaction of Lessee prior to the Delivery Date of the following
conditions precedent:
(i) All appropriate action required to have been taken on or
prior to the Delivery Date in connection with the transactions
contemplated by this Agreement shall have been taken by the Federal
Aviation Administration, or any governmental or political agency,
subdivision or instrumentality of the United States, and all orders,
permits, waivers, exemptions, authorizations and approvals of such
entities required to be in effect on the Delivery Date in connection
with the transactions contemplated by this Agreement shall have been
issued, and all such orders, permits, waivers, exemptions,
authorizations and approvals shall be in full force and effect on the
Delivery Date.
(ii) The conditions specified in Sections 4(a)(ii), 4(a)(iii) and
4(a)(iv) hereof shall have been satisfied.
(iii) Those documents described in Section 4(a)(v) shall have
been duly authorized, executed and delivered by the respective party
or parties thereto (other than Lessee) in the manner specified in
Section 4(a)(v), shall each be satisfactory in form and substance to
Lessee, shall be in full force and effect on the Delivery Date, and an
executed counterpart of each thereof (other than the Equipment Notes)
shall have been delivered to Lessee or its special counsel.
(iv) Lessee shall have received (A) each certificate referred to
in Section 4(a)(vii) (other than the certificate and documents
referred to in clause (A) thereof), (B) the certificate referred to in
Section 4(a)(xxiii)(A), and (C) such other documents and evidence with
respect to the Pass Through Trustee as Lessee or its special counsel
may reasonably request in order to establish the due consummation of
the transactions contemplated by this Agreement, the taking of all
corporate proceedings in connection therewith and compliance with the
conditions herein set forth.
(v) Lessee shall have received the opinions set forth in
Sections 4(a)(xii), 4(a)(xiii), 4(a)(xiv), 4(a)(xv), 4(a)(xvi),
4(a)(xxv), and 4(a)(xxiii)(B) in each case addressed to Lessee and
dated the Delivery Date and in each case in scope and substance
reasonably satisfactory to Lessee and its special counsel.
(vi) No action or proceeding shall have been instituted nor shall
governmental action be threatened before any court or governmental
agency, nor shall any order, judgment or decree have been issued or
proposed to be issued by any court or governmental agency at the time
of the Delivery Date to set aside, restrain, enjoin or prevent the
completion and consummation of this Agreement or the transactions
contemplated hereby.
(vii) No change shall have occurred after the date of the
execution and delivery of this Agreement in applicable law or
regulations or guidelines or interpretations by appropriate regulatory
authorities which would make it a violation of law or regulations or
guidelines for Lessee to enter into any transaction contemplated by
the Operative Documents.
(viii) There shall have been, since the date hereof, no
amendment, modification, addition or change in or to the Code, the
regulations promulgated under the Code (including temporary
regulations), Internal Revenue Service Revenue Procedures or Revenue
Rulings, or other administrative interpretations, applicable judicial
precedents or Executive Orders of the President of the United States
which might give rise to an indemnity obligation of Lessee under any
of the Operative Documents.
(ix) Lessee shall have been paid Lessor's Cost for the Aircraft.
SECTION 5. EXTENT OF INTEREST OF CERTIFICATE HOLDERS. No
Certificate Holder shall have any further interest in, or other right with
respect to, the mortgage and security interests created by the Trust
Indenture when and if the principal of and interest on all Equipment Notes
held by such holder and all other sums payable to such holder hereunder,
under the Trust Indenture and under such Equipment Notes shall have been
paid in full. Each Pass Through Trustee and, by its acceptance of a
Equipment Note, each Certificate Holder agrees that it will look solely to
the income and proceeds from the Trust Indenture Estate to the extent
available for distribution to such Certificate Holder as provided in
Article III of the Trust Indenture and that neither the Owner Participant
nor the Owner Trustee shall be personally liable to the Pass Through
Trustees or any Certificate Holder for any amounts payable under the
Equipment Notes, the Trust Indenture or hereunder, except as expressly
provided in the Operative Documents.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF LESSEE; INDEMNITIES.
(a) Representations and Warranties. Lessee represents and
warrants to the Pass Through Trustee, the Owner Trustee, the Indenture
Trustee, each Liquidity Provider, the Subordination Agent and the Owner
Participant that:
(i) Lessee is a corporation duly organized, validly existing and
in good standing under the laws of the state of its incorporation, has
the corporate power and authority to own or hold under lease its
properties, has, or had on the respective dates of execution thereof,
the corporate power and authority to enter into and perform its
obligations under the Lessee Documents, the Pass Through Trust
Agreements and the other Operative Documents to which it is a party,
and is duly qualified to do business as a foreign corporation in each
state in which its operations or the nature of its business requires
other than failures to so qualify which would not have a material
adverse effect on the condition (financial or otherwise), business or
properties of Lessee and its subsidiaries considered as one
enterprise;
(ii) Lessee is a Certificated Air Carrier, and its chief
executive office (as such term is used in Article 9 of the Uniform
Commercial Code in effect in the State of Virginia) is located at
Arlington, Virginia;
(iii) the execution and delivery by Lessee of the Lessee
Documents, the Pass Through Trust Agreements and each other Operative
Document to which Lessee is a party, and the performance of the
obligations of Lessee under the Lessee Documents, the Pass Through
Trust Agreements and each other Operative Document to which Lessee is
a party, have been duly authorized by all necessary corporate action
on the part of Lessee, do not require any stockholder approval, or
approval or consent of any trustee or holder of any material
indebtedness or material obligations of Lessee, except such as have
been duly obtained and are in full force and effect, and do not
contravene any law, governmental rule, regulation or order binding on
Lessee or the certificate of incorporation or by-laws of Lessee, or
contravene the provisions of, or constitute a default under, or result
in the creation of any Lien (other than Permitted Liens) upon the
property of Lessee under, any indenture, mortgage, contract or other
agreement to which Lessee is a party or by which it may be bound or
affected which contravention, default or Lien, individually or in the
aggregate, would be reasonably likely to have a material adverse
effect on the condition (financial or otherwise), business or
properties of Lessee and its subsidiaries considered as one enterprise
provided, that insofar as the representations and warranties set forth
in this Section 6(a)(iii) apply to the prohibited transaction rules of
ERISA and Section 4975 of the Code, such representations and
warranties are based upon and subject to the truth and accuracy of the
representations, warranties and covenants set forth in Section 6(n)
and the representations and warranties made or deemed made by each
purchaser of Certificates issued by a Pass Through Trust;
(iv) neither the execution and delivery by Lessee of the Lessee
Documents, the Pass Through Trust Agreements or any other Operative
Document to which Lessee is a party, nor the performance of the
obligations of Lessee under the Lessee Documents, the Pass Through
Trust Agreements or the other Operative Documents to which Lessee is a
party, requires the consent or approval of, the giving of notice to,
the registration with, or the taking of any other action in respect
of, the Department of Transportation, the FAA, or any other Federal,
state or foreign governmental authority having jurisdiction over
Lessee, other than (A) the registration of the Pass Through Trust
Certificates under the Securities Act and under the securities laws of
any state in which the Pass Through Trust Certificates may be offered
for sale if the laws of such state require such action, (B) the
qualification of the Pass Through Trust Agreements under the Trust
Indenture Act of 1939, as amended, pursuant to an order of the
Securities and Exchange Commission, (C) the orders, permits, waivers,
exemptions, authorizations and approvals of the regulatory
authorities having jurisdiction over the operation of the Aircraft by
Lessee or any Sublessee required to be obtained on or prior to the
Delivery Date, which orders, permits, waivers, exemptions,
authorizations and approvals have been, or on the Delivery Date will
be, duly obtained and are, or on the Delivery Date will be, in full
force and effect, (D) the application for registration of the Aircraft
referred to in Section 4(a)(ix)(3), (E) the registrations and filings
referred to in Section 6(a)(vi), and (F) authorizations, consents,
approvals, actions, notices and filings required to be obtained,
taken, given or made either only after the date hereof or the failure
of which to obtain, take, give or make would not be reasonably likely
to have a material adverse effect on the condition (financial or
otherwise), business or properties of Lessee and its subsidiaries
considered as one enterprise;
(v) this Agreement, each of the other Lessee Documents and the
Pass Through Trust Agreements to which Lessee is a party constitute
(or, in the case of documents to be executed on the Delivery Date,
will constitute) the legal, valid and binding obligations of Lessee
enforceable against Lessee in accordance with their respective terms,
except as the same may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or
similar laws affecting the rights of creditors or lessors generally
and by general principles of equity, whether considered in a
proceeding at law or in equity, and except, in the case of the Lease,
as limited by applicable laws which may affect the remedies provided
in the Lease;
(vi) except for (A) the filing of the Trust Agreement with the
FAA, (B) the registration of the Aircraft pursuant to the
Transportation Code, (C) the filing for recording pursuant to the
Transportation Code of the Lease with the Lease Supplement covering
the Aircraft, the Trust Indenture and the Trust Supplement attached
thereto and made a part thereof, the Trust Indenture with the Trust
Supplement attached thereto and made a part thereof and the FAA Bill
of Sale, (D) the filing of financing statements (and continuation
statements at periodic intervals) with respect to the security
interests created by such documents under the Uniform Commercial Code
of Virginia and Utah and such other states as may be specified in the
opinion furnished pursuant to Section 4(a)(xi) hereof, and (E) the
taking of possession by the Indenture Trustee of the original chattel
paper counterpart of each of the Lease and the Lease Supplement
covering the Aircraft, no further filing or recording of any document
(including any financing statement in respect thereof under Article 9
of the Uniform Commercial Code of any applicable jurisdiction) or
other action is necessary under the laws of the United States of
America or any State thereof in order to perfect the Owner Trustee's
title to and interest in the Aircraft as against Lessee and any third
parties, or to perfect the security interest in favor of the Indenture
Trustee in the Owner Trustee's interest in the Aircraft (with respect
to such portion of the Aircraft as is covered by the recording system
established by the FAA pursuant to 49 U.S.C. Section 44107) and in the
Lease in any applicable jurisdiction in the United States;
(vii) neither Lessee nor any of its Affiliates has directly
or indirectly offered any interest in the Trust Estate, the Equipment
Notes or the Pass Through Trust Certificates for sale to any Person
other than in a manner permitted by the Securities Act and by the
rules and regulations thereunder;
(viii) Lessee is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended;
(ix) no event has occurred and is continuing which constitutes a
Lease Default or Lease Event of Default;
(x) no event has occurred and is continuing which constitutes an
Event of Loss or would constitute an Event of Loss with the lapse of
time;
(xi) Lessee is solvent and will not be rendered insolvent by the
sale of the Aircraft; after the sale of the Aircraft the capital of
Lessee will not be unreasonably small for the conduct of the business
in which Lessee is engaged or is about to engage; Lessee has no
intention or belief that it is about to incur debts beyond its ability
to pay as they mature; and Lessee's sale of the Aircraft is made
without any intent to hinder, delay or defraud either present or
future creditors;
(xii) none of the proceeds from the issuance of the Equipment
Notes or from the acquisition by the Owner Participant of its
beneficial interest in the Trust Estate will be used directly or
indirectly by Lessee to purchase or carry any "margin security" as
such term is defined in Regulation U of the Board of Governors of the
Federal Reserve System;
(xiii) on the Delivery Date, all sales or use tax then due and
for which Lessee is responsible pursuant to Section 6(b)(i) hereof
shall have been paid, other than such taxes which are being contested
by Lessee in good faith and by appropriate proceedings so long as such
proceedings do not involve any material risk of the sale, forfeiture
or loss of the Aircraft;
(xiv) except as may have been disclosed in the Lessee's
reports filed with the Securities Exchange Commission, there are no
pending or threatened actions or proceedings that individually or in
the aggregate which could be expected to have a material adverse
effect on the condition (financial or otherwise), business or
properties of Lessee and its subsidiaries considered as one
enterprise; and
(xv) the Owner Trustee will receive good and marketable title to
the Aircraft from Lessee free and clear of all Liens, except the
rights of Lessee under the Lease and the Lease Supplement covering the
Aircraft, the Lien of the Trust Indenture, the beneficial interest of
the Owner Participant in the Aircraft, and the Liens permitted by
clause (iv) (solely for Taxes not yet due but excluding any such Taxes
being contested) of Section 6 of the Lease.
(b) General Tax Indemnity.
(i) Indemnity. Except as provided in Section 6(b)(ii) hereof,
Lessee shall pay, protect, save and on written demand shall indemnify
and hold harmless each Indemnitee from and against (x) any and all
Taxes howsoever imposed upon or against any Indemnitee, Lessee or all
or any part of the Aircraft, the Airframe, the Engines, the Parts or
any part thereof or interest therein or otherwise by the United States
Federal government only, any state or local government or other taxing
authority in the United States or by any foreign government or any
political subdivision or taxing authority thereof or by any territory
or possession of the United States or by any international authority
upon or in connection with, relating to, or measured by (A) the
manufacture, financing, purchase, acceptance, delivery, rejection,
transport, ownership, possession, operation, use, sale, return,
storage, leasing, transfer of title to, transfer of registration of,
exportation or other disposition of, the Aircraft, the Airframe, the
Engines, the Parts or any part thereof or interest therein, (B) the
rentals, receipts or earnings from the Aircraft, the Airframe, the
Engines, the Parts or any part thereof or interest therein, (C) the
property or the income or other proceeds with respect to any of the
property held in the Trust Estate or the Trust Indenture Estate, (D)
the Aircraft, the Airframe, the Engines, the Parts or any part thereof
or interest therein, (E) the Secured Certificates, their issuance or
acquisition or the payments of any amounts thereunder, or the
Operative Documents, or amendments or supplements thereto and their
execution.
(ii) Exclusions from General Tax Indemnity. The provisions of
Section 6(b)(i) shall not apply:
(1) to any Income Tax imposed by (A) the United States
Federal government, (B) any state or local government or
other taxing authority in the United States or (C) any
foreign government or any political subdivision or taxing
authority thereof or any territory or possession of the
United States or by any international authority (a "Foreign
Jurisdiction") (A, B and C collectively referred to as,
"Taxing Authority"), provided, however, that unless the
Owner Participant maintains a permanent establishment,
office or other place of business in the foreign
jurisdiction imposing the tax (and for this purpose the
ownership or leasing of one or more aircraft in such
jurisdiction shall not be deemed a permanent establishment,
office or other place of business), the exclusion set forth
in this subparagraph (1) shall not apply to Income Taxes
imposed by a Foreign Jurisdiction on the Owner Participant
as a result of the use or location of the Aircraft in the
jurisdiction imposing such Tax, but only to the extent such
Income Taxes exceed the amount of Income Taxes imposed by
such Foreign Jurisdiction had the Aircraft not been used in
such jurisdiction;
(2) to Taxes (including intangible taxes or transfer
taxes) relating to any payments of principal, interest or
Make-Whole Amount, if any, on the Secured Certificates, or
to a Certificate Holder, imposed by any government or taxing
authority;
(3) to any Tax imposed on an Indemnitee as a result of
a voluntary transfer or disposition by such Indemnitee
including, without limitation, the revocation of the trust
created by the Trust Agreement or an involuntary transfer or
disposition of all or any portion of its respective
equitable or legal ownership interest in the Aircraft, the
Airframe, the Engines, the Parts or any part thereof, the
Trust Estate or the Operative Documents, unless such
transfer or disposition shall occur (A) upon 30 days prior
notice during a period when an Event of Default has
occurred and is continuing under the Lease at the time of
transfer or disposition, or (B) in connection with the
termination of the Lease or action or direction of the
Lessee pursuant to Sections 7(b)(i), (ii), (v), or (vi), 8
(but only to the extent of such disposition), 9, 10 or 19
thereof;
(4) to any Tax imposed on any Indemnitee or any
successor, assign or Affiliate of any thereof, as a result
of a voluntary or involuntary transfer or other disposition
by the Owner Participant of all or any portion of the Owner
Participant's respective equitable or legal interests in the
Aircraft, the Trust Estate or the Trust Indenture Estate;
(5) to any Tax imposed upon any Indemnitee which
results from the willful misconduct or negligence of any
Indemnitee;
(6) to any Tax based on, measured by or imposed with
respect to any fees, commissions or compensation received by
the Owner Trustee or the Indenture Trustee in connection
with any transaction contemplated by the Operative
Documents;
(7) to any Tax imposed with respect to any period
after (A) the expiration of the Term and return of
possession of the Aircraft to the Owner Trustee or its
designee pursuant to the terms of the Lease, (B) the earlier
discharge in full of Lessee's obligation to pay the
Termination Value and all other amounts due under the Lease
and transfer of title to the Aircraft or (C) placement in
storage of the Aircraft pursuant to Section 5(d) of the
Lease;
(8) to any Tax in the nature of an intangible or
similar tax upon or with respect to the value of the Owner
Participant's interest in the Trust Indenture Estate or the
value or principal amount of any interest, in any of the
Secured Certificates imposed by any government or taxing
authority;
(9) to any Tax imposed on or with respect to a
transferee (or subsequent transferee) of an original
Indemnitee to the extent (a) such Tax would not have been
required to be withheld or imposed on or with respect to
such original Indemnitee or (b) to the extent such Tax
exceeds the amount of the Tax that would have been imposed
on the original Indemnitee;
(10) to any Tax imposed resulting from, or which would
not have occurred but for, a Lessor Lien attributable to it;
(11) to any Tax which has been included in the Lessor's
Cost;
(12) to any Tax for which Lessee is obligated to pay
the Owner Participant under the Tax Indemnity Agreement;
(13) to any Tax that would not have been imposed but
for an Indemnitee's breach of any covenant, or the
inaccuracy of any representation or warranty, of such
Indemnitee contained in any Operative Document;
(14) to any Tax being contested pursuant to Section
6(b)(iv);
(15) to any Tax imposed by any jurisdiction which would
have been imposed on any Indemnity as a result of activities
in such jurisdiction unrelated to the transactions
contemplated by the Operative Documents;
(16) to interest, penalties and additions to Tax
imposed as a result of (in whole or in part) failure of
Owner Participant to timely and properly file any return,
unless such failure to file is caused by Lessee's failure to
timely provide information required to be provided under the
Operative Documents;
(17) to any U.S. withholding taxes imposed on payments
to a foreign person; and
(18) to any Taxes imposed by Section 4975 of the Code
or Section 502(i) of ERISA or any successor provisions.
The provisions of this Section 6(b)(ii) shall not apply to any Tax
imposed in respect of the receipt or accrual of any indemnity payment
made by Lessee pursuant to this Section 6(b) or Section 6(c) hereof;
provided, however, that this clause shall not result in any
duplication of any amounts of any gross-up payable under Section
6(b)(iii) or Section 6(c) hereof.
(iii) Payments. Lessee's indemnity obligation to an
Indemnitee under this Section 6(b) shall equal the amount which, after
taking into account any Tax imposed upon the receipt or accrual of the
amounts payable under this Section 6(b) and any tax benefits realized
by such Indemnitee as a result of the indemnifiable Tax (including,
without limitation, any benefits realized as a result of an
indemnifiable Tax being utilized by such Indemnitee as a credit
against Taxes not indemnifiable under this Section 6(b)), shall equal
the amount of the Tax indemnifiable under this Section 6(b).
At Lessee's request, the computation of the amount of any
indemnity payment owed by Lessee or any amount owed by a Indemnitee to
Lessee pursuant to this Section 6(b) shall be verified and certified
by a nationally recognized independent public accounting firm
reasonably acceptable to Lessee and the Indemnitee. The costs of such
verification (including the fee of such public accounting firm) shall
be borne by Lessee unless such verification shall result in an
adjustment in Lessee's favor of 5% or more of the net present value of
the payment as computed by such Indemnitee, in which case the costs
shall be paid by such Indemnitee.
Each Indemnitee shall provide Lessee with such
certifications, information and documentation as shall be in such
Indemnitee's possession and as shall be reasonably requested by Lessee
to minimize any indemnity payment pursuant to this Section 6(b).
Each Indemnitee shall promptly forward to Lessee any written
notice, bill or advice received by it from any Taxing Authority
concerning any Tax for which it seeks indemnification under this
Section 6(b). Lessee shall pay any amount for which it is liable
pursuant to this Section 6(b) directly to the appropriate Taxing
Authority if legally permissible or upon demand of an Indemnitee, to
such Indemnitee within 30 days of such demand (or, if a contest occurs
in accordance with Section (6)(iv), within 30 days after a Final
Determination (as defined below)), but in no event more than one
business day prior to the date the Tax to which such amount payable
hereunder relates is due. If requested by an Indemnitee in writing,
Lessee shall furnish to the appropriate Indemnitee the original or a
certified copy of a receipt for Lessee's payment of any Tax paid by
Lessee or such other evidence of payment of such Tax as is acceptable
to such Indemnitee. Lessee shall also furnish promptly upon written
request such data as any Indemnitee may reasonably require to enable
such Indemnitee to comply with the requirements of any taxing
jurisdiction unless such data is not reasonably available to Lessee
or, unless such data is specifically requested by a Taxing Authority,
is not customarily furnished by domestic air carriers under similar
circumstances. For purposes of this Section 6(b), a "Final
Determination" shall mean (i) a decision, judgment, decree or other
order by any court of competent jurisdiction that occurs pursuant to
the provisions of Section 6(b)(iv), which decision, judgment, decree
or other order has become final and unappealable, (ii) a closing
agreement or settlement agreement entered into in accordance with
Section 6(b)(iv) that has become binding and is not subject to further
review or appeal (absent fraud, misrepresentation, etc.), or (iii) the
termination of administrative proceedings and the expiration of the
time for instituting a claim in a court proceeding.
If any Indemnitee shall realize a tax savings by reason of
any Tax paid or indemnified by Lessee pursuant to this Section 6(b)
(whether such tax savings shall be by means of a foreign tax credit,
depreciation or cost recovery deduction or otherwise) and such savings
is not otherwise taken into account in computing such payment or
indemnity such Indemnitee shall pay to Lessee an amount equal to the
lesser of (i) the amount of such tax savings, plus any additional tax
savings recognized as the result of any payment made pursuant to this
sentence, when, as if, and to the extent, realized or (ii) the amount
of all payments pursuant to this Section 6(b) by Lessee to such
Indemnitee (less any payments previously made by such Indemnitee to
Lessee pursuant to this Section 6(b)(iii)) and the excess, if any, of
the amount described in clause (i) over the amount described in clause
(ii) shall be carried forward and applied to reduce pro tanto any
subsequent obligations of Lessee to make payments to such Indemnitee
pursuant to this Section 6(b)). Each such Indemnitee shall in good
faith use reasonable efforts in filing its tax returns and in dealing
with Taxing Authorities to seek and claim any such tax benefit.
(iv) Contests. If a written claim is made against an Indemnitee
for Taxes with respect to which Lessee could be liable for payment or
indemnity hereunder, or if an Indemnitee makes a determination that a
Tax is due for which Lessee could have an indemnity obligation
hereunder, such Indemnitee shall promptly give Lessee notice in
writing of such claim (provided, that failure to so notify Lessee
shall not relieve Lessee of its indemnity obligations hereunder unless
such failure to notify effectively forecloses Lessee's rights to
require a contest of such claim) and shall take no action with respect
to such claim without the prior written consent of Lessee for 30 days
following the receipt of such notice by Lessee; provided, that, in the
case of a claim made against an Indemnitee, if such Indemnitee shall
be required by law to take action prior to the end of such 30-day
period, such Indemnitee shall, in such notice to Lessee, so inform
Lessee, and such Indemnitee shall take no action for as long as it is
legally able to do so (it being understood that a Indemnitee shall be
entitled to pay the Tax claimed and sue for a refund prior to the end
of such 30-day period if (i)(A) the failure to so pay the Tax would
result in substantial penalties (unless immediately reimbursed by
Lessee) and the act of paying the Tax would not materially prejudice
the right to contest or (B) the failure to so pay would result in
criminal penalties and (ii) such Indemnitee shall take any action so
required in connection with so paying the Tax in a manner that is the
least prejudicial to the pursuit of the contest). In addition, such
Indemnitee shall (provided, that Lessee shall have agreed to keep such
information confidential other than to the extent necessary in order
to contest the claim) furnish Lessee with copies of any requests for
information from any Taxing Authority relating to such Taxes with
respect to which Lessee may be required to indemnify hereunder. If
requested by Lessee in writing within 30 days after its receipt of
such notice, such Indemnitee shall, at the expense of Lessee
(including all reasonable out-of-pocket costs and reasonable
attorneys' and accountants' fees), in good faith contest (or, if
permitted by applicable law, allow Lessee to contest) through
appropriate administrative and judicial proceedings the validity,
applicability or amount of such Taxes by (I) resisting payment
thereof, (II) not paying the same except under protest if protest is
necessary and proper or (III) if the payment is made, using reasonable
efforts to obtain a refund thereof in an appropriate administrative
and/or judicial proceeding. If requested to do so by Lessee, the
Indemnitee shall appeal any adverse administrative or judicial
decision, except that the Indemnitee shall not be required to pursue
any appeals to the United States Supreme Court. If and to the extent
the Indemnitee is able to separate the contested issue or issues from
other issues arising in the same administrative or judicial proceeding
that are unrelated to the transactions contemplated by the Operative
Agreements without, in the good faith judgment of such Indemnitee,
adversely affecting such Indemnitee, such Indemnitee shall permit
Lessee to control the conduct of any such proceeding and shall provide
to Lessee (at Lessee's cost and expense) with such information or data
that is in such Indemnitee's control or possession that is reasonably
necessary to conduct such contest. In the case of a contest controlled
by a Indemnitee, such Indemnitee shall consult with Lessee in good
faith regarding the manner of contesting such claim and shall keep
Lessee reasonably informed regarding the progress of such contest. An
Indemnitee shall not fail to take any action expressly required by
this Section 6(b)(iv) (including, without limitation, any action
regarding any appeal of an adverse determination with respect to any
claim) or settle or compromise any claim without the prior written
consent of the Lessee (except as contemplated by this Section
6(b)(iv).
Notwithstanding the foregoing, in no event shall an
Indemnitee be required to pursue any contest (or to permit Lessee to
pursue any contest) unless (i) Lessee shall have agreed to pay such
Indemnitee on demand all reasonable out-of-pocket costs and reasonable
attorneys' and accountants' fees, (ii) if such contest shall involve
the payment of the claim, Lessee shall advance the amount thereof (to
the extent indemnified hereunder) plus interest, penalties and
additions to tax with respect thereto that are required to be paid
prior to the commencement of such contest on an interest-free after-
Tax basis to such Indemnitee (and such Indemnitee shall promptly pay
to the Lessee any net realized tax benefits resulting from such
advance including any tax benefits resulting from making such
payment), (iii) such Indemnitee shall have reasonably determined that
the action to be taken will not result in any material risk of
forfeiture, sale or loss of the Aircraft (unless Lessee shall have
made provisions to protect the interests of any such Indemnitee in a
manner reasonably satisfactory to such Indemnitee) (provided, that
such Indemnitee agrees to notify Lessee in writing promptly after it
becomes aware of any such risk), (iv) no Lease Event of Default shall
have occurred and be continuing unless Lessee has provided security
for its obligations hereunder by advancing to such Indemnitee before
proceeding or continuing with such contest, the amount of the Tax
being contested, plus any interest and penalties and an amount
estimated in good faith by such Indemnitee for expenses, and (v) prior
to commencing any judicial action controlled by Lessee, Lessee shall
have acknowledged its liability for such claim hereunder, provided
that Lessee shall not be bound by its acknowledgment if the Final
Determination articulates conclusions of law and fact that demonstrate
that Lessee has no liability for the contested amounts hereunder.
Notwithstanding the foregoing, if any Indemnitee shall release, waive,
compromise or settle any claim which may be indemnifiable by Lessee
pursuant to this Section 6(b) without the written permission of
Lessee, Lessee's obligation to indemnify such Indemnitee with respect
to such claim (and all directly related claims and claims based on the
outcome of such claim) shall terminate, subject to this Section
6(b)(iii), and subject to Section 6(b)(iii), such Indemnitee shall
repay to Lessee any amount previously paid or advanced to such
Indemnitee with respect to such claim, plus interest at the rate that
would have been payable by the relevant Taxing Authority with respect
to a refund of such Tax.
Notwithstanding anything contained in this Section 6(b), a
Indemnitee will not be required to contest the imposition of any Tax
and shall be permitted to settle or compromise any claim without
Lessee's consent if such Indemnitee (i) shall waive its right to
indemnity under this Section 6(b) with respect to such Tax (and any
directly related claim and any claim the outcome of which is
determined based upon the outcome of such claim), (ii) shall pay to
Lessee any amount previously paid or advanced by Lessee pursuant to
this Section 6(b) with respect to such Tax, plus interest at the rate
that would have been payable by the relevant Taxing Authority with
respect to a refund of such Tax, and (iii) shall agree to discuss with
Lessee the views or positions of any relevant Taxing Authority with
respect to the imposition of such Tax.
(v) Refund. If any Indemnitee shall receive a refund of, or be
entitled to a credit against other liability for, all or any part of
any Taxes paid, reimbursed or advanced by Lessee, such Indemnitee
shall pay to Lessee within 30 days of such receipt an amount equal to
the lesser of (a) the amount of such refund or credit plus any net tax
benefit (taking into account any Taxes incurred by such Indemnitee by
reason of the receipt of such refund or realization of such credit)
actually realized by such Indemnitee as a result of any payment by
such Indemnitee made pursuant to this sentence (including this clause
(a)) and (b) such tax payment, reimbursement or advance by Lessee to
such Indemnitee theretofore made pursuant to this Section 6(b) (and
the excess, if any, of the amount described in clause (a) over the
amount described in clause (b) shall be carried forward and applied to
reduce pro tanto any subsequent obligation of Lessee to make payments
to such Indemnitee pursuant to this Section 6(b)). If, in addition to
such refund or credit, such Indemnitee shall receive (or be credited
with) an amount representing interest on the amount of such refund or
credit, such Indemnitee shall pay to Lessee within 30 days of such
receipt or realization of such credit that proportion of such interest
that shall be fairly attributable to Taxes paid, reimbursed or
advanced by Lessee prior to the receipt of such refund or realization
of such credit.
(vi) Tax Filing. If any report, return or statement is required
to be filed with respect to any Tax which is subject to
indemnification under this Section 6(b), Lessee shall timely file the
same (except for any such report, return or statement which a
Indemnitee has timely notified the Lessee in writing that such
Indemnitee intends to file, or for which such Indemnitee is required
by law to file, in its own name); provided, that the relevant
Indemnitee shall furnish Lessee with any information in such
Indemnitee's possession or control that is reasonably necessary to
file any such return, report or statement and is reasonably requested
in writing by Lessee. Lessee shall either file such report, return or
statement and send a copy of such report, return or statement to such
Indemnitee, and Owner Trustee if the Indemnitee is not Owner Trustee,
or, where Lessee is not permitted to file such report, return or
statement, it shall notify such Indemnitee of such requirement and
prepare and deliver such report, return or statement to such
Indemnitee in a manner satisfactory to such Indemnitee within a
reasonable time prior to the time such report, return or statement is
to be filed.
(vii) Forms. Each Indemnitee agrees to furnish from time to
time to Lessee or Loan Trustee or to such other person as Lessee or
Loan Trustee may designate, at Lessee's or Loan Trustee's request,
such duly executed and properly completed forms as may be necessary or
appropriate in order to claim any reduction of or exemption from any
withholding or other Tax imposed by any Taxing Authority, if (x) such
reduction or exemption is available to such Indemnitee and (y) Lessee
has provided such Indemnitee with any information necessary to
complete such form not otherwise reasonably available to such
Indemnitee.
(viii) Non-Parties. If a Indemnitee is not a party to this
Agreement, Lessee may require the Indemnitee to agree in writing, in a
form reasonably acceptable to Lessee, to the terms of this Section
6(b) prior to making any payment to such Indemnitee under this Section
6(b).
(ix) Subrogation. Upon payment of any Tax by Lessee pursuant to
this Section 6(b) to or on behalf of a Indemnitee, Lessee, without any
further action, shall be subrogated to any claims that such Indemnitee
may have relating thereto. Such Indemnitee shall cooperate with Lessee
(to the extent such cooperation does not result in any unreimbursed
cost, expense or liability to such Indemnitee) to permit Lessee to
pursue such claims.
(x) Foreign Tax On Loan Payments. If an Owner Participant is
incorporated or organized, or maintains a place of business or
conducts activities in, a country other than the United States or in a
territory, possession or commonwealth of the United States (within the
meaning of the tax law of that foreign jurisdiction) and if as a
result thereof any foreign Taxes (including withholding Taxes) are
imposed on the Pass Through Trustees, Pass Through Trusts, or
Certificate Holders, then Owner Participant shall reimburse Lessee for
any payments Lessee is required to make to or on behalf of any Pass
Through Trustee, Pass Through Trust, or Certificate Holder under this
Section 6(b) as a result of the imposition of such Taxes. The amount
payable by Owner Participant to Lessee shall be an amount which, after
taking into account any such Taxes, any Tax imposed upon the receipt
or accrual by Lessee of such payment by Owner Participant and any tax
benefits or tax savings realized by Lessee with respect to the payment
of such withholding Tax or the payment hereunder, shall equal the
amount of Lessee's payment to or on behalf of such Pass Through
Trustee, or Certificate Holder.
(xi) Income Tax. For purposes of this Section 6, the term Income
Tax means any Tax based on or measured by or with respect to gross or
net income or gross or net receipts (including, without limitation,
capital gains taxes, branch profit taxes, accumulated earnings taxes,
personal holding company taxes, succession taxes, estate taxes,
minimum taxes, any withholding taxes on, based on or measured by gross
or net income or receipts and taxes on tax preference items)
(including in each case other than sales, use, license or property
Taxes) and Taxes which are capital, doing business, franchise, excess
profits, net worth taxes and interest, additions to tax, penalties or
other charges in respect thereof.
(c) General Indemnity. Lessee hereby agrees to indemnify each
Indemnitee against, and agrees to protect, save and keep harmless each of
them from (whether or not the transactions contemplated herein or in any of
the other Operative Documents are consummated), any and all Expenses
imposed on, incurred by or asserted against any Indemnitee, in any way
relating to, based on or arising out of (A) the execution, delivery and
performance of the Operative Documents or the Pass Through Documents and
the transactions contemplated thereby; (B) the manufacture, purchase,
acceptance or rejection of the Airframe or any Engine or Parts; (C) the
Aircraft (or any portion thereof) or any engine installed on the Airframe
or any airframe on which an Engine is installed whether or not arising out
of the manufacture, purchase, registration, reregistration, financing,
refinancing, ownership, delivery, nondelivery, inspection, lease, sublease,
possession, storage, use or non-use, operation, maintenance, overhaul,
modification, alteration, condition, replacement, repair, substitution,
sale, return or other disposition of the Aircraft including, without
limitation, any violation of law relating to the Aircraft (including
environmental laws), latent or other defects, whether or not discoverable,
strict tort liability and any claim for patent, trademark or copyright
infringement; (D) the offer or sale of any interest in the Trust Estate or
the Trust Agreement or any similar interest on or prior to the Delivery
Date (including any violation of securities laws or ERISA); or (E) the
offer or sale of any interest in the Equipment Notes or the Pass Through
Certificates (or other evidence of the debt relating to the Aircraft) on
the Delivery Date or in connection with a refinancing in accordance with
the terms hereof (including any violation of securities laws or ERISA);
provided, that the foregoing indemnity shall not extend to an Indemnitee
with respect to any Expense to the extent such Expense is attributable to
one or more of the following: (1) any representation or warranty by such
Indemnitee in the Operative Documents or the Pass Through Documents being
incorrect, or (2) the failure by such Indemnitee to perform or observe any
of its agreements, covenants or conditions in any of the Operative
Documents or the Pass Through Documents, or (3) the willful misconduct or
the gross negligence of such Indemnitee, or (4) (A) in the case of any
Indemnitee, the offer, sale or other disposition (voluntary or involuntary)
by such Indemnitee of all or any part of its interest in the Airframe or
any Engine (other than during the continuance of a Lease Event of Default
or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the
Lease), (B) in the case of a Certificate Holder, the offer, sale or other
disposition (voluntary or involuntary) by such Certificate Holder of all or
any part of its interest in any Equipment Note or (C) in the case of any
Indemnitee, the offer, sale or other disposition by such Indemnitee of all
or any part of such Indemnitee's interest in the Operative Documents, or
(5) any Tax (other than taxes under ERISA or Section 4975 of the Code)
whether or not Lessee is required to indemnify for such Tax pursuant to
Section 6(b) hereof (it being understood that Section 6(b) hereof and the
Tax Indemnity Agreement exclusively provide for Lessee's liability with
respect to Taxes), or (6) in the case of the Owner Participant, the offer
or sale by the Owner Participant after the Delivery Date of any interest in
the Trust Estate or the Trust Agreement or any similar interest except
during the continuance of an Event of Default so long as such disposition
is made in accordance with Section 7(k), or (7) in the case of the Owner
Trustee in its individual and trust capacities, and the Affiliates,
successors and assigns thereof, a failure on the part of the Owner Trustee
to distribute in accordance with the Trust Agreement any amounts
distributable by it thereunder, or (8) in the case of the Indenture Trustee
in its individual and trust capacities, failure on the part of the
Indenture Trustee to distribute in accordance with the Trust Indenture any
amounts distributable by it thereunder, or (9) in the case of any Pass
Through Trustee, failure on the part of such Pass Through Trustee or the
Subordination Agent to distribute in accordance with the Intercreditor
Agreement and the Pass Through Trust Agreement amounts received and
distributable thereunder, or (10) the authorization or giving or
withholding of any future amendments, supplements, waivers or consents with
respect to any of the Operative Documents which amendments, supplements,
waivers or consents (a) are not or were not requested by Lessee or (b) are
not occasioned by a specific requirement of the Operative Documents, or
(11) except to the extent fairly attributable to acts or events occurring
during the Term or actions taken (or required to be taken and not taken)
during the Term, actions taken (or required to be taken and not taken) or
events occurring after the earlier of: (I) the return of possession of the
Aircraft to the Owner Trustee or its designee pursuant to the terms of the
Lease (other than pursuant to and in accordance with Section 15 thereof, in
which case Lessee's liability under this Section 6(c) shall survive for so
long as Lessor shall be entitled to exercise remedies under such Section
15), (II) the termination of the Term in accordance with Section 9 of the
Lease, (III) the payment by Lessee of all amounts required to be paid under
the Lease following an Event of Loss or (IV) termination of the Lease and
payment by Lessee of all amounts required to be paid by Lessee pursuant to
the terms of the Operative Documents or (12) any amount which any
Indemnitee expressly agrees to pay under any Operative Document or any
amount which is expressly stated to be an Expense that is not reimbursable
by Lessee under the Operative Documents, or (13) any amount that is an
ordinary and usual operating or overhead expense of any Indemnitee (it
being understood out-of-pocket expenses payable to third parties do not
constitute "ordinary and usual operating and overhead expenses"), or (14)
any amounts relating to the deregistration with the FAA of the Aircraft as
a result of the Owner Participant or the Owner Trustee, as the case may be,
not being a Citizen of the United States or any other act or omission of
the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any
amounts attributable to any Lien which such Indemnitee is required to
remove pursuant to the terms of the Operative Documents or the Pass Through
Documents, or (16) any loss of tax benefits or increases in tax liability
whether or not the Lessee is required to indemnify an Indemnitee elsewhere
in the Operative Documents, or (17) principal of, or interest or premium on
the Equipment Notes, or (18) any prohibited transaction, within the meaning
of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with
respect to the purchase or holding of any Pass Through Certificate (i) over
which purchase or holding the Owner Participant or any Affiliate thereof
has discretion or control (other than in the capacity of a directed trustee
or custodian), or (ii) by an employee benefit plan, within the meaning of
Section 3(3) of ERISA, or individual retirement account or plan subject to
Section 4975 of the Code with respect to which the Owner Participant (or
any Affiliate thereof) has the power, directly or indirectly, to appoint or
terminate, or to negotiate the terms of the management agreement with, the
person or persons having discretion or control (other than in the capacity
of a directed trustee or custodian), over such purchase or holding.
Lessee's indemnity obligation to an Indemnitee under this Section
6(c) shall equal the amount which, after taking into account any Tax
imposed upon the receipt or accrual of the amounts payable under this
Section 6(c) and any tax benefits realized by such Indemnitee as a result
of the accrual or payment of such Expense shall equal the amount of the
Expense indemnifiable under this Section 6(c).
If any Indemnitee shall realize a tax savings by reason of any
Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether
such tax savings shall be by means of a foreign tax credit, depreciation or
cost recovery deduction or otherwise) and such savings is not otherwise
taken into account in computing such payment or indemnity such Indemnitee
shall pay to Lessee an amount equal to the lesser of (i) the amount of such
tax savings, plus any additional tax savings recognized as the result of
any payment made pursuant to this sentence, when, as if, and to the extent,
realized or (ii) the amount of all payments pursuant to this Section 6(c)
by Lessee to such Indemnitee (less any payments previously made by such
Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if
any, of the amount described in clause (i) over the amount described in
clause (ii) shall be carried forward and applied to reduce pro tanto any
subsequent obligations of Lessee to make payments to such Indemnitee
pursuant to this Section 6(c)).
Nothing in this Section 6(c) shall be construed as a guaranty by
Lessee of payments due pursuant to the Equipment Notes or of the residual
value of the Aircraft.
If a claim is made against an Indemnitee involving one or more
Expenses and such Indemnitee has notice thereof, such Indemnitee shall
promptly after receiving such notice give notice of such claim to Lessee;
provided that the failure to give such notice shall not affect the
obligations of Lessee hereunder except to the extent Lessee is prejudiced
by such failure or the Lessee's indemnification obligations are increased
as a result of such failure. If no Lease Event of Default shall have
occurred and be continuing, Lessee shall be entitled, at its sole cost and
expense, acting through counsel reasonably acceptable to the respective
Indemnitee, (A) in any judicial or administrative proceeding that involves
solely a claim for one or more Expenses, to assume responsibility for and
control thereof, (B) in any judicial or administrative proceeding involving
a claim for one or more Expenses and other claims related or unrelated to
the transactions contemplated by the Operative Documents, to assume
responsibility for and control of such claim for Expenses to the extent
that the same may be and is severed from such other claims (and such
Indemnitee shall use its best efforts to obtain such severance), and (C) in
any other case, to be consulted by such Indemnitee with respect to judicial
proceedings subject to the control of such Indemnitee and to be allowed, at
Lessee's sole expense, to participate therein. Notwithstanding any of the
foregoing to the contrary, Lessee shall not be entitled to assume
responsibility for and control of, or participate in or be consulted with
respect to any such judicial or administrative proceedings if such
proceedings will involve a material risk of the sale, forfeiture or loss
of, or the creation of any Lien (other than a Permitted Lien) on, the
Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof
unless in such an event Lessee shall have posted a bond or other security
satisfactory to the relevant Indemnitees in respect to such risk. The
Indemnitee may participate at its own expense and with its own counsel in
any judicial proceeding controlled by Lessee pursuant to the preceding
provisions.
The affected Indemnitee shall supply Lessee with such information
reasonably requested by Lessee as is necessary or advisable for Lessee to
control or participate in any proceeding to the extent permitted by this
Section 6(c). Such Indemnitee shall not enter into a settlement or other
compromise with respect to any Expense without the prior written consent of
Lessee, which consent shall not be unreasonably withheld or delayed, unless
such Indemnitee waives its right to be indemnified with respect to such
Expense under this Section 6(c).
The Lessee shall supply the Indemnitee with such information
reasonably requested by the Indemnitee as is necessary or advisable for the
Indemnitee to control or participate in any proceeding to the extent
permitted by this Section 6(c).
Upon payment of any Expense pursuant to this Section 6(c),
Lessee, without any further action, shall be subrogated to any claims the
Indemnitee may have relating thereto. The Indemnitee agrees to give such
further assurances or agreements and to cooperate with Lessee to permit
Lessee to pursue such claims, if any, to the extent reasonably requested by
Lessee.
If an Indemnitee is reimbursed, in whole or in part, with respect
to any Expense paid by Lessee hereunder, it will promptly pay the amount
refunded, including interest received thereto (but not an amount in excess
of the amount Lessee or any of its insurers has paid in respect of such
Expense pursuant to this Section 6(c)) over to Lessee.
To the extent permitted by applicable law, interest at the Base
Rate plus one percent (1.0%) shall be paid, on demand, on any amount or
indemnity not paid when due pursuant to this Section 6 until the same shall
be paid. Such interest shall be paid in the same manner as the unpaid
amount in respect of which such interest is due.
Any amount which is payable to Lessee by any Person pursuant to
this Section 6 shall not be paid to Lessee if a Lease Event of Default has
occurred and is continuing or if any payment is due and owing by Lessee to
such Person under the Lease or any other Operative Document. Any such
amount shall be held by such Person (the Lessee hereby granting a security
interest in such amount to such Person) and, if a Lease Event of Default
shall have occurred and be continuing, shall be applied against Lessee's
obligations hereunder to such Person as and when due (and, to the extent
that Lessee has no obligations hereunder to such Person, such amount shall
be paid to Lessee). At such time as there shall not be continuing any such
Lease Event of Default or there shall not be due and owing any such
payment, such amount shall be paid to Lessee to the extent not previously
applied in accordance with the immediately preceding sentence.
(d) Special Indemnity. If a Class C Special Indemnity Event
shall be continuing at any time during any Lease Period, then on the last
day of such Lease Period, Lessee shall pay to the Pass Through Trustee on
behalf of the US Airways Pass Through Trust 1998-C the amount which has
accrued during such Lease Period in accordance with the following sentence
and which remains unpaid on such Lease Period Date (such amount, the "Class
C Special Indemnity Payment"). The Class C Special Indemnity Payment shall
accrue during each Lease Period at a daily rate equal to the Multiplier, in
effect from time to time during such Lease Period, multiplied by the
aggregate principal amount of the Series C Equipment Notes outstanding on
such date divided by 360. The Pass Through Trustee agrees that it will
accept and receive the Class C Special Indemnity Payment on behalf of the
US Airways Pass Through Trust 1998-C and that it will distribute the Class
C Special Indemnity Payment in accordance with the Trust Agreement for the
US Airways Pass Through Trust 1998-C.
SECTION 7. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) Covenants Regarding Citizenship. Each of the Owner
Participant and First Security Bank, National Association, in its
individual capacity, represents and warrants to the other parties to this
Agreement that it is, and on the Delivery Date will be, a Citizen of the
United States without making use of any voting trust, voting powers
agreement or similar arrangement. The Owner Participant agrees, solely for
the benefit of Lessee and the Loan Participants, that if (i) it shall cease
to be, or believes itself likely to cease to be, a Citizen of the United
States and (ii) the Aircraft shall or would therefore become ineligible for
registration in the name of the Owner Trustee under the Transportation Code
and regulations then applicable thereunder, then the Owner Participant
shall (at its own expense and without any reimbursement or indemnification
from Lessee) as soon as practicable, but in any event within 60 days of
obtaining knowledge of such ineligibility or loss of citizenship effect a
voting trust, voting powers agreement or other similar arrangement or take
any other action as may be necessary to prevent any deregistration and to
maintain the United States registration of the Aircraft. It is agreed
that: (A) the Owner Participant shall be liable to pay on request to each
of the other parties hereto and to each holder of a Equipment Note for any
damages suffered by any such other party or holder as the result of the
representation and warranty of the Owner Participant in the first sentence
of this Section 7(a) proving to be untrue as of the Delivery Date; and (B)
the Owner Participant shall be liable to Lessee, any Sublessee and the Loan
Participants for any damages which may be incurred by Lessee, any Sublessee
or the Loan Participants as a result of the Owner Participant's failure to
comply with its obligations pursuant to the second sentence of this Section
7(a). Each party hereto agrees, upon the request and at the sole expense
of the Owner Participant, to cooperate with the Owner Participant in
complying with its obligations under the provisions of the second sentence
of this Section 7(a). First Security Bank, National Association, in its
individual capacity, agrees that if at any time an officer or responsible
employee of the Corporate Trust Department of First Security Bank, National
Association, shall obtain actual knowledge that First Security Bank,
National Association, has ceased to be a Citizen of the United States
without making use of a voting trust, voting powers agreement or similar
arrangement, it will promptly resign as Owner Trustee (if and so long as
such citizenship is necessary under the Transportation Code as in effect at
such time or, if it is not necessary, if and so long as the Owner Trustee's
citizenship would have any material adverse effect on the Loan
Participants, Lessee or the Owner Participant), effective upon the
appointment of a successor Owner Trustee in accordance with Section 9.01 of
the Trust Agreement. If the Owner Participant or First Security Bank,
National Association, in its individual capacity, does not comply with the
requirements of this Section 7(a), the Owner Trustee, the Indenture Trustee
and the Participants hereby agree that a Lease Default or Lease Event of
Default shall not have occurred and be continuing due to non-compliance by
Lessee with the registration requirements in the Lease.
(b) Location of Records. First Security Bank, National
Association, in its individual capacity, agrees that it will not change
the location of its principal place of business or the office where it
maintains its books and records with respect to the Aircraft and the Trust
Estate to a location outside of Salt Lake City, Utah, without prior written
notice to all parties.
(c) Securities Act. Each Loan Participant represents and
warrants that neither it nor anyone acting in its behalf has offered any
Equipment Notes for sale to, or solicited any offer to buy any Equipment
Note from, any person or entity other than in a manner in compliance with,
and which does not require registration under, the Securities Act or the
rules and regulations thereunder.
(d) Reregistration. The Owner Participant, the Indenture
Trustee, the Pass Through Trustee and each Loan Participant agree that, at
any time after the Depreciation Period, so long as no Lease Event of
Default shall have occurred and be continuing, Lessee may elect to effect a
change in registration of the Aircraft, at Lessee's cost and expense, so
long as the country of registry of the Aircraft is a country listed on
Exhibit A. Upon the request of the Lender, Exhibit A shall be amended from
time to time to include any other country which the Owner Participant and
the Indenture Trustee have determined, acting reasonably, would provide
substantially equivalent protection for the rights of owner participants,
lessors or lenders in similar transactions as provided under the laws of
the United States and the states thereof. In order for Lessee to effect a
change in the country of registry of the Aircraft, Lessee shall deliver to
the Owner Participant, the Owner Trustee (in its individual capacity) and
the Indenture Trustee the following:
(I) an Officer's Certificate to the effect that (A) the insurance or
self-insurance required by Section 11 of the Lease shall be in
full force and effect at the time of such change in registration
after giving effect to such change in registration, (B) all
indemnities in favor of the Owner Participant, the Owner Trustee
(in its individual capacity and as trustee under the Trust
Agreement) and the Indenture Trustee under any Operative Document
afford each such party substantially the same protection as
provided prior to such change of registry, (C) the lien of the
Trust Indenture in favor of the Trustee will continue as a first
priority lien following such change of registry, (D) such change
will not result in the imposition of, or increase in the amount
of, any Tax for which Lessee is not required to indemnify, or is
not then willing to enter into a binding agreement to indemnify,
the Owner Participant, the Certificate Holders, the Indenture
Trustee, the Owner Trustee (in its individual capacity and as
trustee under the Trust Agreement), the Indenture Trustee or the
Trust Estate pursuant to this Agreement or the Tax Indemnity
Agreement, and (E) that the new country of registry imposes
aircraft maintenance standards not materially less stringent from
those of any Permitted Foreign Air Authority; and
(II) a favorable opinion (subject to customary exceptions) of counsel
(opinion and counsel reasonably acceptable to the Owner
Participant) addressed to the Owner Participant and the Indenture
Trustee, from counsel of recognized reputation qualified in the
laws of the relevant jurisdiction to the effect that: (A) the
obligations of Lessee, and the rights and remedies of the Owner
Trustee, under the Lease shall remain valid, binding and (subject
to customary bankruptcy and equitable remedies exceptions and to
other exceptions customary in foreign opinions generally)
enforceable under the laws of such jurisdiction (or the laws of
the jurisdiction to which the laws of such jurisdiction would
refer as the applicable governing law); (B) it is not necessary,
solely as a consequence of such change in registration and
without giving effect to any other activity of the Owner Trustee,
the Owner Participant or the Indenture Trustee (or any Affiliate
thereof), as the case may be, for the Owner Trustee, the Owner
Participant or the Indenture Trustee to register or qualify to do
business in such jurisdiction; (C) there is no tort liability of
the owner of an aircraft not in possession thereof under the laws
of such jurisdiction (it being agreed that, in the event such
latter opinion cannot be given in a form satisfactory to the
Owner Participant, such opinion shall be waived if insurance
reasonably satisfactory to the Owner Participant is provided to
cover such risk); (D) unless Lessee shall have agreed to provide
insurance covering the risk of requisition of use of such
Aircraft by the government of such jurisdiction so long as such
Aircraft is registered under the laws of such jurisdiction, the
laws of such jurisdiction require fair compensation by the
government of such jurisdiction payable in currency freely
convertible into Dollars for the loss of use of such Aircraft in
the event of the requisition by such government of such use; and
(E) after giving effect to such change in registration, the Lien
of the Trust Indenture on the Owner Trustee's right, title and
interest in and to the Aircraft and the Lease shall continue as a
valid and duly perfected first priority security interest and all
filing, recording or other action necessary to protect the same
shall have been accomplished (or, if such opinion cannot be given
at the time of such proposed change in registration because such
change in registration is not yet effective, (1) the opinion
shall detail what filing, recording or other action is necessary,
and (2) the Owner Trustee and the Indenture Trustee shall have
received a certificate from Lessee that all possible preparations
to accomplish such filing, recording and other action shall have
been done, and such filing, recording and other action shall be
accomplished and a supplemental opinion to that effect shall be
delivered to the Owner Trustee and the Indenture Trustee on or
prior to the effective date of such change in registration).
Upon receipt of the foregoing certificate and opinion, the Owner
Participant and the Indenture Trustee will instruct the Owner Trustee to
make such change of registration.
Lessee shall pay all reasonable costs, expenses, fees, recording
and registration taxes, including the reasonable fees and expenses of
counsel to the Owner Trustee, the Owner Participant and the Indenture
Trustee, and other charges in connection with any such change in
registration.
(e) Owner Participant Representations and Warranties. The Owner
Participant represents and warrants to Lessee, the Owner Trustee, the
Indenture Trustee, the Pass Through Trustee, the Subordination Agent, the
Liquidity Provider and the Owner Trustee, in its capacity as such and in
its individual capacity, as follows:
(i) it is duly incorporated, validly existing and in good
standing under the laws of the State of __________ and has the
corporate power and authority to carry on its present business and
operations and to own or lease its properties, and has the corporate
power and authority to enter into and to perform its obligations under
the Owner Participant Documents; this Agreement and the other Owner
Participant Documents have been duly authorized, executed and
delivered by it; and this Agreement and each of the other Owner
Participant Documents constitute the legal, valid and binding
obligations of the Owner Participant enforceable against it in
accordance with its respective terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the rights of creditors generally and
by general principles of equity, whether considered in a proceeding at
law or in equity; [and the Owner Participant is a Qualified Owner
Participant;(1) ]
----------------------
(1) Not applicable to transactions with John Hancock
Leasing Corporation or MarCap Corporation.
(ii) neither (A) the execution and delivery by the Owner
Participant of the Owner Participant Documents nor (B) compliance by
it with all of the provisions thereof, (x) will contravene any law or
order of any court or governmental authority or agency applicable to
or binding on the Owner Participant (it being understood that no
representation or warranty is made with respect to laws, rules or
regulations relating to aviation or to the nature of the equipment
owned by the Owner Trustee other than such laws, rules or regulations
relating to the citizenship requirements of the Owner Participant
under applicable law), or (y) will contravene the provisions of, or
constitutes or has constituted or will constitute a default under, or
result in the creation of any Lien (other than Liens provided for in
the Operative Documents) upon any property of the Owner Participant
under, its certificate of incorporation or by-laws or any indenture,
mortgage, contract or other agreement or instrument to which the Owner
Participant is a party or by which it or any of its property may be
bound or affected;
(iii) no authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory
body (other than as required by the Transportation Code or the
regulations promulgated thereunder) is required for the due execution,
delivery or performance by it of the Owner Participant Documents;
(iv) there are no pending or, to its knowledge, threatened
actions or proceedings before any court or administrative agency or
arbitrator which would materially adversely affect the Owner
Participant's ability to perform its obligations under this Agreement,
the Participation Agreement, the Tax Indemnity Agreement and the Trust
Agreement;
(v) neither the Owner Participant nor anyone authorized by it to
act on its behalf (it being understood that in proposing, facilitating
and otherwise taking any action in connection with the financing
contemplated hereby and agreed to herein by the Owner Participant,
Lessee has not acted as agent of the Owner Participant) has directly
or indirectly offered any Equipment Note or Pass Through Trust
Certificate or any interest in and to the Trust Estate, the Trust
Agreement or any similar interest for sale to, or solicited any offer
to acquire any of the same from, any Person; the Owner Participant's
interest in the Trust Estate and the Trust Agreement is being acquired
for its own account and is being purchased for investment and not with
a view to any resale or distribution thereof;
(vi) on the Delivery Date, the Trust Estate shall be free of
Lessor Liens attributable to the Owner Participant; and
(vii) it is a Citizen of the United States (without making
use of a voting trust agreement, voting powers agreement or similar
arrangement).
(f) Lessor Liens. Each of First Security Bank, National
Association, in its individual capacity, and the Owner Participant
covenants and agrees that it shall not cause or permit to exist a Lessor
Lien attributable to it with respect to the Aircraft or any other portion
of the Trust Estate. Each of First Security Bank, National Association, in
its individual capacity, and the Owner Participant agrees that it will
promptly, at its own expense, take such action as may be necessary duly to
discharge such Lessor Lien attributable to it. Each of First Security
Bank, National Association, in its individual capacity, and the Owner
Participant agrees to make restitution to the Trust Estate for any actual
diminution of the assets of the Trust Estate resulting from Lessor Liens
attributable to it. The Owner Participant agrees to make restitution to
the Trust Estate for any actual diminution of the assets of the Trust
Estate resulting from any Taxes or Expenses imposed on the Trust Estate
against which Lessee is not required to indemnify the Trust Estate pursuant
to Section 6.
(g) Quiet Enjoyment. Each Loan Participant and each of the
Indenture Trustee, the Subordination Agent, the Owner Trustee, the Pass
Through Trustee and the Owner Participant covenants and agrees that, so
long as no Lease Event of Default shall have occurred and be continuing and
the Lessee has not been duly declared in default and, notwithstanding
default by any Loan Participant, the Indenture Trustee, the Owner Trustee,
the Pass Through Trustee or the Owner Participant, that such Person shall
not (and shall not permit any Affiliate or other Person claiming by,
through or under it to) interfere with Lessee's (or any Sublessee's)
continued possession, use and operation of, and quiet enjoyment of, the
Aircraft or Lessee's rights, benefits and obligations pursuant to the
Transactions during the Term of the Lease, and the Lease shall not be
terminated except as expressly provided therein.
(h) Equipment Notes Acquired for Investment. Each Loan
Participant represents and warrants that the Equipment Note to be issued to
it pursuant to the Trust Indenture is being acquired by it for investment
and not with a view to resale or distribution (it being understood that
such Loan Participant may pledge or assign as security its interest in each
Equipment Note issued to it), except that the Loan Participants may sell,
transfer or otherwise dispose of any Equipment Note or any portion thereof,
or grant participations therein, in a manner which in itself does not
require registration under the Securities Act.
(i) [Reserved.]
(j) Representations, Warranties and Covenants of Indenture
Trustee. State Street Bank and Trust Company represents, warrants (as of
the Delivery Date) and covenants, in its individual capacity, to Lessee,
the Owner Trustee, the Pass Through Trustee, the Subordination Agent, the
Liquidity Provider and the Owner Participant as follows:
(i) the Indenture Trustee is a Massachusetts trust company duly
incorporated, validly existing and in good standing under the laws of
the Commonwealth of Massachusetts, is a Citizen of the United States
(without making use of any voting trust, voting powers agreement or
similar arrangement), will notify promptly all parties to this
Agreement if in its reasonable opinion its status as a Citizen of the
United States (without making use of any voting trust, voting powers
agreement or similar arrangement) is likely to change and will resign
as Indenture Trustee as provided in Section 8.02 of the Trust
Indenture promptly after it obtains actual knowledge that it has
ceased to be such a Citizen of the United States (without making use
of a voting trust, voting powers agreement or similar arrangement),
and has the full corporate power, authority and legal right under the
laws of the Commonwealth of Massachusetts and the United States
pertaining to its banking, trust and fiduciary powers to execute and
deliver each of this Agreement, the Trust Indenture and each other
Operative Document to which it is a party and to carry out its
obligations under this Agreement, the Trust Indenture, each other
Operative Document to which it is a party and to authenticate the
Equipment Notes;
(ii) the execution and delivery by the Indenture Trustee of the
Indenture Trustee Documents and the authentication of the Equipment
Notes and the performance by the Indenture Trustee of its obligations
under the Indenture Trustee Documents have been duly authorized by the
Indenture Trustee and will not violate its articles of association or
by-laws or the provisions of any indenture, mortgage, contract or
other agreement to which it is a party or by which it is bound;
(iii) this Agreement and each of the other Indenture Trustee
Documents constitute the legal, valid and binding obligations of the
Indenture Trustee enforceable against it in accordance with their
respective terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and by general principles
of equity, whether considered in a proceeding at law or in equity;
(iv) there are no pending or, to its knowledge, threatened
actions or proceedings against the Indenture Trustee, either in its
individual capacity or as Indenture Trustee, before any court or
administrative agency which, if determined adversely to it, would
materially adversely affect the ability of the Indenture Trustee, in
its individual capacity or as Indenture Trustee as the case may be, to
perform its obligations under the Operative Documents to which it is a
party; and
(v) there are no Indenture Trustee Liens on the Aircraft or any
portion of the Trust Estate.
(k) Owner Participant Transfers. So long as the Aircraft shall
be leased to the Lessee under the Lease, the Owner Participant will not,
directly or indirectly, sell, assign, convey or otherwise transfer any of
its right, title or interest in and to this Agreement, the Trust Estate or
the Trust Agreement or any proceeds therefrom to any person or entity,
unless (i) the proposed transferee is a "Transferee" (as defined below),
(ii) Lessee shall have (1) received an opinion (in form and substance
reasonably satisfactory to Lessee) of counsel to the Owner Participant (who
shall be reasonably satisfactory to Lessee) to the effect that such
transfer will not result in any risk of loss of tax benefits to, or any
increase in the tax liability of, Lessee and (2) received from the Owner
Participant so seeking to transfer such right, title or interest reasonably
satisfactory indemnification for any loss of tax benefits to, and increase
in the tax liability of, Lessee, and (iii) the Owner Participant sells,
assigns, conveys or otherwise transfers all of its right, title and
interest in and to this Agreement, the Trust Estate, the Trust Agreement
and the proceeds therefrom to a single entity. A "Transferee" shall mean
either (A) a bank or other financial institution with a combined capital,
surplus and undivided profits of at least $50,000,000 or a corporation
whose tangible net worth is at least $50,000,000, exclusive of goodwill, in
either case as of the proposed date of such transfer, as determined in
accordance with generally accepted accounting principles, or (B) any
subsidiary of such a bank, financial institution or corporation, provided
that such bank, financial institution or corporation furnishes to the Owner
Trustee, the Indenture Trustee and Lessee a guaranty with respect to the
Owner Participant's obligations under the Operative Documents to which the
Owner Participant is a party in form and substance reasonably satisfactory
to Lessee, the Owner Trustee, and the Indenture Trustee, or (C) is an
affiliate of the Owner Participant and the Owner Participant agrees to
remain liable for all obligations of the Owner Participant under the
Operative Documents; provided, further, that any Transferee shall not be an
airline, a commercial aircraft operator, an air freight forwarder, an
entity engaged in the business of parcel transport by air or other similar
Person or an Affiliate thereof. Each such transfer to a Transferee shall
be subject to the conditions that (S) upon giving effect to such transfer,
the Transferee is a Citizen of the United States (without making use of a
voting trust agreement, voting powers agreement or other similar
arrangement unless approved by Lessee), and has full power and authority to
enter into the transactions contemplated hereby, (T) the Transferee has the
requisite power and authority to enter into and carry out the transactions
contemplated hereby and such Transferee shall have delivered to Lessee, the
Owner Trustee and the Indenture Trustee an opinion of counsel in form and
substance reasonably satisfactory to Lessee and the Owner Trustee as to the
due authorization, delivery, legal, valid and binding effect and
enforceability of the agreement or agreements referred to in the next
clause with respect to the Transferee and any guaranty provided pursuant to
the provisions of this Section 7(k) as to the guarantor, (U) the Transferee
enters into an agreement or agreements, in form and substance reasonably
satisfactory to the Owner Trustee and Lessee, whereby the Transferee
confirms that it shall be deemed a party to this Agreement and a party to
the Trust Agreement and agrees to be bound by all the terms of, and to
undertake all of the obligations of the transferor Owner Participant
contained in, the Owner Participant Documents (to the extent of the
participation so transferred to it) and makes the representations and
warranties made by the Owner Participant thereunder, (V) such transfer does
not affect registration of the Aircraft under the Transportation Code, or
any rules or regulations promulgated thereunder or create a relationship
which would be in violation thereof or violate any provision of the
Securities Act or any other applicable Federal or state law and the Lessee
shall be entitled to require an opinion of counsel to such effect, (W) the
transferor Owner Participant assumes the risk of any adverse tax
consequences with respect to the true lease nature of the transaction
(including, without limitation, loss of depreciation and amortization
deductions and interest deductions resulting from such transfer, (X) the
transferor Owner Participant pays all of the reasonable costs and expenses
(including, without limitation, the reasonable fees and expenses of
counsel) incurred in connection with such transfer, including the
reasonable costs and expenses of the Owner Trustee, the Indenture Trustee,
Lessee and the Loan Participants in connection therewith without the right
of indemnification or reimbursement by Lessee, (Y) the terms of the
Operative Documents and the Transactions shall not be altered and (Z) such
transfer will not give rise to a Default under the Trust Indenture or an
Indenture Event of Default. Upon any such transfer by the Owner
Participant as above provided, the Transferee shall be deemed the Owner
Participant for all purposes hereof and of the other Operative Documents
and each reference herein to the transferor Owner Participant shall
thereafter be deemed for all purposes to be to the Transferee and the
transferor Owner Participant shall be relieved of all obligations of the
transferor Owner Participant under the Owner Participant Documents arising
after the date of such transfer except to the extent fully attributable to
or arising out of acts or events occurring prior thereto and not assumed by
the Transferee. If the Owner Participant intends to transfer any of its
interests hereunder, it shall give thirty (30) days prior written notice
thereof to the Indenture Trustee, the Owner Trustee and Lessee, specifying
the name and address of the proposed Transferee and providing the financial
statements of such proposed Transferee.
(l) Reserved.
(m) Compliance with Trust Indenture. First Security Bank,
National Association, and State Street Bank and Trust Company, each in its
individual capacity, agrees for the benefit of Lessee to comply with the
terms of the Trust Indenture which it is required to comply with in its
individual capacity.
(n) ERISA Matters. The Owner Participant represents and
warrants as of the Delivery Date that it is not acquiring or holding its
interest in the Trust Estate, any Equipment Note or any interests
represented thereby with the assets of any "employee benefit plan" as
defined in Section 3(3) of ERISA or of any "plan" within the meaning of
Section 4975(e)(1) of the Code, including, without limitation, as
applicable, an insurance company general account ("Plan Accounts"). Each
Loan Participant agrees that it will not transfer any Equipment Note (or
any part thereof) to any entity (except pursuant to Section 2.14 of the
Trust Indenture) unless such entity makes (or is deemed to have made) a
representation and warranty as of the date of transfer that either no part
of the funds to be used by it for the purchase and holding of such
Equipment Note (or any part thereof) constitutes Plan Assets or that such
purchase and holding will not control or result in a prohibited transaction
(as defined in Section 4975 of the Code and ERISA). The Owner Participant
agrees that it will not transfer any of its right, title or interest in and
to this Agreement, the Trust Estate or the Trust Agreement or any proceeds
therefrom to any entity unless such entity makes (or is deemed to have
made) a representation and warranty as of the date of transfer that either
no part of the funds to be used by it for the purchase of such right, title
and interest (or any part thereof) constitutes assets of any "employee
benefit plan" or that such transfer will not result in a prohibited
transaction (as defined in Section 4975 of the Code and ERISA). The Pass
Through Trustee agrees that it will not agree to any amendment,
modification or waiver of Section 1.01(e)(1) of the initial supplement to
each Pass Through Trust Agreement without the prior written consent of the
Owner Participant.
(o) Confidentiality of Purchase Agreement. Each Participant,
the Owner Trustee and the Indenture Trustee agrees for the benefit of the
Manufacturer and Lessee that it will not disclose or suffer to be disclosed
the terms of the Purchase Agreement to any third party except (A) as may be
required by any applicable statute, court or administrative order or decree
or governmental ruling or regulation or to any regulatory authorities
having official jurisdiction over them, (B) in connection with the
financing of the Aircraft and the other transactions contemplated by the
Operative Documents (including any transfer of Equipment Notes (including
by way of participation or assignment of an interest, provided such
participant or assignee agrees to hold such terms confidential to the same
extent as herein provided) or the Owner Participant's beneficial interest
in the Trust Estate and any exercise of remedies under the Lease and the
Trust Indenture), (C) with the prior written consent of the Manufacturer
and Lessee, (D) to the Owner Trustee's, the Indenture Trustee's and each
Participant's counsel or special counsel, independent insurance brokers or
other agents who agree to hold such information confidential, or (E) in the
case of the Owner Participant and/or the Owner Trustee, it may disclose so
much of the Purchase Agreement as has been assigned to the Owner Trustee
under the Purchase Agreement Assignment to bona fide potential purchasers
of the Aircraft.
(p) Margin Regulations. The Owner Trustee and the Owner
Participant severally, not jointly, represent and warrant, as of the
Delivery Date that none of the funds made available by the Pass Through
Trustee pursuant to Section 1 hereof will be used for the purpose of
purchasing or carrying any "margin security" as defined in Regulation U of
the Board of Governors of the Federal Reserve System or for the purpose of
reducing or retiring any indebtedness which was originally incurred to
purchase or carry such margin security or for any other purpose which might
cause the transaction contemplated by this Agreement to constitute a
"purpose credit" within the meaning of Regulation X of the Board of
Governors of the Federal Reserve System, assuming that the proceeds were
and are applied as contemplated by the provisions of this Agreement.
(q) Loan Participant Liens. Each Loan Participant covenants and
agrees that it shall not cause or permit to exist a Loan Participant Lien
attributable to it with respect to the Aircraft or any other portion of the
Trust Estate. Each Loan Participant agrees that it will promptly, at its
own expense, take such other action as may be necessary duly to discharge
such Loan Participant Lien attributable to it. Each Loan Participant agrees
to make restitution to the Trust Estate for any actual diminution of the
assets of the Trust Estate resulting from such Loan Participant Lien
attributable to it.
(r) Indenture Trustee Liens. State Street Bank and Trust
Company, in its individual capacity, covenants and agrees that it shall not
cause or permit to exist any Indenture Trustee's Liens with respect to the
Trust Indenture Estate or the Trust Estate. State Street Bank and Trust
Company, in its individual capacity, agrees that it will promptly, at its
own expense, take such action as may be necessary duly to discharge such
Indenture Trustee's Liens. State Street Bank and Trust Company, in its
individual capacity, agrees to make restitution to the Trust Estate for any
actual diminution of the assets of the Trust Indenture Estate or the Trust
Estate resulting from such Indenture Trustee's Liens.
(s) Representations and Warranties of Owner Trustee. The Owner
Trustee, in its individual capacity (except as provided in clauses (iii)
and (vii) below) and (but only as provided in clauses (iii) and (vii) and,
to the extent that it relates to the Owner Trustee, clauses (ii), (ix) and
(xi) below) as Owner Trustee, represents and warrants to Lessee, the Pass
Through Trustee, the Subordination Agent, the Liquidity Provider and the
Owner Participant as follows:
(i) the Owner Trustee, in its individual capacity, is a national
banking association duly organized and validly existing in good
standing under the laws of the United States, has full corporate power
and authority to carry on its business as now conducted, has the
corporate power and authority to execute and deliver the Trust
Agreement, has the corporate power and authority to carry out the
terms of the Trust Agreement, and has (assuming the authorization,
execution and delivery of the Trust Agreement by the Owner
Participant), as Owner Trustee, and to the extent expressly provided
herein or therein, in its individual capacity, the corporate power and
authority to execute and deliver and to carry out the terms of this
Agreement, the Trust Indenture, the Equipment Notes, the Lease and
each other Operative Document (other than the Trust Agreement) to
which it is a party;
(ii) the Owner Trustee in its trust capacity and, to the extent
expressly provided herein, in its individual capacity, has duly
authorized, executed and delivered this Agreement, in its individual
capacity, has duly authorized, executed and delivered the Trust
Agreement and in its trust capacity, except as expressly provided
therein, has duly authorized, executed and delivered (or, in the case
of Owner Trustee Documents to be executed on the Delivery Date, will
on the Delivery Date, execute and deliver) the other Owner Trustee
Documents and (assuming the due authorization, execution and delivery
of the Trust Agreement by the Owner Participant) this Agreement and
each of the other Owner Trustee Documents constitutes (or, in the case
of documents to be executed and delivered on the Delivery Date, upon
execution and delivery will constitute) the legal, valid and binding
obligations of the Owner Trustee, in its individual capacity or as
Owner Trustee, as the case may be, enforceable against it in its
individual capacity or as Owner Trustee, as the case may be, in
accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally and by
general principles of equity, whether considered in a proceeding at
law or in equity;
(iii) assuming the due authorization, execution and delivery
of the Trust Agreement by the Owner Participant, the Owner Trustee has
duly authorized, and on the Closing Date shall have duly issued,
executed and delivered to the Indenture Trustee for authentication,
the Equipment Notes pursuant to the terms and provisions hereof and of
the Trust Indenture, and each Equipment Note on the Closing Date will
constitute the valid and binding obligation of the Owner Trustee and
will be entitled to the benefits and security afforded by the Trust
Indenture in accordance with the terms of such Equipment Note and the
Trust Indenture;
(iv) neither the execution and delivery by the Owner Trustee, in
its individual capacity or as Owner Trustee, as the case may be, of
any Owner Trustee Document, nor the consummation by the Owner Trustee,
in its individual capacity or as Owner Trustee, as the case may be, of
any of the transactions contemplated thereby, nor the compliance by
the Owner Trustee, in its individual capacity or as Owner Trustee, as
the case may be, with any of the terms and provisions thereof, (A)
requires or will require any approval of its stockholders, or approval
or consent of any trustees or holders of any indebtedness or
obligations of it, or (B) violates or will violate its articles of
association or by-laws, or contravenes or will contravene any
provision of, or constitutes or will constitute a default under, or
results or will result in any breach of, or results or will result in
the creation of any Lien (other than as permitted under the Operative
Documents) upon its property under, any indenture, mortgage, chattel
mortgage, deed of trust, conditional sale contract, bank loan or
credit agreement, license or other agreement or instrument to which it
is a party or by which it is bound, or contravenes or will contravene
any law, governmental rule or regulation of the United States of
America or the State of Utah governing the trust powers of the Owner
Trustee, or any judgment or order applicable to or binding on it;
(v) no consent, approval, order or authorization of, giving of
notice to, or registration with, or taking of any other action in
respect of, any Utah state or local governmental authority or agency
or any United States Federal governmental authority or agency
regulating the trust powers of the Owner Trustee in its individual
capacity is required for the execution and delivery of, or the
carrying out by, the Owner Trustee, in its individual capacity or as
Owner Trustee, as the case may be, of any of the transactions
contemplated hereby or by the Trust Agreement, the Participation
Agreement, the Trust Indenture, the Lease or the Equipment Notes, or
any other Operative Document to which it is or will be a party or by
which it is or will be bound, other than any such consent, approval,
order, authorization, registration, notice or action as has been duly
obtained, given or taken or which is described in Section 7(a)(iv);
(vi) there exists no Lessor Lien attributable to the Owner
Trustee, in its individual capacity;
(vii) there exists no Lessor Lien attributable to the Owner
Trustee, as lessor under the Lease;
(viii) there are no Taxes payable by the Owner Trustee, either
in its individual capacity or as Owner Trustee, imposed by the State
of Utah or any political subdivision thereof in connection with the
issuance of the Equipment Notes, or the execution and delivery in its
individual capacity or as Owner Trustee, as the case may be, of any of
the instruments referred to in clauses (i), (ii), (iii) and (iv)
above, that, in each case, would not have been imposed if the Trust
Estate were not located in the State of Utah and First Security Bank,
National Association had not (a) had its principal place of business
in, (b) performed (in its individual capacity or as Owner Trustee) any
or all of its duties under the Operative Documents in, and (c) engaged
in any activities unrelated to the transactions contemplated by the
Operative Documents in, the State of Utah;
(ix) there are no pending or, to its knowledge, threatened
actions or proceedings against the Owner Trustee, either in its
individual capacity or as Owner Trustee, before any court or
administrative agency which, if determined adversely to it, would
materially adversely affect the ability of the Owner Trustee, in its
individual capacity or as Owner Trustee, as the case may be, to
perform its obligations under any of the instruments referred to in
clauses (i), (ii), (iii) and (iv) above;
(x) both its chief executive office, and the place where its
records concerning the Aircraft and all its interests in, to and under
all documents relating to the Trust Estate, are located in Salt Lake
City, Utah;
(xi) the Owner Trustee has not, in its individual capacity or as
Owner Trustee, directly or indirectly offered any Equipment Note or
Pass Through Certificate or any interest in or to the Trust Estate,
the Trust Agreement or any similar interest for sale to, or solicited
any offer to acquire any of the same from, anyone other than the Pass
Through Trustee and the Owner Participant; and the Owner Trustee has
not authorized anyone to act on its behalf (it being understood that
in arranging and proposing the refinancing contemplated hereby and
agreed to herein by the Owner Trustee, the Lessee has not acted as
agent of the Owner Trustee) to offer directly or indirectly any
Equipment Note, any Certificate or any interest in and to the Trust
Estate, the Trust Agreement or any similar interest for sale to, or to
solicit any offer to acquire any of the same from, any person;
(xii) it is a Citizen of the United States (without making
use of a voting trust agreement, voting powers agreement or similar
arrangements);
(xiii) there has not occurred any event which constitutes (or,
to the best of its knowledge would, with the passing of time or the
giving of notice or both, constitute) an Indenture Event of Default
which has been caused by or relates to the Owner Trustee, in its
individual capacity, and which is presently continuing; and
(xiv) on the Delivery Date the Owner Trustee shall have
received whatever title to the Aircraft as was conveyed to it by
Lessee.
(t) Owner Participant Obligations on Lease Termination. The
Owner Participant covenants and agrees that if (i) Lessee has elected
pursuant to Section 9(a)(1) of the Lease to terminate the Lease by causing
the Aircraft to be sold pursuant to Section 9(b) of the Lease and (ii) the
Owner Trustee has, pursuant to Section 9(b) of the Lease, given to Lessee
written notice of Lessor's election to retain title to the Aircraft and
(iii) the Owner Trustee has failed to make, on or before the Termination
Date, any payment required to be made by the Owner Trustee pursuant to
Section 9(b) of the Lease in connection with its retention of title to the
Aircraft, the Owner Participant will indemnify Lessee for any losses,
damages, costs or expenses of any kind (including any additional rents paid
by Lessee and any fees and expenses of lawyers, appraisers, brokers or
accountants) incurred as a consequence of such failure by the Owner
Trustee.
(u) Transfer of Title; Assumption of Equipment Notes. Each of
the Owner Participant, the Owner Trustee, the Indenture Trustee and Lessee
covenants and agrees that if Lessee elects (A) to purchase the Aircraft
pursuant to Section 19(b) of the Lease or (B) to terminate the Lease and
purchase the Aircraft pursuant to Section 19(c) of the Lease, then each of
the parties will execute and deliver appropriate documentation transferring
all right, title and interest in the Aircraft to Lessee (including, without
limitation, such bills of sale and other instruments and documents as
Lessee shall reasonably request to evidence (on the public record or
otherwise) such transfer and the vesting of all right, title and interest
in and to the Aircraft in Lessee), and if Lessee, in connection with such
purchase, elects to assume the obligations of the Owner Trustee pursuant to
the Trust Indenture and the Equipment Notes each of the parties will
execute and deliver appropriate documentation permitting Lessee to assume
such obligations on the basis of full recourse to Lessee, maintaining the
security interest in the Aircraft created by the Trust Indenture, releasing
the Owner Participant and the Owner Trustee from all future obligations in
respect of the Equipment Notes, the Trust Indenture and all other Operative
Documents and all such other actions as are reasonably necessary to permit
such assumption by Lessee. Notwithstanding the provisions of this Section
7(u), unless waived by the Loan Participants, Lessee shall not be entitled
to assume the Equipment Notes on the date for purchase of the Aircraft
pursuant to Section 19(c) of the Lease if on such date a Specified Default
or Lease Event of Default shall have occurred and be continuing.
Notwithstanding the foregoing, Lessee shall not be entitled to
assume the obligations of the Owner Trustee in respect of the Equipment
Notes unless Lessee causes to be delivered to the Indenture Trustee an
opinion of counsel to the effect that (i) the Lien of the Trust Indenture
continues to be a valid and duly perfected first priority security interest
in and to the Aircraft, (ii) the Indenture Trustee will be entitled to the
benefits of 11 U.S.C. Section 1110; provided that the opinion required by
subclause (ii) need only be given if immediately prior to such assumption
the Owner Trustee would have been entitled to the benefits of 11 U.S.C.
Section 1110 and (iii) the Pass Through Trusts will not be subject to
Federal income taxation and the Certificate Holders will not recognize
income, gain or loss for Federal income tax purposes as a result of such
assumption and will be subject to taxation in the same amounts, in the same
manner, and at the same times as would have been the case if such
assumption had not occurred.
(v) Lessee Merger Covenant. Lessee will not consolidate with
or merge into any other corporation or convey, transfer or lease
substantially all of its assets as an entirety to any Person unless:
(i) the corporation formed by such consolidation or into which
Lessee is merged or the Person which acquires by conveyance, transfer
or lease substantially all of the assets of Lessee as an entirety
shall be (i) organized and validly existing under the laws of the
United States of America or any state thereof or the District of
Columbia, (ii) a "citizen of the United States" as defined in 49
U.S.C. Section 40102(a)(15), as amended, and (iii) a Certificated Air
Carrier, if and so long as such status is a condition of entitlement
to the benefits of Section 1110 of the Bankruptcy Code with respect to
the Lease or the Aircraft;
(ii) the corporation formed by such consolidation or into which
Lessee is merged or the Person which acquires by conveyance, transfer
or lease substantially all of the assets of Lessee as an entirety
shall execute and deliver to the Owner Trustee, the Indenture Trustee
and the Owner Participant an agreement in form and substance
reasonably satisfactory to the Owner Participant a duly authorized,
valid, binding and enforceable agreement containing an assumption by
such successor corporation or Person of the due and punctual
performance and observance of each covenant and condition of the
Operative Documents to which Lessee is a party to be performed or
observed by Lessee;
(iii) immediately after giving effect to such transaction, no
Lease Event of Default shall have occurred and be continuing; and
(iv) Lessee shall have delivered to the Owner Trustee, the
Indenture Trustee and the Owner Participant a certificate signed by
the President, any Executive Vice President, any Senior Vice President
or any Vice President and by the Secretary or an Assistant Secretary
of Lessee, and an opinion of counsel (which may be Lessee's General
Counsel, Deputy General Counsel or Associate General Counsel)
reasonably satisfactory to the Owner Participant, each to the effect
that such consolidation, merger, conveyance, transfer or lease and the
assumption agreement mentioned in clause (ii) above comply with this
Section 7(v) and that all conditions precedent herein provided for
relating to such transaction have been complied with.
Upon any such consolidation or merger or any such conveyance,
transfer or lease of substantially all of the assets of Lessee as an
entirety in accordance with this Section 7(v), the successor corporation or
Person formed by such consolidation or into which Lessee is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, Lessee under
this Agreement with the same effect as if such successor corporation or
Person had been named as Lessee herein. No such conveyance, transfer or
lease of substantially all of the assets of Lessee as an entirety shall
have the effect of releasing Lessee or any successor corporation or Person
which shall theretofore have become such in the manner prescribed in this
Section 7(v) from its liability in respect of any Operative Document to
which it is a party.
(w) Further Assurances. Lessee, at its expense, will take, or
cause to be taken, such action with respect to the recording, filing, re-
recording and refiling of the Lease, the Lease Supplement, the Trust
Agreement, the Trust Indenture, the Trust Supplement and any financing
statements or other instruments as are necessary to maintain, so long as
the Trust Indenture or the Lease is in effect, the perfection of the
security interests created by the Trust Indenture and any security interest
that may be claimed to have been created by the Lease and the ownership
interest of the Owner Trustee in the Aircraft or will furnish to the Owner
Trustee, the Owner Participant and the Indenture Trustee timely notice of
the necessity of such action, together with such instruments, in execution
form, and such other information as may be required to enable them to take
such action. Lessee will notify the Owner Trustee, the Owner Participant
and the Indenture Trustee of any change in the location of its chief
executive office (as such term is used in Article 9 of the Uniform
Commercial Code) promptly after making such change or in any event within
the period of time necessary under applicable law to prevent the lapse of
perfection (absent refiling) of financing statements filed under the
Operative Documents.
(x) Rent Adjustments. Section 3 of the Lease contemplates that,
under certain circumstances, the Owner Participant will make certain
recalculations of Basic Rent, EBO Amount and Termination Value, and the
Owner Participant hereby agrees to make such recalculations as and when
contemplated by the Lease and subject to all the terms and conditions of
the Lease and promptly to take such further actions as may be necessary or
desirable to give effect to and to cause the Owner Trustee to give effect
to the provisions of Section 3 of the Lease.
(y) Owner Participant Costs on Return. The Owner Participant
hereby agrees with Lessee that it will pay, or cause to be paid, all costs
and expenses that are for the account of the Owner Trustee pursuant to
Section 5 of the Lease without the right of reimbursement or
indemnification from Lessee.
(z) Transfer of Equipment Notes. Each Loan Participant hereby
represents, warrants and agrees that it shall not transfer any interest in
any Equipment Note unless and until the transferee agrees in writing
(copies of which shall be provided by the Indenture Trustee to Lessee, the
Owner Trustee and the Owner Participant) to make the representations
contemplated to be made by a Loan Participant in this Agreement and to be
bound by the terms of this Agreement and the Trust Indenture (including,
without limitation, the representations and covenants set forth in Sections
7(c), 7(h), 7(i), 7(n), and 7(q) hereof and this Section 7(z) and Sections
2.03, 2.14 and 4.03 of the Trust Indenture).
(aa) Representations and Warranties of Pass Through Trustee.
The Pass Through Trustee represents and warrants to Lessee, the Indenture
Trustee, the Subordination Agent, the Liquidity Provider, the Owner
Participant and the Owner Trustee, in its capacity as such and in its
individual capacity, as follows:
(i) the Pass Through Trustee is a state chartered trust company
duly organized, validly existing and in good standing under the laws
of the Commonwealth of Massachusetts, and has the full corporate
power, authority and legal right under the laws of the Commonwealth of
Massachusetts and the United States pertaining to its banking, trust
and fiduciary powers to execute and deliver each of the Pass Through
Trust Agreements, the Intercreditor Agreement and this Agreement and
to perform its obligations under the Pass Through Trust Agreements,
the Intercreditor Agreement and this Agreement;
(ii) this Agreement, each of the Pass Through Trust Agreements
and the Intercreditor Agreement have been duly authorized, executed
and delivered by the Pass Through Trustee; this Agreement, each of the
Pass Through Trust Agreements and the Intercreditor Agreement
constitute the legal, valid and binding obligations of the Pass
Through Trustee enforceable against it in accordance with their
respective terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and by general principles
of equity, whether considered in a proceeding at law or in equity;
(iii) none of the execution, delivery and performance by the
Pass Through Trustee of any of the Pass Through Trust Agreements, the
Intercreditor Agreement or this Agreement, the purchase by the Pass
Through Trustee of the Equipment Notes pursuant to this Agreement, or
the issuance of the Certificates pursuant to the Pass Through Trust
Agreements, contravenes any law, rule or regulation of the
Commonwealth of Massachusetts or any United States governmental
authority or agency regulating the Pass Through Trustee's banking,
trust or fiduciary powers or any judgment or order applicable to or
binding on the Pass Through Trustee and does not contravene or result
in any breach of, or constitute a default under, the Pass Through
Trustee's articles of association or by-laws or any agreement or
instrument to which the Pass Through Trustee is a party or by which it
or any of its properties may be bound;
(iv) neither the execution and delivery by the Pass Through
Trustee of any of the Pass Through Trust Agreements, the Intercreditor
Agreement or this Agreement, nor the consummation by the Pass Through
Trustee of any of the transactions contemplated hereby or thereby,
requires the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action with respect to,
any Massachusetts governmental authority or agency or any Federal
governmental authority or agency regulating the Pass Through Trustee's
banking, trust or fiduciary powers;
(v) there are no Taxes payable by the Pass Through Trustee
imposed by the Commonwealth of Massachusetts or any political
subdivision or taxing authority thereof in connection with the
execution, delivery and performance by the Pass Through Trustee of
this Agreement, any of the Pass Through Trust Agreements or the
Intercreditor Agreement (other than franchise or other taxes based on
or measured by any fees or compensation received by the Pass Through
Trustee for services rendered in connection with the transactions
contemplated by any of the Pass Through Trust Agreements), and there
are no Taxes payable by the Pass Through Trustee imposed by the
Commonwealth of Massachusetts or any political subdivision thereof in
connection with the acquisition, possession or ownership by the Pass
Through Trustee of any of the Equipment Notes (other than franchise or
other taxes based on or measured by any fees or compensation received
by the Pass Through Trustee for services rendered in connection with
the transactions contemplated by any of the Pass Through Trust
Agreements), and, assuming that the trusts created by the Pass Through
Trust Agreements will not be taxable as corporations, but rather, each
will be characterized either as a grantor trust under subpart E, Part
I, of Subchapter J of the Code or as a partnership, such trusts will
not be subject to any Taxes imposed by the Commonwealth of
Massachusetts or any political subdivision thereof;
(vi) there are no pending or threatened actions or proceedings
against the Pass Through Trustee before any court or administrative
agency which individually or in the aggregate, if determined adversely
to it, would materially adversely affect the ability of the Pass
Through Trustee to perform its obligations under this Agreement, the
Intercreditor Agreement or any Pass Through Trust Agreement;
(vii) except for the issue and sale of the Pass Through Trust
Certificates contemplated hereby, the Pass Through Trustee has not
directly or indirectly offered any Equipment Note for sale to any
Person or solicited any offer to acquire any Equipment Notes from any
Person, nor has the Pass Through Trustee authorized anyone to act on
its behalf to offer directly or indirectly any Equipment Note for sale
to any Person, or to solicit any offer to acquire any Equipment Note
from any Person; and the Pass Through Trustee is not in default under
any Pass Through Trust Agreement; and
(viii) the Pass Through Trustee is not directly or indirectly
controlling, controlled by or under common control with the Owner
Participant, the Owner Trustee or Lessee.
(bb) Representations and Warranties of Subordination Agent. The
Subordination Agent represents and warrants to Lessee, the Indenture
Trustee, the Pass Through Trustee, the Liquidity Provider, the Owner
Participant and the Owner Trustee, in its capacity as such and in its
individual capacity, as follows:
(i) the Subordination Agent is a state chartered trust company
duly organized, validly existing and in good standing under the laws
of the Commonwealth of Massachusetts, and has the full corporate
power, authority and legal right under the laws of the Commonwealth of
Massachusetts and the United States pertaining to its banking, trust
and fiduciary powers to execute and deliver this Agreement, the
Liquidity Facilities and the Intercreditor Agreement and to perform
its obligations under this Agreement, the Liquidity Facilities and the
Intercreditor Agreement;
(ii) this Agreement, each of the Liquidity Facilities and the
Intercreditor Agreement have been duly authorized, executed and
delivered by the Subordination Agent; this Agreement, each of the
Liquidity Facilities and the Intercreditor Agreement constitute the
legal, valid and binding obligations of the Subordination Agent
enforceable against it in accordance with their respective terms,
except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
rights of creditors generally and by general principles of equity,
whether considered in a proceeding at law or in equity;
(iii) none of the execution, delivery and performance by the
Subordination Agent of each of the Liquidity Facilities, the
Intercreditor Agreement or this Agreement contravenes any law, rule or
regulation of the Commonwealth of Massachusetts or any United States
governmental authority or agency regulating the Subordination Agent's
banking, trust or fiduciary powers or any judgment or order applicable
to or binding on the Subordination Agent and do not contravene or
result in any breach of, or constitute a default under, the
Subordination Agent's articles of association or by-laws or any
agreement or instrument to which the Subordination Agent is a party or
by which it or any of its properties may be bound;
(iv) neither the execution and delivery by the Subordination
Agent of any of the Liquidity Facilities, the Intercreditor Agreement
or this Agreement nor the consummation by the Subordination Agent of
any of the transactions contemplated hereby or thereby requires the
consent or approval of, the giving of notice to, the registration
with, or the taking of any other action with respect to, any
Massachusetts governmental authority or agency or any Federal
governmental authority or agency regulating the Subordination Agent's
banking, trust or fiduciary powers;
(v) there are no Taxes payable by the Subordination Agent
imposed by the Commonwealth of Massachusetts or any political
subdivision or taxing authority thereof in connection with the
execution, delivery and performance by the Subordination Agent of this
Agreement, any of the Liquidity Facilities or the Intercreditor
Agreement (other than franchise or other taxes based on or measured by
any fees or compensation received by the Subordination Agent for
services rendered in connection with the transactions contemplated by
the Intercreditor Agreement or any of the Liquidity Facilities), and
there are no Taxes payable by the Subordination Agent imposed by the
Commonwealth of Massachusetts or any political subdivision thereof in
connection with the acquisition, possession or ownership by the
Subordination Agent of any of the Equipment Notes (other than
franchise or other taxes based on or measured by any fees or
compensation received by the Subordination Agent for services rendered
in connection with the transactions contemplated by the Intercreditor
Agreement or any of the Liquidity Facilities);
(vi) there are no pending or threatened actions or proceedings
against the Subordination Agent before any court or administrative
agency which individually or in the aggregate, if determined adversely
to it, would materially adversely affect the ability of the
Subordination Agent to perform its obligations under this Agreement,
the Intercreditor Agreement or any Liquidity Facility;
(vii) the Subordination Agent has not directly or indirectly
offered any Equipment Note for sale to any Person or solicited any
offer to acquire any Equipment Notes from any Person, nor has the
Subordination Agent authorized anyone to act on its behalf to offer
directly or indirectly any Equipment Note for sale to any Person, or
to solicit any offer to acquire any Equipment Note from any Person;
and the Subordination Agent is not in default under any Liquidity
Facility; and
(viii) the Subordination Agent is not directly or indirectly
controlling, controlled by or under common control with the Owner
Participant, the Owner Trustee or Lessee.
SECTION 8. RELIANCE OF LIQUIDITY PROVIDER. Each of the parties
hereto agrees and acknowledges that the Liquidity Provider shall be a third
party beneficiary of each of the representations, warranties and covenants
made herein by such party, and that the Liquidity Provider may rely on such
representations and warranties to the same extent as if such
representations and warranties were made to the Liquidity Provider
directly. Lessee agrees and acknowledges that the Liquidity Provider shall
be a third party beneficiary of the indemnities contained in Section 6(c)
hereof, and may rely on such indemnities to the same extent as if such
indemnities were made to the Liquidity Provider directly.
SECTION 9. OTHER DOCUMENTS. Each of the Owner Participant and the
Owner Trustee hereby (a) agrees with Lessee and the Loan Participants to
comply with all of the terms of the Trust Agreement (as the same may
hereafter be amended or supplemented from time to time in accordance with
the terms thereof) applicable to it; (b) agrees with Lessee and the
Indenture Trustee not to amend, supplement or otherwise modify any
provision of the Trust Agreement in a manner adversely affecting such party
without the prior written consent of such party; and (c) agrees with Lessee
and the Loan Participants not to revoke the Trust Agreement without the
prior written consent of Lessee and the Indenture Trustee. Notwithstanding
the foregoing, so long as the Lease has not been terminated, the
Subordination Agent, the Pass Through Trustee, the Indenture Trustee, the
Owner Participant and the Owner Trustee hereby agree for the benefit of
Lessee that without the consent of Lessee they will not amend, modify or
supplement the definition of "Secured Obligations" or Articles II, III, IX
or Section 5.02 of the Trust Indenture. Furthermore, so long as the Lease
has not been terminated, the Pass Through Trustee, the Subordination Agent,
the Indenture Trustee, the Owner Participant and the Owner Trustee hereby
agree for the benefit of Lessee that without Lessee's consent, each such
party will not amend any other provision of any Operative Document or Pass
Through Document in a manner adversely affecting Lessee. Each of the Owner
Participant, the Indenture Trustee, the Subordination Agent, the Pass
Through Trustee and the Owner Trustee agree to promptly furnish to Lessee
copies of any supplement, amendment, waiver or modification of any of the
Operative Documents or Pass Through Documents to which Lessee is not a
party. Each Loan Participant agrees that it will not take any action in
respect of the Trust Indenture Estate except through the Indenture Trustee
pursuant to the Trust Indenture or as otherwise permitted by the Trust
Indenture.
SECTION 10. CERTAIN COVENANTS OF LESSEE. Lessee covenants and
agrees with each of the Loan Participants, the Owner Participant, the
Indenture Trustee and the Owner Trustee, as follows:
(a) Further Assurances. Lessee will cause to be done, executed,
acknowledged and delivered all and every such further acts, conveyances and
assurances as the Owner Trustee, the Indenture Trustee or the Owner
Participant shall reasonably require for accomplishing the purposes of this
Agreement and the other Operative Documents; provided that any instrument
or other document so executed by Lessee will not expand any obligations or
limit any rights of Lessee in respect of the transactions contemplated by
any Operative Documents. Lessee, forthwith upon delivery of the Aircraft
under the Lease, shall cause the Aircraft to be duly registered, and at all
times thereafter to remain duly registered, in the name of the Owner
Trustee, except as otherwise required or permitted hereunder or under the
Lease, under the Transportation Code, or shall furnish to the Owner Trustee
such information as may be required to enable the Owner Trustee to make
application for such registration (at the expense of Lessee), and shall
promptly furnish to the Owner Trustee such information as may be required
to enable the Owner Trustee to timely file any reports required to be filed
by it as the lessor under the Lease or as the owner of the Aircraft with
any governmental authority (including tax authorities).
(b) Filings. Lessee, at its expense, will cause the Lease, all
Lease Supplements, all amendments to the Lease, the Trust Indenture, all
supplements and amendments to the Trust Indenture and this Agreement to be
promptly filed and recorded, or filed for recording, to the extent
permitted under the Transportation Code, or required under any other
applicable law. Upon the execution and delivery of the FAA Bill of Sale,
the Lease, the Lease Supplement covering the Aircraft, the Trust Supplement
and the Trust Indenture shall be filed for recording with the Federal
Aviation Administration in the following order of priority; First, the FAA
Bill of Sale, Second, the Lease, with the Lease Supplement covering the
Aircraft, the Trust Indenture and the Trust Supplement attached, and Third,
the Trust Indenture, with the Trust Supplement attached.
SECTION 11. OWNER FOR FEDERAL TAX PURPOSES. It is hereby agreed
among Lessee, the Owner Participant and the Owner Trustee that for Federal
income tax purposes the Owner Participant will be the owner of the Aircraft
to be delivered under the Lease and Lessee will be the lessee thereof, and
each party hereto agrees to characterize the Lease as a lease for Federal
income tax purposes.
SECTION 12. NOTICES; CONSENT TO JURISDICTION.
(a) Notices. All notices, demands, instructions and other
communications required or permitted to be given to or made upon any party
hereto shall be in writing and shall be personally delivered or sent by
registered or certified mail, postage prepaid, or by telecopier, or by
prepaid courier service, and shall be deemed to be given for purposes of
this Agreement on the day that such writing is delivered to the recipient
thereof in accordance with the provisions of this Section 12(a). Unless
otherwise specified in a notice sent or delivered in accordance with the
foregoing provisions of this Section 12(a), notices, demands, instructions
and other communications in writing shall be given to or made upon the
respective parties hereto at their respective addresses (or to their
respective telecopier numbers) as follows: (A) if to Lessee, the Owner
Trustee, the Pass Through Trustee, the Subordination Agent, the Indenture
Trustee or the Owner Participant, to the respective addresses set forth
below the signatures of such parties at the foot of this Agreement, or (B)
if to a subsequent Owner Participant, addressed to such subsequent Owner
Participant at such address as such subsequent Owner Participant shall have
furnished by notice to the parties hereto, or (C) if to any subsequent
Certificate Holder, addressed to such Certificate Holder at its address set
forth in the Equipment Note register maintained pursuant to Section 2.07 of
the Trust Indenture.
(b) Consent to Jurisdiction. Each of the parties hereto (A)
hereby irrevocably submits itself to the non-exclusive jurisdiction of the
United States District Court for the Southern District of New York and to
the non-exclusive jurisdiction of the Supreme Court of the State of New
York, New York County, for the purposes of any suit, action or other
proceeding arising out of this Agreement, the Lease, the Tax Indemnity
Agreement or any other Operative Document, the subject matter of any
thereof or any of the transactions contemplated hereby or thereby brought
by any party or parties thereto, or their successors or assigns, and (B)
hereby waives, and agrees not to assert, by way of motion, as a defense, or
otherwise, in any such suit, action or proceeding, to the extent permitted
by applicable law, that the suit, action or proceeding is brought in an
inconvenient forum, that the venue of the suit, action or proceeding is
improper, or that this Agreement, the Lease, the Tax Indemnity Agreement or
any other Operative Document or the subject matter of any thereof or any of
the transactions contemplated hereby or thereby may not be enforced in or
by such courts; provided, however that the foregoing shall not apply to the
right any party may have to seek removal of such suit, action or proceeding
to federal court or to seek consolidation of any separate actions, suits or
proceedings brought by one or more of the other parties in the same or
different jurisdictions. The agreement set forth in this Section 12(b) is
given solely for the benefit of the parties hereto and shall not inure to
the benefit of any other Person.
SECTION 13. CHANGE OF SITUS OF OWNER TRUST. The Owner Participant
agrees that if, at any time, the Trust Estate becomes subject to any Taxes
for which it is indemnified pursuant to Section 6(b) hereof and if, as a
consequence thereof, Lessee should request that the situs of the trust be
moved to another state in the United States from the state in which it is
then located, the situs of the trust may be moved and the Owner Participant
will take whatever action may be reasonably necessary to accomplish such
removal; provided that (A) Lessee shall provide such additional tax
indemnification as the Owner Participant and the Indenture Trustee may
reasonably request, (B) the rights and obligations under the Operative
Documents of the Owner Participant and the Indenture Trustee shall not be
altered as a result of the taking of such action, (C) the lien of the Trust
Indenture on the Trust Indenture Estate shall not be adversely affected by
such action, and (D) the Owner Participant and the Indenture Trustee shall
have received an opinion or opinions of counsel (reasonably satisfactory to
the Owner Participant), in scope, form and substance satisfactory to the
Owner Participant to the effect that (I) the trust, as thus removed, shall
remain a validly established trust, (II) any amendments to the Trust
Agreement necessitated by such removal shall have been duly authorized,
executed and delivered by the parties thereto and shall constitute the
valid and binding obligations of such parties, enforceable in accordance
with their terms, (III) such removal will not result in the imposition of,
or increase in the amount of, any Tax for which Lessee is not required to
indemnify the Owner Participant, the Indenture Trustee, the Owner Trustee
or the Trust Estate pursuant to Section 6(b) hereof (taking into account
any additional indemnification provided by Lessee pursuant to clause (A) of
this sentence), and (IV) if such removal involves the replacement of the
Owner Trustee, an opinion of counsel to such successor Owner Trustee in
form and substance reasonably satisfactory to the Owner Participant
covering the matters described in the opinion delivered pursuant to Section
4(a)(xiii) and such other matters as the Owner Participant may reasonably
request, and (E) Lessee shall indemnify and hold harmless the Owner
Participant and the Indenture Trustee on a net after-tax basis against any
and all reasonable and actual costs and expenses including reasonable
counsel fees and disbursements, registration fees, recording or filing fees
and taxes incurred by the Owner Trustee, the Owner Participant and the
Indenture Trustee in connection with such change of situs. Notwithstanding
anything to the contrary contained herein or in any other Operative
Document, the Owner Participant agrees with Lessee that it will not consent
to or direct a change in the situs of the Trust Estate without the prior
consent of Lessee unless the Owner Trustee, the Indenture Trustee, the
Certificate Holders and the Trust Estate each waives its right to any
indemnity payable by the Lessee under Section 6(b) as a result of the
change in situs.
SECTION 14. MISCELLANEOUS.
(a) Consents Under Lease. The Owner Participant covenants and
agrees that it shall not unreasonably withhold its consent to any consent
requested of the Owner Trustee, as Lessor, under the terms of the Lease
which by its terms is not to be unreasonably withheld by the Owner Trustee,
as Lessor.
(b) Survival. The representations, warranties, indemnities and
agreements of Lessee, the Owner Trustee, the Indenture Trustee, the
Subordination Agent, the Pass Through Trustee and the Owner Participant
provided for in this Agreement or any other Operative Document, and
Lessee's, the Owner Trustee's, the Indenture Trustee's, the Subordination
Agent's, the Pass Through Trustee's and the Owner Participant's obligations
under any and all thereof, shall survive the making available of the
respective Commitments by the Pass Through Trustee and the Owner
Participant, the delivery or return of the Aircraft, the transfer of any
interest of the Owner Participant in the Trust Estate or the Aircraft or
any Engine or the transfer of any interest by any Loan Participant in any
Equipment Note or the Trust Indenture Estate and the expiration or other
termination of this Agreement or any other Operative Document.
(c) Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
(d) Amendments and Waivers. Neither this Agreement nor any of
the terms hereof may be terminated, amended, supplemented, waived or
modified, except by an instrument in writing signed by the party against
which the enforcement of the termination, amendment, supplement, waiver or
modification is sought; and no such termination, amendment, supplement,
waiver or modification shall be effective unless a signed copy thereof
shall have been delivered to the Indenture Trustee and the Owner Trustee.
(e) Successors and Assigns. The terms of this Agreement shall
be binding upon, and inure to the benefit of, Lessee and, subject to the
terms of this Agreement, its successors and permitted assigns, the Pass
Through Trustee and its successors as Pass Through Trustee (and any
additional trustee appointed) under any of the Pass Through Trust
Agreements, the Owner Participant and, subject to the terms of this
Agreement, its successors and permitted assigns, each Certificate Holder
and its successors and registered assigns, the Indenture Trustee and its
successors as Indenture Trustee under the Trust Indenture and the Owner
Trustee and its successors as Owner Trustee under the Trust Agreement. The
terms of this Agreement shall inure to the benefit of the Liquidity
Provider, its successors and permitted assigns.
(f) Governing Law. THIS AGREEMENT SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
(g) Trust Capacity. The parties hereto agree that all of the
statements, representations, covenants and agreements made by the Owner
Trustee (when made in such capacity) contained in this Agreement and any
agreement referred to herein other than the Trust Agreement, unless
expressly otherwise stated, are made and intended only for the purpose of
binding the Trust Estate and establishing the existence of rights and
remedies which can be exercised and enforced against the Trust Estate.
Therefore, anything contained in this Agreement or such other agreements to
the contrary notwithstanding (except for any express provisions that the
Owner Trustee is responsible for in its individual capacity), no recourse
shall be had with respect to this Agreement or such other agreements
against the Owner Trustee in its individual capacity or against any
institution or person which becomes a successor trustee or co-trustee or
any officer, director, trustee, servant or direct or indirect parent or
controlling person or persons of any of them; provided, however, that this
Section 14(g) shall not be construed to prohibit any action or proceeding
against any party hereto for its own willful misconduct or grossly
negligent conduct for which it would otherwise be liable; and provided,
further, that nothing contained in this Section 14(g) shall be construed to
limit the exercise and enforcement in accordance with the terms of this
Agreement or such other agreements of rights and remedies against the Trust
Estate. The foregoing provisions of this Section 14(g) shall survive the
termination of this Agreement and the other Operative Documents.
(h) Section 1110. It is the intention of the parties hereto
that the Owner Trustee, as Lessor under the Lease, and the Indenture
Trustee, as assignee of such Owner Trustee's rights under the Lease
pursuant to the Trust Indenture, will be entitled to the benefits of 11
U.S.C. Section 1110 in the event of any reorganization of Lessee under
such Section.
SECTION 15. EXPENSES.
(a) Invoices And Payment. Each of the parties hereto shall
promptly submit to the Owner Trustee and Lessee for their prompt approval
(which shall not be unreasonably withheld) copies of invoices in reasonable
detail of the Transaction Expenses for which it is responsible for
providing information as they are received. The Owner Participant agrees
to transfer to the Owner Trustee promptly such amount as shall be necessary
in order to enable the Owner Trustee to pay, or if previously paid by
Lessee, to reimburse Lessee for, Transaction Expenses. To the extent of
funds received by it, the Owner Trustee agrees to pay all invoices of
Transaction Expenses that have been approved by it and Lessee promptly upon
receipt thereof and, to the extent such invoices have previously been paid
by Lessee, to reimburse Lessee promptly therefor. Notwithstanding the
foregoing, to the extent that Transaction Expenses exceed 2% of Lessor's
Cost, Lessee at its sole option shall have the right to pay directly any or
all Transaction Expenses which are in excess of 2% of Lessor's Cost.
(b) Payment of Other Expenses. In the event that the
transaction contemplated by this Participation Agreement fails to close as
a result of the Owner Participant's failure to negotiate in good faith or
to comply with the terms and conditions upon which its participation in the
transaction was predicated, the Owner Participant will be responsible for
all of its fees and expenses, including but not limited to the fees,
expenses and disbursements of its special counsel.
SECTION 16. REFINANCINGS.
(a) Refinancing Generally. So long as no Lease Event of
Default shall have occurred and be continuing, Lessee shall have the right
to refinance all (but not less than all) of the Equipment Notes no more
than three times by giving written notice to the Owner Participant and the
Owner Trustee that there shall be effected a voluntary redemption of the
Equipment Notes by the Owner Trustee, whereupon the Owner Participant
agrees to negotiate promptly in good faith to conclude an agreement with
Lessee as to the terms of such refinancing operation (including the terms
of any debt to be issued in connection with such refinancing); provided
that no such refinancing shall require an increase in the amount of the
Owner Participant's investment in the beneficial ownership of the Aircraft
or in the principal amount of the Equipment Notes; and provided further
that the Owner Participant may reject any terms that, in its reasonable
judgment, materially and adversely affect the Owner Participant.
Upon such agreement:
(1) within ten (10) Business Days after the reaching
of such agreement, the Owner Participant will deliver to
Lessee a certificate of an authorized representative of the
Owner Participant (the "Refinancing Certificate") setting
forth (i) (based upon information provided by Lessee and on
the agreement reached between Lessee and the Owner
Participant) the proposed date on which the outstanding
Equipment Notes will be redeemed and a description of any
new debt to be issued and the other aspects of such
refinancing that will be consummated (such date, the
"Refinancing Date") and (ii) the following information
calculated pursuant to the provisions of paragraph (6) of
this Section 16(a): (A) the proposed adjusted debt/equity
ratio, (B) the principal amount of debt to be issued by the
Owner Trustee on the Refinancing Date, (C) the amount, if
any, by which the Owner Participant's aggregate investment
in the beneficial interest in the Aircraft is to be
decreased and (D) the proposed revised schedules of Basic
Rent percentages, debt amortization, EBO Amount, Termination
Value percentages and other purchase option or termination
percentages. The Refinancing Certificate shall not provide
for a debt/equity ratio of more than [_:1]. Within fourteen
days of its receipt of the Refinancing Certificate, Lessee
may demand a verification pursuant to Exhibit E to the Lease
of the information set forth in the Refinancing Certificate.
Upon the acceptance by Lessee of the accuracy of the
information set forth in the Refinancing Certificate (or the
determination pursuant to such verification procedures), as
to the debt/equity ratio, the principal amount of debt to be
issued by the Owner Trustee on the Refinancing Date and the
revised Basic Rent percentages, debt amortization, EBO
Amount, Termination Value percentages and other buyout and
termination percentages (such information, whether as set
forth or as so determined, the "Refinancing Information")
the appropriate parties will take the actions specified in
paragraphs (2) through (5) below;
(2) the appropriate parties will enter into
appropriate documentation (which may involve an underwriting
agreement in connection with such sale or the sale of the
Owner Trustee's interest in the Trust Estate and/or the
Aircraft and its resale to the Owner Trustee) with the
institution or institutions to be named therein providing
for (A) (i) the issuance and sale by the Owner Trustee to
such institution or institutions on the Refinancing Date of
debt securities in an aggregate principal amount specified
in the Refinancing Information which amount shall be equal
to the aggregate principal amount of all Equipment Notes
outstanding on the Refinancing Date (such debt securities,
the "New Debt") except that the principal amount of New Debt
may exceed the principal amount of all outstanding Equipment
Notes in connection with the first refinancing under this
Section 16, (ii) the application of the proceeds of the sale
of the New Debt to the redemption of all such Equipment
Notes on the Refinancing Date and (iii) the payment of the
excess, if any, of such proceeds over the amounts necessary
to effect such redemption to the Owner Trustee and (B)
pursuant to which the parties to the refinancing transaction
(including the Owner Participant, the Lessee, the Owner
Trustee and the Loan Participants, but excluding the holders
of the Pass Through Certificates) make such representations,
warranties and covenants as Lessee and Owner Participant
reasonably require;
(3) Lessee shall give the notice to the Indenture
Trustee pursuant to Section 2.11 of the Trust Indenture, and
Lessee and the Owner Trustee will amend the Lease to provide
that (i) Basic Rent payable in respect of the period from
and after the Refinancing Date shall be as provided in the
Refinancing Information and (ii) amounts payable in respect
of EBO Amount and Termination Value from and after the
Refinancing Date shall be as provided in the Refinancing
Information;
(4) the Owner Trustee will enter into an agreement to
provide for the securing thereunder of the New Debt in like
manner as the Equipment Notes and will enter into such
amendments and supplements to the Trust Indenture (or such
new indenture or other security agreement) as may be
necessary to effect such refinancing;
(5) the Lessee shall pay all of the reasonable
expenses of such refinancing (including, but not limited to,
the reasonable fees, expenses and disbursements of counsel
and any placement or underwriting fees); and
(6) when calculating any of the information required
to be set forth in a Refinancing Certificate, the Owner
Participant shall make such calculations in a manner which
(A) maintains the Owner Participant's Net Economic Return
(except to the extent the assumptions referred are the
subject of the recalculations being conducted by the Owner
Participant), and (B) minimizes the Net Present Value of
Rents to Lessee to the extent possible consistent with
clause (A). All adjustments to Basic Rent, EBO Amount and
Termination Value shall also be in compliance with the tests
of Sections 4.02(5) and 4.07 of Rev. Proc. 75-28 and with
one or more of any "safe harbors" from characterization of
the Lease as a "disqualified leaseback or long-term
agreement" set forth in Section 467 of the Code (or any
proposed, temporary or final regulations thereunder
applicable to the Lease) or, if no "safe harbor" exists,
made in a manner to avoid characterization of the Lease as a
"disqualified leaseback or long-term agreement" within the
meaning of Section 467 of the Code.
(b) Limitation on Redemption. The Equipment Notes shall not be
subject to voluntary redemption by the Owner Trustee without the consent of
Lessee except as set forth in Section 2.14 of the Trust Indenture.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective officers thereunto duly authorized
as of the day and year first above written.
US AIRWAYS, INC.,
Lessee
By:__________________________________
Name:
Title:
Address: 2345 Crystal Drive
Arlington, Virginia 22227
Attn:
Telecopy:
[OWNER PARTICIPANT],
as Owner Participant
By:_________________________________
Name:
Title:
Address: ___________________________
___________________________
___________________________
Attn:
STATE STREET BANK AND
TRUST COMPANY,
not in its individual capacity
except as otherwise provided herein,
but solely as Indenture Trustee
By:_________________________________
Name:
Title:
Address: Two International Place, 4th Floor
Boston, Massachusetts 02110
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not in its individual capacity, except as
expressly provided herein, but solely as
Owner Trustee
By:_________________________________
Name:
Title:
Address: 79 South Main Street, 3rd Floor
Salt Lake City, Utah 84111
STATE STREET BANK AND TRUST
COMPANY, not in its individual capacity,
except as otherwise provided herein, but
solely as Pass Through Trustee
By:_________________________________
Name:
Title:
Address: Two International Place, 4th Floor
Boston, Massachusetts 02110
STATE STREET BANK AND
TRUST COMPANY, not in its individual
capacity, except as otherwise provided
herein, but solely as Subordination Agent
By:_________________________________
Name:
Title:
Address: Two International Place, 4th Floor
Boston, Massachusetts 02110
SCHEDULE I
NAMES AND ADDRESSES
Lessee: US Airways, Inc.
U.S. MAIL
2345 Crystal Drive
Arlington, Virginia 22227
OVERNIGHT COURIER
2345 Crystal Drive
Arlington, Virginia 22227
Attn: Assistant Treasurer
Telecopy No.: (703) 872-5936
WIRE TRANSFER
PNC Bank, N.A.
ABA No. 043-000-096
Acct. No. 214-7591
Reference: US Airways, Inc.
Owner Participant: ____________________________
U.S. Mail
____________________________
____________________________
Attn:_______________________
Telecopy No.:_______________
OVERNIGHT COURIER
____________________________
____________________________
Attn:
Telecopy No.: (___) ___-____
WIRE TRANSFER
ABA No._________________
Acct. No._________________
Indenture Trustee, State Street Bank and Trust Company
Pass Through
Trustee and
Subordination
Agent: U.S. MAIL
Two International Place, 4th Floor
Boston, Massachusetts 02110
Attn: Corporate Trust Department
Ruth A. Smith
Telecopy No.: (617) 664-5371
OVERNIGHT COURIER
Two International Place, 4th Floor
Boston, Massachusetts 02110
Attn: Corporate Trust Department
Ruth A. Smith
Telecopy No.: (617) 664-5371
WIRE TRANSFER
State Street Bank and Trust Company
ABA No. 011-00-0028
for credit to State Street Bank and Trust Company
Acct. No. 9903-990-1
Attn: Corporate Trust Department
Melissa Lewandowski
Reference: US Airways, Inc. 1998-1/US Airways, Inc.
Trust No. N7__UW
Owner Trustee: First Security Bank, National Association
U.S. MAIL
79 South Main Street, 3rd Floor
Salt Lake City, Utah 84111
Attn: Corporate Trust Department
Telecopy No.: (801) 246-5053
OVERNIGHT COURIER
79 South Main Street, 3rd Floor
Salt Lake City, Utah 84111
Attn: Corporate Trust Department
Telecopy No.: (801) 246-5053
WIRE TRANSFER
First Security Bank, National Association
ABA No. 124000012
Acct. No. 051-0922115
Re: US Airways, Inc. Trust No. N7__UW
SCHEDULE II
COMMITMENTS
PERCENTAGE OF
PURCHASERS INTEREST RATE
LESSOR'S COST AND MATURITY PURCHASE PRICE
-------------- ------------- --------------
US Airways, Inc.
Pass Through Trust:
1998-1A 6.85% Series A Secured $__________
_______% Certificates due July 30,
2019
1998-1B 7.35% Series B Secured $__________
_______% Certificates due July 30,
2019
1998-1C 6.82% Series C Secured $__________
______% Certificates due January 30,
2016
OWNER PARTICIPANT EQUITY INVESTMENT
_____% $__________
100% Total Commitments $__________
SCHEDULE III
PASS THROUGH TRUST AGREEMENT AND PASS THROUGH TRUST SUPPLEMENTS
Pass Through Trust Agreement, dated as of December 4, 1998, between US
Airways, Inc. and State Street Bank and Trust Company, as supplemented by
Trust Supplement No. 1998-1A, dated as of December 14, 1998, as
supplemented by Trust Supplement No. 1998-1B, dated as of December 14,
1998, and as supplemented by Trust Supplement No. 1998-1C, dated as of
December 14, 1998.
EXHIBIT A
TO PARTICIPATION AGREEMENT
(US Airways, Inc. Trust No. N7__UW)
SCHEDULE OF COUNTRIES FOR REREGISTRATION
Australia Malta
Austria Mexico
Bahamas Netherlands
Belgium New Zealand
Bermuda Norway
Brazil People's Republic of China
Canada Philippines
Denmark Portugal
Finland Republic of China (Taiwan)*
France Singapore
Germany South Korea
Grenada Spain
Greece Sweden
Iceland Switzerland
India Thailand
Ireland Tobago
Italy Trinidad
Jamaica Turkey
Japan United Kingdom
Luxembourg Venezuela
Malaysia
*So long as on the date of registration such country and the
United States have diplomatic relations at least as good as those in effect
on the Delivery Date.
Form Definitions
N7__UW
ANNEX A
DEFINITIONS
(US Airways, Inc. Trust No. N7__UW)
The following terms shall have the following meanings for all
purposes of the Operative Documents referred to below, unless otherwise
defined in an Operative Document or the context thereof shall otherwise
require and such meanings shall be equally applicable to both the singular
and the plural forms of the terms herein defined. In the case of any
conflict between the provisions of this Annex A and the provisions of the
main body of any Operative Document, the provisions of the main body of
such Operative Document shall control the construction of such Operative
Document.
Except as otherwise provided herein, all references to any
agreement defined in this Annex A shall be deemed to include such agreement
as the same may from time to time be amended, supplemented or otherwise
modified in accordance with its terms and, where applicable, the terms of
the other Operative Documents. All references to statutes, rules and
regulations shall be deemed to include all amendments, replacements and
successors thereto unless otherwise specified herein.
"Acceptable Alternate Engine" means (i) a CFM International Model
56-5 (or improved type) engine having not less than 1,500 cycles left
before such engine's next scheduled maintenance overhaul or (ii) an engine
of the same or another manufacturer suitable for use on the Airframe and
having a value and utility equal to or greater than a CFM Model 56-5 type
engine, assuming such engine is in the condition required by the Lease.
"Acceptance Certificate" has the meaning specified for such term
in Section 4(a)(v) of the Participation Agreement.
"Actual Knowledge" means, (i) as it applies to the Owner Trustee
or Indenture Trustee, as the case may be, actual knowledge of a Responsible
Officer in the Trust Office of the Owner Trustee or in the Corporate Trust
Office of the Indenture Trustee, as the case may be, and (ii) as it applies
to the Owner Participant, actual knowledge of a vice president or other
higher officer of the Owner Participant having responsibility for the
transactions contemplated by the Operative Documents.
"Additional Insured" means Lessor, in its individual capacity and
as owner of the Aircraft, the Indenture Trustee, the Owner Participant, the
Pass Through Trustee, the Liquidity Provider, Lessee in its capacity as
sublessor under any Sublease, and each of their respective Affiliates,
successors and permitted assigns, and the respective directors, officers,
employees and agents of the foregoing.
"Additional Parts" has the meaning specified for such term in
Section 8(c) of the Lease.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control
with such Person. For the purposes of this definition, "control"
(including "controlled by" and "under common control with") shall mean the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person whether through the ownership of
voting securities or by contract or otherwise.
"AIFS" means Airbus Industrie Financial Services, a corporation
formed under the laws of Ireland.
"Aircraft" means the Airframe to be delivered and leased under
the Lease (or any airframe from time to time substituted for such Airframe
pursuant to Section 10(a) of the Lease) together with the two Engines
initially leased under the Lease (or any engine substituted for either of
such Engines pursuant to the terms of the Lease), in each case as specified
in the Applicable Lease Supplement, whether or not any of such initial or
substituted Engines may from time to time be installed on such initial or
substituted Airframe or may be installed on any other airframe or on any
other aircraft.
"Airframe" means: (i) the Airbus aircraft (except Engines or
engines from time to time installed thereon) specified in the initial Lease
Supplement, which aircraft shall be leased by Lessor to Lessee under the
Lease and under such Lease Supplement, and any aircraft (except Engines or
engines from time to time installed thereon) which may from time to time be
substituted for such aircraft (except Engines or engines from time to time
installed thereon) pursuant to clause (ii) of the first paragraph of
Section 10(a) of the Lease; and (ii) any and all Parts (A) so long as the
same shall be incorporated or installed in or attached to such aircraft
(except Engines or engines from time to time installed thereon), or (B) so
long as title thereto shall remain vested in Lessor in accordance with the
terms of Section 8 of the Lease after removal from such aircraft (except
Engines or engines from time to time installed thereon); provided, however,
that at such time as an aircraft (except Engines or engines from time to
time installed thereon) shall be deemed part of the property leased under
the Lease in substitution for the Airframe pursuant to the applicable
provisions of the Lease, the replaced Airframe shall cease to be an
Airframe under the Lease; provided further that the Airframe shall not
include Passenger Convenience Equipment.
"Amortization Amount" means, with respect to any Principal Amount
Repayment Date, the amount set forth opposite such Date as the Principal
Amount to be repaid on the Amortization Schedule.
"Amortization Schedule" means the amortization schedule for the
Equipment Notes delivered pursuant to Section 2.02 of the Trust Indenture.
"Applicable Rate" means as of any date the weighted average of
the interest rates borne by the Equipment Notes then outstanding and, if no
Equipment Notes shall be outstanding, the Base Rate.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as
amended, or any subsequent legislation that amends, supplements or
supersedes such provisions.
"Base Rate" means the rate of interest announced publicly by
Chase Manhattan, N.A. in New York, New York from time to time as its base
rate.
"Basic Rent" means, for the Basic Term, the rent payable for the
Aircraft pursuant to Section 3(b) of the Lease as adjusted as provided in
Section 3(c) of the Lease but subject always to the provisions of Section
3(c)(v) of the Lease and, for any Renewal Term, Basic Rent determined
pursuant to Section 19 of the Lease.
"Basic Term" means the term for which the Aircraft is leased
pursuant to Section 3(a) of the Lease, commencing on the Delivery Date and
ending on the Basic Term Expiration Date.
"Basic Term Expiration Date" means , or such
earlier date as the Lease may be terminated in accordance with the
provisions thereof.
"Bill of Sale" means a full warranty bill of sale covering the
Aircraft, executed by Lessee in favor of the Owner Trustee, dated the
Delivery Date, specifically referring to the Airframe and each Engine,
which Bill of Sale shall contain, among other things, a statement that such
Bill of Sale thereby conveys to the Owner Trustee good title to the
Airframe and each Engine described in such Bill of Sale, free and clear of
all liens, encumbrances and rights of others except Permitted Liens.
"Burdensome Termination Event" means an event which shall be
deemed to have occurred if (A) one or more events have occurred which give
rise to an obligation on the part of Lessee to pay or indemnify any costs
or expenses under Sections 6(b) or 6(c) of the Participation Agreement or
under the Tax Indemnity Agreement if the aggregate amount of such indemnity
or other payments would exceed (as to future payments on a present value
basis discounted at the Debt Rate) 2.50% of Lessor's Cost or (B) Lessee
plans non-severable improvements to the Aircraft which (i) are necessary or
desirable in Lessee's sole discretion, (ii) are expected to cost in excess
of $2.5 million and (iii) the Owner Participant will not permit to be
financed under similar terms then available in the market for similar
transaction.
"Business Day" means any day other than a Saturday or Sunday or a
day on which commercial banks are required or authorized to close in the
City of New York, New York; Boston, Massachusetts, Pittsburgh, Pennsylvania
or the city and state where the office of the Owner Trustee is located.
"Cash Equivalents" means (i) direct obligations of the United
States of America and agencies guaranteed by the United States government
having a final maturity of ninety (90) days or less from date of purchase
thereof; (ii) certificates of deposit issued by, bankers' acceptances of,
or time deposits with, any bank, trust company or national banking
association incorporated under the laws of the United States of America or
one of the states thereof having combined capital and surplus and retained
earnings as of its last report of condition of at least $500,000,000 and
having a rating of Aa or better by Moody's Investors Service, Inc.
("Moody's") or AA or better by Standard & Poor's Corporation ("S&P") and
having a final maturity of ninety (90) days or less from date of purchase
thereof; and (iii) commercial paper of any holding company of a bank, trust
company or national banking association described in (ii) and commercial
paper of any corporation or finance company incorporated or doing business
under the laws of the United States of America or any state thereof having
a rating assigned to such commercial paper of A1 by S&P or P1 by Moody's
and having a final maturity of ninety (90) days or less from the date of
purchase thereof; provided, however, that the aggregate amount at any one
time so invested in certificates of deposit issued by any one bank shall
not be in excess of 5% of such bank's capital and surplus.
"Certificated Air Carrier" means a Citizen of the United States
holding a carrier operating certificate issued by the Secretary of
Transportation pursuant to Chapter 447 of Title 49, United States Code, for
aircraft capable of carrying ten or more individuals or 6,000 pounds or
more of cargo or that otherwise is certified or registered to the extent
required to fall within the purview of 11 U.S.C. Section 1110 or any
analogous successor provision of the Bankruptcy Code.
"Citizen of the United States" has the meaning specified for such
term in Section 40102(a)(15) of Title 49 of the United States Code or any
similar legislation of the United States of America enacted in substitution
or replacement therefor.
"Civil Reserve Air Fleet Program" means the Civil Reserve Air
Fleet Program currently administered by the United States Air Force Air
Mobility Command pursuant to Executive Order No. 11490, as amended, or any
substantially similar program.
"Class A Liquidity Provider" means ABN AMRO Bank, N.V., a bank
organized under the laws of the Netherlands acting through its Chicago
branch, or any successor thereto.
"Class B Liquidity Provider" means ABN AMRO Bank, N.V., a bank
organized under the laws of the Netherlands acting through its Chicago
branch, or any successor thereto.
"Class C Liquidity Provider" means ABN AMRO Bank, N.V., a bank
organized under the laws of the Netherlands acting through its Chicago
branch, or any successor thereto.
"Class C Purchase Agreement" means that certain Purchase
Agreement, dated as of December 14, 1998, by and between Lessee and AIFS.
"Class C Special Indemnity Event" means the existence of any
condition or event which, pursuant to Section 3 of the Registration
Agreement, requires US Airways, Inc. to pay liquidated damages to the US
Airways Pass Through Trust 1998-C in accordance with such Section 3,
subject to the last sentence of the first paragraph of Section 3 of the
Registration Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commitment" means the commitment pursuant to the Participation
Agreement of a Pass Through Trustee or of the Owner Participant, as the
case may be, to finance the Owner Trustee's payment of Lessor's Cost for
the Aircraft.
"Consent and Agreement" means the Consent and Agreement (US
Airways, Inc. Trust No. N7__UW), dated as of the date of the Lease,
executed by the Seller, as the same may be amended, modified or
supplemented from time to time in accordance with the applicable provisions
thereof.
"Continuous Stay Period" has the meaning specified for such term
in Section 4.04(a) of the Trust Indenture.
"Corporate Trust Office" means the principal office of the
Indenture Trustee located at Two International Place, 4th Floor, Boston,
Massachusetts 02110, Attention: Corporate Trust Department, or such other
office at which the Indenture Trustee's corporate trust business shall be
administered which the Indenture Trustee shall have specified by notice in
writing to Lessee, the Owner Trustee, the Loan Participants and each Note
Holder.
"Debt" means any liability for borrowed money, or any liability
for the payment of money in connection with any letter of credit
transaction, or other liabilities evidenced or to be evidenced by bonds,
debentures, notes or other similar instruments or for the deferred purchase
price of property, goods or services.
"Debt Rate" means, with respect to any Series, the rate per annum
specified for such Series under the heading "Interest Rate" in Schedule I
to the Trust Indenture.
"Default" means any event or condition that with the giving of
notice or the lapse of time or both would become an Event of Default or
Lease Event of Default (excluding Lease Events of Default related to
Excluded Payments).
"Delivery Date" means the date of the initial Lease Supplement
for the Aircraft, which date shall be the date the Aircraft is leased by
Lessor to Lessee and accepted by Lessee under the Lease.
"Delivery Notice" means the notice of delivery delivered pursuant
to Section 2(c) of the Participation Agreement.
"Depositaries" means collectively, Credit Suisse First Boston,
New York Branch and Citibank, N.A.
"Depreciation Period" means the period commencing on the Delivery
Date and ending at the end of the calendar year during which the seventh
(7th) anniversary of the Delivery Date occurs, or such earlier date as the
Lease may be terminated in accordance with the provisions of the Lease.
"Designated Interest Rate" has the meaning specified for such
term in Section 2.02 of the Trust Indenture.
"Dollars" and "$" mean the lawful currency of the United States
of America.
"EBO Amount" means the applicable amount for the relevant EBO
Date set forth on Exhibit D to the Lease.
"EBO Date" means the applicable date set forth on Exhibit D to
the Lease.
"Enforcement Date" has the meaning specified for such term in
Section 4.03 of the Trust Indenture.
"Engine" means (i) each of the two CFM International 56-5 type
engines listed by manufacturer's serial number in the initial Lease
Supplement, whether or not from time to time thereafter installed on the
Airframe or installed on any other airframe or on any other aircraft; and
(ii) any Acceptable Alternate Engine that may from time to time be
substituted, pursuant to the terms of the Lease, for either of such two
engines, together in each case with any and all Parts incorporated or
installed in or attached thereto or any and all Parts removed therefrom so
long as title thereto shall remain vested in Lessor in accordance with the
terms of Section 8 of the Lease after removal from such Engine; provided,
however, that at such time as an engine shall be deemed part of the
property leased under the Lease in substitution for an Engine pursuant to
the applicable provisions of the Lease, the replaced Engine shall cease to
be an Engine under the Lease. The term "Engines" means, as of any date of
determination, all Engines then leased under the Lease.
"Equipment Note Holder" has the meaning specified for such term
in Section 2.07 of the Trust Indenture.
"Equipment Notes" means and include any Equipment Notes issued
under the Trust Indenture, and issued in exchange therefor or replacement
thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of the Participation Agreement and any subsequent
provisions of ERISA, amendatory thereof, supplemental thereto or
substituted therefor.
"Event of Default" (i) when such term is used in or with respect
to the Lease has the meaning specified for such term in Section 14 of the
Lease and (ii) when such term is used in or with respect to the Trust
Indenture has the meaning specified for such term in Section 4.02 of the
Trust Indenture.
"Event of Loss" means, with respect to the Aircraft, Airframe or
any Engine, any of the following events with respect to such property: (i)
the loss of such property or of the use thereof due to the destruction of
or damage to such property which renders repair uneconomic or which renders
such property permanently unfit for normal use by Lessee (or any Sublessee)
for any reason whatsoever; (ii) any damage to such property which results
in an insurance settlement with respect to such property on the basis of a
total loss, or a constructive or compromised total loss; (iii) the theft or
disappearance of such property for a period in excess of one hundred eighty
(180) days or, if earlier, the expiration of the Term; (iv) the requisition
for use of such property by any governmental authority (other than a
requisition for use by the United States Government or any government of
registry of the Aircraft or any agency or instrumentality thereof) that
shall have resulted in the loss of possession of such property by Lessee
(or any Sublessee) for a period in excess of one hundred eighty (180)
consecutive days or, if earlier, the expiration of the Term; (v) the
requisition for use by the United States Government or any government of
registry of the Aircraft or any instrumentality or agency thereof, which
shall have occurred during the Basic Term (or any Renewal Term) and shall
have continued for a period of thirty (30) days beyond the Term, provided,
however, that no Event of Loss pursuant to this clause (v) shall exist if
Lessor shall have furnished to Lessee the written notice specified in
Section 10(d) of the Lease; (vi) condemnation, confiscation, requisition or
taking of title of the Aircraft or the Airframe for more than thirty (30)
days, or if earlier, the expiration of the Term; (vii) as a result of any
law, rule, regulation, order or other action by the Federal Aviation
Administration or other governmental body of the government of registry of
the Aircraft having jurisdiction, the use of such property in the normal
course of the business of air transportation shall have been prohibited for
a period of one hundred eighty (180) consecutive days, unless Lessee (or
Sublessee) shall have undertaken and shall be diligently carrying forward
all steps which are necessary or desirable to permit the normal use of such
property by Lessee (or such Sublessee), but in any event an "Event of Loss"
shall occur if such "grounding" extends for a period of more than three
hundred sixty (360) days (or, if earlier, the expiration of the Term);
provided that no Event of Loss shall be deemed to occur if such "grounding"
is applicable to Lessee's entire fleet of A319 aircraft and Lessee, prior
to the expiration of one year from the prohibition of such use, shall have
conformed at least one such aircraft in its fleet to the requirements of
any such law, rule, regulation, order or other action and commenced regular
commercial use of the same in such jurisdiction and shall be diligently
carrying forward, on a non-discriminatory basis, all steps which are
necessary or desirable to permit the normal use of the Aircraft by Lessee
(or such Sublessee), but in any event an "Event of Loss" shall be deemed to
have occurred if such use shall have been prohibited for a period of two
consecutive years or such use shall be prohibited at the expiration of the
Term; and (viii) with respect to an Engine only, any divestiture of title
to or interest in an Engine or any event with respect to an Engine that is
deemed to be an Event of Loss with respect to such Engine pursuant to
Section 7(b) of the Lease. An Event of Loss with respect to the Aircraft
shall be deemed to have occurred if an Event of Loss occurs with respect to
the Airframe.
"Excluded Payments" means (i) indemnity payments paid or payable
by Lessee to or in respect of the Owner Participant or the Owner Trustee in
its individual capacity, their respective Affiliates, successors and
permitted assigns and their directors, officers, employees, servants and
agents (collectively, the "Owner Indemnitees") pursuant to Sections 6(b),
6(c), 15 or 16 of the Participation Agreement, (ii) proceeds of public
liability insurance in respect of the Aircraft payable as a result of
insurance claims made, or losses suffered, by the Owner Trustee or the
Indenture Trustee in their respective individual capacities or by any of
the Owner Indemnitees, (iii) proceeds of insurance maintained with respect
to the Aircraft by the Owner Participant (whether directly or through the
Owner Trustee) or any other Owner Indemnitee and permitted under Section 11
of the Lease in Exhibit H thereto, (iv) all payments required to be made
under the Tax Indemnity Agreement by Lessee and all payments of
Supplemental Rent by Lessee in respect of any amounts payable under the Tax
Indemnity Agreement, (v) fees payable to the Owner Trustee or the Indenture
Trustee, (vi) provided that the Equipment Notes shall have been duly
assumed by Lessee pursuant to Section 2.13 of the Trust Indenture, the
amounts payable to the Owner Trustee pursuant to Section 19(b) of the Lease
plus all reasonable expenses incurred by the Owner Trustee and the Owner
Participant in connection with such assumption, as applicable, (vii)
interest accrued on any of the above, and (viii) any right to enforce the
payment of any amount described in clauses (i) through (vii) above
(provided the rights referred to in this clause (viii) shall not be deemed
to include the exercise of any remedies provided for in the Lease other
than the right to sue for specific performance of any covenant or to make
such payment or to sue for damages in respect of the breach of any such
covenant) and the right to declare an Event of Default in respect of any of
the foregoing amounts. Solely for purposes of the Granting Clause of the
Trust Indenture, amounts payable to AIFS under Section 6(d) of the
Participation Agreement shall be considered Excluded Payments.
"Expenses" means all liabilities, obligations, losses, damages,
settlements, penalties, claims, actions, suits, costs, expenses and
disbursements (including, without limitation, reasonable fees and
disbursements of legal counsel, accountants, appraisers, inspectors or
other professionals and reasonable costs of investigation).
"Fair Market Renewal Term" has the meaning specified for such
term in Section 19(a)(2) of the Lease.
"FAA Bill of Sale" means a bill of sale for the Aircraft on AC
Form 8050-2 or such other form as may be approved by the Federal Aviation
Administration on the Delivery Date for the Aircraft, executed by Lessee in
favor of the Owner Trustee and dated the Delivery Date.
"Federal Aviation Administration" and "FAA" mean the United
States Federal Aviation Administration and any agency or instrumentality of
the United States government succeeding to their functions.
"Federal Funds Rate" means a fluctuating interest rate per annum
in effect from time to time, which rate per annum shall at all times be
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank of
New York, or if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day for such
transactions received by State Street from three Federal funds brokers of
recognized standing selected by it.
"Fixed Renewal Term" has the meaning specified for such term in
Section 19(a)(1) of the Lease.
"Foreign Air Carrier" means any air carrier which is not a U.S.
Air Carrier and which performs, or contracts for the performance of,
maintenance, preventative maintenance and inspections for the Aircraft,
Airframe and/or any Engine or engine to standards which are approved by, or
which are substantially equivalent to those required by, the Federal
Aviation Administration or any Permitted Foreign Air Authority.
"Government Entity" means (a) any federal, state, provincial or
similar government, and any body, board, department, commission, court,
tribunal, authority, agency or other instrumentality of any such government
or otherwise exercising any executive, legislative, judicial,
administrative or regulatory functions of such government or (b) any other
government entity having jurisdiction over any matter contemplated by the
Operative Documents or relating to the observance or performance of the
obligations of any of the parties to the Operative Documents.
"Indemnitee" means (i) the Owner Trustee, in its individual
capacity and as trustee under the Trust Agreement, (ii) the Indenture
Trustee, (iii) the Owner Participant, (iv) the Trust Estate, (v) the Loan
Participants and each other Note Holder, (vi) the Subordination Agent,
(vii) the Liquidity Provider, (viii) the Pass Through Trustees, (ix) each
Affiliate of the Persons described in clauses (i) through (iv), inclusive,
(x) each Affiliate of the Persons described in clauses (vi), (vii) and
(viii), (xi) the respective directors, officers, employees, agents and
servants of each of the Persons described in clauses (i) through (viii),
inclusive, (xii) the successors and permitted assigns of the Persons
described in clauses (i) through (iv), inclusive, and (xiii) the successors
and permitted assigns of the Persons described in clauses (v), (vi), (vii)
and (viii).
"Indemnity Agreements" means each of (i) that certain Indemnity
Agreement, dated as of December 14, 1998, between Citibank, N.A. and Lessee
and (ii) that certain Indemnity Agreement, dated as of December 14, 1998,
between Credit Suisse First Boston, New York Branch, and Lessee.
"Indenture Agreements" means the Participation Agreement, the
Lease, the Purchase Agreement, the Purchase Agreement Assignment, the
Consent and Agreement, the Bills of Sale and any other contract, agreement
or instrument from time to time assigned or pledged under the Trust
Indenture.
"Indenture Event of Default" has the meaning given the term
"Event of Default" in the Trust Indenture.
"Indenture Excess Amount" has the meaning specified for such term
in Section 2.03(b) of the Trust Indenture.
"Indenture Indemnitees" means (i) State Street and the Indenture
Trustee, (ii) each separate or additional trustee appointed pursuant to the
Trust Indenture, (iii) the Subordination Agent, (iv) the Liquidity
Provider, (v) each Pass Through Trustee, and (vi) each of the respective
directors, officers, employees, agents and servants of each of the Persons
described in clauses (i) through (v), inclusive.
"Indenture Trustee" means State Street Bank and Trust Company, a
Massachusetts trust company, not in its individual capacity, but solely as
Indenture Trustee, and any entity which may from time to time be acting as
indenture trustee under the Trust Indenture.
"Indenture Trustee Documents" means the Participation Agreement
and the Trust Indenture and any other agreements between the Indenture
Trustee and any other party to the Participation Agreement relating to the
Transactions, delivered on the Delivery Date.
"Indenture Trustee Event" means either (i) the Equipment Notes
shall have become due and payable pursuant to Section 4.04(b) of the Trust
Indenture, (ii) the Indenture Trustee has taken action or notified Owner
Trustee that it intends to take action to foreclose the Lien of the Trust
Indenture or otherwise commence the exercise of any significant remedy
under the Trust Indenture or the Lease or (iii) in the event of a
reorganization proceeding involving Lessee under Chapter 11 of the
Bankruptcy Code, (A) the trustee in such proceeding or Lessee not assuming
or agreeing to perform its obligations under the Lease, as contemplated
under Section 1110, during the 60-day period under Section 1110(a)(1)(A) of
the Bankruptcy Code (or such longer period as may apply under Section
1110(b) of the Bankruptcy Code) or (B) at any time after agreeing to
perform or assuming such obligations, such trustee or Lessee ceasing to
perform such obligations with the result that the Continuous Stay Period
comes to an end.
"Indenture Trustee's Liens" means any Lien which arises as a
result of (A) claims against the Indenture Trustee not related to its
interest in the Aircraft or the administration of the Trust Estate pursuant
to the Trust Indenture, (B) acts of the Indenture Trustee not permitted by,
or failure of the Indenture Trustee to take any action required by, the
Operative Documents to the extent such acts arise or such failure arises
from or constitutes gross negligence or willful misconduct, (C) claims
against the Indenture Trustee relating to Taxes or Expenses which are
excluded from the indemnification provided by Section 6 of the
Participation Agreement pursuant to said Section 6, or (D) claims against
the Indenture Trustee arising out of the transfer by the Indenture Trustee
of all or any portion of its interest in the Aircraft, the Trust Estate,
the Trust Indenture Estate or the Operative Documents other than a transfer
of the Aircraft pursuant to Section 9, 10 or 19 of the Lease or Article IV
or V of the Trust Indenture, or a transfer of the Aircraft pursuant to
Section 15 of the Lease while an Event of Default is continuing and prior
to the time that the Indenture Trustee has received all amounts due
pursuant to the Trust Indenture.
"Intercreditor Agreement" means that certain Intercreditor
Agreement, dated as of the date of the Lease, among the Pass Through
Trustees, the Liquidity Provider and the Subordination Agent.
"Law" means (a) any constitution, treaty, statute, law,
regulation, order, rule or directive of any Government Entity, and (b) any
judicial or administrative interpretation or application of, or decision
under, any of the foregoing.
"Lease" means that certain Lease Agreement (US Airways, Inc.
Trust No. N7__UW), dated as of _________ __, 199_, entered into by the
Owner Trustee and Lessee concurrently with the execution and delivery of
the Trust Indenture, as said Lease Agreement has been, or may from time to
time be, supplemented or amended, or the terms thereof waived or modified,
to the extent permitted by, and in accordance with, the terms of the Trust
Indenture. The term "Lease" shall also include each Lease Supplement from
time to time entered into pursuant to the terms of the Lease.
"Lease Default" means any event which with the giving of notice
or the lapse of time or both would become a Lease Event of Default.
"Lease Event of Default" means an "Event of Default" as defined
in Section 14 of the Lease.
"Lease Period" means each of the consecutive periods throughout
the Basic Term and any Renewal Term ending on a Lease Period Date, the
first such period commencing on and including the Delivery Date.
"Lease Period Date" means _____ 30, 199_ and each succeeding
_________ 30 and _________ 30, to and including the last such date in the
Term.
"Lease Supplement" means a Lease Supplement, substantially in the
form of Exhibit A to the Lease, to be entered into between Lessor and
Lessee on the Delivery Date for the purpose of leasing the Aircraft under
and pursuant to the terms of the Lease Agreement, and any subsequent Lease
Supplement entered into in accordance with the terms of the Lease.
"Lessee" means US Airways, Inc., a Delaware corporation.
"Lessee Documents" means the Participation Agreement, the Lease,
the Lease Supplement covering the Aircraft, the Purchase Agreement (insofar
as it relates to the Aircraft), the FAA Bill of Sale, the Bill of Sale, the
Purchase Agreement Assignment, the Tax Indemnity Agreement and each other
agreement between the Lessee and any other party to the Lease Agreement
delivered on the Delivery Date.
"Lessor" means First Security Bank, National Association, not in
its individual capacity, but solely as Owner Trustee, or any of its
successors and permitted assigns acting as lessor under the Lease.
"Lessor Liens" means any Lien or disposition of title or interest
arising as a result of (i) claims against Lessor, First Security Bank,
National Association, in its individual capacity, or the Owner Participant
not related to the transactions contemplated by the Operative Documents,
(ii) any act or omission of the Owner Participant, Lessor, or First
Security Bank, National Association, in its individual capacity, which is
not related to the transactions contemplated by the Operative Documents or
is in violation of any of the terms of the Operative Documents, (iii)
claims against the Owner Participant, Lessor, or First Security Bank,
National Association, in its individual capacity, with respect to Taxes or
Expenses against which Lessee is not required to indemnify the Owner
Participant, Lessor or First Security Bank, National Association, in its
individual capacity, pursuant to Section 6 of the Participation Agreement
or (iv) claims against Lessor or the Owner Participant arising out of any
transfer by Lessor or the Owner Participant of all or any portion of the
respective interests of Lessor or the Owner Participant in the Aircraft,
the Trust Estate or the Operative Documents other than the transfer of
possession of the Aircraft by Lessor pursuant to the Lease, the transfer
pursuant to the Trust Indenture or a transfer of the Aircraft pursuant to
Section 9, 10 or 19 of the Lease or pursuant to the exercise of the
remedies set forth in Section 15 of the Lease.
"Lessor's Cost" for the Aircraft means the amount denominated as
such in Exhibit B to the Lease.
"Lien" means any mortgage, pledge, lien, charge, claim,
encumbrance, lease, sublease, sub-sublease or security interest.
"Liquidity Facilities" means the three Revolving Credit
Agreements between the Subordination Agent, as borrower, and the Liquidity
Provider, and any replacement thereof, in each case as the same may be
amended, modified or supplemented.
"Liquidity Provider" means ABN AMRO Bank, N.V., a bank organized
under the laws of the Netherlands acting through its Chicago branch, as
Class A Liquidity Provider, Class B Liquidity Provider and Class C
Liquidity Provider under the Liquidity Facilities, or any successor
thereto.
"Loan Participant" means each Purchaser and its respective
successors and registered assigns, including any Note Holder.
"Loan Participant Liens" means any Lien which arises from acts or
claims against any Loan Participant not related to the transactions
contemplated by the Operative Documents.
"Loss Payment Date" has the meaning specified for such term in
Section 10(a) of the Lease.
"Majority in Interest of Note Holders" as of a particular date of
determination means the holders of more than a majority in aggregate unpaid
Principal Amount of all Equipment Notes outstanding as of such date
(excluding any Equipment Notes held by the Owner Trustee or the Owner
Participant or any interests of the Owner Participant therein by reason of
subrogation pursuant to Section 4.03 of the Trust Indenture (unless all
Equipment Notes then outstanding shall be held by the Owner Trustee or the
Owner Participant) or Lessee or any affiliate of any thereof).
"Make-Whole Amount" means, with respect to any Equipment Note,
the amount (as determined by an independent investment banker selected by
Lessee and reasonably acceptable to the Indenture Trustee and the Owner
Participant) by which (a) the present value of the remaining scheduled
payments of principal and interest from the redemption date to maturity of
such Equipment Note computed by discounting each such payment on a
semiannual basis from its respective Payment Date (assuming a 360-day year
of twelve 30-day months) using a discount rate equal to the Treasury Yield
exceeds (b) the outstanding principal amount of such Equipment Note plus
accrued interest. For purposes of determining the Make-Whole Amount,
"Treasury Yield" means, at the time of determination, the interest rate
(expressed as a semiannual equivalent and as a decimal and, in the case of
United States Treasury bills, converted to a bond equivalent yield)
determined to be the per annum rate equal to the semiannual yield to
maturity for United States Treasury securities maturing on the Average Life
Date and trading in the public securities market either as determined by
interpolation between the most recent weekly average yield to maturity for
two series of United States Treasury securities, trading in the public
securities markets, (A) one maturing as close as possible to, but earlier
than, the Average Life Date and (B) the other maturing as close as possible
to, but later than, the Average Life Date, in each case as published in the
most recent H.15(519) or, if a weekly average yield to maturity for United
States Treasury securities maturing on the Average Life Date is reported on
the most recent H.15(519), such weekly average yield to maturity as
published in such H.15(519). "H.15(519)" means the weekly statistical
release designated as such, or any successor publication, published by the
Board of Governors of the Federal Reserve System. The date of
determination of a Make-Whole Amount shall be the third Business Day prior
to the applicable redemption date and the "most recent H.15(519)" means the
H.15(519) published prior to the close of business on the third Business
Day prior to the applicable redemption date. "Average Life Date" means,
for each Equipment Note to be redeemed, the date which follows the
redemption date by a period equal to the Remaining Weighted Average Life at
the redemption date of such Equipment Note.
"Manufacturer" means Airbus Industrie G.I.E., a groupement
d'interet economique established under Ordonnance No. 67-821 dated
September 23, 1967 of the Republic of France, and its successors and
assigns.
"Manufacturer Documents" means the Purchase Agreement and the
Consent and Agreement.
"Mortgaged Property" has the meaning specified for such term in
Section 3.03 of the Trust Indenture.
"Multiplier" means (i) on any date when no Class C Special
Indemnity Event is continuing , 0.00, (ii) on each day during the first
ninety (90)-day period immediately following the occurrence of a Class C
Special Indemnity Event, 0.0025, and (iii) thereafter, on each day during
each subsequent ninety (90)-day period for so long as such Class C Special
Indemnity Event exists, the Multiplier in effect for the immediately
preceding ninety (90)-day period plus 0.0025; provided, that (a)
notwithstanding the foregoing, the maximum Multiplier shall be 0.01, and
(b) the Multiplier shall reset after such Class C Special Indemnity Event
has ceased or no longer exists and clause (i) shall apply again to any
subsequent Class C Special Indemnity Event.
"Net Economic Return" has the meaning specified for such term in
paragraph 2 of Exhibit E to the Lease.
"Net Present Value of Rents" means the net present value, as of
the date of calculation, of Basic Rent set forth in Exhibit B to the Lease,
discounted at an annual interest rate of ten percent (10%) on a semi-annual
basis.
"New Debt" has the meaning specified for such term in Section
16(a) of the Participation Agreement.
"Net Interest and Related Charges" has the meaning specified for
such term in Section 2.02 of the Trust Indenture.
"Note Holder" means any holder from time to time of one or more
Equipment Notes.
"Note Purchase Agreement" means the Note Purchase Agreement dated
as of the Pass Through Trust Closing Date among Lessee, the Pass Through
Trustee for the Class A, Class B and Class C Pass Through Trusts, the
Subordination Agent, First Security Bank, National Association, as Escrow
Agent, and State Street Bank and Trust Company, as Paying Agent.
"Obsolete Parts" has the meaning specified for such term in
Section 8(c) of the Lease.
"Operative Documents" means, collectively, the Participation
Agreement, the Lease, the Trust Indenture, the Trust Agreement, an
acceptance certificate covering the Aircraft in the form agreed to by the
Participants and Lessee, the Tax Indemnity Agreement, the Lease Supplement
covering the Aircraft, the Trust Supplement covering the Aircraft, the
Equipment Notes, the Bill of Sale, the FAA Bill of Sale, the Purchase
Agreement (insofar as it relates to the Aircraft), the Purchase Agreement
Assignment and the Consent and Agreement (each, an "Operative Document").
"Operative Indentures" means each of the indentures under which
notes have been issued and purchased by the Pass Through Trustees.
"Owner Indemnitee" has the meaning specified for such term in the
definition of Excluded Payments.
"Owner Participant" means ___________________, a [_____________]
corporation, so long as such party shall have any interest in the Trust
Estate, and transferees thereof as permitted by Section 7(k) of the
Participation Agreement and Section 8.01 of the Trust Agreement.
"Owner Participant Documents" means the Participation Agreement,
the Trust Agreement, and the Tax Indemnity Agreement and each other
agreement between the respective parties thereto relating to the subject
matter thereof, delivered on the Delivery Date.
"Owner Trustee" means First Security Bank, National Association,
not in its individual capacity but solely as owner trustee, and any entity
appointed as successor Owner Trustee pursuant to Section 9.01 of the Trust
Agreement, and references to a predecessor Owner Trustee in its individual
capacity by name in the Operative Documents shall include such successor
Owner Trustee in its individual capacity from and after such succession.
"Owner Trustee Documents" means the Participation Agreement, the
Trust Agreement, the Trust Supplement covering the Aircraft, the Lease, the
Lease Supplement covering the Aircraft, the Purchase Agreement Assignment,
the Trust Indenture and the Equipment Notes and each other agreement
between the respective parties thereto relating to the subject matter
thereof, delivered on the Delivery Date.
"Owner Trustee's pro rata share" has the meaning specified for
such term in the Trust Indenture.
"Participants" means the Loan Participants and the Owner
Participant, collectively (each individually, a "Participant").
"Participation Agreement" means that certain Participation
Agreement (US Airways, Inc. Trust No. N7__UW), dated as of the dated of
the Lease, among the Owner Trustee, the Subordination Agent, the Indenture
Trustee, Lessee, the Owner Participant and the Pass Through Trustee, as the
same may from time to time be supplemented or further amended, or the terms
thereof waived or modified, to the extent permitted by, and in accordance
with, the terms thereof.
"Parts" means all appliances, parts, instruments, appurtenances,
accessories, furnishings and other equipment of whatever nature (other than
(a) complete Engines or engines, (b) any items leased by Lessee from a
third party (other than Lessor) and (c) cargo containers) which may from
time to time be incorporated or installed in or attached to the Airframe or
any Engine or so long as title thereto shall remain vested in Lessor in
accordance with Section 8 of the Lease after removal therefrom; provided
that "Parts" shall not include Passenger Convenience Equipment.
"Pass Through Certificates" means the pass through certificates
to be issued by the Pass Through Trustee in connection with the
Transactions.
"Pass Through Documents" means the Participation Agreement, the
Pass Through Trust Agreements and the Intercreditor Agreement.
"Pass Through Indemnitees" means (i) the Subordination Agent, the
Liquidity Provider and the Pass Through Trustee, (ii) each Affiliate of a
Person described in the preceding clause (i), (iii) the respective
directors, officers, employees, agents and servants of each of the Persons
described in the preceding clauses (i) and (ii), and (iv) the successors
and permitted assigns of the Persons described in the preceding clauses
(i), (ii) and (iii).
"Pass Through Trust" means, collectively, the three separate
grantor trusts set forth in Schedule III to the Participation Agreement
created, pursuant to the Pass Through Trust Agreements and each of the Pass
Through Trust Supplements set forth in Schedule III to the Participation
Agreement, to facilitate certain of the transactions contemplated by the
Operative Documents.
"Pass Through Trust Agreement" means the pass through trust
agreement and each of the three separate pass through trust supplements
referred to on Schedule III to the Participation Agreement.
"Pass Through Trust Closing Date" means December 14, 1998.
"Pass Through Trustee" means State Street Bank and Trust Company,
a Massachusetts trust company, in its capacity as trustee under each Pass
Through Trust Agreement, and each other Person that may from time to time
be acting as successor trustee under any such Pass Through Trust Agreement.
"Passenger Convenience Equipment" means available components or
systems installed on or affixed to the Airframe that are used to provide
individual telecommunications or electronic entertainment to passengers
aboard the Aircraft.
"Past Due Rate" has the meaning specified for such term in
Exhibit B to the Lease.
"Payment Date" means each January 30 and July 30, commencing on
________ 30, ____ (or, if any such day is not a Business Day, the
immediately succeeding Business Day) until the Equipment Notes have been
paid in full.
"Permitted Foreign Air Authority" means the Civil Aviation
Authority of the United Kingdom, the Direction Generale de l'Aviation
Civile of the French Republic, the Luftfahrt Bundesamt of the Federal
Republic of Germany, the Rijflauchtraatdienst of the Kingdom of the
Netherlands, the Ministry of Transportation of Japan or the Federal
Ministry of Transport of Canada (and any agency or instrumentality of the
applicable government succeeding to the functions of any of the foregoing
entities).
"Permitted Lien" means any Lien referred to in clauses (i)
through (viii) of Section 6 of the Lease.
"Permitted Sublessee" means any entity domiciled in a country
listed in Exhibit F to the Lease as in effect from time to time and as may
be modified in accordance with Section 7(d) of the Participation Agreement.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Principal Amount", with respect to a Equipment Note, means the
stated original principal amount of such Equipment Note and, with respect
to all Equipment Notes, means the aggregate stated original principal
amounts of all Equipment Notes.
"Principal Amount Repayment Date" means each Payment Date on
which any portion of the Principal Amount is due and payable in accordance
with the Amortization Schedule.
"Purchase Agreement" means the Sale and Purchase Agreement, dated
as of October 31, 1997, between the Seller and US Airways Group, Inc., as
the same has been assigned to Lessee, relating to the purchase by Lessee of
the Aircraft, as originally executed or as modified, amended or
supplemented in accordance with the terms thereof, but only insofar as the
foregoing relates to the Aircraft.
"Purchase Agreement Assignment" means the Purchase Agreement
Assignment (US Airways, Inc. Trust No. N7__UW), dated as of the date of
the Lease, between Lessee and Lessor, as the same may be amended,
supplemented or modified from time to time, with a form of Consent and
Agreement to be executed by the Seller attached thereto.
"Purchase Option Date" has the meaning specified for such term in
Section 19(b) of the Lease.
"Purchasers" means the Pass Through Trustees under each Pass
Through Trust Agreement.
"QIB" has the meaning specified for such term in Section 2.08 of
the Trust Indenture.
"Qualified Owner Participant" means a Person which has a tangible
net worth, calculated in accordance with generally accepted accounting
principles, greater than $50,000,000, or a Person whose obligations under
the Operative Documents are unconditionally guaranteed by such a Person.
"Refinancing Certificate" has the meaning specified for such term
in Section 16(a) of the Participation Agreement.
"Refinancing Date" has the meaning specified for such term in
Section 16(a) of the Participation Agreement.
"Refinancing Information" has the meaning specified for such term
in Section 16(a) of the Participation Agreement.
"Registration Agreement" means the Registration Agreement dated
December 14, 1998 by Lessee, and confirmed and accepted by AIFS, in respect
of the 6.82% Pass Through Certificates, Series 1998-1, Class C, as such
Registration Agreement may be amended, modified and supplemented from time
to time in accordance with the provisions thereof.
"Related Indemnitee Group" means, with respect to any Indemnitee,
any officer, director, servant, employee, agent or Affiliate thereof.
"Remaining Weighted Average Life" of a Equipment Note, at the
redemption date of such Equipment Note, means the number of days equal to
the quotient obtained by dividing (a) the sum of the products obtained by
multiplying (i) the amount of each then remaining installment of principal,
including the payment due on the maturity date of such Equipment Note, by
(ii) the number of days from and including the redemption date to but
excluding the scheduled payment date of such principal installment; by (b)
the then unpaid principal amount of such Equipment Note.
"Renewal Term" means any Fixed Renewal Term or Fair Market
Renewal Term.
"Rent" means Basic Rent and Supplemental Rent, collectively.
"Replacement Airframe" means any airframe substituted for the
Airframe pursuant to Section 10 of the Lease.
"Replacement Engine" means any engine substituted for an Engine
pursuant to Sections 9(c) and 10 of the Lease.
"Responsible Officer" means with respect to the Owner Trustee, a
responsible officer in the Trust Office of the Owner Trustee (including,
without limitation, any authorized officer in the Trust Office of the Owner
Trustee), and with respect to the Indenture Trustee, a responsible officer
in the Corporate Trust Office of the Indenture Trustee.
"Scheduled Delivery Date" has the meaning specified for such term
in Section 2(f) of the Participation Agreement.
"Section 1110 Period" has the meaning specified for such term in
Section 4.04(a) of the Trust Indenture.
"Secured Obligations" has the meaning specified for such term in
the Granting Clause of the Trust Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" means AVSA, S.A.R.L., a societE a responsabilite limitee
organized and existing under the laws of the Republic of France.
"Senior Holder" has the meaning specified for such term in
Section 2.15(c) of the Trust Indenture.
"Series A" or "Series A Equipment Notes" means Equipment Notes
issued and designated as "Series A" under the Trust Indenture, in the
Principal Amount and maturities and bearing interest as specified in
Schedule I to the Trust Indenture under the heading "Series A."
"Series B" or "Series B Equipment Notes" means Equipment Notes
issued and designated as "Series B" under the Trust Indenture, in the
Principal Amount and maturities and bearing interest as specified in
Schedule I to the Trust Indenture under the heading "Series B."
"Series C" or "Series C Equipment Notes" means Equipment Notes
issued and designated as "Series C" under the Trust Indenture, in the
Principal Amount and maturities and bearing interest as specified in
Schedule I to the Trust Indenture under the heading "Series C."
"Significant Expenditure" means an expenditure or planned
expenditure of the type described in clause (B) of the definition of
Burdensome Termination Event.
"State Street" means State Street Bank and Trust Company, a
Massachusetts trust company, not in its capacity as Indenture Trustee under
the Trust Indenture, but in its individual capacity.
"Sublease" means any sublease permitted by the terms of Section
7(b)(x) of the Lease.
"Sublessee" means any Person for so long, but only so long, as
such Person is in possession of the Airframe and/or any Engine pursuant to
the terms of a Sublease which is then in effect pursuant to Section 7(b)(x)
of the Lease.
"Subordination Agent" means State Street Bank and Trust Company,
a Massachusetts trust company, as subordination agent under the
Intercreditor Agreement, or any successor thereto.
"Subsequent Owner Participant" means any entity to which the
Owner Participant or any transferee from the Owner Participant or any
Subsequent Owner Participant shall have transferred at any time after the
Delivery Date all of the undivided right, title and interest originally
held by the Owner Participant in the Trust Agreement, the Trust Estate and
the Participation Agreement, to the extent permitted by Section 8.01 of the
Trust Agreement and Section 7(k) of the Participation Agreement.
"Supplemental Rent" means, without duplication, (a) all amounts,
liabilities, indemnities and obligations (other than Basic Rent) that
Lessee assumes or becomes obligated to or agrees to pay under any Lessee
Document to or on behalf of Lessor or any other Person, including, without
limitation, payments of Termination Value, any amounts in respect of a
purchase price payable pursuant to Section 19(c) of the Lease and payments
of indemnities under Section 6 of the Participation Agreement, but
excluding any amount as to which Lessee is obligated to pay a pro rata
share pursuant to clause (d) or (e) of this definition, (b) (i) to the
extent not payable (whether or not in fact paid) under Section 7(a) of the
Note Purchase Agreement (as originally in effect or amended with the
consent of the Owner Participant), an amount or amounts equal to the fees
payable to the Liquidity Provider under Section 2.03 of each Liquidity
Facility and the related Fee Letter (as defined in the Intercreditor
Agreement) multiplied by a fraction the numerator of which shall be the
then outstanding aggregate principal amount of the Series A Equipment
Notes, Series B Equipment Notes and Series C Equipment Notes and the
denominator of which shall be the then outstanding aggregate principal
amount of all "Series A Equipment Notes", "Series B Equipment Notes" and
"Series C Equipment Notes" (in each case as defined in the relevant
Operative Indenture) issued under the Operative Indentures; (ii) (x) the
amount equal to interest on any Downgrade Advance (other than any Applied
Downgrade Advance) payable under Section 3.07 of each Liquidity Facility
minus Investment Earnings from such Downgrade Advance multiplied by (y)
the fraction specified in the foregoing clause (i); (iii) (x) the amount
equal to interest on any Non-Extension Advance (other than any Applied Non-
Extension Advance) payable under Section 3.07 of each Liquidity Facility
minus Investment Earnings from such Non-Extension Advance multiplied by (y)
the fraction specified in the forgoing clause (i); (iv) if any payment
default shall have occurred and be continuing with respect to interest on
any Series A Equipment Note, Series B Equipment Note or Series C Equipment
Note, (x) the excess, if any, of (1) an amount equal to interest on any
Unpaid Advance, Applied Downgrade Advance or Applied Non-Extension Advance
payable under Section 3.07 of each Liquidity Facility over (2) the sum of
Investment Earnings from any Final Advance plus any amount of interest at
the Past Due Rate actually payable (whether or not in fact paid) by Lessee
in respect of the overdue scheduled interest on the Equipment Notes in
respect of which such Unpaid Advance, Applied Downgrade Advance or Applied
Non-Extension Advance was made multiplied by (y) a fraction the numerator
of which shall be the then aggregate overdue amounts of interest on the
Series A Equipment Notes, Series B Equipment Notes and Series C Equipment
Notes (other than interest becoming due and payable solely as a result of
acceleration of any such Equipment Notes) and the denominator of which
shall be the then aggregate overdue amounts of interest on all "Series A
Equipment Notes", "Series B Equipment Notes" and "Series C Equipment
Notes" (in each case as defined in the relevant Operative Indenture) issued
under the Operative Indenture (other than interest becoming due and payable
solely as a result of acceleration of any such "Equipment Notes," in each
case as defined in the relevant Operative Indenture) issued under the
Operative Indentures); and (v) Lessee's pro rata share of any other amounts
owed to the Liquidity Provider by the Subordination Agent as borrower
under each Liquidity Facility (other than amounts due as repayment of
advances thereunder or as interest on such advances), except to the extent
payable pursuant to clause (i), (ii), (iii) or (iv) above, (c) Lessee's
pro rata share of all compensation and reimbursement of expenses,
disbursements and advances payable by Lessee under the Pass Through Trust
Agreements, (d) Lessee's pro rata share of all compensation and
reimbursement of expenses and disbursements payable to the Subordination
Agent under the Intercreditor Agreement except with respect to any income
or franchise taxes incurred by the Subordination Agent in connection with
the transactions contemplated by the Intercreditor Agreement and (e)
Lessee's pro rata share of any amount payable under Section 6(c) of the
Participation Agreement to any Pass Through Indemnitee to the extent such
amount relates to, results from or arises out of or in connection with (i)
the Pass Through Trust Agreement or the enforcement of any of the terms of
any Pass Through Document, (ii) the offer, sale, or delivery of the Pass
Through Certificates or any interest therein or represented thereby or
(iii) any breach of or failure to perform or observe, or any other
noncompliance with, any covenant or agreement or other obligation to be
performed by Lessee under any Pass Through Document or the falsity of any
representation or warranty of Lessee in any Pass Through Document. As used
herein, "Lessee's pro rata share" means as of any time a fraction, the
numerator of which is the principal balance then outstanding of Equipment
Notes and the denominator of which is the aggregate principal balance then
outstanding of all "Equipment Notes" (in each case as defined in the
relevant Operative Indenture) issued under the Operative Indentures. For
purposes of this definition, the terms "Applied Downgrade Advance",
"Applied Non-Extension Advance", "Cash Collateral Account", "Downgrade
Advance", "Final Advance", "Investment Earnings", "Non-Extension Advance"
and "Unpaid Advance" shall have the meanings specified in each Liquidity
Facility. For the avoidance of doubt, it is understood and agreed that
Supplemental Rent includes, without limitation, any amounts payable under
the third paragraph of Section 2.02 of the Trust Indenture.
"Tax Indemnitee" means (i) the Owner Participant, the Owner
Trustee, in its individual capacity and as trustee under the Trust
Agreement, the Trust Estate, the Indenture Trustee, (ii) the respective
Affiliates, successors and permitted assigns of each of the entities
described in the preceding clause (i), and (iii) the Trust Indenture
Estate.
"Tax Indemnity Agreement" means that certain Tax Indemnity
Agreement (US Airways, Inc. Trust No. N7__UW), dated as of the date of the
Lease, between the Owner Participant and Lessee, as originally executed or
as modified, amended or supplemented pursuant to the applicable provisions
thereof.
"Taxes" means any and all fees (including, without limitation,
license, recording, documentation and registration fees), taxes (including,
without limitation, income, gross receipts, sales, rental, use, turnover,
value added, property (tangible and intangible), excise and stamp taxes),
license, levies, imposts, duties, recording charges and assessments of any
kind whatsoever that are in the nature of taxes or other governmental
charges including interest, penalties and additions to tax (each,
individually a "Tax").
"Term" means the Basic Term and, if actually entered into, any
Renewal Term.
"Termination Date" has the meaning set forth in Section 9(a) of
the Lease.
"Termination Value" with respect to the Aircraft as of any date
during the Term means, but subject always to the provisions of Section
3(c)(v) of the Lease, the amount determined by multiplying Lessor's Cost
for the Aircraft by the percentage specified in Exhibit D to the Lease
opposite the Termination Date with respect to which the amount is
determined (as such Exhibit D may be adjusted from time to time as provided
in Section 3(c) of the Lease and as expressly provided in any other
Operative Document).
"Transaction Expenses" means: all of the reasonable out-of-pocket
costs, fees and expenses incurred by Lessee, the Owner Trustee, the Pass
Through Trustee, the Subordination Agent and the Indenture Trustee in
connection with the transactions contemplated by the Participation
Agreement, the other Operative Documents, the Pass Through Trust
Agreements, the Pass Through Documents, the Intercreditor Agreement, the
Liquidity Facilities and the Underwriting Agreement (except, in each case,
as otherwise provided therein) including, without limitation:
(a) the reasonable and actual fees, expenses and
disbursements of (A) Bingham, Dana & Gould LLP, special counsel for the
Pass Through Trustee and the Indenture Trustee, (B) Ray, Quinney & Nebeker,
special counsel for the Owner Trustee, (C) Shearman & Sterling, special
counsel for the Underwriters, and (D) Crowe & Dunlevy, P.C., special
counsel in Oklahoma City, Oklahoma and (E) Simpson Thacher & Bartlett,
special counsel to AIFS;
(b) the initial fees and reasonable and actual disbursements
of the Owner Trustee under the Trust Agreement;
(c) the initial fee and reasonable and actual disbursements
of the Indenture Trustee under the Trust Indenture;
(d) the initial fees and expenses of the Liquidity Provider,
the Pass Through Trustee and the Subordination Agent;
(e) underwriting fees and commissions;
(f) the fees and expenses with respect to the appraisal of
the Aircraft;
(g) the reasonable fees, expenses and disbursements of
_________________, special counsel to the Owner Participant, such fees not
to exceed the amount previously agreed to by the Owner Participant and
Lessee;
(h) the fees, expenses and disbursements of Skadden, Arps,
Slate, Meagher & Flom LLP and its affiliates, special counsel for Lessee;
(i) the costs of filing and recording documents with the FAA
and filing Uniform Commercial Code statements in the United States;
(j) the reasonable fees, expenses and disbursements of
special counsel to the Liquidity Provider; and
(k) the expenses of the Depositaries payable under Section
10(a) of each Indemnity Agreement; and
(l) the reasonable fees, expenses and disbursements of,
special counsel to the Seller and the Manufacturer.
"Transactions" means the transactions contemplated by the
Participation Agreement and the other Operative Documents.
"Transferee" has the meaning specified for such term in Section
7(k) of the Participation Agreement.
"Transportation Code" means that portion of the United States Code
comprising those provisions formerly referred to as the Federal Aviation
Act of 1958, as amended, or any subsequent legislation that amends,
supplements or supersedes such provisions.
"Trust Agreement" means that certain Trust Agreement (US Airways,
Inc. Trust No. N7__UW), dated as of the date of the Lease, between the
Owner Participant and First Security Bank, National Association, in its
individual capacity, as originally executed or as modified, amended or
supplemented pursuant to the applicable provisions thereof, including,
without limitation, supplementation thereof by one or more Trust
Supplements entered into pursuant to the applicable provisions thereof.
"Trust Agreement and Indenture Supplement" or "Trust Supplement"
means a supplement to the Trust Agreement and the Trust Indenture,
substantially in the form of Exhibit A to the Trust Indenture, which shall
particularly describe the Aircraft, and any Replacement Airframe and
Replacement Engine included in the property of the Owner Trustee covered by
the Trust Agreement.
"Trust Estate" means all estate, right, title and interest of the
Owner Trustee in and to the Aircraft, the Lease, any Lease Supplement, the
Purchase Agreement, the Purchase Agreement Assignment, the Bill of Sale and
the FAA Bill of Sale, including, without limitation, all amounts of Basic
Rent and Supplemental Rent including without limitation insurance proceeds
(other than insurance proceeds payable to or for the benefit of the Owner
Trustee, for its own account or in its individual capacity, the Owner
Participant, the Loan Participants or the Indenture Trustee) and
requisition, indemnity or other payments of any kind for or with respect to
the Aircraft (except amounts owing to the Owner Participant, to the
Indenture Trustee, to the Owner Trustee, in its individual capacity, or to
the Loan Participants or any other holder of a Equipment Note, or to any of
their respective directors, officers, employees, servants and agents,
pursuant to Section 6 of the Participation Agreement). Notwithstanding the
foregoing, "Trust Estate" shall not include any Excluded Payments.
"Trust Indenture" means that certain Trust Indenture and Security
Agreement (US Airways, Inc. Trust No. N7__UW), dated as of the date of the
Lease, between Lessor and the Indenture Trustee, as it may from time to
time be supplemented or amended as therein provided, including
supplementing by the Trust Agreement and Indenture Supplement pursuant to
the Trust Indenture.
"Trust Indenture Estate" means all estate, right, title and
interest of the Indenture Trustee in and to the properties referred to in
the Granting Clause of the Trust Indenture, excluding Excluded Payments.
"Underwriters" means Morgan Stanley & Co. Incorporated, Salomon Smith
Barney Inc., Lehman Brothers Inc. and Credit Suisse First Boston Corporation.
"U.S. Air Carrier" means any Certificated Air Carrier as to which
there is in force an air carrier operating certificate issued pursuant to
Part 121 of the regulations under the Transportation Code, or which may
operate as an air carrier by certification or otherwise under any successor
or substitute provisions therefor or in the absence thereof.
"Wet Lease" means any arrangement whereby the Lessee (or any
Sublessee) agrees to furnish the Airframe and Engines or engines installed
thereon to a third party pursuant to which such Airframe and Engines or
engines (i) shall be operated solely by regular employees of Lessee (or any
Sublessee) possessing all current certificates and licenses that would be
required under the Transportation Code, or, if the Aircraft is not
registered in the United States, all certificates and licenses required by
the laws of the jurisdiction of registry, for the performance by such
employees of similar functions within the United States of America or such
other jurisdiction of registry (it is understood that cabin attendants need
not be regular employees of Lessee (or any Sublessee)) and (ii) shall be
maintained by Lessee (or any Sublessee) in accordance with its normal
maintenance practices.
EXHIBIT 4(a)(xiv)
Form Lease
N7___UW
LEASE AGREEMENT
(US Airways, Inc. Trust No. N7__UW)
Dated as of
________ __, 199_
Between
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
Not in its individual capacity except as expressly
provided herein, but solely as Owner Trustee,
Lessor
and
US AIRWAYS, INC.,
Lessee
One Airbus Model A319 Aircraft
As set forth in Section 21 hereof, Lessor has assigned to the Indenture
Trustee (as defined herein) certain of its right, title and interest in and
to this Lease. To the extent, if any, that this Lease constitutes chattel
paper (as such term is defined in the Uniform Commercial Code as in effect
in any applicable jurisdiction) no security interest in this Lease may be
created through the transfer or possession of any counterpart other than
the original executed counterpart, which shall be identified as the
counterpart containing the receipt therefor executed by the Indenture
Trustee on the signature page thereof.
TABLE OF CONTENTS TO LEASE AGREEMENT
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. ACCEPTANCE AND LEASE . . . . . . . . . . . . . . . . . . . 1
SECTION 3. TERM AND RENT . . . . . . . . . . . . . . . . . . . . . . 1
(a) Basic Term . . . . . . . . . . . . . . . . . . . . . 1
(b) Basic Rent . . . . . . . . . . . . . . . . . . . . . 1
(c) Adjustments to Basic Rent . . . . . . . . . . . . . . 2
(d) Supplemental Rent . . . . . . . . . . . . . . . . . . 3
(e) Payments in General . . . . . . . . . . . . . . . . . 4
(f) Business Day Convention . . . . . . . . . . . . . . . 5
SECTION 4. DISCLAIMER; LESSOR'S REPRESENTATIONS, WARRANTIES
AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . 5
(a) Disclaimer . . . . . . . . . . . . . . . . . . . . . 5
(b) Representations, Warranties and Covenants of
First Security Bank . . . . . . . . . . . . . . . . 6
(c) Lessor's Covenants . . . . . . . . . . . . . . . . . 6
(d) Manufacturer's Warranties . . . . . . . . . . . . . . 7
SECTION 5. RETURN OF THE AIRCRAFT. . . . . . . . . . . . . . . . . . 7
(a) Condition Upon Return . . . . . . . . . . . . . . . . 7
(b) Storage and Related Matters . . . . . . . . . . . . . 7
(c) Return of Other Engines . . . . . . . . . . . . . . . 8
(d) Obligations Continue Until Return . . . . . . . . . . 8
SECTION 6. LIENS . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 7. REGISTRATION, MAINTENANCE, OPERATION AND REGISTRATION;
POSSESSION AND SUBLEASES; INSIGNIA . . . . . . . . . . . . 9
(a) Registration, Maintenance, Operation and
Registration . . . . . . . . . . . . . . . . . . . . 9
(1) Registration and Maintenance . . . . . . . . . . 9
(2) Operation . . . . . . . . . . . . . . . . . . . 10
(3) Reregistration . . . . . . . . . . . . . . . . . 11
(b) Possession and Subleases . . . . . . . . . . . . . . 11
(c) Insignia . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 8. REPLACEMENT AND POOLING OF PARTS; ALTERATIONS,
MODIFICATIONS
AND ADDITIONS . . . . . . . . . . . . . . . 17
(a) Replacement of Parts . . . . . . . . . . . . . . . . 17
(b) Pooling of Parts . . . . . . . . . . . . . . . . . . 18
(c) Alterations, Modifications and Additions. . . . . . . 19
(d) Certain Matters Regarding Passenger Convenience
Equipment . . . . . . . . . . . . . . . . . . . . . 20
SECTION 9. VOLUNTARY TERMINATION . . . . . . . . . . . . . . . . . . 20
(a) Termination Event . . . . . . . . . . . . . . . . . . 20
(b) Optional Sale of the Aircraft . . . . . . . . . . . . 21
(c) Termination as to Engines . . . . . . . . . . . . . . 23
(d) Special Purchase Options . . . . . . . . . . . . . . 24
SECTION 10. LOSS, DESTRUCTION, REQUISITION, ETC. . . . . . . . . . . 25
(a) Event of Loss with Respect to the Aircraft . . . . . 25
(b) Event of Loss with Respect to an Engine . . . . . . . 27
(c) Application of Payments from Governmental
Authorities for Requisition of Title, etc. . . . . 28
(d) Requisition for Use of the Aircraft by the
United States Government or the Government
of Registry of the Aircraft . . . . . . . . . . . . 29
(e) Requisition for Use of an Engine by the
United States Government or the Government
of Registry of the Aircraft . . . . . . . . . . . . 30
(f) Application of Payments During Existence of
Event of Default . . . . . . . . . . . . . . . . . 30
SECTION 11. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . 31
(a) Lessee's Obligation to Insure . . . . . . . . . . . . 31
(b) Additional Insurance by Lessor and Lessee . . . . . . 31
(c) Indemnification by Government in Lieu of
Insurance . . . . . . . . . . . . . . . . . . . . . 31
(d) Application of Payments During Existence of
an Event of Default . . . . . . . . . . . . . . . . 31
SECTION 12. INSPECTION . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 13. ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 14. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . 34
SECTION 15. REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 16. LESSEE'S COOPERATION CONCERNING CERTAIN MATTERS;
DELIVERY OF FINANCIAL STATEMENTS . . . . . . . . . . . . . 40
SECTION 17. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 18. NO SET-OFF, COUNTERCLAIM, ETC. . . . . . . . . . . . . . . 42
SECTION 19. RENEWAL OPTIONS; PURCHASE OPTIONS; VALUATION . . . . . . . 43
(a) Renewal Options . . . . . . . . . . . . . . . . . . . 43
(1) Fixed Renewal Term . . . . . . . . . . . . . . . 43
(2) Fair Market Renewal Term . . . . . . . . . . . . 43
(3) Waiver . . . . . . . . . . . . . . . . . . . . . 43
(4) Conditions Precedent, Payment of Basic Rent . . 44
(5) Termination Value . . . . . . . . . . . . . . . 44
(b) Purchase Options . . . . . . . . . . . . . . . . . . 44
(c) Valuation . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 20. BURDENSOME PURCHASE OPTION . . . . . . . . . . . . . . . . 47
SECTION 21. SECURITY FOR LESSOR'S OBLIGATION TO HOLDERS OF
EQUIPMENT NOTES . . . . . . . . . . . . . . . . . . . . . 48
SECTION 22. LESSOR'S RIGHT TO PERFORM FOR LESSEE . . . . . . . . . . . 48
SECTION 23. INVESTMENT OF SECURITY FUNDS; LIABILITY OF LESSOR
LIMITED . . . . . . . . . . . . . . . . . . . . . . . . . 49
(a) Investment of Security Funds . . . . . . . . . . . . 49
(b) Liability of Lessor Limited . . . . . . . . . . . . . 49
SECTION 24. JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 25. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 26. SUCCESSOR TRUSTEE . . . . . . . . . . . . . . . . . . . . 50
SECTION 27. LEASE FOR U.S. FEDERAL INCOME TAX LAW PURPOSES;
SECTION 1110 OF BANKRUPTCY CODE . . . . . . . . . . . . . 51
(a) Lease for Federal Income Tax Law Purposes . . . . . . 51
(b) Section 1110 of Bankruptcy Code . . . . . . . . . . . 51
EXHIBITS
EXHIBIT A - LEASE SUPPLEMENT NO.
EXHIBIT B - PAST DUE RATE DEFINED; BASIC RENT AND LESSOR'S COST
EXHIBIT C - TERMINATION VALUE SCHEDULE
EXHIBIT D - EBO AMOUNT
EXHIBIT E - RENT RECALCULATION AND INDEMNIFICATION VERIFICATION
EXHIBIT F - SCHEDULE OF DOMICILES OF PERMITTED SUBLESSEES
EXHIBIT G - RETURN CONDITIONS
EXHIBIT H - INSURANCE
LEASE AGREEMENT
(US Airways, Inc. Trust No. N7__UW)
This LEASE AGREEMENT (US Airways, Inc. Trust No. N7__UW), dated
as of __________ __, 199_, between FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual capacity, except as expressly provided
herein, but solely as Owner Trustee under the Trust Agreement (as defined
in Annex A hereto) (in such capacity, "Lessor"), and US AIRWAYS, INC., a
corporation organized and existing pursuant to the laws of the State of
Delaware ("Lessee");
W I T N E S S E T H:
Section 1. DEFINITIONS. Capitalized terms used but not
defined herein shall have the respective meanings set forth or incorporated
by reference, and shall be construed and interpreted in the manner
described, in Annex A.
Section 2. ACCEPTANCE AND LEASE. Lessor hereby agrees
(subject to satisfaction of the conditions set forth in Section 4(a) of the
Participation Agreement) to accept the transfer of title from and
simultaneously to lease to Lessee hereunder, and Lessee hereby agrees
(subject to satisfaction of the conditions set forth in Section 4(b) of the
Participation Agreement) to lease from Lessor hereunder, the Aircraft as
evidenced by the execution by Lessor and Lessee of a Lease Supplement
leasing the Aircraft hereunder. Lessee hereby agrees that such acceptance
of the Aircraft by Lessor shall, without further act, irrevocably
constitute acceptance by Lessee of such Aircraft for all purposes of this
Lease.
Section 3. TERM AND RENT.
(a) Basic Term. The Basic Term shall commence on the Delivery
Date and end on the Basic Term Expiration Date.
(b) Basic Rent. Lessee shall pay Basic Rent with respect to
each Lease Period during the Basic Term on each Lease Period Date during
the Basic Term, in consecutive installments in the amounts as provided in
the next sentence, each such installment to cover the Lease Period
specified in Exhibit B. Each such installment of Basic Rent shall be equal
to Lessor's Cost multiplied by the percentage for the Delivery Date or
applicable Lease Period Date, as the case may be, specified in Exhibit B
hereto.
(c) Adjustments to Basic Rent.
(i) In the event of a refinancing as contemplated by
Section 16 of the Participation Agreement, then the Basic Rent
percentages set forth in Exhibit B, the Termination Value percentages
set forth in Exhibit C and the EBO Amount set forth on Exhibit D shall
be recalculated (upwards or downwards) by the Owner Participant as
contemplated by such Section to (1) maintain the Owner Participant's
Net Economic Return and (2) to the extent possible consistent with
clause (1) hereof, minimize the Net Present Value of Rents to Lessee;
(ii) In the event that Lessee elects to satisfy any
indemnity obligation under the Tax Indemnity Agreement pursuant to
Section [__] of the Tax Indemnity Agreement, then the Basic Rent
percentages set forth in Exhibit B, the Termination Value percentages
set forth in Exhibit C and the EBO Amount set forth on Exhibit D shall
be recalculated (upwards or downwards) by the Owner Participant, using
the same methods and assumptions (except to the extent such
assumptions shall be varied to take into account the Loss (as defined
in the Tax Indemnity Agreement) that is the subject of such
indemnification and any prior or contemporaneous Loss) used to
calculate the Basic Rent percentages, the Termination Value
percentages and the EBO Amount on the Delivery Date, in order to (1)
maintain the Owner Participant's Net Economic Return and (2) to the
extent possible consistent with clause (1) hereof, minimize the Net
Present Value of Rents to Lessee.
(iii) Whenever Basic Rent is recalculated pursuant to
this Section 3(c), the Owner Participant shall redetermine the
Termination Value Percentages set forth in Exhibit C and the EBO
Amount set forth in Exhibit D in a manner consistent with such
recalculation.
(iv) Any recalculation of Basic Rent and Termination Value
percentages pursuant to this Section 3(c) shall be determined by the
Owner Participant and shall be subject to the verification procedures
set forth in Exhibit E hereto. Such recalculated Basic Rent and
Termination Value percentages shall be set forth in a Lease Supplement
or an amendment to this Lease.
(v) Anything contained in the Participation Agreement or
this Lease to the contrary notwithstanding, each installment of Basic
Rent payable hereunder, whether or not adjusted in accordance with
this Section 3(c), shall, together with all other amounts (including
an amount equal to the premium, if any, payable by Lessor on the
Equipment Notes) payable simultaneously by Lessee pursuant to this
Lease, in each case be, under any circumstances and in any event, in
an amount at least sufficient to pay in full, on the date on which
such amount of Rent is due, any payments then required to be made on
account of the principal of, premium, if any, and interest on the
Equipment Notes. It is agreed that no installment of Basic Rent,
payment of Termination Value or EBO Amount shall be increased or
adjusted by reason of (i) any attachment or diversion of Rent on
account of (A) Lessor Liens or (B) any Loan Participant Lien or other
Lien on or against the Trust Estate, any part thereof or the Operative
Documents arising as a result of claims against the Indenture Trustee
not related to the transactions contemplated by the Operative
Documents, (ii) any modification of the payment terms of the Equipment
Notes made without the prior written consent of Lessee or (iii) the
acceleration of any Equipment Note or Equipment Notes due to the
occurrence of an Indenture Event of Default which does not constitute
a Lease Event of Default.
(vi) All adjustments to Basic Rent under this Section 3(c)
shall be (A) in compliance with the tests of Sections 4.02(5) and 4.07
of Rev. Proc. 75-28 and with one or more of any "safe harbors" from
characterization of this Lease as a "disqualified leaseback or long-
term agreement" set forth in Section 467 of the Code (or any proposed,
temporary or final regulations thereunder applicable to this Lease)
or, if no "safe harbor" exists, made in a manner to avoid
characterization of this Lease as a "disqualified leaseback or long-
term agreement" within the meaning of Section 467 of the Code and (B)
subject to verification pursuant to Exhibit E.
(d) Supplemental Rent. Lessee shall pay (or cause to be paid)
promptly to Lessor, or to whomsoever shall be entitled thereto, any and all
Supplemental Rent constituting Termination Value and Make-Whole Amount as
the same shall become due and owing and all other amounts of Supplemental
Rent within five Business Days (5) days after demand or within such other
relevant period as may be provided in any Operative Document, and in the
event of any failure on the part of Lessee to pay any Supplemental Rent
when due, Lessor shall have all rights, powers and remedies provided for
herein or in any other Operative Document or by law or equity or otherwise
in the case of nonpayment of Basic Rent. Lessee shall pay as Supplemental
Rent the Make-Whole Amount, if any, due pursuant to Section 2.10(b) or
Section 2.11 of the Trust Indenture in connection with a prepayment of the
Equipment Notes upon redemption of such Equipment Notes in accordance with
Section 2.10(b) or Section 2.11 of the Trust Indenture. Lessee also will
pay to Lessor, or to whomsoever shall be entitled thereto, on demand, as
Supplemental Rent, to the extent permitted by applicable law, interest at
the Past Due Rate on any part of any installment of Basic Rent not paid
when due for any period for which the same shall be overdue and on any
payment of Supplemental Rent not paid when due for the period until the
same shall be paid.
(e) Payments in General. All payments of Rent shall be made
directly by Lessee (whether or not any Sublease shall be in effect) by wire
transfer of immediately available funds prior to 11:00 a.m., New York time,
on the date of payment, to Lessor at its account at First Security Bank,
National Association, 79 South Main Street, Salt Lake City, Utah 84111, ABA
No. 124-0000-12, Account No. 051-0922115, Attention: Corporate Trust
Department, Credit US Airways/US Airways, Inc. Trust No. N7__UW (or such
other account of Lessor in the continental United States as Lessor shall
direct in a notice to Lessee at least ten (10) Business Days prior to the
date such payment of Rent is due); provided that so long as the Trust
Indenture shall not have been fully discharged, Lessor hereby irrevocably
directs and Lessee agrees, that, unless the Indenture Trustee shall
otherwise direct, all Rent payable to Lessor and assigned to the Indenture
Trustee pursuant to the Trust Indenture shall be paid prior to 11:00 a.m.,
New York time on the due date thereof in funds of the type specified in
this Section 3(e) directly to the Indenture Trustee at its account at State
Street Bank and Trust Company, 225 Franklin Street, 4th Floor, Boston,
Massachusetts 02110, ABA No. 011-00-0028, Account No. 9903-990-1,
Attention: Corporate Trust Department, Reference: US Airways, Inc. 1998-1
EETC/US Airways, Inc. Trust No. N7__UW (or such other account of the
Indenture Trustee in the continental United States as the Indenture Trustee
shall direct in a notice to Lessee at least ten (10) Business Days prior to
the date such payment of Rent is due). Lessor hereby directs and Lessee
agrees that all payments of Supplemental Rent owing to the Indenture
Trustee or to a Loan Participant or any other Person (other than the
Excluded Payments payable to the Owner Participant) pursuant to the
Participation Agreement shall be made in Dollars in immediately available
funds prior to 11:00 a.m., New York time, on the due date thereof at the
office of the Indenture Trustee or at such other office of such other
financial institution located in the continental United States as the party
entitled thereto may so direct at least ten (10) Business Days prior to the
due date thereof. All payments of Supplemental Rent payable to the Owner
Participant, to the extent that such amounts constitute Excluded Payments,
shall be made in Dollars in immediately available funds prior to 11:00
a.m., New York time, on the due date thereof, to the account of the Owner
Participant specified in Schedule I to the Participation Agreement (or to
such other account as may be specified in writing by the Owner Participant
from time to time).
(f) Business Day Convention. Notwithstanding anything to the
contrary contained herein, if any date on which a payment of Rent becomes
due and payable is not a Business Day, then such payment shall not be made
on such scheduled date but shall be made on the next succeeding Business
Day with the same force and effect as if made on such scheduled date and
(provided such payment is made on such next succeeding Business Day) no
interest shall accrue on the amount of such payment from and after such
scheduled date.
Section 4. DISCLAIMER; LESSOR'S REPRESENTATIONS, WARRANTIES
AND AGREEMENTS.
(a) Disclaimer. LESSOR LEASES AND LESSEE TAKES THE AIRCRAFT
AND EACH PART THEREOF "AS-IS," "WHERE-IS." EXCEPT AS EXPRESSLY PROVIDED
HEREIN, NEITHER LESSOR, THE INDENTURE TRUSTEE NOR ANY PARTICIPANT MAKES,
HAS MADE OR SHALL BE DEEMED TO HAVE MADE, AND EACH HEREBY EXPRESSLY
DISCLAIMS AND WILL BE DEEMED TO HAVE EXPRESSLY DISCLAIMED, ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, WORKMANSHIP, CONDITION, DESIGN, OPERATION, MERCHANTABILITY
OR FITNESS FOR USE OR A PARTICULAR PURPOSE OF THE AIRCRAFT OR ANY PART
THEREOF, AS TO THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT
DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT,
TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON STRICT
LIABILITY IN TORT, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF.
(b) Representations, Warranties and Covenants of First Security
Bank. First Security Bank, National Association, in its individual
capacity, (i) represents and warrants that on the Delivery Date, Lessor
shall have received whatever title to the Aircraft was conveyed to it by
Lessee, (ii) represents and warrants that on the Delivery Date the Aircraft
shall be free of Lessor Liens attributable to it, (iii) covenants that
neither it nor any Person claiming by, through or under it will, through
its own actions or inactions, interfere in Lessee's or any Sublessee's
continued possession, use, operation and quiet enjoyment of the Aircraft
during the Term unless an Event of Default has occurred and is continuing
and this Lease has been duly declared in default, and this Lease shall not
be terminated except as expressly provided herein, (iv) covenants that it
will not directly or indirectly create, incur, assume or suffer to exist
any Lessor Lien attributable to it on or with respect to the Airframe or
any Engine or any portion of the Trust Estate and (v) represents and
warrants that it is a Citizen of the United States without making use of a
voting trust, voting powers agreement or similar arrangement, and agrees
that if at any time it shall cease to be a Citizen of the United States
without making use of a voting trust, voting powers agreement or similar
arrangement it will promptly resign as Owner Trustee (if and so long as
such citizenship is necessary under the Transportation Code as in effect at
such time or, if it is not necessary, if and so long as the Owner Trustee's
citizenship would have any material adverse effect on the Loan
Participants, the Owner Participant or Lessee), effective upon the
appointment of a successor Owner Trustee in accordance with Section 9.01 of
the Trust Agreement.
(c) Lessor's Covenants. Lessor (i) covenants that neither it
nor any Person claiming by, through or under it will, through its own
actions or inactions, interfere in Lessee's or any Sublessee's continued
possession, use, operation and quiet enjoyment of the Aircraft during the
Term unless an Event of Default has occurred and is continuing and this
Lease has been duly declared in default, and this Lease shall not be
terminated except as expressly provided herein and (ii) covenants that it
will not directly or indirectly create, incur, assume or suffer to exist
any Lessor Lien attributable to it on or with respect to the Airframe or
any Engine.
(d) Manufacturer's Warranties. None of the provisions of this
Lease shall be deemed to amend, modify or otherwise affect the
representations, warranties or other obligations (express or implied) of
the Seller, the Manufacturer, any subcontractor or supplier of the
Manufacturer with respect to the Airframe, the Engines or any Parts, or to
release the Seller, the Manufacturer, or any such subcontractor or
supplier, from any such representation, warranty or obligation. Unless an
Event of Default shall have occurred and be continuing under Section 14 and
this Lease shall have been declared in default, Lessor agrees to make
available to Lessee such rights as Lessor may have under any warranty with
respect to the Aircraft made by the Seller, the Manufacturer or any
affiliate thereof or any of its subcontractors or suppliers and any other
claims against the Seller, the Manufacturer or any affiliate thereof, or
any such subcontractor or supplier with respect to the Aircraft, all
pursuant to and in accordance with the terms of the Purchase Agreement
Assignment.
Section 5. RETURN OF THE AIRCRAFT.
(a) Condition Upon Return. Lessee shall comply with each of the
provisions of Exhibit G, which provisions are hereby incorporated by this
reference as if set forth in full herein.
(b) Storage and Related Matters. Unless Lessee has elected to
purchase the Aircraft in accordance with the terms hereof, if Lessor gives
written notice to Lessee not less than sixty (60) days nor more than one
hundred eighty (180) days prior to the end of the Term requesting storage
of the Aircraft upon its return hereunder, Lessee will provide Lessor, or
cause Lessor to be provided, with outdoor parking facilities for the
Aircraft for a period up to thirty (30) days, commencing on the date of
such return, at such storage facility in the forty eight (48) contiguous
states of the United States as Lessee may select; provided that such
location shall be a location generally used for the storage or parking of
commercial aircraft by aircraft owners or operators. Notwithstanding
subsection (a) of Exhibit G, such location shall be deemed to be the return
location of the Aircraft for purposes of such Exhibit G. Such storage
shall be at Lessor's risk and expense and Lessor shall pay all applicable
storage, maintenance and insurance fees and expenses. Lessee's obligation
to arrange parking shall be subject to Lessee and Lessor entering into an
agreement prior to the commencement of the storage period with the storage
facility providing, among other things, that Lessor shall bear all
maintenance charges and other costs incurred relating to such storage.
(c) Return of Other Engines. In the event that any Engine owned
by Lessor shall not be installed on the Airframe at the time of return
hereunder, Lessee shall be required to return the Airframe hereunder with
an Acceptable Alternate Engine meeting the requirements of, and in
accordance with, Section 10 and Exhibit G hereto. Thereupon, Lessor will
transfer to Lessee the Engine constituting part of such Aircraft but not
installed on such Airframe at the time of the return of the Airframe.
(d) Obligations Continue Until Return. If Lessee shall, for any
reason, fail to return the Aircraft at the time specified herein, all
obligations of Lessee under this Lease shall continue in effect with
respect to the Aircraft until the Aircraft is returned to Lessor and Lessee
shall pay to Lessor an amount equal to the average daily Basic Rent payable
by Lessee during the Term for each day after the end of the Term to but
excluding the day of such return; provided, however, that Lessee shall not
be responsible for Lessor's failure to accept return of the Aircraft in
accordance with this Section 5 in a timely manner or for any Rent with
respect to periods after Lessee has tendered the Aircraft for return in
accordance with this Lease. Any Rent owed to Lessor pursuant to this
Section 5(d) shall be payable upon acceptance of the Aircraft by Lessor or
on the last day of each calendar month following the last day of the Term
if the Aircraft has not been accepted earlier.
Section 6. LIENS. Lessee will not directly or indirectly
create, incur, assume or suffer to exist any Lien on or with respect to the
Aircraft, title thereto or any interest therein or in this Lease, except
(i) the respective rights of Lessor as owner of the Aircraft and Lessee as
herein provided, the Lien of the Trust Indenture, the rights of any
Sublessee under a sublease permitted hereunder and any other rights of any
Person existing pursuant to the Operative Documents, (ii) the rights of
others under agreements or arrangements to the extent permitted by the
terms of Sections 7(b) and 8(b) hereof, (iii) Lessor Liens, Loan
Participant Liens and Indenture Trustee's Liens, (iv) Liens for Taxes of
Lessee (or any Sublessee) either not yet due or being contested in good
faith by appropriate proceedings so long as such proceedings do not involve
any material danger of the sale, forfeiture or loss of the Airframe or any
Engine or any interest therein, (v) materialmen's, mechanics', workmen's,
repairmen's, employees' or other like Liens arising in the ordinary course
of Lessee's (or, if a Sublease is then in effect, Sublessee's) business
(including those arising under maintenance agreements entered into in the
ordinary course of business) securing obligations that are not overdue for
a period of more than sixty (60) days or are being contested in good faith
by appropriate proceedings so long as such proceedings do not involve any
material danger of the sale, forfeiture or loss of the Airframe or any
Engine or any interest therein, (vi) Liens arising out of any judgment or
award against Lessee (or any Sublessee), unless the judgment secured shall
not, within sixty (60) days after the entry thereof, have been discharged,
vacated, reversed or execution thereof stayed pending appeal or shall not
have been discharged, vacated or reversed within sixty (60) days after the
expiration of such stay, (vii) any other Lien with respect to which Lessee
(or any Sublessee) shall have provided a bond, cash collateral or other
security adequate in the reasonable opinion of Lessor, and (viii) Liens
approved in writing by Lessor. Lessee will promptly, at its own expense,
take (or cause to be taken) such actions as may be necessary duly to
discharge any such Lien not excepted above if the same shall arise at any
time.
Section 7. REGISTRATION, MAINTENANCE, OPERATION AND
REGISTRATION; POSSESSION AND SUBLEASES; INSIGNIA.
(a) Registration, Maintenance, Operation and Registration.
(1) Registration and Maintenance. Lessee, at its own
cost and expense, shall (or shall cause any Sublessee to): (A)
forthwith upon the delivery thereof hereunder, cause the Aircraft
to be duly registered in the name of Lessor, and, subject to
clause 3 of this Section 7(a) and Section 7(d) of the
Participation Agreement, to remain duly registered in the name of
Lessor under the Transportation Code, provided that Lessor shall
execute and deliver all such documents as Lessee (or any
Sublessee) may reasonably request for the purpose of effecting
and continuing such registration, and shall not register the
Aircraft or permit the Aircraft to be registered under any laws
other than the Transportation Code at any time except as provided
in Section 7(d) of the Participation Agreement and, unless the
Lien of the Trust Indenture shall have been discharged, shall
cause the Trust Indenture to be duly recorded and maintained of
record as a first mortgage on the Aircraft; (B) maintain,
service, repair and/or overhaul (or cause to be maintained,
serviced, repaired and/or overhauled) the Aircraft so as to keep
the Aircraft in as good an operating condition as when delivered
by the Seller to Lessee, ordinary wear and tear excepted, and as
may be necessary to enable the applicable airworthiness
certification for the Aircraft to be maintained in good standing
at all times (other than during temporary periods of storage or
during maintenance or modification permitted hereunder) under the
Transportation Code, except when all Airbus Model A319 aircraft
powered by engines of the same type as those with which the
Airframe shall be equipped at the time of such grounding and
registered in the United States have been grounded by the FAA
(although such certification need actually be maintained only
during such periods as the Aircraft is registered in the United
States), or the applicable laws of any other jurisdiction in
which the Aircraft may then be registered from time to time in
accordance with Section 7(d) of the Participation Agreement,
utilizing, except during any period that a Sublease is in effect,
the same manner and standard of maintenance, service, repair or
overhaul used by Lessee with respect to similar aircraft operated
by Lessee in similar circumstances and utilizing, during any
period that a Sublease is in effect, the same manner and standard
of maintenance, service, repair or overhaul used by the Sublessee
with respect to similar aircraft operated by the Sublessee in
similar circumstances; (C) maintain or cause to be maintained in
English all records, logs and other materials required to be
maintained in respect of the Aircraft by the FAA or the
applicable regulatory agency or body of any other jurisdiction in
which the Aircraft may then be registered; and (D) promptly
furnish or cause to be furnished to Lessor and the Owner
Participant such information as may be required to enable Lessor
to file any reports required to be filed by Lessor or the Owner
Participant with any governmental authority because of Lessor's
ownership of the Aircraft.
(2) Operation. Lessee will not maintain, use,
service, repair, overhaul or operate the Aircraft (or permit any
Sublessee to maintain, use, service, repair, overhaul or operate
the Aircraft) in violation of any law or any rule, regulation,
order or certificate of any government or governmental authority
(domestic or foreign) having jurisdiction over the Aircraft, or
in violation of any airworthiness certificate, license or
registration relating to the Aircraft issued by any such
authority, except to the extent Lessee (or, if a Sublease is then
in effect, any Sublessee) is contesting in good faith the
validity or application of any such law, rule, regulation or
order in any reasonable manner which does not involve any
material risk of sale, forfeiture or loss of the Aircraft.
Lessee will not operate the Aircraft, or permit any Sublessee to
operate the Aircraft, in any area excluded from coverage by any
insurance required by the terms of Section 11; provided, however,
that the failure of Lessee to comply with the provisions of this
sentence shall not give rise to an Event of Default hereunder if
indemnification complying with Section 11(c) has been provided or
where such failure is attributable to extraordinary circumstances
involving an isolated occurrence or series of incidents not in
the ordinary course of the regular operations of Lessee (or any
Sublessee) such as a hijacking, medical emergency, equipment
malfunction, weather condition, navigational error or other
causes beyond the reasonable control of Lessee (or any
Sublessee).
(3) Reregistration. At any time after the
Depreciation Period, Lessor, upon Lessee's compliance with all of
the terms of Section 7(d) of the Participation Agreement, shall,
at the request and sole expense of Lessee, cooperate with Lessee
to take all actions required to change the registration of the
Aircraft to another country.
(b) Possession and Subleases. Lessee will not, without the
prior written consent of Lessor, sublease or otherwise in any manner
deliver, transfer or relinquish possession of the Airframe or any Engine or
install or permit any Engine to be installed on any airframe other than the
Airframe or enter into any Wet Lease, and so long as Lessee (or any
Sublessee) shall comply with the provisions of Section 7(a) and Section 11
hereof, Lessee may (or may permit any Sublessee to), without the prior
written consent of Lessor:
(i) subject the Airframe and the Engines or
engines then installed thereon to interchange agreements or any
Engine to pooling or similar arrangements, in each case customary
in the airline industry and entered into by Lessee (or, if a
Sublease is then in effect, by Sublessee) in the ordinary course
of its business; provided that (A) no such agreement or
arrangement contemplates or requires the transfer of title to the
Airframe, (B) if Lessor's title to any Engine shall be divested
under any such agreement or arrangement, such divestiture shall
be deemed to be an Event of Loss with respect to such Engine and
Lessee shall (or shall cause Sublessee to) comply with Section
10(b) hereof in respect thereof, and (C) any interchange
agreement to which the Airframe may be subject shall be with a
U.S. Air Carrier or a Foreign Air Carrier.
(ii) deliver possession of the Airframe or
any Engine to the manufacturer thereof (or for delivery thereto)
or to any organization (or for delivery thereto) for testing,
service, repair, maintenance or overhaul work on the Airframe or
Engine or any part of any thereof or for alterations or
modifications in or additions to such Airframe or Engine to the
extent required or permitted by the terms of Section 8(c) hereof;
(iii) install an Engine on an airframe
owned by Lessee (or any Sublessee) free and clear of all Liens,
except: (A) Permitted Liens and those which apply only to the
engines (other than Engines), appliances, parts, instruments,
appurtenances, accessories, furnishings and other equipment
(other than Parts) installed on such airframe (but not to the
airframe as an entirety), (B) the rights of third parties under
interchange agreements or pooling or similar arrangements which
would be permitted under clause (i) above, provided that Lessor's
title to such Engine and, if any Equipment Notes shall be
outstanding, the first priority Lien of the Trust Indenture shall
not be divested or impaired as a result thereof and (C) mortgage
liens or other security interests, provided that (as regards this
clause (C)) the documents creating such mortgage liens or other
security interests (or, if applicable, another written agreement
governing such mortgage liens or other security interests)
effectively provide that such Engine shall not become subject to
the lien of such mortgage or security interest, notwithstanding
the installation thereof on such airframe;
(iv) install an Engine on an airframe leased
to Lessee (or any Sublessee) or purchased by Lessee (or any
Sublessee) subject to a conditional sale or other security
agreement, provided that (x) such airframe is free and clear of
all Liens, except: (A) the rights of the parties to the lease or
conditional sale or other security agreement covering such
airframe, or their assignees, and (B) Liens of the type permitted
by clause (iii) of this paragraph (b) and (y) such lease,
conditional sale or other security agreement effectively provides
that such Engine shall not become subject to the lien of such
lease, conditional sale or other security agreement,
notwithstanding the installation thereof on such airframe;
(v) install an Engine on an airframe owned
by Lessee (or any Sublessee), leased to Lessee (or any Sublessee)
or purchased by Lessee (or any Sublessee) subject to a
conditional sale or other security agreement under circumstances
where neither clause (iii) nor clause (iv) of this paragraph (b)
is applicable, provided that such installation shall be deemed an
Event of Loss with respect to such Engine and Lessee shall (or
shall cause any Sublessee to) comply with Section 10(b) hereof in
respect thereof, Lessor not intending hereby to waive any right
or interest it may have to or in such Engine under applicable law
until compliance by Lessee with such Section 10(b);
(vi) to the extent permitted by Section 8(b)
hereof, subject any appliances, Parts or other equipment owned by
Lessor and removed from the Airframe or any Engine to any pooling
arrangement referred to in Section 8(b) hereof;
(vii) subject (or permit any Sublessee to
subject) the Airframe or any Engine to the Civil Reserve Air
Fleet Program and transfer (or permit any Sublessee to transfer)
possession of the Airframe or any Engine to the United States
Government or any instrumentality or agency thereof pursuant to
the Civil Reserve Air Fleet Program, so long as Lessee (or any
Sublessee) shall (A) promptly notify Lessor upon subjecting the
Airframe or any Engine to the Civil Reserve Air Fleet Program in
any contract year and provide Lessor with the name and address of
the Contracting Office Representative for the Air Mobility
Command of the United States Air Force to whom notice must be
given pursuant to Section 15 hereof, and (B) promptly notify
Lessor upon transferring possession of the Airframe or any Engine
to the United States of America or any agency or instrumentality
thereof pursuant to such program;
(viii) for a period not to extend beyond
the end of the Term, enter into a Wet Lease for the Airframe and
Engines or engines then installed thereon with any third party;
provided that if Lessee (or any Sublessee) shall enter into any
Wet Lease for a period of more than one year (including renewal
options) Lessee shall provide Lessor written notice of such Wet
Lease (such notice to be given prior to entering into such Wet
Lease, if practicable, but in any event promptly after entering
into such Wet Lease);
(ix) for a period not to extend beyond the
end of the Term, transfer possession of the Airframe or any
Engine to the United States Government or any instrumentality or
agency thereof pursuant to a contract, a copy of which shall be
provided to Lessor; or
(x) Lessee may, at any time in its sole
discretion, enter into any sublease with (A) any Person domiciled
in the United States, (B) after the Depreciation Period, any
Permitted Sublessee or (C) after the Depreciation Period, any
other Person approved in writing by Lessor, which approval shall
not be unreasonably withheld; provided, however, that no sublease
entered into pursuant to this clause (x) shall extend beyond the
expiration of the Basic Term or any Renewal Term then in effect
unless Lessee shall have irrevocably committed to purchase the
Aircraft or renew the Lease in accordance with the terms hereof
at the end of the Basic Term or Renewal Term, as the case may be,
to a date beyond the latest permissible expiration date of such
sublease; provided, further, with respect to a sublease under
subclauses (B) or (C) of this clause (x), Lessee shall deliver to
Lessor an opinion of counsel to the effect that (I) the
obligations of Lessee and the rights and remedies of the Lessor
under the Lease remain valid, binding and (subject to customary
bankruptcy and equitable remedies exceptions and to other
exceptions customary in such Opinions) enforceable; (II) the
terms of the sublease constitute valid and binding obligations of
the Sublessee and (subject to customary bankruptcy and equitable
remedies exceptions and to other exceptions customary in such
Opinions) enforceable against Sublessee (it being understood that
such opinion may be an opinion as to the form of the Sublease
only and may assume due authorization, execution, delivery,
requisite approvals and absence of conflicts with laws, contracts
or organizational documents) under the laws of the jurisdiction
governing the sublease, (III) that there is no tort liability of
the owner of an aircraft not in possession thereof under the laws
of the jurisdiction of the proposed sublessee other than tort
liability which might have been imposed on such owner under the
laws of the United States or any state thereof (it being
understood that in the event such opinion cannot be given such
opinion requirement shall be waived if insurance reasonably
satisfactory to Lessor, in its individual capacity, is provided
at Lessee's expense), and (IV) unless Lessee shall have agreed to
provide insurance covering the risk of requisition of use of the
Aircraft by the government of the jurisdiction of the proposed
sublessee reasonably satisfactory to the Owner Participant, that
the laws of such jurisdiction require fair compensation by the
government of such jurisdiction payable in currency freely
convertible into Dollars for the loss of use of the Aircraft in
the event of the requisition by such government of such use.
Lessee shall provide Lessor with a copy of any sublease which has
a term of more than one (1) year.
The rights of any Sublessee or other transferee who receives
possession by reason of a transfer permitted by this paragraph (b) (other
than the transfer of an Engine which is deemed an Event of Loss) shall be
subject and subordinate to, and any Sublease permitted by this paragraph
(b) shall be expressly subject and subordinate to, all the terms of this
Lease and Lessor's (and so long as the Trust Indenture is in effect, the
Indenture Trustee's (as Lessor's assignee) rights to repossess and to void
such Sublease upon such repossession, and Lessee shall remain primarily
liable hereunder for the performance of all of the terms of this Lease, and
the terms of any such Sublease shall not permit any Sublessee to take any
action not permitted to be taken by Lessee in this Lease with respect to
the Aircraft. No pooling agreement, sublease or other relinquishment of
possession of the Airframe or any Engine or Wet Lease shall in any way
discharge or diminish any of Lessee's obligations to Lessor hereunder or
constitute a waiver of Lessor's rights or remedies hereunder. Lessor
agrees, for the benefit of Lessee (and any Sublessee) and for the benefit
of any mortgagee or other holder of a security interest in any engine
(other than an Engine) owned by Lessee (or any Sublessee), any lessor of
any engine (other than an Engine) leased to Lessee (or any Sublessee) and
any conditional vendor of any engine (other than an Engine) purchased by
Lessee (or any Sublessee) subject to a conditional sale agreement or any
other security agreement, that no interest shall be created hereunder in
any engine so owned, leased or purchased and that none of Lessor, its
successors or assigns will acquire or claim, as against Lessee (or any
Sublessee) or any such mortgagee, lessor or conditional vendor or other
holder of a security interest or any successor or assignee of any thereof,
any right, title or interest in such engine as the result of such engine
being installed on the Airframe.
Any Wet Lease or similar arrangement under which Lessee maintains
operational control of the Aircraft shall not constitute a delivery,
transfer or relinquishment of possession of the Aircraft for purposes of
this section. Lessor acknowledges that any consolidation or merger of
Lessee or conveyance, transfer or lease of all or substantially all of
Lessee's assets otherwise permitted by the Operative Documents shall not be
prohibited by this Section.
(c) Insignia. On or prior to the Delivery Date, or as soon as
practicable thereafter, Lessee agrees to affix and maintain (or cause to be
affixed and maintained), at its expense, in the cockpit of the Airframe
adjacent to the airworthiness certificate therein and on each Engine a
nameplate bearing the inscription:
Leased From
First Security Bank, National Association, as Owner Trustee, Lessor
and, for so long as the Airframe and each Engine shall be subject to the
Lien of the Trust Indenture, bearing the following additional inscription:
Mortgaged To
State Street Bank and Trust Company,
as Indenture Trustee
(such nameplate to be replaced, if necessary, with a nameplate reflecting
the name of any successor Lessor or successor Indenture Trustee, in each
case as permitted under the Operative Documents). Except as above
provided, Lessee will not allow the name of any Person to be placed on the
Airframe or on any Engine as a designation that might be interpreted as a
claim of ownership; provided that nothing herein contained shall prohibit
Lessee (or any Sublessee) from placing its customary colors and insignia on
the Airframe or any Engine.
Section 8. REPLACEMENT AND POOLING OF PARTS; ALTERATIONS,
MODIFICATIONS AND ADDITIONS.
(a) Replacement of Parts. Lessee, at its own cost and expense,
will promptly replace or cause to be replaced all Parts which may from time
to time be incorporated or installed in or attached to the Airframe or any
Engine and which may from time to time become worn out, lost, stolen,
destroyed, seized, confiscated, damaged beyond repair or permanently
rendered unfit for use for any reason whatsoever, except as otherwise
provided in paragraph (c) of this Section 8 or if the Airframe or an Engine
to which a Part relates has suffered an Event of Loss. In addition, Lessee
(or any Sublessee) may, at its own cost and expense, remove in the ordinary
course of maintenance, service, repair, overhaul or testing, any Parts,
whether or not worn out, lost, stolen, destroyed, seized, confiscated,
damaged beyond repair or permanently rendered unfit for use, provided that
Lessee (or any Sublessee), except as otherwise provided in paragraph (c) of
this Section 8, will, at its own cost and expense, replace such Parts as
promptly as practicable. All replacement Parts shall be free and clear of
all Liens (except for Permitted Liens and pooling arrangements to the
extent permitted by paragraph (b) of this Section 8 and except in the case
of replacement property temporarily installed on an emergency basis) and
shall be in as good operating condition as, and shall have a value and
utility at least equal to, the Parts replaced assuming such replaced Parts
were in the condition and repair required to be maintained by the terms
hereof. Except as otherwise provided in paragraph (c) of this Section 8,
all Parts at any time removed from the Airframe or any Engine shall remain
the property of Lessor, no matter where located, until such time as such
Parts shall be replaced by Parts which have been incorporated or installed
in or attached to the Airframe or such Engine and which meet the
requirements for replacement Parts specified above. Immediately upon any
replacement part becoming incorporated or installed in or attached to the
Airframe or any Engine as above provided, without further act (subject only
to Permitted Liens and any pooling arrangement to the extent permitted by
paragraph (b) of this Section 8 and except in the case of replacement
property temporarily installed on an emergency basis), (i) title to such
replacement Part shall thereupon vest in Lessor, (ii) such replacement Part
shall become subject to this Lease and be deemed part of the Airframe or
such Engine for all purposes hereof to the same extent as the Parts
originally incorporated or installed in or attached to the Airframe or such
Engine, and (iii) title to the replaced Part shall thereupon vest in Lessee
(or, if a Sublease is then in effect, any Sublessee), free and clear of all
rights of Lessor, and shall no longer be deemed a Part hereunder.
(b) Pooling of Parts. Any Part removed from the Airframe or any
Engine as provided in paragraph (a) of this Section 8 may be subjected by
Lessee (or any Sublessee) to a normal pooling arrangement customary in the
airline industry of which Lessee (or, if a Sublease is then in effect, any
Sublessee) is a party entered into in the ordinary course of Lessee's (or
any Sublessee's) business; provided that the Part replacing such removed
Part shall be incorporated or installed in or attached to such Airframe or
Engine in accordance with such paragraph (a) as promptly as practicable
after the removal of such removed Part. In addition, any replacement Part
when incorporated or installed in or attached to the Airframe or any Engine
in accordance with such paragraph (a) may be owned by any third party
subject to such a normal pooling arrangement, provided that Lessee (or any
Sublessee), at its expense, as promptly thereafter as practicable, either
(i) causes title to such replacement Part to vest in Lessor in accordance
with such paragraph (a) by Lessee (or any Sublessee) acquiring title
thereto for the benefit of, and transferring such title to, Lessor free and
clear of all Liens except Permitted Liens (other than pooling arrangements)
or (ii) replaces such replacement Part by incorporating or installing in or
attaching to the Airframe or Engine a further replacement Part owned by
Lessee (or any Sublessee) free and clear of all Liens except Permitted
Liens (other than pooling arrangements) and by causing title to such
further replacement Part to vest in Lessor in accordance with such
paragraph (a).
(c) Alterations, Modifications and Additions. Lessee, at its
own expense, will make (or cause to be made) such alterations and
modifications in and additions to the Airframe and Engines as may be
required from time to time to meet the applicable standards of the FAA or
any applicable regulatory agency or body of any other jurisdiction in which
the Aircraft may then be registered as permitted by Section 7(d) of the
Participation Agreement; provided, however, that Lessee (or, if a Sublease
is then in effect, any Sublessee) may, in good faith, contest the validity
or application of any such law, rule, regulation or order in any reasonable
manner which does not adversely affect Lessor or, so long as any Equipment
Notes are outstanding, the Indenture Trustee. In addition, Lessee (or any
Sublessee), at its own expense, may from time to time add further parts or
accessories and make such alterations and modifications in and additions to
the Airframe or any Engine as Lessee (or any Sublessee) may deem desirable
in the proper conduct of its business, including, without limitation,
removal of Parts which Lessee (or any Sublessee) has determined in its
reasonable judgment to be obsolete or no longer suitable or appropriate for
use on the Airframe or such Engine (such parts, "Obsolete Parts"); provided
that no such alteration, modification or addition shall materially diminish
the value, utility or remaining useful life of the Airframe or such Engine
below the value, utility or remaining useful life thereof immediately prior
to such alteration, modification or addition (it being agreed that the
modification that makes an Engine a CFM 56-5B-5/P engine shall be deemed
not to diminish the value, utility and remaining useful life of an Engine),
assuming the Airframe or such Engine was then in the condition required to
be maintained by the terms of this Lease, except that the value (but not
the utility or remaining useful life) of the Airframe or any Engine may be
reduced by the value of Obsolete Parts which shall have been removed so
long as the aggregate value of all Obsolete Parts which shall have been
removed and not replaced shall not exceed $350,000 in aggregate value at
the time of removal. Title to all Parts incorporated or installed in or
attached or added to the Airframe or an Engine as the result of such
alteration, modification or addition (except those parts which (x) Lessee
has leased from others and (y) may be removed by Lessee pursuant to the
next sentence (the "Additional Parts")) shall, without further act, vest in
Lessor. Notwithstanding the foregoing sentence, Lessee (or any Sublessee)
may remove or suffer to be removed any Additional Part, provided that such
Additional Part (i) is in addition to, and not in replacement of or
substitution for, any Part originally incorporated or installed in or
attached to the Airframe or any Engine at the time of delivery thereof
hereunder or any Part in replacement of, or substitution for, any such
Part, (ii) is not required to be incorporated or installed in or attached
or added to the Airframe or any Engine pursuant to the terms of Section 7
hereof or the first sentence of this paragraph (c) and (iii) can be removed
from the Airframe or such Engine without diminishing or impairing the
value, utility or remaining useful life which the Airframe or such Engine
would have had at the time of removal had such alteration, modification or
addition not occurred. Upon the removal by Lessee (or Sublessee) of any
Part as provided above, title thereto shall, without further act, vest in
Lessee (or any Sublessee, as the case may be) and such Part shall no longer
be deemed part of the Airframe or Engine from which it was removed. Any
Part not removed by Lessee (or any Sublessee) as above provided prior to
the return of the Airframe or Engine to Lessor hereunder shall remain the
property of Lessor.
(d) Certain Matters Regarding Passenger Convenience Equipment.
Lessee may install on the Airframe, subject to the requirements of Section
8(c) above, Passenger Convenience Equipment that is (i) owned by another
Person and leased to Lessee, (ii) sold to Lessee by another Person subject
to a conditional sale contract or other retained security interest,
(iii) leased to Lessee pursuant to a lease which is subject to a security
interest in favor of another Person or (iv) installed on the Aircraft
subject to a license granted to Lessee by another Person, and in any such
case (A) the Lessor and the Indenture Trustee will not acquire or claim, as
against any such other Person, any right, title or interest in any such
Passenger Convenience Equipment solely as a result of its installation on
the Airframe, (B) Lessee shall notify such Person of Lessor's and Indenture
Trustee's respective interest in the Aircraft, and (C) upon the occurrence
of any default under the applicable lease, conditional sale agreement,
security agreement or license, such Person shall not be entitled to
repossess such Passenger Convenience Equipment unless it shall, in
connection with such repossession, undertake to restore the Aircraft to the
condition it would have been in had the installation of such Passenger
Convenience Equipment not occurred.
Section 9. VOLUNTARY TERMINATION.
(a) Termination Event.
(i) Lessee shall have the right to elect to terminate this
Lease (x) on any Lease Period Date occurring on or after the close of
the calendar year in which the seventh (7th) anniversary of the
Delivery Date occurs if Lessee shall have made the good faith
determination, which shall be evidenced by a certificate of a
responsible officer of Lessee, that the Aircraft is obsolete or
surplus to its needs or (y) on the tenth, thirteenth and sixteenth
anniversaries of the Delivery Date.
(ii) Lessee shall give to Lessor at least one hundred twenty
(120) days revocable advance written notice of Lessee's intention to
so terminate this Lease (any such notice, a "Termination Notice")
specifying (A) the Lease Period Date on which Lessee intends to
terminate this Lease in accordance with this Section 9 (such specified
date, a "Termination Date"), (B) either (x) that Lessee has determined
that the Aircraft is obsolete or surplus to its needs or (y) that it
is exercising its termination option pursuant to Section 9(a)(i)(y)
and (C) in the case of a Termination under Section 9(a)(i)(y) whether
Lessee elects to purchase the Aircraft pursuant to Section 9(d). Any
Termination Notice shall become irrevocable fifteen (15) days prior to
the Termination Date.
(b) Optional Sale of the Aircraft; Lessor Retention Option;
Revocation of Termination Notice. In the event that Lessee shall have
exercised its right to terminate this Lease under Section 9(a)(i)(y) but
shall not have elected to purchase the Aircraft pursuant to Section 9(d),
or Lessee shall have elected to terminate this Lease pursuant to Section
9(a)(i)(x), then during the period from the giving of the notice referred
to in Section 9(a) until the proposed Termination Date (unless Lessee shall
have revoked the Termination Notice specifying such proposed Termination
Date or Lessor shall have irrevocably elected to retain the Aircraft
pursuant to this Section 9(b)), Lessee, as agent for Lessor and at no
expense to Lessor, shall use commercially reasonable efforts to obtain bids
for the purchase of the Aircraft and, in the event it receives any bid,
Lessee shall, within five (5) Business Days after receipt thereof and at
least ten (10) Business Days prior to the proposed Termination Date,
certify to Lessor in writing the amount and terms of such bid, and the name
and address of the party or parties (who shall not be Lessee or any
Affiliate of Lessee or any Person with whom Lessee or any such Affiliate
has an arrangement or understanding regarding the future use of the
Aircraft by Lessee or any such Affiliate but who may be the Owner
Participant, any Affiliate thereof or any Person contacted by the Owner
Participant) submitting such bid. Subject to the next succeeding sentence,
on or before the Termination Date, subject to the release of all mortgage
and security interests with respect to the Aircraft under the Trust
Indenture: (1) Lessee shall deliver the Aircraft, or cause the Aircraft to
be delivered, to the bidder(s), if any, which shall have submitted the
highest bid therefor at least ten Business Days prior to such Termination
Date, in the same manner and in the same condition and otherwise in
accordance with all the terms of this Lease as if delivery were made to
Lessor pursuant to Section 5, and shall duly transfer to Lessor title to
any engines not owned by Lessor all in accordance with the terms of Section
5, (2) Lessor shall comply with the terms of the Trust Indenture and shall,
without recourse or warranty (except as to the absence of Lessor Liens),
subject to prior or concurrent payment by Lessee of all amounts due under
clause (3) of this sentence, sell all of Lessor's right, title and interest
in and to the Aircraft for cash in Dollars to such bidder(s), the total
sales price realized at such sale to be retained by Lessor, and (3) Lessee
shall simultaneously pay or cause to be paid to Lessor in funds of the type
specified in Section 3(e) hereof, an amount equal to the sum of (A) the
excess, if any, of (i) the Termination Value for the Aircraft, computed as
of the Termination Date, over (ii) the sales price of the Aircraft sold by
Lessor after deducting the reasonable expenses incurred by Lessor in
connection with such sale, (B) all unpaid Basic Rent with respect to the
Aircraft due prior to such Termination Date and, if such Basic Rent is
payable in arrears on such Termination Date as indicated on Exhibit B, on
such Termination Date, and all unpaid Supplemental Rent due on or prior to
the Termination Date with respect to the Aircraft, and (C) the Make-Whole
Amount, if any, due on the Equipment Notes, and upon such payment Lessor
simultaneously will transfer to Lessee, without recourse or warranty
(except as to the absence of Lessor Liens), all of Lessor's right, title
and interest in and to any Engines constituting part of the Aircraft which
were not sold with the Aircraft. Notwithstanding the preceding sentence,
Lessor may, if Lessee has not revoked the Termination Notice, elect to
retain title to the Aircraft. If Lessor so elects, Lessor shall give to
Lessee irrevocable written notice of such election within thirty (30) days
of its receipt of a Termination Notice accompanied by an irrevocable
undertaking by the Owner Participant to make available to the Lessor for
payment to the Indenture Trustee on the Termination Date the amount
required to pay in full the unpaid principal amount of the Equipment Notes
outstanding on the Termination Date plus interest accrued thereon through
the Termination Date together with the Make-Whole Amount, if any, due on
the Equipment Notes, if the same is not otherwise paid. Upon receipt of
notice of such an election by Lessor and the accompanying undertaking by
the Owner Participant, Lessee shall cease its efforts to obtain bids as
provided above and shall reject all bids theretofore or thereafter
received. On the Termination Date, Lessor shall (subject to the payment by
Lessee of all Rent due on or prior to such date as set forth below) pay in
full the unpaid principal amount of the Equipment Notes outstanding on the
Termination Date plus interest accrued thereon through the Termination Date
together with all Make-Whole Amount, if any, due on the Equipment Notes
and, so long as the Equipment Notes are paid as aforesaid, Lessee shall
deliver the Airframe and Engines or engines to Lessor in accordance with
Section 5 and shall pay all Basic Rent due prior to the Termination Date
and, if such Basic Rent is payable in arrears on such Termination Date as
indicated on Exhibit B, on such Termination Date, and all Supplemental Rent
(other than Make-Whole Amount or Termination Value) due on or prior to the
Termination Date. If no sale shall have occurred on the Termination Date
and Lessor has not made the payment contemplated by the preceding sentence
and thereby caused this Lease to terminate, or if Lessee revokes its
Termination Notice, this Lease shall continue in full force and effect as
to the Aircraft, Lessee shall pay the reasonable costs and expenses
incurred by the Owner Participant and Lessor (unless such failure to
terminate the Lease is a consequence of the failure of Lessor or the Owner
Participant without due cause to make, or cause to be made, the payment
referred to in the immediately preceding sentence, in which case Lessor and
the Owner Participant shall be responsible for damages), if any, in
connection with preparation for such sale and Lessee may give one or more
additional Termination Notices in accordance with Section 9(a), subject to
the last sentence of this Section 9(b). In the event of any such sale or
such retention of the Aircraft by Lessor and upon compliance by Lessee with
the provisions of this paragraph, the obligation of Lessee to pay Basic
Rent or any other amounts hereunder shall cease to accrue and this Lease
shall terminate. Lessor may, but shall be under no duty to, solicit bids,
inquire into the efforts of Lessee to obtain bids or otherwise take any
action in connection with any such sale other than to transfer (in
accordance with the foregoing provisions) to the purchaser named in the
highest bid certified by Lessee to Lessor all of Lessor's right, title and
interest in the Aircraft, against receipt of the payments provided herein.
Lessee may revoke a Termination Notice given pursuant to Section 9(a) no
more than two times during the Term.
(c) Termination as to Engines; Replacement. Lessee shall have
the right at its option at any time during the Term, on at least thirty
(30) days prior written notice, to terminate this Lease with respect to any
Engine. In such event, and prior to the date of such termination, Lessee
shall replace such Engine hereunder by complying with the terms of Section
10(b) to the same extent as if an Event of Loss had occurred with respect
to such Engine, and Lessor shall transfer such right, title and interest as
it may have to the replaced Engine as provided in Section 5(b). No
termination of this Lease with respect to any Engine as contemplated by
this Section 9(c) shall result in any reduction of Basic Rent.
(d) Special Purchase Options. If Lessee exercises its right to
terminate this Lease under Section 9(a)(1)(y), gives its notice pursuant to
Section 9(a)(ii) to purchase the Aircraft pursuant to this Section 9(d) and
such notice becomes irrevocable, then on the Termination Date specified in
Section 9(a), Lessee shall purchase the Aircraft at the greater of (i) the
Termination Value on the Termination Date, or (ii) its fair market sale
value on the Termination Date (determined in accordance with Section 19(c)
hereof), provided the Lessee shall have also paid the amounts specified in
(A) and (B) of the following sentence. In such event, Lessor shall,
without recourse or warranty (except as to the absence of Lessor Liens),
sell the Aircraft to Lessee in exchange for the payment in immediately
available funds in an amount equal to the greater of (x) the Termination
Value for the Aircraft, computed as of the Termination Value Date, or (y)
the fair market sales value of the Aircraft on the Termination Date,
provided that on such date the Lessee shall have also paid to the Lessor
the sum of (A) all unpaid Basic Rent with respect to the Aircraft due on or
prior to such Termination Date (other than Basic Rent payable in advance
and due on the Termination Date) and all unpaid Supplemental Rent with
respect to the Aircraft due on or prior to such Termination Date plus (B)
all reasonable expenses incurred by Lessor and the Owner Participant in
connection with such sale. Upon payment in full of the amounts required to
be paid and the performance of all acts required to be performed by Lessee
pursuant to the preceding sentence, (i) the obligation of Lessee to pay
Basic Rent hereunder with respect to the Aircraft for any period commencing
on or after the Termination Date shall terminate with respect to the
Aircraft, (ii) this Lease shall terminate on the Termination Date, (iii)
Lessor will transfer to or at the direction of Lessee, without recourse or
warranty (except as to the absence of Lessor Liens), all of Lessor's right,
title and interest in the Airframe and Engines and furnish to or at the
direction of the Lessee a bill of sales in form and substance reasonably
satisfactory to Lessee, evidencing such transfer. Notwithstanding the
foregoing, Lessee may, in accordance with Section 7(u) of the Participation
Agreement, assume the principal amount of the Equipment Notes then
outstanding on any Termination Date specified in Section 9(a), in which
event the Lessee will receive a credit against the purchase price otherwise
payable pursuant to this Section 9(d) in an amount equal to the principal
amount of Equipment Notes so assumed.
Section 10. LOSS, DESTRUCTION, REQUISITION, ETC.
(a) Event of Loss with Respect to the Aircraft. Upon the
occurrence of an Event of Loss with respect to the Airframe or the Airframe
and the Engines and/or engines then installed thereon, Lessee shall
forthwith (and in any event, within fifteen (15) days after such
occurrence) give Lessor written notice of such Event of Loss, and, within
sixty (60) days after such Event of Loss, Lessee shall give Lessor written
notice of its election to perform one of the following options (it being
agreed that if Lessee shall not have given such notice of election within
such period, Lessee shall be deemed to have elected the option set forth in
clause (i) below). Lessee may elect either to:
(i) make the payments specified in this
clause (i), in which event not later than the earlier of (x) the
Business Day next succeeding the 120th day following the
occurrence of such Event of Loss or (y) an earlier Business Day
irrevocably specified fifteen (15) days in advance by notice from
Lessee to Lessor and the Indenture Trustee (the "Loss Payment
Date"), Lessee shall pay or cause to be paid to Lessor in funds
of the type specified in Section 3(e) hereof, an amount equal to
the Termination Value of the Aircraft corresponding to the
Termination Value Date occurring on or immediately following the
Loss Payment Date;
(ii) substitute an aircraft or an airframe or
an airframe and one or more engines, as the case may be; provided
that, if Lessee does not perform its obligation to effect such
substitution in accordance with this Section 10(a), during the
period of time provided herein, then Lessee shall pay or cause to
be paid to Lessor on the Business Day next succeeding the 120th
day following the occurrence of such Event of Loss the amount
specified in clause (i) above.
At such time as Lessor shall have received the amounts specified
in clause (i) above, together with all other amounts that then may be due
hereunder (including, without limitation, all Basic Rent due before the
date of such payment and all Supplemental Rent), under the Participation
Agreement and under the Tax Indemnity Agreement, (1) the obligation of
Lessee to pay the installments of Basic Rent shall cease to accrue, (2)
this Lease shall terminate, (3) Lessor will comply with the terms of the
Trust Indenture and transfer to or at the direction of Lessee, without
recourse or warranty (except as to the absence of Lessor Liens), all of
Lessor's right, title and interest in and to the Airframe and any Engines
subject to such Event of Loss, as well as any Engines not subject to such
Event of Loss, and furnish to or at the direction of Lessee a bill of sale
in form and substance reasonably satisfactory to Lessee (or any Sublessee),
evidencing such transfer, and (4) Lessee will be subrogated to all claims
of Lessor, if any, against third parties, for damage to or loss of the
Airframe and any Engines which were subject to such Event of Loss to the
extent of the then insured value of the Aircraft.
In the event Lessee shall elect to substitute an aircraft (or an
airframe or an airframe and one or more engines, as the case may be) Lessee
shall, at its sole expense, not later than the Business Day next succeeding
the 120th day following the occurrence of such Event of Loss, (A) convey or
cause to be conveyed to Lessor and to be leased by Lessee hereunder, an
aircraft (or an airframe or an airframe and one or more engines which,
together with the Engines constituting a part of the Aircraft but not
installed thereon at the time of such Event of Loss constitute the
Aircraft) free and clear of all Liens (other than Permitted Liens) and
having a value, utility and remaining useful life at least equal to the
Aircraft subject to such Event of Loss assuming that the Aircraft had been
maintained in accordance with this Lease and (B) prior to or at the time of
any such substitution, Lessee (or any Sublessee), at its own expense, will
(1) furnish Lessor with a full warranty bill of sale and a Federal Aviation
Administration bill of sale, in form and substance reasonably satisfactory
to Lessor, evidencing such transfer of title, (2) cause a Lease Supplement
and a Trust Supplement to be duly executed by Lessee and filed for
recording pursuant to the Transportation Code, or the applicable laws,
rules and regulations of any other jurisdiction in which the Airframe may
then be registered as permitted by Section 7(d) of the Participation
Agreement, (3) cause a financing statement or statements with respect to
such substituted property to be filed in such place or places as are deemed
necessary or desirable by Lessor to perfect its and the Indenture Trustee's
interest therein and herein, (4) furnish Lessor with such evidence of
compliance with the insurance provisions of Section 11 with respect to such
substituted property as Lessor may reasonably request, (5) furnish Lessor
with copies of the documentation required to be provided by Lessee pursuant
to Section 5.06 of the Trust Indenture, and Lessor simultaneously will
comply with the terms of the Trust Indenture and transfer to or at the
direction of Lessee, without recourse or warranty (except as to the absence
of Lessor Liens), all of Lessor's right, title and interest, if any, in and
to the Aircraft or the Airframe and one or more Engines, as the case may
be, with respect to which such Event of Loss occurred and furnish to or at
the direction of Lessee a bill of sale in form and substance reasonably
satisfactory to Lessee (or any Sublessee), evidencing such transfer, (6)
furnish Lessor with an opinion of counsel (which shall be Skadden, Arps,
Slate, Meagher & Flom LLP or Skadden, Arps, Slate, Meagher & Flom
(Illinois) and, if not, other counsel chosen by Lessee and reasonably
acceptable to Lessor) reasonably satisfactory to Lessor to the effect that
Lessor and the Indenture Trustee as assignee of Lessor will be entitled to
the benefits of Section 1110 of the U.S. Bankruptcy Code with respect to
the substitute aircraft, provided that such opinion need not be delivered
to the extent that immediately prior to such substitution the benefits of
Section 1110 of the U.S. Bankruptcy Code were not, solely by reason of a
change in law or governmental interpretation thereof, available to Lessor
and, so long as any Equipment Notes are outstanding, the Indenture Trustee
as assignee of Lessor's rights under the Lease with respect to the
Aircraft, and (7) Lessee will be subrogated to all claims of Lessor, if
any, against third parties for damage to or loss of the Airframe and any
Engine which were subject to such Event of Loss to the extent of the then
insured value of the Aircraft. For all purposes hereof, the property so
substituted shall after such transfer be deemed part of the property leased
hereunder and shall be deemed an "Aircraft", "Airframe" and "Engine", as
the case may be, as defined herein. No Event of Loss with respect to the
Airframe or the Airframe and the Engines or engines then installed thereon
for which substitution has been elected pursuant to Section 10(a)(ii)
hereof shall result in any reduction in Basic Rent.
(b) Event of Loss with Respect to an Engine. Upon the
occurrence of an Event of Loss with respect to an Engine under
circumstances in which there has not occurred an Event of Loss with respect
to the Airframe, Lessee shall forthwith (and in any event, within fifteen
days after such occurrence) give Lessor written notice thereof and shall,
within one hundred twenty (120) days after the occurrence of such Event of
Loss, convey or cause to be conveyed to Lessor, as replacement for the
Engine with respect to which such Event of Loss occurred, title to an
Acceptable Alternate Engine. Prior to or at the time of any such
conveyance, Lessee, at its own expense, will (i) furnish Lessor with a
warranty (as to title) bill of sale, in form and substance reasonably
satisfactory to Lessor, with respect to such Acceptable Alternate Engine,
(ii) cause a Lease Supplement and Trust Supplement to be duly executed by
Lessee and to be filed for recording pursuant to the Transportation Code,
or the applicable laws, rules and regulations of any other jurisdiction in
which the Airframe may then be registered as permitted by Section 7(d) of
the Participation Agreement, (iii) furnish Lessor with such evidence of
compliance with the insurance provisions of Section 11 hereof with respect
to such replacement engine as Lessor may reasonably request and furnish
Lessor with copies of the documentation required to be provided by Lessee
pursuant to Section 5.06 of the Trust Indenture, and Lessor will comply
with the terms of the Trust Indenture and transfer to or at the direction
of Lessee without recourse or warranty (except as to absence of Lessor
Liens) all of Lessor's right, title and interest, if any, in and to (A) the
Engine with respect to which such Event of Loss occurred and furnish to or
at the direction of Lessee a bill of sale in form and substance reasonably
satisfactory to Lessee, evidencing such transfer and (B) all claims, if
any, against third parties, for damage to or loss of the Engine subject to
such Event of Loss, and such Engine shall thereupon cease to be the Engine
leased hereunder. For all purposes hereof, each such replacement engine
shall, after such conveyance, be deemed part of the property leased
hereunder, and shall be deemed an "Engine". No Event of Loss with respect
to an Engine under the circumstances contemplated by the terms of this
paragraph (b) shall result in any reduction in Basic Rent.
(c) Application of Payments from Governmental Authorities for
Requisition of Title, etc. Any payments (other than insurance proceeds the
application of which is provided for in Section 11) received at any time by
Lessor or by Lessee from any governmental authority or other Person with
respect to an Event of Loss will be applied as follows:
(i) if payments are received with respect to
the Airframe (or the Airframe and any Engine or engines then
installed thereon), (A) unless the same are replaced pursuant to
the last paragraph of Section 10(a), after reimbursement of
Lessor (as provided in Section 7.01 of the Trust Agreement) for
reasonable costs and expenses, so much of such payments remaining
as shall not exceed the Termination Value required to be paid by
Lessee pursuant to Section 10(a), shall be applied in reduction
of Lessee's obligation to pay Termination Value, if not already
paid by Lessee, or, if already paid by Lessee, shall be applied
to reimburse Lessee for its payment of Termination Value, and
following the foregoing application, the balance, if any, of such
payments will be paid over to, or retained by Lessee, provided
that Lessor shall be entitled to so much of the excess, if any,
of such payment over the greater of (x) the Termination Value and
(y) the fair market value of the Aircraft as Lessor shall
demonstrate to Lessee's reasonable satisfaction is attributable
to compensation for loss of Lessor's interest in the Aircraft as
distinguished from the loss of use of the Aircraft; or (B) if
such property is replaced pursuant to the last paragraph of
Section 10(a), such payments shall be paid over to, or retained
by, Lessee; and
(ii) if such payments are received with
respect to an Engine under circumstances contemplated by Section
10(b) hereof, so much of such payments remaining after
reimbursement of Lessor (as provided for in Section 7.01 of the
Trust Agreement) for reasonable costs and expenses shall be paid
over to, or retained by, Lessee.
(d) Requisition for Use of the Aircraft by the United States
Government or the Government of Registry of the Aircraft. In the event of
the requisition for use of the Airframe and the Engines or engines
installed on the Airframe during the Term by the United States Government
or any other government of registry of the Aircraft or any instrumentality
or agency of any thereof, Lessee shall promptly notify Lessor of such
requisition, and all of Lessee's obligations under this Lease Agreement
with respect to the Aircraft shall continue to the same extent as if such
requisition had not occurred (except to the extent that any failure or
delay in repairing or maintaining the Aircraft shall have been caused by
such requisition), provided that if such Airframe and Engines or engines
installed thereon are not returned by such government prior to the end of
the Term, Lessee shall be obligated to return the Airframe and such Engines
or engines to Lessor pursuant to, and in all other respects in compliance
with the provisions of, Section 5 promptly on the date of such return by
such government. If, in the event of any such requisition, Lessee shall
fail to return the Aircraft on or before the thirtieth (30th) day beyond
the end of the Term, such failure shall constitute an Event of Loss which
shall be deemed to have occurred on the last day of the Term and in such
event Lessee shall make the payment contemplated by Section 10(a)(i) in
respect of such Event of Loss; provided, however, that Lessor may notify
Lessee in writing on or before the twentieth (20th) day prior to the last
day of the Term that, in the event Lessee shall fail by reason of such
requisition to return the Airframe and such Engines or engines on or before
the thirtieth day beyond the end of the Term, such failure shall not be
deemed an Event of Loss. Upon the giving of such notice and such failure
to return by the thirtieth (30th) day beyond the end of the Term, Lessee
shall be relieved of all of its obligations pursuant to the provisions of
Section 5 (but not under any other Section), except that if any engine not
owned by Lessor shall then be installed on the Airframe, Lessee will, at no
cost to Lessor, furnish, or cause to be furnished, to Lessor a full
warranty (as to title) bill of sale with respect to each such engine, in
form and substance reasonably satisfactory to Lessor (together with an
opinion of counsel (which may be Lessee's General Counsel, Deputy General
Counsel, Assistant General Counsel or Associate General Counsel) to the
effect that such full warranty bill of sale has been duly authorized and
delivered and is enforceable in accordance with its terms and that such
engines are free and clear of Liens other than Lessor Liens, Loan
Participant Liens and Indenture Trustee Liens), against receipt from Lessor
of a bill of sale evidencing the transfer, without recourse or warranty
(except as to the absence of Lessor Liens), by Lessor to Lessee or its
designee of all of Lessor's right, title and interest in and to any Engine
constituting part of the Aircraft but not then installed on the Airframe.
All payments received by Lessor or Lessee from such government for the use
of such Airframe and Engines or engines during the Term shall be paid over
to, or retained by, Lessee (or, if directed by Lessee, any Sublessee); and
all payments received by Lessor or Lessee from such government for the use
of such Airframe and Engines or engines after the end of the Term shall be
paid over to, or retained by, Lessor unless Lessee shall have exercised its
purchase option hereunder, in which case such payments shall be made to
Lessee.
(e) Requisition for Use of an Engine by the United States
Government or the Government of Registry of the Aircraft. In the event of
the requisition for use of an Engine by the United States Government or any
other government of registry of the Aircraft or any agency or
instrumentality of any thereof (other than in the circumstances
contemplated by paragraph (d)), Lessee shall replace such Engine hereunder
by complying (or causing any Sublessee to comply) with the terms of Section
10(b) to the same extent as if an Event of Loss had occurred with respect
thereto, and, upon compliance with Section 10(b) hereof, any payments
received by Lessor or Lessee from such government with respect to such
requisition shall be paid over to, or retained by, Lessee.
(f) Application of Payments During Existence of Event of
Default. Any amount referred to in this Section 10 which is payable to or
retainable by Lessee (or any Sublessee) shall not be paid to or retained by
Lessee (or such Sublessee) if at the time of such payment or retention an
Event of Default has occurred and is continuing, but shall be held by or
paid over to Lessor as security for the obligations of Lessee (or such
Sublessee) under this Lease and, if an Event of Default has occurred and is
continuing hereunder, applied against Lessee's obligations hereunder as and
when due. At such time as there shall not be continuing any such Event of
Default, such amount shall be paid to Lessee (or such Sublessee) to the
extent not previously applied in accordance with the preceding sentence.
Section 11. INSURANCE.
(a) Lessee's Obligation to Insure. Lessee shall comply with, or
cause to be complied with, each of the provisions of Exhibit H, which
provisions are hereby incorporated by this reference as if set forth in
full herein.
(b) Additional Insurance by Lessor and Lessee. Lessee (and any
Sublessee) may at its own expense carry insurance with respect to its
interest in the Aircraft in amounts in excess of that required to be
maintained by this Section 11; the Owner Participant may carry for its own
account at its sole cost and expense insurance with respect to its interest
in the Aircraft, provided that such insurance does not prevent Lessee (or
any Sublessee) from carrying the insurance required or permitted by this
Section 11 or adversely affect such insurance or the cost thereof.
(c) Indemnification by Government in Lieu of Insurance.
Notwithstanding any provisions of this Section 11 requiring insurance,
Lessor agrees to accept, in lieu of insurance against any risk with respect
to the Aircraft, indemnification from, or insurance provided by, the United
States Government or any agency or instrumentality thereof, or, upon the
written consent of Lessor, other government of registry of the Aircraft or
agency or instrumentality thereof, against such risk in an amount which,
when added to the amount of insurance against such risk maintained by
Lessee (or any Sublessee) shall be at least equal to the amount of
insurance against such risk otherwise required by this Section 11 (taking
into account self-insurance permitted by Exhibit H hereto).
(d) Application of Payments During Existence of an Event of
Default. Any amount referred to in paragraph (b) of Exhibit H hereto which
is payable to or retainable by Lessee (or any Sublessee) shall not be paid
to or retained by Lessee (or any Sublessee) if at the time of such payment
or retention an Event of Default has occurred and is continuing, but shall
be held by or paid over to Lessor as security for the obligations of Lessee
under this Lease and, if Lessor declares this Lease to be in default
pursuant to Section 15 hereof, applied against Lessee's obligations
hereunder as and when due. At such time as there shall not be continuing
any such Event of Default, such amount shall be paid to Lessee to the
extent not previously applied in accordance with the preceding sentence.
Section 12. INSPECTION. At all reasonable times and upon at
least 15 days prior written notice to Lessee, the Owner Participant or the
Indenture Trustee, or their respective authorized representatives, may
inspect the Aircraft and inspect and make copies of the books and records
of Lessee and any Sublessee required to be maintained by the Federal
Aviation Administration or the regulatory agency or body of another
jurisdiction in which the Aircraft is then registered relating to the
maintenance of the Aircraft (at Lessor's, the Owner Participant's or the
Indenture Trustee's risk and expense, as the case may be) and shall keep
any information or copies obtained thereby confidential and shall not
disclose the same to any Person, except (A) to the Lessor, the Certificate
Holders and to prospective and permitted transferees of Lessor's, the Owner
Participant's, the Certificate Holders' or the Indenture Trustee's interest
(and such prospective and permitted transferee's counsel, independent
insurance advisors or other agents) who agree to hold such information
confidential, (B) to Lessor's, the Owner Participant's, the Certificate
Holders' or the Indenture Trustee's counsel, independent insurance advisors
or other agents who agree to hold such information confidential, or (C) as
may be required by any statute, court or administrative order or decree or
governmental ruling or regulation, provided, however, that any and all
disclosures permitted by clause (C) above shall be made only to the extent
necessary to meet the specific requirements or needs of the Persons for
whom such disclosures are hereby permitted. Any such inspection of the
Aircraft shall be subject to Lessee's safety and security rules applicable
to the location of the Aircraft, shall be a visual, walk-around inspection
of the interior and exterior of the Aircraft and shall not include opening
any panels, bays or the like without the express consent of Lessee (except
in connection with a heavy maintenance visit when a panel, bay or the like
is scheduled or required to be opened), which consent Lessee may in its
sole discretion withhold; provided that no exercise of such inspection
right shall interfere with the normal operation or maintenance of the
Aircraft by, or the business of, Lessee (or any Sublessee). Upon receipt
by Lessee of a written request from the Owner Participant specifying that
the Owner Participant desires to have an authorized representative observe
the next scheduled heavy maintenance visit to be performed on the Aircraft
during the Term, Lessee shall cooperate with the Owner Participant to
enable the Owner Participant's representative to observe such scheduled
maintenance to be performed on the Aircraft during the Term; provided that
the Owner Participant's authorized representative shall merely observe such
scheduled heavy maintenance visit, shall not interfere with or extend in
any manner the normal conduct or duration of the scheduled heavy
maintenance visit, and shall not be entitled to direct any of the work
performed in connection with such scheduled heavy maintenance visit.
Neither the Owner Participant nor the Indenture Trustee shall have any duty
to make any such inspection nor shall either of them incur any liability or
obligation by reason of not making such inspection. Except during the
final six (6) months of the Term or during the continuance of an Event of
Default, all inspections by the Owner Participant and its authorized
representatives or the Indenture Trustee and its authorized representatives
provided for under this Section 12 shall, in regard to each of the Owner
Participant and the Indenture Trustee, be limited to one (1) inspection of
any kind contemplated by this Section 12 during any calendar year. During
the last three months of the Term (unless Lessee shall have elected to
purchase the Aircraft or renew this Lease in accordance with the terms of
this Lease), with reasonable notice, Lessee will cooperate and cause any
Sublessee to cooperate, at Lessor's sole cost, in all reasonable respects
with the efforts of Lessor to sell or lease the Aircraft, including,
without limitation, permitting prospective purchasers or lessees to inspect
the Aircraft, any maintenance records relating to the Aircraft then
required to be retained by the FAA or by the comparable government of
registry of the Aircraft, all in accordance with the provisions set forth
above; provided that any such cooperation shall not interfere with the
normal operation or maintenance of the Aircraft by, or the business of,
Lessee or any Sublessee.
Section 13. ASSIGNMENT. Except as otherwise provided herein,
Lessee will not, without prior written consent of Lessor, assign in whole
or in part any of its rights or obligations hereunder. Lessor agrees that
it will not assign or convey its right, title and interest in and to this
Lease or the Aircraft except as provided herein, in the Trust Indenture,
the Trust Agreement, in the Participation Agreement or in any other
Operative Document. Subject to the foregoing, the terms and provisions of
this Lease shall be binding upon and inure to the benefit of Lessor and
Lessee and their respective successors and permitted assigns.
Section 14. EVENTS OF DEFAULT. Each of the following events
shall constitute an Event of Default (whether any such event shall be
voluntary or involuntary or come about or be effected by operation of law
or pursuant to or in compliance with any judgment, decree or order of any
court or any order, rule or regulation of any administrative or
governmental body) and each such Event of Default shall continue so long
as, but only as long as, it shall not have been remedied:
(a) Lessee shall not have made a payment of (i) Basic Rent
within five (5) Business Days after the same shall have become due or (ii)
Termination Value within ten (10) Business Days after receipt by Lessee of
written notice that the same is past due; or
(b) Lessee shall have failed to make a payment of Supplemental
Rent (other than Termination Value) after the same shall have become due
and such failure shall continue for thirty (30) days after Lessee's receipt
of written demand therefor by the party entitled thereto (provided that any
failure to pay any amount owed by Lessee under the Tax Indemnity Agreement
or any failure of Lessee to pay to Lessor or the Owner Participant when due
any Excluded Payments shall not constitute an Event of Default unless
notice is given by the Owner Participant to Lessee and the Indenture
Trustee that such failure shall constitute an Event of Default); or
(c) Lessee shall have failed to perform or observe (or caused to
be performed and observed) in any material respect any covenant or
agreement (except the covenants set forth in the Tax Indemnity Agreement)
to be performed or observed by it under any Operative Document, and such
failure shall continue unremedied for a period of thirty (30) days after
receipt by Lessee of written notice thereof from Lessor or the Indenture
Trustee; provided, however, that if Lessee shall have undertaken to cure
any such failure and, notwithstanding the diligence of Lessee in attempting
to cure such failure, such failure is not cured within said thirty (30) day
period but is curable with future due diligence, there shall exist no Event
of Default under this Section 14 so long as Lessee is proceeding with due
diligence to cure such failure and such failure is remedied not later than
three hundred sixty (360) days after receipt by Lessee of such written
notice; or
(d) any representation or warranty made by Lessee herein or in
the Participation Agreement or any document or certificate furnished by
Lessee in connection herewith or therewith or pursuant hereto or thereto
(except the representations and warranties set forth in the Tax Indemnity
Agreement and such documents or certificates as are furnished to the Owner
Participant solely in connection with matters dealt with in the Tax
Indemnity Agreement and for no other purpose and except for representations
or warranties contained in the Pass Through Trust Agreement or the
Underwriting Agreement or any document or instrument furnished pursuant to
either thereof) shall prove to have been incorrect in any material respect
at the time made, shall remain material at the time in question and such
incorrectness shall not have been cured (to the extent of the adverse
impact of such incorrectness on the interests of the Owner Participant,
Lessor or the Certificate Holders) within thirty (30) days after the
receipt by Lessee of a written notice from Lessor or the Indenture Trustee
advising Lessee of the existence of such incorrectness; or
(e) the commencement of an involuntary case or other proceeding
in respect of Lessee in an involuntary case under the federal bankruptcy
laws, as now or hereafter constituted, or any other applicable federal or
state bankruptcy, insolvency or other similar law in the United States or
seeking the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of Lessee or for all or
substantially all of its property, or seeking the winding-up or liquidation
of its affairs and the continuation of any such case or other proceeding
undismissed and unstayed for a period of ninety (90) consecutive days or an
order, judgment or decree shall be entered in any proceeding by any court
of competent jurisdiction appointing, without the consent of Lessee, a
receiver, trustee or liquidator of Lessee, or of any substantial part of
its property, or sequestering any substantial part of the property of
Lessee and any such order, judgment or decree or appointment or
sequestration shall be final or shall remain in force undismissed, unstayed
or unvacated for a period of ninety (90) days after the date of entry
thereof; or
(f) the commencement by Lessee of a voluntary case under the
federal bankruptcy laws, as now constituted or hereafter amended, or any
other applicable federal or state bankruptcy, insolvency or other similar
law in the United States, or the consent by Lessee to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of Lessee or for all or
substantially all of its property, or the making by Lessee of any
assignment for the benefit of creditors, or Lessee shall take any corporate
action to authorize any of the foregoing; or
(g) Lessee shall fail to carry and maintain on or with respect
to the Aircraft (or cause to be carried and maintained) insurance required
to be maintained in accordance with the provisions of Section 11 hereof;
provided, however, that, notwithstanding anything to the contrary contained
in Section 14(c) or (d) hereof, any failure of Lessee to perform or observe
any covenant, condition, agreement or any error in a representation or
warranty shall not constitute an Event of Default if such failure or error
is caused solely by reason of an event that constitutes an Event of Loss so
long as Lessee is continuing to comply with all of the terms of Section 10
hereof.
Section 15. REMEDIES. Upon the occurrence of any Event of
Default and at any time thereafter so long as the same shall be continuing,
Lessor may, at its option, declare by written notice to Lessee this Lease
Agreement to be in default; and at any time thereafter, so long as any such
outstanding Events of Default shall not have been remedied, Lessor may do
one or more of the following with respect to all or any part of the
Airframe and any or all of the Engines as Lessor in its sole discretion
shall elect, to the extent permitted by, and subject to compliance with any
mandatory requirements of, applicable law then in effect; provided,
however, that during any period the Aircraft is subject to the Civil
Reserve Air Fleet Program in accordance with the provisions of Section 7(b)
hereof and in possession of the United States government or an agency or
instrumentality of the United States, Lessor shall not, on account of any
Event of Default, be entitled to do any of the following in such manner as
to limit Lessee's control under this Lease (or any Sublessee's control
under any Sublease) of any Airframe or any Engines installed thereon,
unless at least sixty (60) days (or such lesser period as may then be
applicable under the Air Mobility Command program of the United States
Government) written notice of default hereunder shall have been given by
Lessor by registered or certified mail to Lessee (and any Sublessee) with a
copy addressed to the Contracting Office Representative for the Air
Mobility Command of the United States Air Force under any contract with
Lessee (or any Sublessee) relating to the Aircraft:
(a) upon the written demand of Lessor and at Lessee's expense,
cause Lessee to return promptly, and Lessee shall return promptly, the
Airframe or any Engine as Lessor may so demand to Lessor or its order in
the manner and condition required by, and otherwise in accordance with all
the provisions of, Section 5 as if such Airframe or Engine were being
returned at the end of the Term, or Lessor, at its option, may enter upon
the premises where all or any part of the Airframe or any Engine is located
and take immediate possession of and remove the same by summary proceedings
or otherwise (and/or, at Lessor's option, store the same at Lessee's
premises until disposal thereof by Lessor), all without liability accruing
to Lessor for or by reason of such entry or taking of possession or
removing whether for the restoration of damage to property caused by such
action or otherwise;
(b) sell the Airframe and/or any Engine at public or private
sale, as Lessor may determine, or otherwise dispose of, hold, use, operate,
lease to others or keep idle the Aircraft as Lessor, in its sole
discretion, may determine, all free and clear of any rights of Lessee,
except as hereinafter set forth in this Section 15;
(c) whether or not Lessor shall have exercised, or shall
thereafter at any time exercise, any of its rights under paragraph (a) or
paragraph (b) above with respect to the Airframe and/or any Engine, Lessor,
by written notice to Lessee specifying a payment date which shall be the
Lease Period Date not earlier than ten (10) days from the date of such
notice, may demand that Lessee pay to Lessor, and Lessee shall pay Lessor,
on the payment date so specified, as liquidated damages for loss of a
bargain and not as a penalty (in lieu of the installments of Basic Rent for
the Aircraft due for Lease Periods commencing on or after the Lease Period
Date specified as the payment date in such notice), any unpaid Basic Rent
due on Lease Period Dates prior to the payment date so specified
(including, without limitation, any adjustments to Basic Rent payable
pursuant to Section 3(c)) plus whichever of the following amounts Lessor,
in its sole discretion, shall specify in such notice (together with
interest, if any, on such amount at the Past Due Rate from such specified
payment date until the date of actual payment of such amount): (i) an
amount equal to the excess, if any, of the Termination Value for the
Aircraft, computed as of the Lease Period Date specified as the payment
date in such notice, over the aggregate fair market rental value (computed
as hereafter in this Section 15 provided) of such Aircraft for the
remainder of the Term, after discounting such aggregate fair market rental
value to present value as of the Lease Period Date specified as the payment
date in such notice at an annual rate equal to the Past Due Rate; or (ii)
an amount equal to the excess, if any, of the Termination Value for such
Aircraft, computed as of the Lease Period Date specified as the payment
date in such notice over the fair market sales value of such Aircraft
(computed as hereafter in this Section provided) as of the Lease Period
Date specified as the payment date in such notice;
(d) in the event Lessor, pursuant to paragraph (b) above, shall
have sold the Airframe and/or any Engine, Lessor, in lieu of exercising its
rights under paragraph (c) above with respect to such Aircraft, may, if it
shall so elect, demand that Lessee pay Lessor, and Lessee shall pay to
Lessor, on the date of such sale, as liquidated damages for loss of a
bargain and not as a penalty (in lieu of the installments of Basic Rent for
the Aircraft due on or after such date), any unpaid Basic Rent with respect
to the Aircraft due prior to such date (including, without limitation, any
adjustments to Basic Rent payable pursuant to Section 3(c)) plus the amount
of any deficiency between the net proceeds of such sale (after deduction of
all reasonable costs of sale) and the Termination Value of such Aircraft,
computed as of the Termination Date on or immediately following the date of
such sale together with interest, if any, on the amount of such deficiency,
at the Past Due Rate, from the date of such sale to the date of actual
payment of such amount; and/or
(e) Lessor may rescind this Lease Agreement as to the Aircraft,
and/or may exercise any other right or remedy which may be available to it
under applicable law or proceed by appropriate court action to enforce the
terms hereof or to recover damages for breach hereof.
For the purposes of paragraph (c) above, the "fair market rental
value" or the "fair market sales value" of the Aircraft shall be the rental
value or sales value, as the case may be, which would be obtained in an
arm's-length transaction between an informed and willing lessee or
purchaser, as the case may be, under no compulsion to lease or purchase, as
the case may be, and an informed and willing lessor or seller in possession
under no compulsion to lease, sell, as the case may be, in each case based
upon the actual condition and location of the Aircraft, which value shall
be determined by mutual agreement or, in the absence of mutual written
agreement, pursuant to an appraisal prepared and delivered by a nationally
recognized firm of independent aircraft appraisers nominated by Lessor, and
Lessor shall immediately notify Lessee of such nomination. Unless Lessee
shall have objected in writing within ten (10) Business Days after its
receipt of Lessor's notice, Lessor's nomination shall be conclusive and
binding. If Lessee shall object, however, Lessor and Lessee shall
endeavor, within ten (10) Business Days after such objection is made, to
select a mutually acceptable appraiser; provided that, if Lessee shall not
so endeavor to make such selection, Lessor's nomination referred to in the
preceding sentence hereof shall be conclusive and binding. If Lessor and
Lessee fail to reach agreement (except for the reason referred to in the
proviso in the preceding sentence), or if any appraiser selected fails to
act for any reason, then the question shall be determined by an appraisal
(applying the definitions of "fair market rental value" and "fair market
sales value" as set forth above based upon the actual condition of the
Aircraft) mutually agreed to by two (2) recognized independent aircraft
appraisers, one of which appraisers shall be chosen by Lessor and one by
Lessee within five (5) Business Days after Lessor or Lessee shall have
received written notice from the other party of a demand that such an
appraisal be made, which notice shall specify the appraiser chosen by the
party giving the notice or, if such appraisers cannot agree on the amount
of such appraisal within twenty (20) Business Days after the end of such
five (5) Business Day period, each shall render its own appraisal and shall
by mutual consent choose another appraiser within five (5) Business Days
after the end of such twenty (20) day period. If, within such five (5) day
period, such two appraisers fail to appoint a third appraiser, then either
Lessor or Lessee, on behalf of both, may request such appointment by the
then President of the Association of the Bar of the City of New York (or
any successor organization thereto) or, in his absence, failure, refusal or
inability to act, then either Lessor or Lessee may apply to the American
Arbitration Association (or any successor organization thereto) in New
York, New York for the appointment of such third appraiser. The decision
of the third appraiser so appointed shall be given within twenty (20)
Business Days after the appointment of such third appraiser. As soon as
the third appraiser has delivered his appraisal, that appraisal shall be
compared with the appraisals given by the other two (2) appraisers. If the
determination of one appraiser is more disparate from the average of all
three determinations than each of the other two determinations, then the
determination of such appraiser shall be excluded, the remaining two
determinations shall be averaged and such average shall be final and
binding upon the parties hereto. If no determination is more disparate
from the average of all three determinations than each of the other
determinations, then such average shall be final and binding upon the
parties thereto. The cost of such appraisal or appointment shall be borne
by Lessee.
In addition, Lessee shall be liable, except as otherwise provided
above and without duplication of amounts payable hereunder, for any and all
unpaid Rent due hereunder before, after or during the exercise of any of
the foregoing remedies and for all reasonable legal fees and other costs
and expenses (including fees of the appraisers hereinabove referred to)
incurred by Lessor, the Indenture Trustee, the Loan Participants and the
Owner Participant in connection with the return of the Airframe or any
Engine in accordance with the terms of Section 5 or in placing such
Airframe or Engine in the condition and airworthiness required by such
Section.
At any sale of the Aircraft or any part thereof pursuant to this
Section 15, Lessor (or the Indenture Trustee, any Loan Participant or the
Owner Participant) or Lessee may bid for and purchase such property.
Lessor agrees to give Lessee at least fifteen (15) days prior written
notice of the date fixed for any public sale of the Airframe or any Engine
or of the date on or after which will occur the execution of any contract
providing for any private sale and any such public sale shall be conducted
in general so as to afford Lessee (and any Sublessee) a reasonable
opportunity to bid. Except as otherwise expressly provided above, no
remedy referred to in this Section 15 is intended to be exclusive, but each
shall be cumulative and in addition to any other remedy referred to above
or otherwise available to Lessor at law or in equity; and the exercise or
beginning of exercise by Lessor of any one or more of such remedies shall
not preclude the simultaneous or later exercise by Lessor of any or all of
such other remedies. No waiver by Lessor of any Event of Default shall in
any way be, or be construed to be, a waiver of any future or subsequent
Event of Default.
Section 16. LESSEE'S COOPERATION CONCERNING CERTAIN MATTERS;
DELIVERY OF FINANCIAL STATEMENTS. Forthwith upon the execution and
delivery of each Lease Supplement and Trust Supplement from time to time
required by the terms hereof and upon the execution and delivery of any
amendment to this Lease, to the Trust Indenture or to the Trust Agreement,
Lessee will cause such Lease Supplement, Trust Supplement (and, in the case
of the initial Lease Supplement and Trust Supplement, this Lease, the Trust
Agreement and the Trust Indenture as well) or amendment to be duly filed
and recorded, and maintained of record, in accordance with the applicable
laws of the government of registry of the Aircraft. In addition, Lessee
will promptly and duly execute and deliver to Lessor such further documents
and take such further action as Lessor or the Indenture Trustee may from
time to time reasonably request in order more effectively to carry out the
intent and purpose of this Lease and to establish and protect the rights
and remedies created or intended to be created in favor of Lessor and the
Indenture Trustee hereunder, including, without limitation, if requested by
Lessor or the Indenture Trustee, at the expense of Lessee, the execution
and delivery of supplements or amendments hereto or to the Trust Indenture,
each in recordable form, subjecting to this Lease and the Trust Indenture,
any airframe or engine substituted for the Airframe or any Engine pursuant
to the terms thereof and the recording or filing of counterparts thereof,
in accordance with the laws of such jurisdictions as Lessor or the
Indenture Trustee may from time to time deem advisable. Lessee agrees to
furnish to Lessor and the Indenture Trustee promptly after execution and
delivery of any supplement and amendment hereto and promptly after the
execution and delivery of any supplement and amendment to the Trust
Indenture (except for any such supplement or amendment which does not
require or receive the approval of Lessee pursuant to the Operative
Documents and is not required pursuant to the terms of the Operative
Documents), an opinion of counsel (which may be Lessee's General Counsel or
other senior attorney) reasonably satisfactory to Lessor and the Indenture
Trustee as to the due recording or filing of such supplement or amendment.
Lessee will deliver to Lessor, the Owner Participant and the Indenture
Trustee (a) within sixty (60) days after the end of each of the first three
quarterly periods of each fiscal year of Lessee, the publicly filed Form
10-Q report of Lessee; and (b) within one hundred twenty (120) days after
the close of such fiscal year, the publicly filed annual report and Form
10-K report of Lessee.
Section 17. NOTICES. All notices required under the terms and
provisions hereof shall be by telecopier or other telecommunication means
(with such telecopy or other telecommunication means to be confirmed in
writing), or if such notice is impracticable, by registered, first-class
airmail, with postage prepaid, or by personal delivery of written notice
and any such notice shall become effective when received, addressed:
(a) if to Lessee, for U.S. mail at 2345 Crystal Drive,
Arlington, Virginia 22227, and for overnight courier at 2345 Crystal Drive,
Arlington, Virginia 22227, Attention: Assistant Treasurer (Telecopy No.
(703) 872-5936), or to such other address or telecopy number as Lessee
shall from time to time designate in writing to Lessor,
(b) if to Lessor, at 79 South Main Street, 3rd Floor, Salt Lake
City, Utah 84111, Attention: Corporate Trust Department (Telecopy No.
(801) 246-5053), or to such other address or telecopy number as Lessor
shall from time to time designate in writing to Lessee, and
(c) if to a Loan Participant, the Indenture Trustee or the Owner
Participant, addressed to such Loan Participant, the Indenture Trustee or
the Owner Participant at such address or telecopy number as such Loan
Participant, the Indenture Trustee or the Owner Participant shall have
furnished by notice to Lessor and to Lessee, and, until an address is so
furnished, addressed to such Loan Participant, the Indenture Trustee or the
Owner Participant at its address or telecopy number set forth in Schedule I
to the Participation Agreement.
Section 18. NO SET-OFF, COUNTERCLAIM, ETC. All Rent shall be
paid by Lessee to Lessor in funds of the type specified in Section 3(e).
Except as expressly provided herein, Lessee's obligation to pay all Rent
payable hereunder shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, (i) any set-
off, counterclaim, recoupment, defense or other right which Lessee may have
against Lessor, in its individual capacity or as Owner Trustee under the
Trust Agreement, the Indenture Trustee (in its individual capacity or as
Indenture Trustee), any Loan Participant, the Owner Participant, or anyone
else for any reason whatsoever (whether in connection with the transactions
contemplated hereby or any other transactions), including, without
limitation, any breach by Lessor or the Owner Participant of their
respective warranties, agreements or covenants contained in any of the
Operative Documents, (ii) any defect in the title, registration,
airworthiness, condition, design, operation, or fitness for use of, or any
damage to or loss or destruction of, the Aircraft, or any interruption or
cessation in or prohibition of the use or possession thereof by Lessee (or
any Sublessee) for any reason whatsoever, including, without limitation,
any such interruption, cessation or prohibition resulting from the act of
any government authority, (iii) any insolvency, bankruptcy, reorganization
or similar case or proceedings by or against Lessee (or any Sublessee) or
any other person, or (iv) any other circumstance, happening, or event
whatsoever, whether or not unforeseen or similar to any of the foregoing;
provided, however, that notwithstanding the foregoing, Lessee shall be
entitled to offset from any payment due to the Owner Participant the cost
incurred by Lessee to discharge Lessor Liens relating to the Owner
Participant. If for any reason whatsoever this Lease shall be terminated
in whole or in part by operation of law or otherwise except as specifically
provided herein, Lessee nonetheless agrees without limitation of the other
rights or remedies of Lessor hereunder to pay to Lessor an amount equal to
each Rent payment at the time such payment would have become due and
payable in accordance with the terms hereof had this Lease not been
terminated in whole or in part. Lessee hereby waives, to the extent
permitted by applicable law, any and all rights which it may now have or
which at any time hereafter may be conferred upon it, by statute or
otherwise, to terminate, cancel, quit or surrender this Lease except in
accordance with the express terms hereof.
Section 19. RENEWAL OPTIONS; PURCHASE OPTIONS; VALUATION.
(a) Renewal Options.
(1) Fixed Renewal Term. Not more than 365 days and
not less than one hundred twenty (120) days, before the end of
the Basic Term, Lessee may deliver to Lessor a written notice
irrevocably electing to renew this Lease for a term having a
duration and at a Basic Rent as determined below (any such
renewal term, a "Fixed Renewal Term"). The duration of the Fixed
Renewal Term shall be a period specified by Lessee before the end
of the Basic Term which is (i) not less than one year (provided
any such period shall be in six (6) month increments), (ii) not
more than the longest period of time which would cause the Term,
after giving effect to such Fixed Renewal Term, to be equal to
75% of the total useful life of the aircraft as determined by the
Delivery Date appraisal. Each semi-annual installment of Basic
Rent during the Fixed Renewal Term shall be equal to (x) the
lesser of (A) the fair market rental value of the Aircraft or (B)
one-half of the average annual Basic Rent during the Basic Term
or (y) divided by two.
(2) Fair Market Renewal Term. Lessee shall have the
right to renew this Lease for additional periods of one (1) year
or more (provided any such period shall be on six (6) month
increments) commencing at the end of the Basic Term or the Fixed
Renewal Term for a Basic Rent equal to the fair market rental
value of the Aircraft for such period (any such renewal term, a
"Fair Market Renewal Term"). Each such option to renew shall be
exercised by Lessee providing irrevocable notice at least one
hundred twenty (120) days prior to the commencement of such Fair
Market Renewal Term.
(3) Waiver. If no written notice is delivered by
Lessee to Lessor pursuant to Section 19(a)(1) or (a)(2) on or
before the day specified therefor, Lessee shall be deemed to have
waived any right to renew this Lease.
(4) Conditions Precedent, Payment of Basic Rent. At
the end of the Basic Term or any Renewal Term, if Lessee has
elected to renew this Lease as aforesaid, (i) this Lease shall
continue in full force and effect during the Renewal Term, and
(ii) Basic Rent for such Renewal Term shall be payable in semi-
annual installments in arrears, each such installment being due
and payable on each Lease Period Date occurring during the
Renewal Term, commencing with the Lease Period Date immediately
following the commencement of the Renewal Term, provided that
Basic Rent for such Renewal Term shall be payable at such other
frequency of payment consistent with the length of the Renewal
Term as Lessor may reasonably designate in the event that such
period is not divisible into whole semi-annual periods.
(5) Termination Value. The amounts which are payable
during any Renewal Term in respect of Termination Value with
respect to the Aircraft shall be determined on the basis of the
fair market sales value of the Aircraft as of the commencement of
such Renewal Term, amortized on a straight-line basis over such
Renewal Term to the projected fair market sales value of the
Aircraft as of the expiration of such Renewal Term, as such fair
market sales value in each case is determined prior to the
commencement of such Renewal Term. In determining fair market
sales value for purposes of calculating Termination Value for any
Renewal Term effect shall be given to the encumbrance on the
Aircraft of any Fixed Renewal Term available or in force.
(b) Purchase Options. Lessee shall have the option, (i) upon at
least thirty (30) days irrevocable prior written notice to Lessor prior to
the EBO Date with respect to the purchase option set forth in clause (i)
and (ii) upon at least one hundred twenty (120) days irrevocable prior
written notice to Lessor prior to the relevant purchase date (each a
"Purchase Option Date") with respect to the purchase option set forth in
clause (ii), to terminate this Lease and to purchase the Aircraft:
(1) on the EBO Date, for a purchase price equal to the
EBO Amount set forth on Exhibit D, it being understood that if
such amount is to be paid in installments, Lessee will, upon
payment of the first installment of the EBO Amount, on the EBO
date, receive title to the Aircraft free and clear of all liens;
(2) on the last Business Day of the Basic Term for a
purchase price equal to the fair market sales value of the
Aircraft on such date, provided, however, that in no event shall
such purchase price exceed 50% of Lessor's Cost;
(3) on the last Business Day of any Renewal Term for a
purchase price equal to the fair market sales value of the
Aircraft on such date.
Notwithstanding the foregoing, the purchase price on any Purchase
Option Date shall be sufficient, together with all other amounts payable
simultaneously by Lessee, to pay in full the payments then required to be
made on account of the principal amount of and accrued and unpaid interest
on the Equipment Notes then outstanding. Upon payment to Lessor in
immediately available funds in Dollars of the full amount of the purchase
price and payment of any other amounts then due hereunder (including all
Rent and all reasonable costs or expenses of the Owner Participant in
connection with such purchase), Lessor will transfer to Lessee, without
recourse or warranty (except as to the absences of Lessor Liens), all of
Lessor's right, title and interest in and to the Aircraft. Notwithstanding
the foregoing, Lessee may, in accordance with Section 7(u) of the
Participation Agreement, assume the principal amount of the Equipment Notes
then outstanding on any applicable Purchase Option Date in which event
Lessee shall receive a credit against the purchase price otherwise payable
pursuant to the preceding two sentences in an amount equal to the principal
amount so assumed.
(c) Valuation. At any time not earlier than three hundred
sixty-five (365) days prior to the date on which Lessee may purchase the
Aircraft pursuant to Section 19(b)(2) or (b)(3) hereof or renew this Lease
pursuant to Section 19(a)(1) or (a)(2) hereof, Lessee may deliver to Lessor
a revocable notice of its intent to exercise its renewal option or purchase
option. For all purposes of this Section 19, including the appraisal
referred to in this Section 19(c), in determining "fair market rental
value" or "fair market sales value", the Aircraft shall be valued (i) as if
in the condition and otherwise in compliance with the terms of Section 5
upon a return of the Aircraft to Lessor and as if it had been maintained at
all times as required in accordance with Section 7(a)(i) during periods
when no Sublease was in effect, (ii) on the basis of the value which would
obtain in an arm's-length transaction between an informed and willing
buyer-user or lessee (other than a lessee or an Affiliate of a lessee
currently in possession or a used equipment scrap dealer) under no
compulsion to buy or lease and an informed and willing seller or lessor
unaffiliated with such buyer-user or lessee and under no compulsion to sell
or lease and disregarding the purchase and renewal options of the lessee
provided in this Lease, and (iii) in the case of such valuation for
determining "fair market rental value", assuming such lessee would have
substantially the same obligations during the Fair Market Renewal Term as
provided hereunder including without limitation the obligations of Lessee
to carry and maintain the insurance required by Section 11 hereof and to
make certain payments with reference to Termination Value during the
applicable Fair Market Renewal Term. Upon receipt of such notice Lessor
and Lessee shall confer in good faith with a view to reaching agreement on
the "fair market rental value" or "fair market sales value" of the
Aircraft. If the parties have not so agreed within two hundred seventy
(270) days prior to the end of the Basic Term or the Renewal Term in
question, then the question shall be determined by an appraisal mutually
agreed to by two recognized independent aircraft appraisers, one of which
appraisers shall be chosen by Lessor and one by Lessee within five (5)
Business Days after Lessor or Lessee shall have received written notice
from the other party of a demand that such an appraisal be made, which
notice shall specify the appraiser chosen by the party giving the notice
or, if such appraisers cannot agree on the amount of such appraisal within
twenty (20) Business Days after the end of such five (5) Business Day
period, each shall render its own appraisal and shall by mutual consent
choose another appraiser within five (5) Business Days after the end of
such twenty (20) Business Day period. If, within such five (5) Business
Day period, such two appraisers fail to appoint a third appraiser, then
either Lessor or Lessee, on behalf of both, may request such appointment by
the then President of the Association of the Bar of the City of New York
(or any successor organization thereto) or, in his absence, failure,
refusal or inability to act, then either Lessor or Lessee may apply to the
American Arbitration Association (or any successor organization thereto) in
New York, New York for the appointment of such third appraiser. The
decision of the third appraiser so appointed shall be given within ten (10)
Business Days after the appointment of such third appraiser. As soon as
the third appraiser has delivered his appraisal, that appraisal shall be
compared with the appraisals given by the other two appraisers. If the
determination of one appraiser is more disparate from the average of all
three determinations than each of the other two determinations, then the
determination of such appraiser shall be excluded, the remaining two
determinations shall be averaged and such average shall be final and
binding upon the parties hereto. If no determination is more disparate
from the average of all three determinations than each of the other
determinations, then such average shall be final and binding upon the
parties thereto. Lessee and Lessor shall share equally all expenses
relating to such appraisal procedure provided if Lessee elects not to renew
this Lease or purchase the Aircraft following such appraisal, Lessee shall
pay all expenses of such appraisal.
Section 20. BURDENSOME PURCHASE OPTION. If a Burdensome
Termination Event shall have occurred, then on any Lease Period Date
occurring after the expiration of the Depreciation Period, Lessee shall
have the option, upon at least one hundred twenty (120) days revocable
prior notice to Lessor and, if any Secured Certificates are then
outstanding, the Indenture Trustee, to purchase the Aircraft on such date
for a purchase price equal to the higher of the Termination Value as of
such date or the fair market sales value of the aircraft (determined as set
forth in clause (c) above and excluding the value of any Significant
Expenditure) (such price, the "Burdensome Buyout Price"). In addition, if
on such date there shall be any Secured Certificates outstanding, Lessee
shall have the option to assume, pursuant to Section 7(u) of the
Participation Agreement and Section 2.13 of the Trust Indenture, all of the
obligations of Lessor under the Trust Indenture. If such assumption is
made, Lessee shall pay Lessor a purchase price equal to (I) the Burdensome
Buyout Price minus (II) an amount equal to principal of, and accrued but
unpaid interest on, any Secured Certificates that are outstanding on such
date. Upon such payment in full and payment of any other amounts then due
hereunder (including costs or expenses of the Owner Participant in
connection with such purchase, any installments of Basic Rent due prior to
such date and, if Basic Rent is payable in arrears on such date as
indicated on Exhibit B, on such date (but not any installment of Basic Rent
due on such date if Basic Rent is payable in advance on such date), and all
unpaid Supplemental Rent due on or prior to such date), Lessor will
transfer to Lessee, without recourse or warranty (except as to the absence
of Lessor Liens, all of Lessor's right, title and interest in and to the
Aircraft and under the Trust Indenture and, unless there shall be any
Secured Certificates outstanding after such payment, exercise such rights
as it has to cause the Aircraft to be released from the Lien of the Trust
Indenture.
Section 21. SECURITY FOR LESSOR'S OBLIGATION TO HOLDERS OF
EQUIPMENT NOTES. In order to secure the indebtedness evidenced by the
Equipment Notes, Lessor has agreed in the Trust Indenture, among other
things, to assign to the Indenture Trustee this Lease, the Lease
Supplements and any amendments to this Lease and to mortgage its interest
in the Aircraft in favor of the Indenture Trustee, subject to the
reservations and conditions therein set forth. To the extent, if any, that
this Lease, the Lease Supplements and any amendments to this Lease
constitute chattel paper (as such term is defined in the Uniform Commercial
Code as in effect in any applicable jurisdiction), no security interest in
this Lease, the Lease Supplements and any amendments to this Lease may be
created through the transfer or possession of any counterpart other than
the original counterpart, which shall be identified as the counterpart
containing the receipt therefor executed by the Indenture Trustee on the
signature page thereof. Lessee hereby accepts and consents to the
assignment of all Lessor's right, title and interest in and to this Lease
pursuant to the terms of the Trust Indenture. Subject to Section 3(e)
hereof, Lessee agrees to pay directly to the Indenture Trustee (or, after
receipt by Lessee of notice from the Indenture Trustee of the discharge of
the Trust Indenture, to Lessor), all amounts of Rent due or to become due
hereunder and assigned to the Indenture Trustee and Lessee agrees that the
Indenture Trustee's right to such payments hereunder shall be absolute and
unconditional and shall not be affected by any circumstance, including,
without limitation, the circumstances set forth in clauses (i) through (iv)
of Section 18 hereof. Notwithstanding the foregoing assignment of this
Lease, the obligations of Lessor to Lessee to perform the terms and
conditions of this Lease shall remain in full force and effect.
Section 22. LESSOR'S RIGHT TO PERFORM FOR LESSEE. If Lessee
fails to make any payment of Rent required to be made by it hereunder or
fails to perform or comply with any of its agreements contained herein,
then (but in each case, except in the case of failure to pay Rent or in the
case of failure to maintain insurance as required hereunder, no earlier
than the fifteenth day after the occurrence of such failure, whether or not
it shall yet constitute an Event of Default hereunder) Lessor may itself
make such payment or perform or comply with such agreement but shall not be
obligated hereunder to do so, and the amount of such payment and the amount
of the reasonable expenses of Lessor incurred in connection with such
payment or the performance of or compliance with such agreement, as the
case may be, together with interest thereon at the Past Due Rate, shall be
deemed Supplemental Rent, payable by Lessee upon demand.
Section 23. INVESTMENT OF SECURITY FUNDS; LIABILITY OF LESSOR
LIMITED.
(a) Investment of Security Funds. Any moneys held by Lessor as
security hereunder for future payments to Lessee at a time when there is
not continuing an Event of Default shall, until paid to Lessee, be invested
by Lessor or, if the Trust Indenture shall not have been discharged, by the
Indenture Trustee, as the case may be, as Lessee may from time to time
direct in writing (and in absence of a written direction by Lessee, there
shall be no obligation to invest such moneys) in Cash Equivalents. There
shall be promptly remitted to Lessee or its order (but no more frequently
than monthly) any gain (including interest received) realized as a result
of any such investment (net of any fees, commissions and other expenses, if
any, incurred in connection with such investment) unless an Event of
Default shall have occurred and be continuing. Lessee shall be responsible
for any net loss realized as a result of any such investment and shall
reimburse Lessor (or the Indenture Trustee, as the case may be) therefor on
demand.
(b) Liability of Lessor Limited. It is expressly agreed and
understood that all representations, warranties and undertakings of Lessor
hereunder shall be binding upon Lessor only in its capacity as trustee
under the Trust Agreement, and the institution acting as Lessor shall not
be liable in its individual capacity for any breach thereof except for its
gross negligence or willful misconduct or for breach of its covenants,
representations and warranties contained herein, to the extent covenanted
or made in its individual capacity.
Section 24. JURISDICTION. Lessor and Lessee each hereby
irrevocably submits itself to the non-exclusive jurisdiction of the United
States District Court for the Southern District of New York and to the non-
exclusive jurisdiction of the Supreme Court of the State of New York, New
York County, for the purposes of any suit, action or other proceeding
arising out of this Lease, the subject matter hereof or any of the
transactions contemplated hereby brought by Lessor, Lessee, the Indenture
Trustee, the Loan Participants or the Owner Participant or their successors
or assigns.
Section 25. MISCELLANEOUS. Any provision of this Lease which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction. No term or provision of this Lease may be changed, waived,
discharged or terminated orally, but only by an instrument in writing
signed by Lessor, Lessee and any assignee of Lessor's rights hereunder.
This Lease shall constitute an agreement of lease, and nothing contained
herein shall be construed as conveying to Lessee any right, title or
interest in the Aircraft except as a lessee only. Neither Lessee nor any
affiliate of Lessee will file any tax returns in a manner inconsistent with
the foregoing fact or with Lessor's ownership of the Aircraft. The section
and paragraph headings in this Lease and the table of contents are for
convenience of reference only and shall not modify, define, expand or limit
any of the terms or provisions hereof and all references herein to numbered
sections, unless otherwise indicated, are to sections of this Lease. THIS
LEASE HAS BEEN DELIVERED IN THE STATE OF NEW YORK AND SHALL IN ALL RESPECTS
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
This Lease may be executed by the parties hereto in separate counterparts,
each of which when so executed and delivered shall be an original, but all
such counterparts shall together constitute but one and the same
instrument.
Section 26. SUCCESSOR TRUSTEE. Lessee agrees that in the case
of the appointment of any successor Owner Trustee pursuant to the terms of
the Trust Agreement, such successor Owner Trustee shall, upon written
notice by such successor Owner Trustee, succeed to all the rights, powers
and title of Lessor hereunder and shall be deemed to be Lessor and the
owner of the Aircraft for all purposes hereof without the necessity of any
consent or approval by Lessee (subject to Section 9 of the Participation
Agreement) and without in any way altering the terms of this Lease or
Lessee's obligations hereunder. One such appointment and designation of a
successor Owner Trustee shall not exhaust the right to appoint and
designate further successor Owner Trustees pursuant to the Trust Agreement,
but such right may be exercised repeatedly as long as this Lease shall be
in effect.
Section 27. LEASE FOR U.S. FEDERAL INCOME TAX LAW PURPOSES;
SECTION 1110 OF BANKRUPTCY CODE
(a) Lease for Federal Income Tax Law Purposes. Lessee and
Lessor agree that this Lease is, and shall be treated for U.S. Federal
income tax purposes as, a lease of the Aircraft, Airframe, Engines and
Parts.
(b) Section 1110 of Bankruptcy Code. It is the intention of
each of Lessee and Lessor that Lessor (and the Indenture Trustee as
assignee of Lessor under the Trust Indenture) shall be entitled to the
benefits of Section 1110 of the Bankruptcy Code with respect to the right
to take possession of the Aircraft, Airframe, Engines and Parts as provided
in this Lease.
IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease
to be duly executed as of the day and year first above written.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity except as
expressly provided herein, but solely as
Owner Trustee, Lessor
By:______________________________________
Title:___________________________________
US AIRWAYS, INC.,
Lessee
By:______________________________________
Title:___________________________________
Receipt of this original counterpart of the foregoing Lease is
hereby acknowledged on the ___ day of _________, 199_.
STATE STREET BANK AND TRUST COMPANY,
Indenture Trustee
By:______________________________________
Title:___________________________________
As set forth in Section 21 of the Lease (as defined below), Lessor has
assigned to the Indenture Trustee (as defined herein) certain of its right,
title and interest in and to the Lease and this Lease Supplement. To the
extent, if any, that this Lease Supplement constitutes chattel paper (as
such term is defined in the Uniform Commercial Code as in effect in any
applicable jurisdiction) no security interest in this Lease Supplement may
be created through the transfer or possession of any counterpart other than
the original executed counterpart, which shall be identified as the
counterpart containing the receipt therefor executed by the Indenture
Trustee on the signature page thereof.
EXHIBIT A
to
Lease Agreement
(US Airways, Inc. Trust No. N7__UW)
LEASE SUPPLEMENT NO.
(US Airways, Inc. Trust No. N7__UW)
LEASE SUPPLEMENT NO. __, dated _________, 19___, between FIRST
SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, not in
its individual capacity, but solely as Owner Trustee under the Trust
Agreement (US Airways, Inc. Trust No. N7__UW), dated as of __________ __,
199_ with the Owner Participant named therein (such Owner Trustee, in its
capacity as such Owner Trustee, being herein called "Lessor"), and US
AIRWAYS, INC., a Delaware corporation ("Lessee").
Lessor and Lessee have heretofore entered into that certain Lease
Agreement (US Airways, Inc. Trust No. N7__UW), dated as of __________ __,
199_, relating to one Airbus Model A319 aircraft (herein called the
"Lease," and the defined terms therein being hereinafter used with the same
meanings). The Lease provides for the execution and delivery from time to
time of Lease Supplements for the purpose of leasing the Airframe and
Engines under the Lease as and when delivered by Lessor to Lessee in
accordance with the terms thereof.
[The Lease relates to the Airframe and Engines described below,
and a counterpart of the Lease is attached hereto, and made a part hereof,
and this Lease Supplement, together with such attachment, is being filed
for recordation on the date hereof with the Federal Aviation Administration
as one document.](1)
[The Lease Agreement relates to the Airframe and Engines
described below, and a counterpart of the Lease Agreement, attached and
made a part of Lease Supplement No. 1 dated _______________, 19__ to the
Lease Agreement, has been recorded by the Federal Aviation Administration
on ________________, 19__, as one document and assigned Conveyance No.
__.](2)
--------------------
(1) For use on Lease Supplement No. 1.
(2) For use on Lease Supplement No. 2 and thereafter.
NOW, THEREFORE, in consideration of the premises and other good
and sufficient consideration, Lessor and Lessee hereby agree as follows:
(a) Lessor hereby delivers and leases to Lessee under the Lease
and Lessee hereby accepts and leases from Lessor under the Lease the
following described Airbus Model A319 aircraft (the "Aircraft"), which
Aircraft as of the date hereof consists of the following components:
(i) Airframe: Airbus Model A319-112
airframe bearing FAA Registration No. ______; manufacturer's
serial no. _____; and
(ii) Engines: two (2) engines identified as
CFM International 56-5B-6/P type aircraft engines bearing,
respectively, manufacturer's serial nos.______ and _____ (each of
which engines has 750 or more rated takeoff horsepower or the
equivalent of such horsepower).
(b) The Delivery Date of the Aircraft is the date of this Lease
Supplement set forth in the opening paragraph hereof. Except as otherwise
provided in the Lease, the Term for the Aircraft shall commence on the
Delivery Date and end on ____________, 201_.
(c) Lessee hereby confirms its agreement to pay Lessor Basic
Rent for the Aircraft throughout the Term therefor in accordance with
Section 3 of the Lease.
(d) Lessee hereby confirms to Lessor that Lessee has accepted
the Aircraft for all purposes hereof and of the Lease as being airworthy,
in good working order and repair and without defect or inherent vice in
title, condition, design, operation or fitness for use; provided, however,
that nothing contained herein or in the Lease shall in any way diminish or
otherwise affect any right Lessee or Lessor may have with respect to the
Aircraft against Airbus Industrie G.I.E., or any subcontractor or supplier
of Airbus Industrie G.I.E., under the Purchase Agreement or otherwise.
(e) All of the terms and provisions of the Lease are hereby
incorporated by reference in this Lease Supplement to the same extent as if
fully set forth herein.
(f) This Lease Supplement may be executed by the parties hereto
in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute
but one and the same instrument. To the extent, if any, that this Lease
Supplement constitutes chattel paper (as such term is defined in the
Uniform Commercial Code as in effect in any jurisdiction), no security
interest in this Lease Supplement may be created through the transfer or
possession of any counterpart other than the original counterpart, which
shall be identified as the counterpart containing the receipt therefor
executed by the Indenture Trustee on the signature page hereof.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease
Supplement to be duly executed on the day and year first above written.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity except as
expressly provided herein, but solely as
Owner Trustee,
Lessor
By:______________________________________
Name:
Title:
US AIRWAYS, INC.,
Lessee
By_______________________________________
Name:
Title:
(1) Receipt of this original counterpart of the foregoing Lease
Supplement is hereby acknowledged on this day of , 19 .
STATE STREET BANK AND TRUST COMPANY,
Indenture Trustee
By:______________________________________
Name:
Title:
------------------
(1) This language contained in the original counterpart only.
EXHIBIT B
to
Lease Agreement
(US Airways, Inc. Trust No. N7__UW)
PAST DUE RATE DEFINED; BASIC RENT AND LESSOR'S COST
The portion of this Exhibit appearing below will be intentionally
deleted from the FAA filing counterpart as the parties hereto deem it to
contain confidential information.
"Past Due Rate" means (i) with respect to any portion of any
payment of Rent that may be required by the Trust Indenture to be paid by
the Indenture Trustee to the Loan Participants, or the holders of any
outstanding Equipment Notes, a rate per annum equal to 1% over the interest
rate then in effect for such Equipment Notes, and (ii) with respect to the
remaining portion of any payment of Rent (and the entire amount of any
payment of Rent after the satisfaction and discharge of the Trust
Indenture), a rate per annum equal to 1% over the Base Rate.
Basic Rent:
Basic Rent
Lease Period (Percentage of
Date Lessor's Cost)
------------ ---------------
*
**
Lessor's Cost: $_______________
_______________
* Denotes payment in arrears from preceding Lease Period Date (or
Delivery Date in the case of the first Lease Period) to specified
Lease Period Date.
** Denotes payment in advance from specified Lease Period Date to
succeeding Lease Period Date.
EXHIBIT C
to
Lease Agreement
(US Airways, Inc. Trust No. N7__UW)
TERMINATION VALUE SCHEDULE
The portion of this Exhibit appearing below this text will be
intentionally deleted from the FAA filing counterpart as the parties hereto
deem it to contain confidential information.
Termination Termination
Value Date Value Percentage
----------- ----------------
EXHIBIT D
to
Lease Agreement
(US Airways, Inc. Trust No. N7__UW)
EBO AMOUNT
The portion of this Exhibit appearing below this text will be
intentionally deleted from the FAA filing counterpart as the parties hereto
deem it to contain confidential information.
EBO Date EBO Amount
-------- ----------
EXHIBIT E
to
Lease Agreement
(US Airways, Inc. N7__UW)
RENT RECALCULATION AND
INDEMNIFICATION VERIFICATION
The portion of this Exhibit appearing below this will be
intentionally deleted from the FAA filing counterpart as the parties hereto
deem it to contain confidential information.
Any recalculation of Basic Rent, Termination Value percentages
and EBO Amount pursuant to the Lease shall be determined by the Owner
Participant, and shall maintain the Owner Participant's Net Economic Return
except as assumptions have been modified pursuant to Section 3 of the Lease
or pursuant to the Tax Indemnity Agreement or the Participation Agreement,
as the case may be; provided, however, that Lessee may request (A) Lessee's
independent public accountants to verify such calculations but without any
requirement that the Owner Participant disclose to such persons the
methodology and assumptions and (B) if Lessee believes that such
calculations by the Owner Participant are in error then a nationally
recognized firm of accountants selected by the Owner Participant and
reasonably acceptable to Lessee shall be permitted to verify such
calculations and the Owner Participant will make available to such firm
(subject to the execution by such firm of a confidentiality agreement
reasonably acceptable to the Owner Participant) the methodology and
assumptions and any changes made therein pursuant to Section 3 of the
Lease. In the event of a verification under clause (B) of the first
sentence of this paragraph 1 the determination by such firm of accountants
shall be final. Lessee will pay the reasonable costs and expenses of the
verification under clause (B) of the first sentence of this paragraph 1
unless an error adverse to Lessee is established by such firm, and if as a
result of such verification process the Basic Rent is adjusted and such
adjustment causes the Net Present Value of Rents to decline by 10 (ten) or
more basis points or causes a material reduction in Termination Value, EBO
Amount or any indemnity payment (in which event the Owner Participant shall
pay the reasonable costs and expenses of such verification process). Such
recalculated Basic Rent, Termination Value percentages and EBO amounts
shall be set forth in a Lease Supplement or an amendment to the Lease.
"Net Economic Return" means the Owner Participant's after-tax
yield and aggregate after-tax cash flow utilizing the multiple investment
sinking fund method of analysis, computed on the basis of the same
methodology and assumptions as were utilized by the Owner Participant in
determining Basic Rent, Termination Value percentages and EBO Amount as of
the Delivery Date.
EXHIBIT F
to
Lease Agreement
(US Airways, Inc. Trust No. N7__UW)
SCHEDULE OF DOMICILES OF PERMITTED SUBLESSEES
Australia Malta
Austria Mexico
Bahamas Netherlands
Belgium New Zealand
Bermuda Norway
Brazil People's Republic of China
Canada Philippines
Denmark Portugal
Finland Republic of China (Taiwan)*
France Singapore
Germany South Korea
Grenada Spain
Greece Sweden
Iceland Switzerland
India Thailand
Ireland Tobago
Italy Trinidad
Jamaica Turkey
Japan United Kingdom
Luxembourg Venezuela
Malaysia
*So long as on the date of the Sublease such country and the
United States have diplomatic relations at least as good as those in effect
on the Delivery Date.
EXHIBIT G
to
Lease Agreement
(US Airways, Inc. Trust No. N7__UW)
RETURN CONDITIONS
The portion of this Exhibit appearing below this text will be
intentionally deleted from the FAA filing counterpart as the parties hereto
deem it to contain confidential information.
(a) Condition Upon Return. Unless purchased by Lessee pursuant
to Section 19 hereof, upon the termination of this Lease at the end of the
Basic Term or any Renewal Term or pursuant to Sections 9(b) or 15, unless
Lessor has requested that Lessee return the Aircraft to a storage location
pursuant to Section 5(b) (in which case the storage location provided in
said Section 5(b) shall be deemed to be the return location), Lessee will
return the Airframe to Lessor at one of Lessee's principal maintenance
bases located in one of the forty-eight contiguous states of the United
States chosen by Lessee, and Lessee will give Lessor at least ten (10) days
prior written notice of the place of such return. At the time of such
return, (i) Lessee will, at its own cost and expense, unless otherwise
requested by Lessor to retain the existing registration of the Aircraft at
least ninety (90) days prior to the date of return hereunder, cause the
Aircraft, if it is not then so registered, to be registered under the laws
of the United States with the Federal Aviation Administration in the name
of the Lessor or its designee, provided that Lessee shall be relieved of
its obligations under this sentence if such registration is prohibited by
reason of the failure of Lessor, Owner Participant or Lessor's designee to
be eligible on such date to own an aircraft registered with the Federal
Aviation Administration and (ii) the Airframe will be fully equipped with
the Engines (or Acceptable Alternate Engines) installed thereon. Also, at
the time of such return, Lessor shall have good title to such Airframe and
Engines or Acceptable Alternate Engines, and such Airframe and Engine or
Acceptable Alternate Engines (A) shall be certified (or, if not then
registered under the Transportation Code by reason of the proviso of clause
(i) in the preceding sentence or because Lessor has so requested that the
Aircraft not be so registered, shall hold a valid certificate of
airworthiness issued by the country of registry and be eligible for
certification by the Federal Aviation Administration) as an airworthy
aircraft by the Federal Aviation Administration, (B) shall be free and
clear of all Liens (other than Lessor Liens, Indenture Trustee's Liens and
Loan Participant Liens) and rights of third parties under pooling,
interchange, overhaul, repair or other similar agreements or arrangements,
(C) shall be in a regular passenger configuration, and in as good a
condition as when delivered by Seller to Lessee, ordinary wear and tear
excepted, and otherwise in the condition required to be maintained under
Lessee's FAA-approved maintenance plan (notwithstanding any Sublease
theretofore in effect), (D) in the event that Lessee (or any Sublessee then
in possession of the Aircraft) shall not then be using a continuous
maintenance program with respect to the Airframe immediately prior to such
return but instead shall have been using a block overhaul program with
respect to the Airframe, then (i) such block overhaul program shall have
been approved by the government of registry of the Aircraft and (ii) the
Airframe shall have remaining until the next scheduled block overhaul at
least 25% of the allowable hours between block overhauls permitted under
the block overhaul program then used by Lessee or such Sublessee, (E) in
the event that Lessee (or any Sublessee then in possession of the Aircraft)
during the period of operation of the Aircraft immediately prior to such
return shall not have been using an on-condition maintenance program with
respect to the Engines (or Acceptable Alternate Engines), Lessee agrees
that the average number of hours or cycles of operation (whichever shall be
applicable under the maintenance program then in use with respect to such
Engines (or Acceptable Alternate Engines) on such Engines (or Acceptable
Alternate Engines) remaining until the next scheduled engine heavy
maintenance shall be at least 25% of the hours or cycles (whichever shall
be applicable) between engine heavy maintenance allowed under the
maintenance program then in use with respect to such Engines (or Acceptable
Alternate Engines), (F) shall have all Lessee's and any Sublessee's
exterior marking removed or painted over with areas thereof refinished to
match adjacent areas, and (G) shall be in a state of cleanliness suitable
under Lessee's normal service standards for operation in Lessee's revenue
passenger service and in all such cases the Aircraft shall not have been
discriminated against whether by reason of its leased status or otherwise
in maintenance, use, operation or in any other manner whatsoever.
If clause (D) of the first paragraph of this subsection (a) shall
be applicable but the Airframe does not meet the conditions specified in
said clause (D), Lessee shall pay or cause to be paid to Lessor,
concurrently with the return thereof, a Dollar amount computed by
multiplying (i) 110% of the direct cost to Lessee (based upon the direct
cost to Lessee for similar aircraft in the fleet of Lessee) during the
preceding 12 months of performing an airframe block overhaul of the type
referred to in such clause (D) by (ii) a fraction of which (x) the
numerator shall be the excess of 25% of the hours of operation allowable
between such block overhauls over the actual number of hours of operation
remaining on the Airframe to the next such block overhaul and (y) the
denominator shall be the number of hours of operation allowable between
such block overhauls in accordance with such block overhaul program.
If clause (E) of the first paragraph of this subsection (a) shall
be applicable but the Engines (or Acceptable Alternate Engines) do not meet
the conditions specified in said clause (E), Lessee shall pay or cause to
be paid to Lessor, concurrently with the return thereof, a Dollar amount
computed by multiplying (i) 110% of the direct cost to Lessee (based upon
the direct cost to Lessee for similar aircraft in the fleet of Lessee)
during the preceding 12 months of performing for an engine of the same
model as the Engines (or Acceptable Alternate Engines) the scheduled engine
heavy maintenance under the maintenance program then used by Lessee for
engines of the same model as the Engines (or Acceptable Alternate Engines)
by (ii) a fraction which (x) the numerator shall be the excess of 25% of
the hours or cycles (whichever is applicable) of operation of one Engine
between engine heavy maintenance allowable under the maintenance program
then in use with respect to such Engines (or Acceptable Alternate Engines)
over the actual average number of hours or cycles of operation of such
Engines (or Acceptable Alternate Engines) remaining until the next such
scheduled engine heavy maintenance and (y) the denominator shall be the
number of hours or cycles allowable between such scheduled engine heavy
maintenance.
(b) Return of the Engines. In the event that an Acceptable
Alternate Engine shall be delivered with the returned Airframe as set forth
in subsection (a) of this Exhibit G, Lessee, concurrently with such
delivery, will, at no cost to Lessor, furnish, or cause to be furnished, to
Lessor a full warranty (as to title) bill of sale with respect to each such
Acceptable Alternate Engine, in form and substance satisfactory to Lessor
(together with an opinion of counsel (which may be Lessee's General Counsel
or other senior attorney) to the effect that such full warranty bill of
sale has been duly authorized and delivered and is enforceable in
accordance with its terms and that each such Acceptable Alternate Engine is
free and clear of all Liens other than Lessor Liens, Loan Participant Liens
and Indenture Trustee Liens), against receipt from Lessor of a bill of sale
or evidencing the transfer, without recourse or warranty (except as to the
absence of Lessor Liens), by Lessor to Lessee or its designee of all of
Lessor's right, title and interest in and to any Engine not installed on
the Airframe at the time of the return of the Airframe.
(c) Fuel and Manuals. Upon the return of the Airframe upon any
termination of this Lease in accordance with subsection (a) of this Exhibit
G, (i) Lessor shall pay to Lessee, the amount of Lessee's cost for any fuel
or oil contained in the fuel or oil tanks of such Airframe and (ii) Lessee
shall deliver or cause to be delivered to Lessor all logs, manuals and data
and inspection, modification and overhaul records required to be maintained
under the provisions of the Lease.
EXHIBIT H
to
Lease Agreement
(US Airways, Inc. Trust No. N7__UW)
INSURANCE
The portion of this Exhibit appearing below this text will be
intentionally deleted from the FAA filing counterpart as the parties hereto
deem it to contain confidential information.
(a) Public Liability and Property Damage Insurance. (1) Except
as provided in clause (2) of this subsection (a), and subject to self-
insurance to the extent permitted by subsection (d) of this Exhibit H,
Lessee will carry or cause to be carried with respect to the Aircraft at
its or any Sublessee's expense (i) comprehensive airline liability
(including, without limitation, passenger, contractual, bodily injury and
property damage liability) insurance (exclusive of manufacturer's product
liability insurance) and (ii) cargo liability insurance, (A) in an amount
not less than the greater of (x) the amounts of comprehensive airline
liability insurance from time to time applicable to aircraft owned or
leased, and operated by Lessee (or, if a Sublease is then in effect, by
Sublessee) of the same type as the Aircraft and (y) $300 million per
occurrence, (B) of the type and covering the same risks as from time to
time applicable to aircraft owned or leased and operated by Lessee of the
same type as the Aircraft, and (C) which is maintained in effect with
insurers of recognized reputation and responsibility; provided, however,
that Lessee need not maintain such cargo liability insurance, or may
maintain such cargo liability insurance in an amount less than $300 million
per occurrence, so long as the amount of cargo liability insurance, if any,
maintained with respect to the Aircraft is not less than the cargo
liability insurance, if any, maintained for other Airbus Model A319
aircraft owned or leased and operated by Lessee.
(2) During any period that the Airframe or an Engine, as the case
may be, is on the ground and not in operation, Lessee may carry or cause to
be carried as to such non-operating property, in lieu of the insurance
required by clause (1) above, and subject to the self-insurance to the
extent permitted by subsection (d) hereof, insurance by insurers of
recognized reputation and responsibility otherwise conforming with the
provisions of said clause (1) except that (A) the amounts of coverage shall
not be required to exceed the amounts of comprehensive airline liability
from time to time applicable to property owned or leased by Lessee of the
same type as such non-operating property and which is on the ground and not
in operation; and (B) the scope of the risks covered and the type of
insurance shall be the same as from time to time shall be applicable to
aircraft owned or leased by Lessee of the same type as such non-operating
property and which is on the ground and not in operation.
(b) Insurance Against Loss or Damage to the Aircraft.
(1) Except as provided in clause (2) of this subsection (b), and subject to
the provisions of subsection (d) of this Exhibit H permitting the self-
insurance, Lessee shall maintain or cause to be maintained in effect, at
its or any Sublessee's expense, with insurers of recognized responsibility,
all-risk aircraft hull insurance covering the Aircraft and fire and
extended coverage and all-risk aircraft hull insurance covering Engines and
Parts while temporarily removed from the Aircraft and not replaced by
similar components; provided that such insurance shall at all times while
the Aircraft is subject to this Lease be for an amount (taking into account
the self-insurance to the extent permitted by subsection (d) of this
Exhibit H) not less than the Termination Value for the Aircraft; provided
further, that, subject to compliance with subsection (d) of this Exhibit H,
such all-risk property damage insurance covering Engines and Parts
temporarily removed from an Airframe or an airframe or (in the case of
Parts) an Engine need be obtained only to the extent available at
reasonable cost (as reasonably determined by Lessee). In the case of a
Loss with respect to an engine (other than an Engine) installed on the
airframe in circumstances which do not constitute an Event of Loss with
respect to the Airframe, Lessor shall promptly remit any payment made to it
of any insurance proceeds in respect of such Loss to Lessee or any other
third party that is entitled to receive such proceeds.
Unless an Event of Default has occurred and is continuing, all
losses will be adjusted by Lessee with the insurers. As between Lessor and
Lessee, it is agreed that all insurance payments received as the result of
the occurrence of an Event of Loss will be applied as follows:
(x) if such payments are received with respect to the
Airframe (or the Airframe and the Engines installed thereon), (i)
unless such property is replaced pursuant to the last paragraph
of Section 10(a), so much of such payments remaining, after
reimbursement of Lessor (as provided in Section 7.01 of the Trust
Agreement) and the Owner Participant for reasonable costs and
expenses, as shall not exceed the Termination Value and the other
amounts payable pursuant to Section 10(a) hereof shall be applied
in reduction of Lessee's obligation to pay such Termination Value
and other amounts payable pursuant to Section 10(a) hereof, if
not already paid by Lessee, or, if already paid by Lessee, shall
be applied to reimburse Lessee for its payment of such
Termination Value and such other amounts payable, and the
balance, if any, of such payments remaining thereafter will be
paid over to, or retained by, Lessee (or if directed by Lessee,
any Sublessee); or (ii) if such property is replaced pursuant to
the last paragraph of Section 10(a), such payments shall be paid
over to, or retained by, Lessee (or if directed by Lessee, any
Sublessee), provided that Lessee shall have fully performed or,
concurrently therewith, will fully perform the terms of the last
paragraph of Section 10(a) with respect to the Event of Loss for
which such payments are made; and
(y) if such payments are received with respect to an Engine
under the circumstances contemplated by Section 10(b) hereof, so
much of such payments remaining after reimbursement of Lessor (as
provided in Section 7.01 of the Trust Agreement) and the Owner
Participant for reasonable costs and expenses, shall be paid over
to, or retained by, Lessee (or if directed by Lessee, any
Sublessee), provided that Lessee shall have fully performed or
concurrently therewith will fully perform the terms of Section
10(b) with respect to the Event of Loss for which such payments
are made.
As between Lessor and Lessee, the insurance payments for any
property damage loss to the Airframe or any engine not constituting an
Event of Loss with respect thereto will be applied in payment for repairs
or for replacement property in accordance with the terms of Sections 7 and
8, if not already paid for by Lessee (or any Sublessee), and any balance
(or if already paid for by Lessee (or any Sublessee), all such insurance
proceeds) remaining after compliance with such Sections with respect to
such loss shall be paid to Lessee (or any Sublessee if directed by Lessee).
(2) During any period that the Aircraft is on the ground and not
in operation, Lessee may carry or cause to be carried, in lieu of the
insurance required by clause (1) above, and subject to self-insurance to
the extent permitted by subsection (d) of this Exhibit H, insurance
otherwise conforming with the provisions of said clause (1) except that the
scope of the risks and the type of insurance shall be the same as from time
to time applicable to aircraft owned or leased by Lessee (or, if a Sublease
is then in effect, by Sublessee) of the same type as the Aircraft similarly
on the ground and not in operation, provided that, subject to self-
insurance to the extent permitted by subsection (d) of this Exhibit H,
Lessee shall maintain insurance against risk of loss or damage to the
Aircraft in an amount at least equal to the Termination Value of the
Aircraft during such period that the Aircraft is on the ground and not in
operation.
(3) If Lessee (or any Sublessee) shall at any time operate or
propose to operate the Aircraft, Airframe or any Engine (i) in any area of
recognized hostilities or (ii) on international routes, and war-risk,
hijacking or allied perils insurance is maintained by Lessee (or any
Sublessee) with respect to other aircraft owned and operated by Lessee (or
any Sublessee) on such routes or in such areas, Lessee shall maintain or
cause to be maintained war-risk, hijacking and related perils insurance of
substantially the same type carried by major United States commercial air
carriers operating the same or comparable models of aircraft on similar
routes or in such areas and in no event in an amount less than the
Termination Value.
(c) Reports, etc. Lessee will furnish, or cause to be
furnished, to Lessor, the Indenture Trustee, the Owner Participant and the
Pass Through Trustee, on or before the Delivery Date and on each annual
anniversary date of Lessee's applicable insurance, a report, signed by
Lessee's regular insurance broker or any other independent firm of
insurance brokers reasonably acceptable to Lessor which brokers may be in
the regular employ of Lessee (the "Insurance Brokers"), describing in
reasonable detail the hull and liability insurance (and property insurance
for detached engines and parts) then carried and maintained with respect to
the Aircraft and stating the opinion of such firm that the insurance
complies with the terms hereof; provided, that all information contained in
the foregoing report shall not be made available by Lessor, the Indenture
Trustee or the Owner Participant or the Pass Through Trustee to anyone
except (i) to prospective and permitted transferees of Lessor's, the Owner
Participant's, the Indenture Trustee's or the Pass Through Trustee's
interest or their respective counsel, independent certified public
accountants and independent insurance brokers or other agents, who agree to
hold such information confidential, (ii) to Lessor's, the Owner
Participant's, the Indenture Trustee's or a Pass Through Trustee's counsel
or independent certified public accountants, independent insurance brokers
or agents who agree to hold such information confidential or (iii) as may
be required by any statute, court or administrative order or decree or
governmental ruling or regulation; provided, however that any disclosure
permitted by clause (iii) above shall be made only to the extent necessary
to meet the specific requirements or needs of the Persons to whom such
disclosures are hereby permitted. Lessee will cause such Insurance Broker
to agree to advise Lessor, the Indenture Trustee, the Owner Participant and
the Pass Through Trustee in writing of any act or omission on the part of
Lessee of which it has knowledge and which might invalidate or render
unenforceable, in whole or in part, any insurance on the Aircraft and to
advise in writing at least thirty (30) days (seven (7) days in the case of
war risk and allied perils coverage) and ten (10) days notice with respect
to the Electronic Date Recognition Exclusion Limited Coverage Endorsement,
prior to the cancellation or material adverse change of any insurance
maintained pursuant to Section 11, provided that if the notice period
specified above is not reasonably obtainable, the Insurance Broker shall
provide for as long a period of prior notice as shall then be reasonably
obtainable. In addition, Lessee will also cause such Insurance Brokers to
deliver to Lessor, the Indenture Trustee, the Owner Participant and the
Pass Through Trustee, on or prior to the date of expiration of any
insurance policy referenced in a previously delivered certificate of
insurance, a new certificate of insurance, substantially in the same form
as delivered by Lessee to such parties on the Delivery Date except for such
changes in the report or the coverage consistent with the terms hereof. In
the event that Lessee or any Sublessee shall fail to maintain or cause to
be maintained insurance as herein provided, Lessor or the Indenture Trustee
may at its sole option, but shall be under no duty to, provide such
insurance and, in such event, Lessee shall, upon demand, reimburse Lessor
or the Indenture Trustee, as Supplemental Rent, for the cost thereof to
Lessor or the Indenture Trustee, as the case may be; provided, however,
that no exercise by Lessor or the Indenture Trustee, as the case may be, of
said option shall affect the provisions of this Lease, including the
provisions of Section 14(g).
(d) Self-Insurance. Lessee may self-insure by way of
deductible, premium adjustment or franchise provisions or otherwise
(including, with respect to insurance maintained pursuant to subsection (b)
of this Exhibit H, insuring for an amount that is less than the Termination
Value of the Aircraft) the risks required to be insured against pursuant to
Section 11 under a program applicable to all aircraft (whether owned or
leased) in Lessee's fleet, but in no case shall the aggregate amount of
self-insurance in regard to subsection (a) and (b) of this Exhibit H exceed
for any policy year, with respect to all of the aircraft (whether owned or
leased) in Lessee's fleet (including, without limitation, the Aircraft),
the lesser of (i) 50% of the highest replacement value of any single
aircraft in Lessee's fleet or (ii) 1-1/2% of the average aggregate
insurable value (during the preceding policy year) of all aircraft
(including, without limitation, the Aircraft) on which Lessee carries
insurance, unless an insurance broker of national standing shall certify
that the standard among all other major United States airlines is a higher
level of self-insurance, in which case Lessee may insure the Aircraft to
such higher level. In addition to the foregoing right to self-insure,
Lessee (and any Sublessee) may self-insure to the extent of any applicable
mandatory minimum per aircraft (or, if applicable, per annum or other
period) hull or liability insurance deductible customary in the airline
industry imposed by the aircraft hull or liability insurer.
(e) Terms of Policies. Any policies of insurance carried in
accordance with subsection (a) or (b) of this Exhibit H and any policies
taken out in substitution or replacement for any of such policies (A) shall
be amended to name the Additional Insureds as their respective interests
may appear, (B) may provide for the self-insurance to the extent permitted
in subsection (d) of this Exhibit H, (C) shall provide that if the insurers
cancel such insurance for any reason whatever or if any material change is
made in such insurance which adversely affects the interest of the
Additional Insureds, or such insurance shall lapse for non-payment of
premium, such cancellation, lapse or change shall not be effective as to
the Additional Insureds for thirty (30) days (ten (10) days in the case of
war risk and allied perils coverage) after issuance to the Additional
Insureds, respectively, of written notice by such insurers of such
cancellation, lapse or change; provided, however, that if any notice period
specified above is not reasonably obtainable, such policies shall provide
for as long a period of prior notice as shall then be reasonably
obtainable, (D) shall provide that in respect of the respective interests
of the Additional Insureds in such policies the insurance shall not be
invalidated by any action or inaction of Lessee (or, if any Sublease is
then in effect, any Sublessee) or any other Person and shall insure the
Additional Insureds regardless of any breach or violation of any warranty,
declaration or condition contained in such policies by Lessee (or, if any
Sublease is then in effect, any Sublessee), (E) shall be primary without
right of contribution from any other insurance which is carried by any
Additional Insured, (F) shall expressly provide that all of the provisions
thereof, except the limits of liability, shall operate in the same manner
as if there were a separate policy covering each insured, (G) shall waive
any right of the insurers to any set-off or counterclaim or any other
deduction, whether by attachment or otherwise, in respect of any liability
of any Additional Insured to the extent of any moneys due to any Additional
Insured, and (H) shall provide that (i) in the event of a loss involving
proceeds in excess of $5,000,000, the proceeds in respect of such loss up
to an amount equal to the Termination Value for the Aircraft shall be
payable to Lessor (or, so long as the Trust Indenture shall not have been
discharged, the Indenture Trustee) (except in the case of a loss with
respect to an Engine installed on an airframe other than the Airframe, in
which case Lessee (or any Sublessee) shall arrange for any payment of
insurance proceeds in respect of such loss to be held for the account of
Lessor (or, so long as the Trust Indenture shall not have been discharged,
the Indenture Trustee) whether such payment is made to Lessee (or any
Sublessee) or any third party), it being understood and agreed that in the
case of any payment to Lessor (or the Indenture Trustee) otherwise than in
respect of an Event of Loss, Lessor (or the Indenture Trustee) shall, upon
receipt of evidence satisfactory to it that the damage giving rise to such
payment shall have been repaired or that such payment shall then be
required to pay for repairs then being made, pay the amount of such payment
(and all earnings thereon) to Lessee or its order, and (ii) the entire
amount of any loss involving proceeds of $5,000,000 or less or the amount
of any proceeds of any loss in excess of the Termination Value for the
Aircraft shall be paid to Lessee or its order unless an Event of Default
shall have occurred and be continuing and the insurers have been notified
thereof by Lessor or the Indenture Trustee.
EXHIBIT 4(a)(xv)
Indenture
Trust N7___UW
TRUST INDENTURE AND SECURITY AGREEMENT
(US Airways, Inc. Trust No. N7__UW)
Dated as of __________ __, 199_
Between
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
except as expressly stated herein,
but solely as Owner Trustee,
Owner Trustee
and
STATE STREET BANK AND TRUST COMPANY
Indenture Trustee
EQUIPMENT NOTES COVERING
ONE AIRBUS A319 AIRCRAFT
BEARING U.S. REGISTRATION MARK N7__UW
LEASED BY US AIRWAYS, INC.
Page
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE II
THE EQUIPMENT NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.01. Form of Equipment Notes. . . . . . . . . . . . . . 7
SECTION 2.02. Issuance and Terms of Equipment Notes. . . . . . . 12
SECTION 2.03. Payments from Trust Indenture Estate Only . . . . . 15
SECTION 2.04. Method of Payment . . . . . . . . . . . . . . . . . 17
SECTION 2.05. Application of Payments . . . . . . . . . . . . . . 20
SECTION 2.06. Termination of Interest in Trust Indenture
Estate . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.07. Registration, Transfer and Exchange of
Equipment Notes . . . . . . . . . . . . . . . . . 20
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen
Equipment Notes . . . . . . . . . . . . . . . . . 22
SECTION 2.09. Payment of Expenses on Transfer; Cancellation . . . 23
SECTION 2.10. Mandatory Redemptions of Equipment Notes . . . . . 23
SECTION 2.11. Voluntary Redemptions of Equipment Notes . . . . . 23
SECTION 2.12. Redemptions; Notice of Redemption . . . . . . . . . 24
SECTION 2.13. Assumption of Equipment Notes by Lessee . . . . . . 25
SECTION 2.14. Option to Purchase Equipment Notes . . . . . . . . 25
SECTION 2.15. Subordination . . . . . . . . . . . . . . . . . . . 27
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE . . . . . . . . . . . . . . . . 28
SECTION 3.01. Basic Rent Distribution . . . . . . . . . . . . . . 28
SECTION 3.02. Event of Loss; Replacement; Voluntary
Termination; Refinancing . . . . . . . . . . . . 29
SECTION 3.03. Payments After Event of Default . . . . . . . . . . 30
SECTION 3.04. Certain Payments . . . . . . . . . . . . . . . . . 32
SECTION 3.05. Other Payments . . . . . . . . . . . . . . . . . . 33
SECTION 3.06. Payments to Owner Trustee . . . . . . . . . . . . . 33
ARTICLE IV
COVENANTS OF OWNER TRUSTEE; EVENTS OF
DEFAULT; REMEDIES OF INDENTURE TRUSTEE . . . . . . . . . . . . . . . . 34
SECTION 4.01. Covenants of Owner Trustee . . . . . . . . . . . . 34
SECTION 4.02. Event of Default . . . . . . . . . . . . . . . . . 35
SECTION 4.03. Certain Rights . . . . . . . . . . . . . . . . . . 37
SECTION 4.04. Remedies . . . . . . . . . . . . . . . . . . . . . 39
SECTION 4.05. Return of Aircraft, Etc . . . . . . . . . . . . . . 41
SECTION 4.06. Remedies Cumulative . . . . . . . . . . . . . . . . 43
SECTION 4.07. Discontinuance of Proceedings . . . . . . . . . . . 43
SECTION 4.08. Waiver of Past Defaults . . . . . . . . . . . . . . 43
SECTION 4.09. Appointment of Receiver . . . . . . . . . . . . . . 44
SECTION 4.10. Indenture Trustee Authorized to Execute
Bills of Sale, Etc. . . . . . . . . . . . . . . 44
SECTION 4.11. Rights of Note Holders to Receive Payment . . . . . 44
ARTICLE V
DUTIES OF THE INDENTURE TRUSTEE . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.01. Notice of Event of Default . . . . . . . . . . . . 45
SECTION 5.02. Action upon Instructions; Certain Rights and
Limitations . . . . . . . . . . . . . . . . . . . 46
SECTION 5.03. Indemnification. . . . . . . . . . . . . . . . . . 49
SECTION 5.04. No Duties Except as Specified in Trust
Indenture or Instructions . . . . . . . . . . . . 49
SECTION 5.05. No Action Except Under Lease, Trust Indenture
or Instructions . . . . . . . . . . . . . . . . . 50
SECTION 5.06. Replacement Airframes and Replacement Engines . . . 50
SECTION 5.07. Indenture Supplements for Replacements . . . . . . 54
SECTION 5.08. Effect of Replacement . . . . . . . . . . . . . . . 54
SECTION 5.09. Investment of Amounts Held by Indenture Trustee . . 54
ARTICLE VI
THE OWNER TRUSTEE AND THE INDENTURE TRUSTEE . . . . . . . . . . . . . . 55
SECTION 6.01. Acceptance of Trusts and Duties. . . . . . . . . . 55
SECTION 6.02. Absence of Duties. . . . . . . . . . . . . . . . . 55
SECTION 6.03. No Representations or Warranties as to
Aircraft or Documents. . . . . . . . . . . . . . 56
SECTION 6.04. No Segregation of Monies; No Interest. . . . . . . 57
SECTION 6.05. Reliance; Agreements; Advice of Counsel. . . . . . 57
SECTION 6.06. Capacity in Which Acting. . . . . . . . . . . . . 58
SECTION 6.07. Compensation. . . . . . . . . . . . . . . . . . . 58
SECTION 6.08. Instructions from Note Holders. . . . . . . . . . 58
ARTICLE VII
INDEMNIFICATION OF INDENTURE TRUSTEE BY OWNER TRUSTEE . . . . . . . . . 59
SECTION 7.01. Scope of Indemnification. . . . . . . . . . . . . 59
ARTICLE VIII
SUCCESSOR AND SEPARATE TRUSTEES . . . . . . . . . . . . . . . . . . . . 60
SECTION 8.01. Notice of Successor Owner Trustee. . . . . . . . . 60
SECTION 8.02. Resignation of Indenture Trustee; Appointment
of Successor . . . . . . . . . . . . . . . . . . 60
SECTION 8.03. Appointment of Additional and Separate Trustees. . 61
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE
AND OTHER DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 9.01. Instructions of Majority; Limitations. . . . . . . 63
SECTION 9.02. Trustees Protected. . . . . . . . . . . . . . . . 66
SECTION 9.03. Documents Mailed to Note Holders. . . . . . . . . 66
SECTION 9.04. No Request Necessary for Lease Supplement or
Trust Agreement and Indenture Supplement . . . . 66
ARTICLE X
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 10.01. Termination of Trust Indenture. . . . . . . . . . 66
SECTION 10.02. No Legal Title to Trust Indenture Estate in
Note Holders. . . . . . . . . . . . . . . . . . 67
SECTION 10.03. Sale of Aircraft by Indenture Trustee Is Binding. . 67
SECTION 10.04. Trust Indenture for Benefit of Owner Trustee,
Indenture . . . . . . . . . . . . . . . . . . . 68
SECTION 10.05. Notices. . . . . . . . . . . . . . . . . . . . . . 68
SECTION 10.06. Severability. . . . . . . . . . . . . . . . . . . 68
SECTION 10.07. No Oral Modification or Continuing Waivers. . . . 69
SECTION 10.08. Successors and Assigns. . . . . . . . . . . . . . 69
SECTION 10.09. Headings. . . . . . . . . . . . . . . . . . . . . 69
SECTION 10.10. Normal Commercial Relations. . . . . . . . . . . . 69
SECTION 10.11. Governing Law; Counterpart Form. . . . . . . . . . 70
SECTION 10.12. Voting By Note Holders. . . . . . . . . . . . . . 70
SECTION 10.13. Bankruptcy. . . . . . . . . . . . . . . . . . . . 70
SECTION 10.14. No Action Contrary to Lessee's Rights Under
the Lease. . . . . . . . . . . . . . . . . . . . 70
EXHIBIT A TRUST AGREEMENT AND INDENTURE SUPPLEMENT . . . EXHIBIT A-1
SCHEDULE I SERIES A . . . . . . . . . . . . . . . . . . . SCHEDULE I-2
SERIES B . . . . . . . . . . . . . . . . . . . SCHEDULE I-3
SERIES C . . . . . . . . . . . . . . . . . . . SCHEDULE I-4
SCHEDULE II PASS THROUGH TRUST AGREEMENT AND
PASS THROUGH TRUST SUPPLEMENTS . . . . . . . . SCHEDULE II-1
TRUST INDENTURE AND SECURITY AGREEMENT
(US Airways, Inc. Trust No. N7__UW)
TRUST INDENTURE AND SECURITY AGREEMENT (US Airways, Inc. Trust
No. N7__UW), dated as of _________ __, 199_ ("Trust Indenture"), between
FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking association,
not in its individual capacity, except as expressly stated herein, but
solely as Owner Trustee under the Trust Agreement referred to below
(together with its successors under the Trust Agreement, the "Owner
Trustee"), and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust
company, as Indenture Trustee hereunder (together with its successors
hereunder, the "Indenture Trustee").
W I T N E S S E T H
WHEREAS, the Owner Participant and the Owner Trustee have
entered into the Trust Agreement whereby, among other things, (i) the Owner
Trustee has established a certain trust for the use and benefit of the
Owner Participant subject, however, to the Trust Indenture Estate created
pursuant hereto for the use and benefit of, and with the priority of
payment to, the holders of Equipment Notes issued hereunder, and (ii) the
Owner Trustee has been authorized and directed to execute and deliver this
Trust Indenture;
WHEREAS, the parties desire by this Trust Indenture, among
other things, (i) to provide for the issuance by the Owner Trustee to the
Pass Through Trustees (or their designee) of the Equipment Notes evidencing
the participation of the Pass Through Trustees in the payment of Lessor's
Cost for the Aircraft, as provided in the Participation Agreement and (ii)
to provide for the assignment, mortgage and pledge by the Owner Trustee to
the Indenture Trustee, as part of the Trust Indenture Estate hereunder,
among other things, of all of the Owner Trustee's right, title and interest
in and to the Aircraft and, except as hereinafter expressly provided, all
of the Owner Trustee's right, title and interest in, to and under the Lease
and all payments and other amounts received hereunder or thereunder in
accordance with the terms hereof or thereof, as security for, among other
things, the Owner Trustee's obligations to the Indenture Trustee, for the
ratable benefit and security of the Note Holders, subject to Section 2.15
and Article III hereof;
WHEREAS, all things have been done to make the Equipment Notes,
when executed by the Owner Trustee and authenticated and delivered by the
Indenture Trustee hereunder, the valid, binding and enforceable obligations
of the Owner Trustee; and
WHEREAS, all things necessary to make this Trust Indenture the
valid, binding and legal obligation of the Owner Trustee for the uses and
purposes herein set forth, in accordance with its terms, have been done and
performed and have happened:
GRANTING CLAUSE
NOW, THEREFORE, THIS TRUST INDENTURE AND SECURITY AGREEMENT
WITNESSETH, that, to secure (i) the prompt payment of the Principal Amount
of, interest on, Make-Whole Amount, if any, and all other amounts due with
respect to, all Equipment Notes from time to time outstanding hereunder and
(ii) the performance and observance by the Owner Trustee of all the
agreements, covenants and provisions herein and in the Participation
Agreement and the Equipment Notes contained, for the benefit of the Note
Holders, the Loan Participants and each of the Indenture Indemnitees and
the prompt payment of all amounts from time to time owing hereunder, under
the Participation Agreement and under the Lease to the Note Holders, the
Loan Participants or any Indenture Indemnitee by the Owner Trustee or
Lessee (the "Secured Obligations") and for the uses and purposes and
subject to the terms and provisions hereof, and in consideration of the
premises and of the covenants herein contained, and of the acceptance of
the Equipment Notes by the holders thereof, and for other good and valuable
consideration the receipt and adequacy whereof are hereby acknowledged, the
Owner Trustee has granted, bargained, sold, assigned, transferred,
conveyed, mortgaged, pledged and confirmed, and does hereby grant, bargain,
sell, assign, transfer, convey, mortgage, pledge and confirm, unto the
Indenture Trustee, its successors in trust and assigns, for the security
and benefit of the Note Holders, a first priority security interest in and
mortgage lien on all right, title and interest of the Owner Trustee in, to
and under the following described property, rights and privileges, other
than Excluded Payments (which collectively, excluding Excluded Payments but
including all property hereafter specifically subjected to the Lien of this
Trust Indenture by the Trust Agreement and Indenture Supplement or any
mortgage supplemental hereto, are included within the Trust Indenture
Estate), to wit:
(1) the Aircraft (including the Airframe and the Engines and
all replacements thereof and substitutions therefor to which the Owner
Trustee shall from time to time acquire title as provided herein and in the
Lease), all as more particularly described in the Trust Agreement and
Indenture Supplement executed and delivered with respect to the Aircraft or
any such replacements or substitutions therefor, as provided in this
Indenture;
(2) the Lease and any Lease Supplement and all Rent thereunder
(including, without limitation, all amounts of Basic Rent, EBO Amount,
Supplemental Rent and payments of any kind thereunder (excluding any
Excluded Payments));
(3) the Purchase Agreement (to the extent specified in the
Purchase Agreement Assignment), the Purchase Agreement Assignment, the
Consent and Agreement and the Bill of Sale;
(4) all rents, issues, profits, revenues and other income of
the property subjected or required to be subjected to the Lien of this
Indenture;
(5) all insurance and requisition proceeds with respect to the
Aircraft, including but not limited to the insurance required under Section
11 of the Lease, but excluding insurance proceeds described in clauses (ii)
and (iii) of the definition of Excluded Payments;
(6) all monies and securities from time to time deposited or
required to be deposited with the Indenture Trustee pursuant to any terms
of this Indenture or the Lease or required hereby or by the Lease to be
held by the Indenture Trustee hereunder (other than Excluded Payments); and
(7) all proceeds of the foregoing.
BUT EXCLUDING from the foregoing and from the Trust Indenture
Estate all Excluded Payments, and the right to enforce and collect the
same, and SUBJECT TO all of the terms and conditions of this Trust
Indenture and the rights of the Owner Trustee and the Owner Participant
hereunder.
Concurrently with the delivery hereof, the Owner Trustee is
delivering to the Indenture Trustee the original executed counterpart of
the Lease and the Lease Supplement No. 1 (to each of which a chattel paper
receipt is attached), and executed copies of the Participation Agreement,
and the Purchase Agreement Assignment with the Consent and Agreement
attached thereto.
TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Indenture Trustee, and its successors and assigns, in trust for
the benefit and security of the Note Holders, the Loan Participants and the
Indenture Indemnitees except as provided in Section 2.15 and Article III
hereof without any preference, distinction or priority of any one Equipment
Note over any other by reason of priority of time of issue, sale,
negotiation, date of maturity thereof or otherwise for any reason
whatsoever, and for the uses and purposes and in all cases and as to all
property specified in paragraphs (1) through (7) inclusive above, subject
to the terms and provisions set forth in this Trust Indenture.
It is expressly agreed that anything herein contained to the
contrary notwithstanding, the Owner Trustee shall remain liable under each
of the Indenture Agreements to which it is a party to perform all of the
obligations assumed by it thereunder, except to the extent prohibited or
excluded from doing so pursuant to the terms and provisions thereof, and
the Loan Participants, Indenture Indemnitees, Indenture Trustee and the
Note Holders shall have no obligation or liability under the Indenture
Agreements, by reason of or arising out of the assignment hereunder, nor
shall the Loan Participants, Indenture Indemnitees, Indenture Trustee or
the Note Holders be required or obligated in any manner to perform or
fulfill any obligations of the Owner Trustee under or pursuant to any of
the Indenture Agreements to which it is a party, or, except as herein
expressly provided, to make any payment, or to make any inquiry as to the
nature or sufficiency of any payment received by it, or present or file any
claim, or take any action to collect or enforce the payment of any amounts
which may have been assigned to it or to which it may be entitled at any
time or times.
The Owner Trustee does hereby constitute the Indenture Trustee
the true and lawful attorney of the Owner Trustee, irrevocably, granted for
good and valuable consideration and coupled with an interest and with full
power of substitution, and with full power (in the name of the Owner
Trustee or otherwise) to ask for, require, demand, receive, compound and
give acquittance for any and all monies and claims for monies (in each case
including insurance and requisition proceeds but in all cases excluding
Excluded Payments) due and to become due under or arising out of the
Indenture Agreements, and all other property which now or hereafter
constitutes part of the Trust Indenture Estate, to endorse any checks or
other instruments or orders in connection therewith and to file any claims
or to take any action or to institute any proceedings which the Indenture
Trustee may deem to be necessary or advisable in the premises. Without
limiting the generality of the foregoing, but subject to the rights of the
Owner Trustee and the Owner Participant hereunder, during the continuance
of any Event of Default under this Trust Indenture, the Indenture Trustee
shall have the right under such power of attorney to accept any offer in
connection with the exercise of remedies as set forth herein of any
purchaser to purchase the Airframe and Engines and upon such purchase to
execute and deliver in the name of and on behalf of the Owner Trustee an
appropriate bill of sale and other instruments of transfer relating to the
Airframe and Engines, when purchased by such purchaser, and to perform all
other necessary or appropriate acts with respect to any such purchase, and
in its discretion to file any claim or take any other action or
proceedings, either in its own name or in the name of the Owner Trustee or
otherwise, which the Indenture Trustee may deem necessary or appropriate to
protect and preserve the right, title and interest of the Indenture Trustee
in and to such Rents and other sums and the security intended to be
afforded hereby; provided, however, that no action of the Indenture Trustee
pursuant to this paragraph shall increase the obligations or liabilities of
the Owner Trustee to any Person beyond those obligations and liabilities
specifically set forth in this Trust Indenture and in the other Operative
Documents. Under the Lease, Lessee is directed, so long as this Trust
Indenture shall not have been fully discharged, to make all payments of
Rent (other than Excluded Payments) and all other amounts which are
required to be paid to or deposited with the Owner Trustee pursuant to the
Lease (other than Excluded Payments) directly to, or as directed by, the
Indenture Trustee at such address or addresses as the Indenture Trustee
shall specify, for application as provided in this Trust Indenture. The
Owner Trustee agrees that promptly upon receipt thereof, it will transfer
to the Indenture Trustee any and all monies from time to time received by
it constituting part of the Trust Indenture Estate, for distribution by the
Indenture Trustee pursuant to this Trust Indenture, except that the Owner
Trustee shall accept for distribution pursuant to the Trust Agreement any
amounts distributed to it by the Indenture Trustee under this Trust
Indenture.
The Owner Trustee agrees that at any time and from time to
time, upon the written request of the Indenture Trustee, the Owner Trustee
will promptly and duly execute and deliver or cause to be duly executed and
delivered any and all such further instruments and documents as the
Indenture Trustee may reasonably deem necessary or desirable to perfect,
preserve or protect the mortgage, security interests and assignments
created or intended to be created hereby or to obtain for the Indenture
Trustee the full benefits of the assignment hereunder and of the rights and
powers herein granted. The parties hereto acknowledge that neither the
Owner Trustee nor the Owner Participant shall have any obligation as to any
recording, filing, refiling or re-recording of any documents or instruments
in regard to maintaining the perfection of the security interests created
hereunder, in the Trust Indenture Estate or any security interest that may
be claimed to have been created by the Lease or the ownership interest of
the Owner Trustee in the Aircraft.
The Owner Trustee does hereby warrant and represent that it has
not assigned or pledged, and hereby covenants and agrees that it will not
assign or pledge, so long as the assignment hereunder shall remain in
effect, and the Lien hereof shall not have been released pursuant to
Section 10.01 hereof, any of its right, title or interest hereby assigned,
to anyone other than the Indenture Trustee, and that it will not, except as
otherwise provided in this Trust Indenture and except with respect to
Excluded Payments to which it is entitled, (i) accept any payment from
Lessee under any Indenture Agreement, (ii) enter into any agreement
amending or supplementing any Indenture Agreement, (iii) execute any waiver
or modification of, or consent under, the terms of, or exercise any rights,
powers or privileges under, any Indenture Agreement, (iv) settle or
compromise any claim (other than those relating to an Excluded Payment)
arising under any Indenture Agreement or (v) submit or consent to the
submission of any dispute, difference or other matter arising under or in
respect of any Indenture Agreement to arbitration thereunder.
The Owner Trustee does hereby further agree that it will not
without the written consent of the Indenture Trustee:
(a) collect or agree to the receipt or collection of any
payment of Rent (other than Excluded Payments),
including Basic Rent, EBO Amount, Termination Value or
any other payment to be made pursuant to Section 9, 10
or 19 of the Lease prior to the date for the payment
thereof provided for by the Lease or assign, transfer
or hypothecate (other than to the Indenture Trustee
hereunder) any payment of Rent (other than Excluded
Payments), including Basic Rent, EBO Amount,
Termination Value or any other payment to be made
pursuant to Section 9, 10 or 19 of the Lease, then due
or to accrue in the future under the Lease in respect
of the Airframe and Engines; or
(b) except as contemplated by the Trust Agreement in
connection with the appointment of a successor owner
trustee, sell, mortgage, transfer, assign or
hypothecate (other than to the Indenture Trustee
hereunder) its interest in the Airframe and Engines or
any part thereof or in any amount to be received by it
from the use or disposition of the Airframe and
Engines, other than amounts distributed to it pursuant
to Article III hereof.
It is hereby further agreed that any and all property described
or referred to in the granting clauses hereof which is hereafter acquired
by the Owner Trustee shall ipso facto, and without any further conveyance,
assignment or act on the part of the Owner Trustee or the Indenture
Trustee, become and be subject to the Lien herein granted as fully and
completely as though specifically described herein, but nothing contained
in this paragraph shall be deemed to modify or change the obligations of
the Owner Trustee contained in the foregoing paragraphs.
The Owner Trustee does hereby ratify and confirm the Lease and
does hereby agree that it will not violate any covenant or agreement made
by it therein, herein or in any of the other Owner Trustee Documents.
Notwithstanding the Granting Clause or any of the foregoing
paragraphs, there is hereby excluded from the foregoing sale, transfer,
assignment, grant, pledge and security interest all Excluded Payments.
IT IS HEREBY COVENANTED AND AGREED by and between the parties
hereto as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. For all purposes of this Indenture,
capitalized terms used but not defined herein shall have the respective
meanings set forth or incorporated by reference, and shall be construed and
interpreted in the manner described, in Annex A.
ARTICLE II
THE EQUIPMENT NOTES
SECTION 2.01. Form of Equipment Notes.
The Equipment Notes shall be substantially in the form set forth
below:
THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR PURSUANT
TO THE SECURITIES LAWS OF ANY STATE. ACCORDINGLY, THIS
EQUIPMENT NOTE MAY NOT BE SOLD UNLESS EITHER REGISTERED
UNDER THE ACT AND SUCH APPLICABLE STATE LAWS OR AN EXEMPTION
FROM SUCH REGISTRATIONS IS AVAILABLE.
FIRST SECURITY BANK, NATIONAL ASSOCIATION, AS OWNER TRUSTEE
UNDER TRUST AGREEMENT (US AIRWAYS, INC. TRUST NO. N7__UW)
DATED AS OF _______ __, 199_.
SERIES [___] NON-RECOURSE EQUIPMENT NOTE DUE [___] ISSUED IN
CONNECTION WITH THE AIRBUS A-___ AIRCRAFT BEARING UNITED
STATES REGISTRATION NUMBER _____.
No.____ Date: [______,__] $________________
INTEREST RATE MATURITY DATE
[____] [___________,_____]
FIRST SECURITY BANK, NATIONAL ASSOCIATION, not in its individual
capacity but solely as Owner Trustee (herein in such capacity called the
"Owner Trustee") under that certain Trust Agreement (US Airways, Inc.
Trust No. N7__UW), dated as of _________ __, 199_, between the Owner
Participant named therein and the Owner Trustee (herein as such Trust
Agreement may be supplemented or amended from time to time called the
"Trust Agreement"), hereby promises to pay to ___________, or the
registered assignee thereof, the principal sum of $_________ (the
"Principal Amount"), together with interest on the amount of the Principal
Amount remaining unpaid from time to time (calculated on the basis of a
year of 360 days comprised of twelve 30-day months) from the date hereof
until paid in full at a rate per annum equal to the Interest Rate indicated
above. The Principal Amount of this Equipment Note shall be payable on the
dates and in the installments as set forth in Schedule I hereto. Accrued
but unpaid interest shall be due and payable in semi-annual installments
commencing _______ 30, ____, and thereafter on _______ 30 and ______ 30 of
each year, to and including _______, _____. Notwithstanding the foregoing,
the final payment made on this Equipment Note shall be in an amount
sufficient to discharge in full the unpaid Principal Amount and all accrued
and unpaid interest on, and any other amounts due under, this Equipment
Note. Notwithstanding anything to the contrary contained herein, if any
date on which a payment under this Equipment Note becomes due and payable
is not a Business Day then such payment shall not be made on such scheduled
date but shall be made on the next succeeding Business Day with the same
force and effect as if made on such scheduled date and if such payment is
made on such next succeeding Business Day, no interest shall accrue on the
amount of such payment from and after such scheduled date.
For purposes hereof, the term "Trust Indenture" means the Trust
Indenture and Security Agreement (US Airways, Inc. Trust No. N7__UW), dated
as of ___________ __, 199_, between the Owner Trustee and State Street Bank
and Trust Company (the "Indenture Trustee"), as the same may be amended or
supplemented from time to time. All other capitalized terms used in this
Equipment Note and not defined herein shall have the respective meanings
assigned in the Trust Indenture.
This Equipment Note shall bear interest, payable on demand, at the
Past Due Rate (calculated on the basis of a year of 360 days comprised of
twelve 30-day months) on any overdue Principal Amount, any overdue Make-
Whole Amount, if any, and (to the extent permitted by applicable law) any
overdue interest and any other amounts payable hereunder which are overdue,
in each case for the period the same is overdue. Amounts shall be overdue
if not paid when due (whether at stated maturity, by acceleration or
otherwise).
All payments of the Principal Amount of, interest on, Make-Whole
Amount, if any, and all other amounts due hereunder by the Owner Trustee of
every obligation or covenant contained in the Trust Indenture and in the
Participation Agreement or any of the other Operative Documents shall be
payable only from the income and proceeds from the Trust Estate to the
extent included in the Trust Indenture Estate and only to the extent that
the Owner Trustee shall have sufficient income or proceeds from the Trust
Estate to the extent included in the Trust Indenture Estate to enable the
Indenture Trustee to make such payments in accordance with the terms of
Section 2.03 and Article III of the Trust Indenture and each holder hereof,
by its acceptance of this Equipment Note, agrees that it will look solely
to the income and proceeds from the Trust Indenture Estate to the extent
available for distribution to the holder hereof as above provided and that
none of the Owner Participant, the Owner Trustee, in its individual
capacity, or the Indenture Trustee is personally liable or liable in any
manner extending to any assets other than the Trust Indenture Estate to the
holder hereof for any amounts payable or any liability under this Equipment
Note or, except as expressly provided in the Trust Indenture or in the
Participation Agreement, for any liability under the Trust Indenture or the
Participation Agreement; provided, however, that nothing herein contained
shall limit, restrict or impair the right of the Indenture Trustee, subject
always to the terms and provisions of the Trust Indenture, to accelerate
the maturity of this Equipment Note upon occurrence of an Event of Default
under the Trust Indenture in accordance with Section 4.04(b) of the Trust
Indenture, to bring suit and obtain a judgment against the Owner Trustee on
this Equipment Note for purposes of realizing upon the Trust Indenture
Estate and to exercise all rights and remedies provided under the Trust
Indenture or otherwise realize upon the Trust Indenture Estate.
There shall be maintained a Equipment Note Register for the purpose
of registering transfers and exchanges of Equipment Notes at the Corporate
Trust Office of the Indenture Trustee or at the office of any successor in
the manner provided in Section 2.07 of the Trust Indenture.
The Principal Amount and interest and other amounts due hereunder
shall be payable in Dollars in immediately available funds at the Corporate
Trust Office of the Indenture Trustee, or as otherwise provided in the
Trust Indenture. Each such payment shall be made on the date such payment
is due and without any presentment or surrender of this Equipment Note,
except that in the case of any final payment with respect to this Equipment
Note, the Equipment Note shall be surrendered promptly thereafter to the
Indenture Trustee for cancellation.
The holder hereof, by its acceptance of this Equipment Note, agrees
that, except as provided in the Trust Indenture, each payment of an
installment of the Principal Amount, Make-Whole Premium, if any, and
interest received by it hereunder shall be applied, first, to the payment
of accrued interest on this Equipment Note (as well as any interest on any
overdue Principal Amount, any overdue Make-Whole Amount, if any, or, to the
extent permitted by Law, any overdue interest and other amounts hereunder)
to the date of such payment, second, to the payment of the Principal Amount
of this Equipment Note (or portion hereof) then due (other than by reason
of redemption), third, to the payment of Make-Whole Amount, if any, and any
other amount due hereunder or under the Trust Indenture, and fourth, the
balance, if any, remaining thereafter, to the payment of the Principal
Amount hereof remaining unpaid and due by reason of redemption. The
amounts paid pursuant to clause fourth of the preceding sentence shall be
applied to installments of the Principal Amount of this Equipment Note
remaining unpaid in the inverse order of their normal maturity.
This Equipment Note is one of the Equipment Notes referred to in
the Trust Indenture which have been or are to be issued by the Owner
Trustee pursuant to the terms of the Trust Indenture. The Trust Indenture
Estate is held by the Indenture Trustee as security, in part, for the
Equipment Notes. The provisions of this Equipment Note are subject to the
Trust Indenture. Reference is hereby made to the Trust Indenture and the
Participation Agreement for a complete statement of the rights and
obligations of the holder of, and the nature and extent of the security
for, this Equipment Note and the rights and obligations of the holders of,
and the nature and extent of the security for, any other Equipment Notes
executed and delivered under the Trust Indenture, as well as for a
statement of the terms and conditions of the Trust created by the Trust
Indenture, to all of which terms and conditions in the Trust Indenture and
the Participation Agreement each holder hereof agrees by its acceptance of
this Equipment Note.
As provided in the Trust Indenture and subject to certain
limitations therein set forth, this Equipment Note is exchangeable for a
like aggregate Principal Amount of Equipment Notes of different authorized
denominations, as requested by the holder surrendering the same.
Prior to the due presentment for registration of transfer of this
Equipment Note, the Owner Trustee and the Indenture Trustee shall deem and
treat the Person in whose name this Equipment Note is registered on the
Equipment Note Register as the absolute owner and holder hereof for the
purpose of receiving all amounts payable with respect to this Equipment
Note and for all purposes, and neither of the Owner Trustee nor the
Indenture Trustee shall be affected by notice to the contrary.
This Equipment Note is subject to redemption as provided in
Sections 2.10, 2.11 and 2.12 of the Trust Indenture but not otherwise.
This Equipment Note is also subject to assumption by Lessee as provided in
Section 2.13 of the Trust Indenture, to exchange and to purchase by the
Owner Participant or the Owner Trustee as provided in Section 2.14 of the
Trust Indenture but not otherwise.
[The indebtedness evidenced by this Equipment Note is, to the
extent and in the manner provided in the Trust Indenture, subordinate and
subject in right of payment to the prior payment in full of the Secured
Obligations (as defined in the Trust Indenture) in respect of [Series A
Equipment Notes](1) [Series A and Series B Equipment Notes](2), and this
Equipment Note is issued subject to such provisions. The Note Holder of
this Equipment Note, by accepting the same, (a) agrees to and shall be
bound by such provisions, (b) authorizes and directs the Indenture Trustee
on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in the Trust Indenture and (c)
appoints the Indenture Trustee his attorney-in-fact for such purpose.](3)
-----------------
(1) To be inserted in the case of a Series B Equipment Note.
(2) To be inserted in the case of a Series C Equipment Note.
(3) To be inserted for each Equipment Note other than any
Series A Equipment Note.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Indenture Trustee by manual signature, this
Equipment Note shall not be entitled to any benefit under the Trust
Indenture or be valid or obligatory for any purpose.
THIS EQUIPMENT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
* * *
IN WITNESS WHEREOF, the Owner Trustee has caused this Equipment
Note to be executed in its corporate name by its officer thereunto duly
authorized on the date hereof.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Owner Trustee
By: ____________________________
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OFAUTHENTICATION
This is one of the Equipment Notes referred to in the within-
mentioned Trust Indenture.
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity but
solely as Indenture Trustee
By: ____________________________
Name:
Title:
SCHEDULE I
EQUIPMENT NOTES AMORTIZATION
Payment Date Principal Amount to be Paid
------------ ---------------------------
[SEE SCHEDULE I TO TRUST INDENTURE
WHICH IS INSERTED UPON ISSUANCE]
* * *
SECTION 2.02. Issuance and Terms of Equipment Notes.
The Equipment Notes shall be dated the date of issuance thereof,
shall be issued in three separate series consisting of Series A, Series B
and Series C and in the maturities and principal amounts and shall bear
interest as specified in Schedule I hereto. On the date hereof, each
Equipment Note shall be issued to the Pass Through Trustees (or their
designee) under the Pass Through Agreements as set forth in Schedule II
hereto in connection therewith. The Equipment Notes shall be issued in
registered form only. The Equipment Notes shall be issued in denominations
of $1,000 and integral multiples thereof, except that one Equipment Note of
each Series may be in an amount that is not an integral multiple of $1,000.
Each Equipment Note shall bear interest at the Debt Rate
(calculated on the basis of a year of 360 days comprised of twelve 30-day
months) on the unpaid Principal Amount thereof from time to time
outstanding, payable in arrears on ________ 30, ____, and on each ______ 30
and ______ 30 thereafter until maturity. The Principal Amount of each
Equipment Note shall be payable on the dates and in the installments as set
forth in Schedule I which shall be attached to the Equipment Notes.
Notwithstanding the foregoing, the final payment made under each Equipment
Note shall be in an amount sufficient to discharge in full the unpaid
Principal Amount and all accrued and unpaid interest on, and any other
amounts due under, such Equipment Note. Each Equipment Note shall bear
interest at the Past Due Rate (calculated on the basis of a year of 360
days comprised of twelve 30-day months) on any part of the Principal
Amount, Make-Whole Amount, if any, and to the extent permitted by
applicable law, interest and any other amounts payable thereunder not paid
when due for any period during which the same shall be overdue, in each
case for the period the same is overdue. Amounts shall be overdue if not
paid when due (whether at stated maturity, by acceleration or otherwise).
Notwithstanding anything to the contrary contained herein, if any date on
which a payment under any Equipment Note becomes due and payable is not a
Business Day then such payment shall not be made on such scheduled date but
shall be made on the next succeeding Business Day with the same force and
effect as if made on such scheduled date and if such payment is made on
such next succeeding Business Day, no interest shall accrue on the amount
of such payment from and after such scheduled date.
The Owner Trustee agrees to pay to the Indenture Trustee for
distribution in accordance with Section 3.04 hereof (i) to the extent not
payable (whether or not in fact paid) under Section 7(a) of the Note
Purchase Agreement (as originally in effect or as amended with the consent
of the Owner Participant) an amount or amounts equal to the fees payable to
the Liquidity Provider under Section 2.03 of each Liquidity Facility and
the related Fee Letter (as defined in the Intercreditor Agreement)
multiplied by a fraction the numerator of which shall be the then
outstanding aggregate principal amount of the Series A Equipment Notes,
Series B Equipment Notes and Series C Equipment Notes and the denominator
of which shall be the then outstanding aggregate principal amount of all
"Series A Equipment Notes", "Series B Equipment Notes" and "Series C
Equipment Notes" (in each case as defined in the relevant Operative
Indenture) issued under the Operative Indentures; (ii) (x) the amount equal
to interest on any Downgrade Advance (other than any Applied Downgrade
Advance) payable under Section 3.07 of each Liquidity Facility minus
Investment Earning from such Downgrade Advance multiplied by (y) the
fraction specified in the foregoing clause (i); (iii) (x) the amount equal
to interest on any Non-Extension Advance (other than any Applied Non-
Extension Advance) payable under Section 3.07 of each Liquidity Facility
minus Investment Earnings from such Non-Extension Advance multiplied by (y)
the fraction specified in the foregoing clause (i); (iv) if any payment
default shall have occurred and be continuing with respect to interest on
any Series A Equipment Note, Series B Equipment Note or Series C Equipment
Note, (x) the excess, if any, of (1) the amount equal to interest on any
Unpaid Advance, Applied Downgrade Advance or Applied Non-Extension
Advance payable under Section 3.07 of each Liquidity Facility over (2)
the sum of Investment Earnings from any Final Advance plus any amount of
interest at the Past Due Rate actually payable (whether or not in fact
paid) by the Owner Trustee in respect of the overdue scheduled interest on
the Equipment Notes in respect of which such Unpaid Advance, Applied
Downgrade Advance or Applied Non-Extension Advance was made multiplied by
(y) a fraction the numerator of which shall be the then aggregate overdue
amounts of interest on the Series A Equipment Notes, Series B Equipment
Notes and Series C Equipment Notes (other than interest becoming due and
payable solely as a result of acceleration of any such Equipment Notes)
and the denominator of which shall be the then aggregate overdue amounts of
interest on all "Series A Equipment Notes", "Series B Equipment Notes" and
"Series C Equipment Notes" (in each case as defined in the relevant
Operative Indenture) issued under the Operative Indentures (other than
interest becoming due and payable solely as a result of acceleration of any
such "Equipment Notes") and (v) any other amounts owed to the Liquidity
Provider by the Subordination Agent as borrower under each Liquidity
Facility (other than amounts due as repayment of advances thereunder or as
interest on such advances), except to the extent payable pursuant to clause
(i), (ii), (iii) or (iv) above multiplied by the fraction specified in the
foregoing clause (i). For purposes of this paragraph, the terms "Applied
Downgrade Advance", "Applied Non-Extension Advance", "Cash Collateral
Account", "Downgrade Advance", "Final Advance", "Investment Earnings",
"Non-Extension Advance" and "Unpaid Advance" shall have the meanings
specified in each Liquidity Facility or the Intercreditor Agreement.
The Equipment Notes shall be executed on behalf of the Owner
Trustee by its President or one of its Vice Presidents, Assistant Vice
Presidents or Assistant Secretaries or other authorized officer. Equipment
Notes bearing the signatures of individuals who were at any time the proper
officers of the Owner Trustee shall bind the Owner Trustee, notwithstanding
that such individuals or any of them have ceased to hold such offices prior
to the authentication and delivery of such Equipment Notes or did not hold
such offices at the respective dates of such Equipment Notes. The Owner
Trustee may from time to time execute and deliver Equipment Notes with
respect to the Aircraft to the Indenture Trustee for authentication upon
original issue and such Equipment Notes shall thereupon be authenticated
and delivered by the Indenture Trustee upon the written request of the
Owner Trustee signed by a Vice President or Assistant Vice President or
other authorized officer of the Owner Trustee; provided, however, that each
such request shall specify the aggregate Principal Amount of all Equipment
Notes to be authenticated hereunder on original issue with respect to the
Aircraft. No Equipment Note shall be secured by or entitled to any benefit
under this Trust Indenture or be valid or obligatory for any purposes,
unless there appears on such Equipment Note a certificate of authentication
in the form provided for herein executed by the Indenture Trustee by the
manual signature of one of its authorized officers and such certificate
upon any Equipment Notes shall be conclusive evidence, and the only
evidence, that such Equipment Note has been duly authenticated and
delivered hereunder.
SECTION 2.03. Payments from Trust Indenture Estate Only.
(a) Without impairing any of the other rights, powers, remedies,
privileges, liens or security interests of the Note Holders under this
Trust Indenture, each Note Holder, by its acceptance of a Equipment Note,
agrees that as between it and the Owner Trustee, except as expressly
provided in this Trust Indenture, the Participation Agreement or any other
Operative Document, (i) the obligation to make all payments of the
Principal Amount of, interest on, Make-Whole Amount, if any, and all other
amounts due with respect to the Equipment Notes, and the performance by the
Owner Trustee of every obligation or covenant contained in this Trust
Indenture and in the Participation Agreement or any of the other Operative
Documents, shall be payable only from the income and proceeds from the
Trust Estate to the extent included in the Trust Indenture Estate and only
to the extent that the Owner Trustee shall have sufficient income or
proceeds from the Trust Estate to the extent included in the Trust
Indenture Estate to enable the Indenture Trustee to make such payments in
accordance with the terms of Article III hereof, and all of the statements,
representations, covenants and agreements made by the Owner Trustee (when
made in such capacity) contained in this Trust Indenture and any agreement
referred to herein other than the Trust Agreement, unless expressly
otherwise stated, are made and intended only for the purpose of binding the
Trust Estate and establishing the existence of rights and remedies which
can be exercised and enforced against the Trust Estate; therefore, anything
contained in this Trust Indenture or such other agreements to the contrary
notwithstanding (except for any express provisions or representations that
the Owner Trustee is responsible for, or is making, in its individual
capacity, for which there would be personal liability of the Owner
Trustee), no recourse shall be had with respect to this Trust Indenture or
such other agreements against the Owner Trustee in its individual capacity
or against any institution or person which becomes a successor trustee or
co-trustee or any officer, director, trustee, servant or direct or indirect
parent or controlling Person or Persons of any of them, and (ii) none of
the Owner Trustee, in its individual capacity, the Owner Participant, the
Indenture Trustee and any officer, director, trustee, servant, employee,
agent or direct or indirect parent or controlling Person or Persons of any
of them shall have any personal liability for any amounts payable, or other
obligation owed, hereunder, under the Participation Agreement or any of the
other Operative Documents or under the Equipment Notes except as expressly
provided herein or in the Participation Agreement; provided, however, that
nothing contained in this Section 2.03(a) shall be construed to limit the
exercise and enforcement in accordance with the terms of this Trust
Indenture or such other agreements of rights and remedies against the Trust
Estate.
(b) If (i) all or any part of the Trust Estate becomes the
property of, or the Owner Trustee or Owner Participant becomes, a debtor
subject to the reorganization provisions of the Bankruptcy Code, (ii)
pursuant to such reorganization provisions, including Section 1111(b) of
the Bankruptcy Code, the Owner Trustee (in its individual capacity) or the
Owner Participant is required, by reason of the Owner Trustee (in its
individual capacity) or the Owner Participant being held to have recourse
liability to any Note Holder or the Indenture Trustee, directly or
indirectly (other than the recourse liability of the Owner Trustee (in its
individual capacity)), to make payment on account of any amount payable as
principal, Make-Whole Amount, if any, interest or other amounts on the
Equipment Notes or under this Indenture and (iii) any Note Holder or the
Indenture Trustee actually receives any Indenture Excess Amount (as
hereinafter defined) which reflects any payment by the Owner Trustee (in
its individual capacity) or the Owner Participant on account of clause (ii)
above, then such Note Holder or the Indenture Trustee, as the case may be,
shall promptly refund to the Owner Trustee (in its individual capacity) or
the Owner Participant (whichever shall have made such payment) such
Indenture Excess Amount.
For purposes of this Section 2.03(b), "Indenture Excess Amount"
means the amount by which such payment exceeds the amount that would have
been received by a Note Holder or the Indenture Trustee if the Owner
Trustee (in its individual capacity) or the Owner Participant had not
become subject to the recourse liability referred to in clause (ii) above.
Nothing contained in this Section 2.03(b) shall prevent a Note Holder or
the Indenture Trustee from enforcing any personal recourse obligation (and
retaining the proceeds thereof) of the Owner Trustee (in its individual
capacity) or the Owner Participant under the Participation Agreement or
this Trust Indenture (and any exhibits or annexes hereto or thereto) or by
separate agreement or from retaining any amount paid by Owner Participant
under Section 2.14 or 4.03 hereof.
SECTION 2.04. Method of Payment.
(a) The Principal Amount of, interest on, Make-Whole Amount, if
any, and other amounts due under each Equipment Note or hereunder will be
payable in Dollars by wire transfer of immediately available funds not
later than [11:00 a.m.], New York City time, on the due date of payment to
the Indenture Trustee at the Corporate Trust Office for distribution among
the Note Holders in the manner provided herein. The Owner Trustee shall
not have any responsibility for the distribution of such payment to any
Note Holder. Notwithstanding the foregoing or any provision in any
Equipment Note to the contrary, the Indenture Trustee will use reasonable
efforts to pay or cause to be paid, if so directed in writing by any Note
Holder (with a copy to the Owner Trustee), all amounts paid by the Owner
Trustee hereunder and under such holder's Equipment Note or Equipment Notes
to such holder or a nominee therefor (including all amounts distributed
pursuant to Article III of this Trust Indenture) by transferring, or
causing to be transferred, by wire transfer of immediately available funds
in Dollars, prior to 2:00 p.m., New York City time, on the due date of
payment, to an account maintained by such holder with a bank located in the
continental United States the amount to be distributed to such holder, for
credit to the account of such holder maintained at such bank. If the
Indenture Trustee shall fail to make any such payment as provided in the
immediately preceding sentence after its receipt of funds at the place and
prior to the time specified above, the Indenture Trustee, in its individual
capacity and not as trustee, agrees to compensate such holders for loss of
use of funds at the Federal Funds Rate until such payment is made and the
Indenture Trustee shall be entitled to any interest earned on such funds
until such payment is made. Any payment made hereunder shall be made
without any presentment or surrender of any Equipment Note, except that, in
the case of the final payment in respect of any Equipment Note, such
Equipment Note shall be surrendered to the Indenture Trustee for
cancellation promptly after such payment. Notwithstanding any other
provision of this Trust Indenture to the contrary, the Indenture Trustee
shall not be required to make, or cause to be made, wire transfers as
aforesaid prior to the first Business Day on which it is practicable for
the Indenture Trustee to do so in view of the time of day when the funds to
be so transferred were received by it if such funds were received after
11:00 a.m., New York City time, at the place of payment. Prior to the due
presentment for registration of transfer of any Equipment Note, the Owner
Trustee and the Indenture Trustee shall deem and treat the Person in whose
name any Equipment Note is registered on the Equipment Note Register as the
absolute owner and holder of such Equipment Note for the purpose of
receiving payment of all amounts payable with respect to such Equipment
Note and for all other purposes, and neither the Owner Trustee nor the
Indenture Trustee shall be affected by any notice to the contrary. So long
as any signatory to the Participation Agreement or nominee thereof shall be
a registered Note Holder, all payments to it shall be made to the account
of such Note Holder specified in Schedule I thereto and otherwise in the
manner provided in or pursuant to the Participation Agreement unless it
shall have specified some other account or manner of payment by notice to
the Indenture Trustee consistent with this Section 2.04.
(b) The Indenture Trustee, as agent for the Owner Trustee, shall
exclude and withhold at the appropriate rate from each payment of Principal
Amount of, interest on, Make-Whole Amount, if any, and other amounts due
hereunder or under each Equipment Note (and such exclusion and withholding
shall constitute payment in respect of such Equipment Note) any and all
United States withholding taxes applicable thereto as required by Law. The
Indenture Trustee agrees to act as such withholding agent and, in
connection therewith, whenever any present or future United States taxes or
similar charges are required to be withheld with respect to any amounts
payable hereunder or in respect of the Equipment Notes, to withhold such
amounts (and such withholding shall constitute payment in respect of such
Equipment Note) and timely pay the same to the appropriate authority in the
name of and on behalf of the Note Holders, that it will file any necessary
United States withholding tax returns or statements when due, and that as
promptly as possible after the payment thereof it will deliver to each Note
Holder (with a copy to the Owner Trustee and Lessee) appropriate receipts
showing the payment thereof, together with such additional documentary
evidence as any such Note Holder may reasonably request from time to time.
If a Note Holder which is a Non-U.S. Person has furnished to the
Indenture Trustee a properly completed and currently effective U.S.
Internal Revenue Service Form 1001 or W-8 (or such successor form or forms
as may be required by the United States Treasury Department) during the
calendar year in which the payment hereunder or under the Equipment Note(s)
held by such holder is made (but prior to the making of such payment), or
in either of the two preceding calendar years, and has not notified the
Indenture Trustee of the withdrawal or inaccuracy of such form prior to the
date of such payment (and the Indenture Trustee has no reason to know that
any information set forth in such form is inaccurate), the Indenture
Trustee shall withhold only the amount, if any, required by Law (after
taking into account any applicable exemptions claimed by the Note Holder)
to be withheld from payments hereunder or under the Equipment Notes held by
such holder in respect of United States federal income tax (and such
withholding shall constitute payment in respect of such Equipment Note).
If a Note Holder (x) which is a Non-U.S. Person has furnished to the
Indenture Trustee a properly completed and currently effective U.S.
Internal Revenue Service Form 4224 in duplicate (or such successor
certificate, form or forms as may be required by the United States Treasury
Department as necessary in order to avoid withholding of United States
federal income tax), during the calendar year in which the payment is made
(but prior to the making of such payment), and has not notified the
Indenture Trustee of the withdrawal or inaccuracy of such certificate or
form prior to the date of such payment (and the Indenture Trustee has no
reason to know that any information set forth in such form is inaccurate)
or (y) which is a U.S. Person has furnished to the Indenture Trustee a
properly completed and currently effective U.S. Internal Revenue Service
Form W-9, if applicable, prior to a payment hereunder or under the
Equipment Notes held by such holder, no amount shall be withheld from
payments in respect of United States federal income tax. If any Note
Holder has notified the Indenture Trustee that any of the foregoing forms
or certificates is withdrawn or inaccurate, or if such holder has not filed
a form claiming an exemption from United States withholding tax or if the
Code or the regulations thereunder or the administrative interpretation
thereof are at any time after the date hereof amended to require such
withholding of United States federal income taxes from payments under the
Equipment Notes held by such holder, the Indenture Trustee agrees to
withhold from each payment due to the relevant Note Holder withholding
taxes at the appropriate rate under Law and will, on a timely basis as more
fully provided above, deposit such amounts with an authorized depository
and make such returns, statements, receipts and other documentary evidence
in connection therewith as required by applicable law. Neither the Owner
Participant nor the Owner Trustee shall be liable if the Indenture Trustee
fails to withhold withholding taxes in accordance with this Section 2.04 or
if any Note Holder provides false or inaccurate information on any form
required to be delivered under this Section 2.04.
SECTION 2.05. Application of Payments.
In the case of each Equipment Note, each payment of Principal
Amount, Make-Whole Amount, if any, and interest or other amounts due
thereon shall be applied:
First: to the payment of accrued interest on such Equipment Note
(as well as any interest on any overdue Principal Amount, any overdue Make-
Whole Amount, if any, and to the extent permitted by Law, any overdue
interest and any other overdue amounts thereunder) to the date of such
payment;
Second: to the payment of the Principal Amount of such Equipment
Note (or a portion thereof) then due thereunder (other than by reason of
redemption);
Third: to the payment of Make-Whole Amount, if any, and any
other amount due hereunder or under such Equipment Note; and
Fourth: the balance, if any, remaining thereafter, to the
payment of the Principal Amount of such Equipment Note remaining unpaid and
due by reason of redemption (provided that such Equipment Note shall not be
subject to redemption except as provided in Sections 2.10, 2.11 and 2.12
hereof).
The amounts paid pursuant to clause "Fourth" above shall be
applied to the installments of Principal Amount of such Equipment Note in
the inverse order of their normal maturity.
SECTION 2.06. Termination of Interest in Trust Indenture
Estate.
A Note Holder and Indenture Indemnitees shall not, as such, have
any further interest in, or other right with respect to, the Trust
Indenture Estate when and if the Secured Obligations due to such Note
Holder or Indenture Indemnitee shall have been paid in full.
SECTION 2.07. Registration, Transfer and Exchange of Equipment
Notes.
The Indenture Trustee shall keep a register (the "Equipment Note
Register") in which the Indenture Trustee shall provide for the
registration of Equipment Notes and the registration of transfers of
Equipment Notes. No such transfer shall be given effect unless and until
registration hereunder shall have occurred. The Equipment Note Register
shall be kept at the Corporate Trust Office of the Indenture Trustee. The
Indenture Trustee is hereby appointed "Equipment Note Registrar" for the
purpose of registering Equipment Notes and transfers of Equipment Notes as
herein provided. A holder of any Equipment Note intending to exchange such
Equipment Note shall surrender such Equipment Note to the Indenture Trustee
at the Corporate Trust Office, together with a written request from the
registered holder thereof for the issuance of a new Equipment Note,
specifying, in the case of a surrender for transfer, the name and address
of the new holder or holders. Upon surrender for registration of transfer
of any Equipment Note, the Owner Trustee shall execute, and the Indenture
Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Equipment Notes of a like
aggregate Principal Amount and of the same series. At the option of the
Note Holder, Equipment Notes may be exchanged for other Equipment Notes of
any authorized denominations of a like aggregate Principal Amount, upon
surrender of the Equipment Notes to be exchanged to the Indenture Trustee
at the Corporate Trust Office. Whenever any Equipment Notes are so
surrendered for exchange, the Owner Trustee shall execute, and the
Indenture Trustee shall authenticate and deliver, the Equipment Notes which
the Note Holder making the exchange is entitled to receive. All Equipment
Notes issued upon any registration of transfer or exchange of Equipment
Notes (whether under this Section 2.07 or under Section 2.08 hereof or
otherwise under this Trust Indenture) shall be the valid obligations of the
Owner Trustee evidencing the same respective obligations, and entitled to
the same security and benefits under this Trust Indenture, as the Equipment
Notes surrendered upon such registration of transfer or exchange. Every
Equipment Note presented or surrendered for registration of transfer, shall
(if so required by the Indenture Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by the Note Holder or such holder's
attorney duly authorized in writing, and the Indenture Trustee shall
require evidence satisfactory to it as to the compliance of any such
transfer with the Securities Act, and the securities Laws of any applicable
state. The Indenture Trustee shall make a notation on each new Equipment
Note of the amount of all payments of Principal Amount previously made on
the old Equipment Note or Equipment Notes with respect to which such new
Equipment Note is issued and the date to which interest on such old
Equipment Note or Equipment Notes has been paid. Interest shall be deemed
to have been paid on such new Equipment Note to the date on which interest
shall have been paid on such old Equipment Note, and all payments of the
Principal Amount marked on such new Equipment Note, as provided above,
shall be deemed to have been made thereon. The Owner Trustee shall not be
required to exchange any surrendered Equipment Notes as provided above
during the ten-day period preceding the due date of any payment on such
Equipment Note. The Owner Trustee shall in all cases deem the Person in
whose name any Equipment Note shall have been issued and registered as the
absolute owner and holder of such Equipment Note for the purpose of
receiving payment of all amounts payable by the Owner Trustee with respect
to such Equipment Note and for all purposes until a notice stating
otherwise is received from the Indenture Trustee and such change is
reflected on the Equipment Note Register. The Indenture Trustee will
promptly notify the Owner Trustee, the Owner Participant and Lessee of each
registration of a transfer of a Equipment Note. Any such transferee of a
Equipment Note, by its acceptance of a Equipment Note, agrees to the
provisions of the Participation Agreement applicable to Note Holders,
including Sections 5, 7(a), 7(c), 7(g), 7(h), 7(i), 7(n), 7(q), 7(u) and
7(z), 9, 12(a), 12(b), 14(b) and 14(e), and shall be deemed to have
represented and warranted (except as provided above), and covenanted, to
the parties to the Participation Agreement as to the matters represented,
warranted and covenanted by the Purchasers in the Participation Agreement.
Subject to compliance by the Note Holder and its transferee (if any) of the
requirements set forth in this Section 2.07, the Indenture Trustee and the
Owner Trustee shall use all reasonable efforts to issue new Equipment Notes
upon transfer or exchange within ten (10) Business Days of the date a
Equipment Note is surrendered for transfer or exchange.
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Equipment
Notes.
If any Equipment Note shall become mutilated, destroyed, lost or
stolen, the Owner Trustee shall, upon the written request of the holder of
such Equipment Note, execute and the Indenture Trustee shall authenticate
and deliver in replacement thereof a new Equipment Note, payable in the
same Principal Amount dated the same date and captioned as issued in
connection with the Aircraft. If the Equipment Note being replaced has
become mutilated, such Equipment Note shall be surrendered to the Indenture
Trustee and a photocopy thereof shall be furnished to the Owner Trustee.
If the Equipment Note being replaced has been destroyed, lost or stolen,
the holder of such Equipment Note shall furnish to the Owner Trustee, the
Owner Participant and the Indenture Trustee such security or indemnity as
may be required by them to save the Owner Trustee, the Owner Participant
and the Indenture Trustee harmless and evidence satisfactory to the Owner
Trustee, the Owner Participant and the Indenture Trustee of the
destruction, loss or theft of such Equipment Note and of the ownership
thereof. If a "qualified institutional buyer" of the type referred to in
paragraph (a)(l)(i)(A), (B), (D) or (E) of Rule 144A under the Securities
Act (a "QIB") is the holder of any such destroyed, lost or stolen Equipment
Note, then the written indemnity of such QIB, signed by an authorized
officer thereof, in favor of, delivered to and in form reasonably
satisfactory to Lessee, the Owner Participant, the Owner Trustee and the
Indenture Trustee shall be accepted as satisfactory indemnity and security
and no further indemnity or security shall be required as a condition to
the execution and delivery of such new Equipment Note. Subject to
compliance by the Note Holder of the requirements set forth in this Section
2.08, the Indenture Trustee and the Owner Trustee shall use all reasonable
efforts to issue new Equipment Notes within ten (10) Business Days of the
date of the written request therefor from the Note Holder.
SECTION 2.09. Payment of Expenses on Transfer; Cancellation.
(a) No service charge shall be made to a Note Holder for any
registration of transfer or exchange of Equipment Notes, but the Indenture
Trustee, as Equipment Note Registrar, may require payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Equipment Notes.
(b) The Indenture Trustee shall cancel all Equipment Notes
surrendered for replacement, redemption, transfer, exchange, payment or
cancellation and shall destroy the canceled Equipment Notes.
SECTION 2.10. Mandatory Redemptions of Equipment Notes.
(a) On the date on which Lessee is required pursuant to Section
10(a)(i) of the Lease to make payment for an Event of Loss with respect to
the Aircraft, all of the Equipment Notes shall be redeemed in whole at a
redemption price equal to 100% of the unpaid Principal Amount thereof,
together with all accrued interest thereon to the date of redemption and
all other amounts payable hereunder or under the Participation Agreement to
the Note Holders but without the Make-Whole Amount.
(b) If the Lease is terminated with respect to the Aircraft by
Lessee pursuant to Section 9, Section 19(b) or Section 20 thereof and
Lessee shall not have assumed all of the obligations of the Owner Trustee
hereunder pursuant to Section 2.13 and Section 7(u) of the Participation
Agreement, on the date the Lease is so terminated all the Equipment Notes
shall be redeemed in whole at a redemption price equal to 100% of the
unpaid Principal Amount thereof, together with accrued interest thereon to
the date of redemption and all other amounts payable hereunder or under the
Participation Agreement to the Note Holders plus the Make-Whole Amount, if
any.
SECTION 2.11. Voluntary Redemptions of Equipment Notes.
All, but not less than, all of the Equipment Notes may be
redeemed by the Owner Trustee with the prior consent of Lessee upon at
least 20 days revocable prior written notice to the Indenture Trustee, at a
redemption price equal to 100% of the unpaid Principal Amount thereof,
together with accrued interest thereon to the date of redemption and all
other amounts payable hereunder or under the Participation Agreement to the
Note Holders plus the Make-Whole Amount, if any.
SECTION 2.12. Redemptions; Notice of Redemption.
(a) Neither any redemption of any Equipment Note nor any
purchase by the Owner Trustee of any Equipment Note may be made except to
the extent and in the manner expressly permitted by this Trust Indenture.
No purchase of any Equipment Note may be made by the Indenture Trustee.
(b) Notice of redemption or purchase with respect to the
Equipment Notes shall be given by the Indenture Trustee by first-class
mail, postage prepaid, mailed not less than 15 nor more than 60 days prior
to the applicable redemption date, to each Note Holder of such Equipment
Notes to be redeemed or purchased, at such Note Holder's address appearing
in the Equipment Note Register; provided, that in the case of a redemption
to be made pursuant to Section 2.10(b) or Section 2.11, such notice shall
be revocable and shall be deemed revoked in the event that the Lease does
not in fact terminate on the specified termination date or if notice of
such redemption shall have been given in connection with a refinancing of
Equipment Notes and the Indenture Trustee receives written notice of such
revocation from Lessee or the Owner Trustee not later than three days prior
to the redemption date. All notices of redemption shall state: (1) the
redemption date, (2) the applicable basis for determining the redemption
price, (3) that on the redemption date, the redemption price will become
due and payable upon each such Equipment Note, and that, if any such
Equipment Notes are then outstanding, interest on such Equipment Notes
shall cease to accrue on and after such redemption date, and (4) the place
or places where such Equipment Notes are to be surrendered for payment of
the redemption price.
(c) On or before the redemption date, the Owner Trustee (or any
person on behalf of the Owner Trustee) shall, to the extent an amount equal
to the redemption price for the Equipment Notes to be redeemed or purchased
on the redemption date shall not then be held in the Trust Indenture
Estate, deposit or cause to be deposited with the Indenture Trustee by
11:00 a.m. New York City time on the redemption date in immediately
available funds the redemption price of the Equipment Notes to be redeemed
or purchased.
(d) Notice of redemption or purchase having been given as
aforesaid (and not deemed revoked as contemplated in the proviso to Section
2.12(b)), the Equipment Notes to be redeemed or purchased shall, on the
redemption date, become due and payable at the Corporate Trust Office of
the Indenture Trustee or at any office or agency maintained for such
purposes pursuant to Section 2.07, and from and after such redemption date
(unless there shall be a default in the payment of the redemption price)
any such Equipment Notes then outstanding shall cease to bear interest.
Upon surrender of any such Equipment Note for redemption or purchase in
accordance with said notice, such Equipment Note shall be redeemed at the
redemption price. If any Equipment Note called for redemption or purchase
shall not be so paid upon surrender thereof for redemption, the principal
amount thereof shall, until paid, continue to bear interest from the
applicable redemption date at the interest rate in effect for such
Equipment Note as of such redemption date.
SECTION 2.13. Assumption of Equipment Notes by Lessee.
If, in accordance with Section 7(u) of the Participation
Agreement Lessee shall assume (on a full recourse basis) all of the
obligations of the Owner Trustee hereunder, under the Equipment Notes and
all other Operative Documents by supplemental indenture satisfactory to the
Indenture Trustee (which shall contain (i) the provisions substantially
similar to Sections 6, 7, 8, 10, 11 and 12 of the Lease and (ii) other
provisions necessary or advisable to effectuate such assumption), then upon
delivery of such supplemental indenture, payment by Lessee of all expenses
(including reasonable fees and expenses of counsel) for the Owner Trustee
and the Owner Participant and delivery of an opinion of counsel for Lessee
that such assumption has been duly and validly effected, the Owner Trustee
shall be released and discharged from any further obligations hereunder and
under the Equipment Notes and all other Operative Documents and the Owner
Participant shall be released and discharged from any further obligations
under the Participation Agreement and any other Operative Document to which
it is a party, except with respect to any such obligations that accrued
prior thereto.
SECTION 2.14. Option to Purchase Equipment Notes.
Either the Owner Trustee or the Owner Participant may, upon the
events and subject to the terms and conditions and for the price set forth
in this Section 2.14, purchase all but not less than all of the Equipment
Notes outstanding hereunder, and each Note Holder agrees that it will, upon
such events and subject to such terms and conditions and upon receipt of
such price, sell, assign, transfer and convey to such purchaser or its
nominee (without recourse or warranty of any kind except as to its title to
the Equipment Notes and except against Liens on such Equipment Notes
arising by, through or under such holder), all of the right, title and
interest of such Note Holder in and to the Trust Indenture Estate, this
Trust Indenture and the Equipment Notes held by it, and such purchaser or
its nominee shall assume all of such holder's obligations under the
Participation Agreement and hereunder.
Such option to purchase the Equipment Notes may be exercised by
the Owner Trustee or the Owner Participant at any time following the
occurrence of any of the following events, and, in any such event, the
purchase price thereof shall equal for each Equipment Note the aggregate
unpaid Principal Amount thereof, plus accrued and unpaid interest thereon
to, but not including, the date of purchase and all other amounts (other
than the Make-Whole Amount, except as provided in the next sentence) then
payable hereunder or under the Participation Agreement to the holder
thereof. Such option to purchase the Equipment Notes may be exercised: (i)
upon an Indenture Trustee Event or (ii) in the event there shall have
occurred and be continuing a Lease Event of Default, provided, that if such
option is exercised pursuant to this clause (ii) at a time when there shall
have occurred and be continuing for less than one hundred eighty (180) days
a Lease Event of Default, the purchase price thereof shall equal the price
provided in the preceding sentence plus the Make-Whole Amount, if any.
Such option to purchase the Equipment Notes may be exercised by
the Owner Trustee or the Owner Participant giving written notice of its
election of such option to the Indenture Trustee, which notice (i) shall
specify a date for such purchase not more than thirty (30) days or less
than fifteen (15) days after the date of such notice and (ii) may specify
that its election of such option is contingent upon the trustee or the
debtor-in-possession in a proceeding involving Lessee under Chapter 11 of
the Bankruptcy Code not entering into an agreement during the Section 1110
Period to perform the Lease. The Indenture Trustee shall not exercise any
of the remedies hereunder or, without the consent of the Owner Trustee or
the Owner Participant, under the Lease, during the period from the time
that a notice of exercise by the Owner Participant of such option to
purchase becomes irrevocable until the date on which such purchase is
required to occur pursuant to the terms of the preceding sentence. Such
election to purchase the Equipment Notes shall become irrevocable (subject
to the provision in clause (ii) of the first sentence of this paragraph)
upon the fifteenth day preceding the date specified in the written notice
described in the first sentence of this paragraph.
If the Owner Trustee or the Owner Participant on or before the
date of such purchase shall so request, the Note Holders will comply with
all the provisions of Section 2.07 to enable new Equipment Notes to be
issued to the Owner Trustee or the Owner Participant or its nominee in such
denominations as the Owner Trustee or the Owner Participant shall request.
All taxes, charges and expenses required pursuant to Section 2.09 in
connection with the issuance of such new Equipment Note shall be borne by
the Owner Participant.
SECTION 2.15. Subordination.
(a) The Owner Trustee and, by acceptance of its Equipment Notes
of any Series, each Note Holder of such Series, hereby agree that no
payment or distribution shall be made on or in respect of the Secured
Obligations owed to such Note Holder of such Series, including any payment
or distribution of cash, property or securities after the commencement of a
proceeding of the type referred to in Section 4.02(g) hereof, except as
expressly provided in Article III hereof.
(b) By the acceptance of its Equipment Notes of any Series
(other than Series A), each Note Holder of such Series agrees that in the
event that such Note Holder, in its capacity as a Note Holder, shall
receive any payment or distribution on any Secured Obligations in respect
of such Series which it is not entitled to receive under this Section 2.15
or Article III hereof, it will hold any amount so received in trust for the
Senior Holder (as defined in Section 2.15(c) hereof) and will forthwith
turn over such payment to the Indenture Trustee in the form received to be
applied as provided in Article III hereof.
(c) As used in this Section 2.15, the term "Senior Holder" shall
mean, (i) the Note Holders of Series A until the Secured Obligations in
respect of Series A Equipment Notes have been paid in full and (ii) after
the Secured Obligations in respect of Series A Equipment Notes have been
paid in full, the Note Holders of Series B until the Secured Obligations in
respect of Series B Equipment Notes have been paid in full.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
SECTION 3.01. Basic Rent Distribution.
Except as otherwise provided in Section 3.02 and 3.03 hereof, each
installment of Basic Rent, any payment of interest on overdue installments
of Basic Rent and any payment received by the Indenture Trustee pursuant to
Section 4.03 hereof shall be promptly distributed in the following order of
priority:
First, (i) so much of such installment or payment as shall be
required to pay in full the aggregate amount of the payment or payments of
Principal Amount and interest and other amounts (as well as any interest on
any overdue Principal Amount and, to the extent permitted by applicable
law, on any overdue interest and any other overdue amounts) then due under
all Series A Equipment Notes shall be distributed to the Note Holders of
Series A ratably, without priority of one over the other, in the proportion
that the amount of such payment or payments then due under each Series A
Equipment Note bears to the aggregate amount of the payments then due under
all Series A Equipment Notes; (ii) after giving effect to paragraph (i)
above, so much of such installment or payment remaining as shall be
required to pay in full the aggregate amount of the payment or payments of
Principal Amount and interest and other amounts (as well as any interest on
any overdue Principal Amount and, to the extent permitted by applicable
law, on any overdue interest and any other overdue amounts) then due under
all Series B Equipment Notes shall be distributed to the Note Holders of
Series B ratably, without priority of one over the other, in the proportion
that the amount of such payment or payments then due under each Series B
Equipment Note bears to the aggregate amount of the payments then due under
all Series B Equipment Notes; and (iii) after giving effect to paragraph
(ii) above, so much of such installment or payment remaining as shall be
required to pay in full the aggregate amount of the payment or payments of
Principal Amount and interest and other amounts (as well as any interest on
any overdue Principal Amount and, to the extent permitted by applicable
law, on any overdue interest and any other overdue amounts) then due under
all Series C Equipment Notes shall be distributed to the Note Holders of
Series C ratably, without priority of one over the other, in the proportion
that the amount of such payment or payments then due under each Series C
Equipment Note bears to the aggregate amount of the payments then due under
all Series C Equipment Notes; and
Second, the balance, if any, of such installment remaining
thereafter shall be distributed to the Owner Trustee free and clear of the
Lien of this Indenture; provided, however, that if an Event of Default
shall have occurred and be continuing, then such balance shall not be
distributed as provided in this clause "Second" but shall be held by the
Indenture Trustee as part of the Trust Indenture Estate and invested in
accordance with Section 5.09 hereof until whichever of the following shall
first occur: (i) all Events of Default shall have been cured or waived, in
which event such balance shall be distributed as provided in this clause
"Second" without reference to this proviso, (ii) Section 3.03 hereof shall
be applicable, in which event such balance shall be distributed in
accordance with the provisions of such Section 3.03, or (iii) the 120th day
after the receipt of such payment in which case such payment shall be
distributed as provided in this clause "Second" without reference to this
proviso.
SECTION 3.02. Event of Loss; Replacement; Voluntary
Termination; Refinancing.
Except as otherwise provided in Section 3.03 hereof, any payments
received by the Indenture Trustee (i) with respect to the Aircraft as the
result of an Event of Loss, (ii) pursuant to a voluntary termination of the
Lease pursuant to Section 9, 19(b) or 20 thereof, (iii) in connection with
a refinancing of the Equipment Notes pursuant to Section 16 of the
Participation Agreement or (iv) in connection with any optional redemption
of the Equipment Notes effected in accordance with the Operative Documents
shall be applied to redemption of the Equipment Notes, to payment of the
Secured Obligations or to the Indenture Trustee or any Note Holder under
the Participation Agreement by applying such funds in the following order
of priority:
First, (i) to reimburse the Indenture Trustee and the Note
Holders for any reasonable costs or expenses incurred in connection with
such redemption for which they are entitled to reimbursement, or indemnity
by Lessee, under the Operative Documents and then (ii) to pay any other
amounts then due to the Indenture Trustee and the Note Holders under this
Trust Indenture, the Participation Agreement or the Equipment Notes;
Second, (i) to pay the amounts specified in paragraph (i) of
clause "Third" of Section 3.03 hereof plus Make-Whole Amount, if any, then
due and payable in respect of the Series A Equipment Notes; (ii) after
giving effect to paragraph (i) above, to pay the amounts specified in
paragraph (ii) of clause "Third" of Section 3.03 hereof plus Make-Whole
Amount, if any, then due and payable in respect of the Series B Equipment
Notes; and (iii) after giving effect to paragraph (ii) above, to pay the
amounts specified in paragraph (iii) of clause "Third" of Section 3.03
hereof plus Make-Whole Amount, if any, then due and payable in respect of
the Series C Equipment Notes; and
Third, as provided in clause "Fourth" of Section 3.03 hereof;
provided, however, that if a Replacement Airframe or Replacement Engine
shall be substituted for the Airframe or Engine subject to such Event of
Loss as provided in Section 10 of the Lease and as permitted by Section
5.06 hereof, any insurance, condemnation or similar proceeds which result
from such Event of Loss and are paid over to the Indenture Trustee shall be
held by the Indenture Trustee as permitted by Section 6.04 hereof (provided
that such moneys shall be invested as provided in Section 5.09 hereof) as
additional security for the obligations of Lessee under the Lessee
Documents and, unless otherwise applied pursuant to the Lease, such
proceeds (and such investment earnings) shall be released to Lessee at
Lessee's written request upon the release of such damaged Airframe or
Engine and the replacement thereof as provided in the Lease.
SECTION 3.03. Payments After Event of Default.
Except as otherwise provided in Section 3.04 hereof, all payments
received and amounts held or realized by the Indenture Trustee (including
any amounts realized by the Indenture Trustee from the exercise of any
remedies pursuant to Section 15 of the Lease or Article IV hereof) after
both an Event of Default shall have occurred and be continuing and the
Equipment Notes shall have become due and payable pursuant to Section
4.04(b) hereof, as well as all payments or amounts then held by the
Indenture Trustee as part of the Trust Indenture Estate, shall be promptly
distributed by the Indenture Trustee in the following order of priority:
First, so much of such payments or amounts as shall be required
to reimburse the Indenture Trustee for any tax, expense or other loss
(including, without limitation, all amounts to be expended at the expense
of, or charged upon the tolls, rents, revenues, issues, products and
profits of, the property included in the Trust Indenture Estate (all such
property being herein called the "Mortgaged Property") pursuant to Section
4.05(b) hereof) incurred by the Indenture Trustee (to the extent not
previously reimbursed), the expenses of any sale, taking or other
proceeding, reasonable attorneys' fees and expenses, court costs, and any
other expenditures incurred or expenditures or advances made by the
Indenture Trustee or the Note Holders in the protection, exercise or
enforcement of any right, power or remedy or any damages sustained by the
Indenture Trustee or any Note Holder, liquidated or otherwise, upon such
Event of Default shall be applied by the Indenture Trustee as between
itself and the Note Holders in reimbursement of such expenses and any other
expenses for which the Indenture Trustee or the Note Holders are entitled
to reimbursement under any Operative Document and all amounts payable to
the other Indenture Indemnitees hereunder and under the Participation
Agreement and the Lease excluding those amounts described in clauses Second
and Third below, and in the case the aggregate amount to be so distributed
is insufficient to pay as aforesaid, then ratably, without priority of one
over the other, in proportion to the amounts owed each hereunder;
Second, so much of such payments or amounts remaining as shall be
required to reimburse the then existing or prior Note Holders for payments
made pursuant to Section 5.03 hereof (to the extent not previously
reimbursed) shall be distributed to such then existing or prior Note
Holders ratably, without priority of one over the other, in accordance with
the amount of the payment or payments made by each such then existing or
prior Note Holder pursuant to said Section 5.03 hereof;
Third, (i) so much of such payments or amounts remaining as
shall be required to pay in full the aggregate unpaid Principal Amount of
all Series A Equipment Notes, and the accrued but unpaid interest and other
amounts due thereon and all other Secured Obligations in respect of the
Series A Equipment Notes to the date of distribution, shall be distributed
to the Note Holders of Series A, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid, then
ratably, without priority of one over the other, in the proportion that the
aggregate unpaid Principal Amount of all Series A Equipment Notes held by
each holder plus the accrued but unpaid interest and other amounts due
hereunder or thereunder to the date of distribution, bears to the aggregate
unpaid Principal Amount of all Series A Equipment Notes held by all such
holders plus the accrued but unpaid interest and other amounts due thereon
to the date of distribution; (ii) after giving effect to paragraph (i)
above, so much of such payments or amounts remaining as shall be required
to pay in full the aggregate unpaid Principal Amount of all Series B
Equipment Notes, and the accrued but unpaid interest and other amounts due
thereon and all other Secured Obligations in respect of the Series B
Equipment Notes to the date of distribution, shall be distributed to the
Note Holders of Series B, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid, then
ratably, without priority of one over the other, in the proportion that the
aggregate unpaid Principal Amount of all Series B Equipment Notes held by
each holder plus the accrued but unpaid interest and other amounts due
hereunder or thereunder to the date of distribution, bears to the aggregate
unpaid Principal Amount of all Series B Equipment Notes held by all such
holders plus the accrued but unpaid interest and other amounts due thereon
to the date of distribution; and (iii) after giving effect to paragraph
(ii) above, so much of such payments or amounts remaining as shall be
required to pay in full the aggregate unpaid Principal Amount of all Series
C Equipment Notes, and the accrued but unpaid interest and other amounts
due thereon and all other Secured Obligations in respect of the Series C
Equipment Notes to the date of distribution, shall be distributed to the
Note Holders of Series C, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid, then
ratably, without priority of one over the other, in the proportion that the
aggregate unpaid Principal Amount of all Series C Equipment Notes held by
each holder plus the accrued but unpaid interest and other amounts due
hereunder or thereunder to the date of distribution, bears to the aggregate
unpaid Principal Amount of all Series C Equipment Notes held by all such
holders plus the accrued but unpaid interest and other amounts due thereon
to the date of distribution; and
Fourth, the balance, if any, of such payments or amounts
remaining thereafter shall be distributed to the Owner Trustee free and
clear of the Lien of this Indenture.
No Make-Whole Amount shall be due and payable on the Equipment
Notes as a consequence of the acceleration of the Equipment Notes.
SECTION 3.04. Certain Payments.
(a) Any payments received by the Indenture Trustee for which no
provision as to the application thereof is made in this Trust Indenture and
for which such provision is made in the Lease, the Participation Agreement
or any other Operative Document shall be applied forthwith to the purpose
for which such payment was made in accordance with the terms of the Lease,
the Participation Agreement or such other Operative Document, as the case
may be.
(b) The Indenture Trustee will distribute promptly upon receipt
any indemnity payment received by it from the Owner Trustee or Lessee in
respect of (i) the Indenture Trustee in its individual capacity or any
other Indenture Indemnitees, (ii) any Note Holder, (iii) the Subordination
Agent, (iv) the Liquidity Provider, and (v) the Pass Through Trustees, in
each case whether pursuant to Section 6 of the Participation Agreement or
as Supplemental Rent, directly to the Person entitled thereto. Any payment
received by the Indenture Trustee under clause (b) of the third paragraph
of Section 2.02 shall be distributed to the Subordination Agent to be
distributed in accordance with the terms of the Intercreditor Agreement,
and any payment received by the Indenture Trustee under clause (c) of the
third paragraph of Section 2.02 shall be distributed directly to the
Persons entitled thereto.
(c) Notwithstanding anything to the contrary contained in this
Article III, any amounts received by the Indenture Trustee which constitute
Excluded Payments shall be distributed promptly upon receipt by the
Indenture Trustee directly to the Person or Persons entitled thereto.
(d) Notwithstanding any provision of this Trust Indenture to the
contrary, any amounts held by the Indenture Trustee that would, but for the
provisions of Section 3.03 hereof, otherwise be distributed to Lessee
shall, notwithstanding the provisions of said Section, be distributed to
Lessee unless and until a Lease Event of Default shall have occurred and be
continuing.
SECTION 3.05. Other Payments.
Any payments received by the Indenture Trustee for which no
provision as to the application thereof is made in the Lease, the
Participation Agreement, elsewhere in this Trust Indenture or in any other
Operative Document shall be distributed by the Indenture Trustee to the
extent received or realized at any time (i) prior to the payment in full of
all Secured Obligations due the Note Holders, in the order of priority
specified in Section 3.01 hereof subject to the proviso thereto, and (ii)
after payment in full of all Secured Obligations due the Note Holders, in
the following order of priority:
First, to the extent payments or amounts described in clause
"First" of Section 3.03 hereof are otherwise obligations of Lessee under
the Operative Documents or for which Lessee is obligated to indemnify
against thereunder, in the manner provided in clause "First" of Section
3.03 hereof, and
Second, in the manner provided in clause "Fourth" of Section
3.03 hereof.
Further, and except as otherwise provided in Sections 3.02, 3.03 and 3.04
hereof, all payments received and amounts realized by the Indenture Trustee
under the Lease or otherwise with respect to the Aircraft (including,
without limitation, all amounts realized upon the sale or release of the
Aircraft after the termination of the Lease with respect thereto), to the
extent received or realized at any time after payment in full of all
Secured Obligations due the Note Holders, shall be distributed by the
Indenture Trustee in the order of priority specified in clause (ii) of the
immediately preceding sentence of this Section 3.05.
SECTION 3.06. Payments to Owner Trustee.
Any amounts distributed hereunder by the Indenture Trustee to the
Owner Trustee shall be paid to the Owner Trustee (within the time limits
contemplated by Section 2.04(a)) by wire transfer of funds of the type
received by the Indenture Trustee at such office and to such account or
accounts of such entity or entities as shall be designated by notice from
the Owner Trustee to the Indenture Trustee from time to time. The Owner
Trustee hereby notifies the Indenture Trustee that unless and until the
Indenture Trustee receives notice to the contrary from the Owner Trustee,
all amounts to be distributed to the Owner Trustee pursuant to clause
"Second" of Section 3.01 hereof shall be distributed by wire transfer of
funds of the type received by the Indenture Trustee to the Owner
Participant's account (within the time limits contemplated by Section
2.04(a)) specified in Schedule I to the Participation Agreement.
ARTICLE IV
COVENANTS OF OWNER TRUSTEE; EVENTS OF
DEFAULT; REMEDIES OF INDENTURE TRUSTEE
SECTION 4.01. Covenants of Owner Trustee.
The Owner Trustee hereby covenants and agrees as follows:
(a) the Owner Trustee will duly and punctually pay the Principal
Amount of, Make-Whole Amount, if any, and interest on and other amounts due
under the Equipment Notes and hereunder in accordance with the terms of the
Equipment Notes and this Trust Indenture and all amounts, if any, payable
by it to the Note Holders under the Participation Agreement;
(b) [Reserved]
(c) in the event the Owner Trustee shall have Actual Knowledge
of an Event of Default, a Default or an Event of Loss, the Owner Trustee
will give prompt written notice of such Event of Default, Default or Event
of Loss to the Indenture Trustee, each Note Holder, Lessee and the Owner
Participant;
(d) the Owner Trustee will furnish to the Indenture Trustee,
promptly upon receipt thereof, duplicates or copies of all reports,
notices, requests, demands, certificates and other instruments furnished to
the Owner Trustee under the Lease, including, without limitation, a copy of
any Termination Notice received pursuant to Section 9(a) of the Lease, a
copy of each notice delivered pursuant to Section 10, 19 or 20 of the Lease
and a copy of each report or notice received pursuant to Section 11(c) of
the Lease to the extent that the same shall not be required to have been
furnished to the Indenture Trustee pursuant to the Lease;
(e) except pursuant to the Operative Documents or with the
consent of the Indenture Trustee (acting pursuant to instructions given in
accordance with Section 9.01 hereof), the Owner Trustee will not contract
for, create, incur, assume or suffer to exist any Debt, and will not
guarantee (directly or indirectly or by an instrument having the effect of
assuring another's payment or performance on any obligation or capability
of so doing, or otherwise), endorse or otherwise be or become contingently
liable, directly or indirectly, in connection with the Debt of any other
person; and
(f) the Owner Trustee will not enter into any business or other
activity other than the business of owning the Aircraft, the leasing
thereof to Lessee and the carrying out of the transactions contemplated
hereby and by the Lease, the Participation Agreement, the Trust Agreement
and the other Operative Documents.
SECTION 4.02. Event of Default.
"Event of Default" means any of the following events (whatever
the reason for such Event of Default and whether such event shall be
voluntary or involuntary or come about or be effected by operation of Law
or pursuant to or in compliance with any judgment, decree or order of any
court or any order, rule or regulation of any administrative or
governmental body):
(a) any Lease Event of Default (provided that any such Lease
Event of Default caused solely by a failure of Lessee to pay to the Owner
Trustee or the Owner Participant when due any amount that is included in
the definition of Excluded Payments shall not constitute an Event of
Default unless notice is given by the Owner Trustee to the Indenture
Trustee that such failure shall constitute an Event of Default); or
(b) the failure of the Owner Trustee to pay when due any payment
of Principal Amount of, interest on, Make-Whole Amount, if any, or other
amount due and payable under any Equipment Note or hereunder (other than
any such failure arising as a result of a Lease Event of Default or a Lease
Default) and such failure shall have continued unremedied for ten (10)
Business Days in the case of any payment of Principal Amount or interest or
Make-Whole Amount, if any, thereon and, in the case of any other amount,
for ten (10) Business Days after the Owner Trustee or the Owner Participant
receives written demand from the Indenture Trustee or any Note Holder; or
(c) any Lien required to be discharged by the Owner Trustee in
its individual or trust capacity pursuant to Section 7(f) of the
Participation Agreement, or by the Owner Participant pursuant to Section
7(f) of the Participation Agreement shall remain undischarged for a period
of thirty (30) days after the Owner Trustee and the Owner Participant shall
have received written notice from the Indenture Trustee or any Note Holder
of such Lien; or
(d) any representation or warranty made by the Owner Participant
or the Owner Trustee herein, in the Participation Agreement or in any
certificate furnished by the Owner Participant or the Owner Trustee to the
Indenture Trustee or any Note Holder in connection with the transactions
contemplated by the Operative Documents shall prove to have been false or
incorrect when made in any material respect and continues to be material
and adverse to the interests of the Indenture Trustee or the Note Holders;
and if such misrepresentation is capable of being corrected and if such
correction is being sought diligently, such misrepresentation shall not
have been corrected within sixty (60) days (or, without affecting Section
4.02(f) hereof, in the case of the representations made in Section 7(a) of
the Participation Agreement as to the citizenship of the Owner Trustee in
its individual capacity [or of the Owner Participant, respectively,](4) as
soon as is reasonably practicable but in any event within sixty (60) days
following notice thereof from the Indenture Trustee or any Note Holder to
the Owner Trustee or the Owner Participant, as the case may be; or
---------------
(4) Delete for foreign OP.
(e) other than as provided in (c) above or (f) below, any
failure by the Owner Trustee or Owner Participant to observe or perform any
other covenant or obligation of the Owner Trustee or Owner Participant, as
the case may be, for the benefit of the Indenture Trustee or the Note
Holders contained in the Participation Agreement, Section 4.01(a) of the
Trust Agreement, the Equipment Notes or this Trust Indenture which is not
remedied within a period of sixty (60) days after notice thereof has been
given to the Owner Trustee and the Owner Participant; or
(f) if at any time when the Aircraft is registered under the
laws of the United States, the Owner Participant shall not be a Citizen of
the United States, and as the result thereof the registration of the
Aircraft under the Transportation Code, and regulations then applicable
thereunder, shall cease to be effective; provided that no Event of Default
shall be deemed to have occurred under this paragraph (f) unless such
circumstances continue unremedied for more than sixty (60) days after the
Owner Participant has Actual Knowledge of the state of facts that resulted
in such ineffectiveness and of such loss of citizenship; or
(g) at any time either (i) the commencement of an involuntary
case or other proceeding in respect of the Owner Participant, the Owner
Trustee or the Trust Estate under the federal bankruptcy Laws, as now
constituted or hereafter amended, or any other applicable federal or state
bankruptcy, insolvency or other similar Law in the United States or seeking
the appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Owner Participant, the Owner
Trustee or the Trust Estate or for all or substantially all of its
property, or seeking the winding-up or liquidation of its affairs and the
continuation of any such case or other proceeding undismissed and unstayed
for a period of ninety (90) consecutive days; or (ii) the commencement by
the Owner Participant, the Owner Trustee or the Trust Estate of a voluntary
case or proceeding under the federal bankruptcy Laws, as now constituted or
hereafter amended, or any other applicable federal or state bankruptcy,
insolvency or other similar Law in the United States, or the consent by the
Owner Participant, the Owner Trustee or the Trust Estate to the appointment
of or taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar official) of the Owner
Participant, the Owner Trustee or the Trust Estate or for all or
substantially all of its property, or the making by the Owner Participant,
the Owner Trustee or the Trust Estate of any assignment for the benefit of
creditors or the Owner Participant or the Owner Trustee shall take any
action to authorize any of the foregoing; provided, however, that an event
referred to in this Section 4.02(g) with respect to the Owner Participant
shall not constitute an Event of Default if within thirty (30) days of the
commencement of the case or proceeding a final non-appealable order,
judgement or decree shall be entered in such case or proceeding by a court
or a trustee, custodian, receiver or liquidator, to the effect that no part
of the Trust Estate (except for the Owner Participant's beneficial interest
therein) and no right, title or interest under the Trust Indenture Estate
shall be included in, or be subject to, any declaration or adjudication of,
or proceedings with respect to, the bankruptcy, insolvency or liquidation
of the Owner Participant referred to in this Section 4.02(g).
SECTION 4.03. Certain Rights.
The Indenture Trustee shall give the Note Holders, the Owner
Trustee and the Owner Participant prompt written notice of any Event of
Default of which the Indenture Trustee has Actual Knowledge and, if any
such Event of Default results from a Lease Event of Default, shall give the
Note Holders, the Owner Trustee and the Owner Participant not less than ten
(10) Business Days prior written notice of the date (the "Enforcement
Date") on or after which the Indenture Trustee may (subject to the notice
provision set forth in Section 4.04(a)) commence and consummate the
exercise of any remedy or remedies described in Section 4.04, 4.05 or 4.06
hereof, or the exercise of any remedy or remedies pursuant to the
provisions of Section 15 of the Lease; provided, however, that in the event
the Indenture Trustee shall have validly terminated the Lease (or, in the
event of a reorganization proceeding involving Lessee instituted under
Chapter 11 of the Bankruptcy Code, such Lease is rejected), the Indenture
Trustee shall not, without the consent of the Owner Participant, sell or
lease, or otherwise afford the use of, the Aircraft or any portion thereof
to Lessee or any Affiliate thereof. Without limiting the generality of the
foregoing, the Indenture Trustee shall give the Owner Trustee, the Owner
Participant and Lessee at least ten (10) Business Days prior written notice
(which may be given concurrently with notice of the Enforcement Date) of
any declaration of the Lease to be in default pursuant to Sections 14 and
15 of the Lease or any termination of the Lease. If an Event of Default
shall have occurred and be continuing, the Owner Trustee shall have the
following rights hereunder, any of which may be exercised directly by the
Owner Participant.
If as a result of the occurrence of an Event of Default in
respect of the nonpayment by Lessee of Basic Rent due under the Lease, the
Indenture Trustee shall have insufficient funds to make any payment of
Principal Amount and interest on any Equipment Note on the day it becomes
due and payable, the Owner Trustee or the Owner Participant may, but shall
not be obligated to, pay the Indenture Trustee prior to the Enforcement
Date, in the manner provided in Section 2.04 hereof, for application in
accordance with Section 3.01 hereof, an amount equal to the portion of the
Principal Amount and interest (including interest, if any, on any overdue
payments of such portion of Principal Amount and interest) then due and
payable on the Equipment Notes, and, unless the Owner Trustee has cured
Events of Default in respect of payments of Basic Rent on each of the three
(3) immediately preceding Basic Rent payment dates, or the Owner Trustee
has cured six (6) previous Events of Default in respect of payments of
Basic Rent, such payment by the Owner Trustee shall, solely for purposes of
this Trust Indenture, be deemed to cure any Event of Default which would
otherwise have arisen on account of the nonpayment by Lessee of such
installment of Basic Rent (but not any other Default or Event of Default
which shall have occurred and be continuing).
If any Event of Default (other than in respect of the nonpayment
of Basic Rent by Lessee) which can be cured by the payment of money has
occurred, the Owner Trustee or the Owner Participant may, but shall not be
obligated to, cure such Event of Default by making such payment prior to
the Enforcement Date as is necessary to accomplish the observance or
performance of the defaulted covenant, condition or agreement.
Except as hereinafter in this Section 4.03 provided, the Owner
Trustee shall not, as a result of exercising the right to cure any such
Event of Default, obtain any Lien on any of the Mortgaged Property or any
Rent payable under the Lease for or on account of costs or expenses
incurred in connection with the exercise of such right, nor shall any claim
of the Owner Trustee against Lessee or any other party for the repayment of
such costs or expenses impair the prior right and security interest of the
Indenture Trustee in and to the Mortgaged Property. Upon any payment by
the Owner Trustee or the Owner Participant pursuant to the first or second
preceding paragraphs of this Section 4.03, the Owner Trustee or the Owner
Participant, as the case may be, shall be subrogated to the rights of the
Indenture Trustee and the Note Holders in respect of the Basic Rent which
was overdue at the time of such payment and interest payable by Lessee on
account of its being overdue and any Supplemental Rent in respect of the
reimbursement of amounts paid by Owner Trustee pursuant to the immediately
preceding paragraph (but in either case shall have no rights as a secured
party hereunder), and thereafter, the Owner Trustee or the Owner
Participant, as the case may be, shall be entitled to receive such overdue
Basic Rent or Supplemental Rent, as the case may be, and interest thereon
upon receipt thereof by the Indenture Trustee (and shall be entitled to
bring an action against Lessee to enforce such payment); provided, however,
that (i) if the Principal Amount and interest on the Equipment Notes shall
have become due and payable pursuant to Section 4.04(b) hereof (and such
acceleration shall not have been rescinded pursuant to Section 4.04(b)),
such subrogation shall, until the Principal Amount of, interest on, Make-
Whole Amount, if any, and all other amounts due with respect to all
Equipment Notes shall have been paid in full, be subordinate to the rights
of the Indenture Trustee, the Indenture Indemnitees and the Note Holders in
respect of such payment of overdue Basic Rent, Supplemental Rent and such
interest and (ii) the Owner Trustee shall not be entitled to seek to
recover any such payment (or any payment in lieu thereof) except pursuant
to the foregoing right of subrogation by demand or suit for damages.
SECTION 4.04. Remedies.
(a) Subject to the provisions of Section 2.14 hereof, if an
Event of Default shall have occurred and be continuing and so long as the
same shall continue unremedied, then and in every such case the Indenture
Trustee may, subject to the second paragraph of this Section 4.04(a), on
and after the Enforcement Date if such Event of Default results from a
Lease Event of Default, exercise any or all of the rights and powers and
pursue any and all of the remedies pursuant to this Article IV and shall
have and may exercise all of the rights and remedies of a secured party
under the Uniform Commercial Code and, in the event such Event of Default
is also a Lease Event of Default, any and all of the remedies pursuant to
Section 15 of the Lease and may take possession of all or any part of the
properties covered or intended to be covered by the Lien created hereby or
pursuant hereto and may exclude the Owner Participant, the Owner Trustee
and Lessee and all persons claiming under any of them wholly or partly
therefrom, provided, that (x) in the case of a sale of the Aircraft, the
Indenture Trustee shall give the Owner Trustee and the Owner Participant,
subsequent to the earlier of (I) the expiration of the Section 1110 Period
(as hereinafter defined) and (II) Lessee's rejection of the Lease in a
proceeding instituted under Chapter 11 of the Bankruptcy Code, twenty (20)
days prior written notice of its intention to sell the Aircraft and (y) in
the case of any judicial proceeding to foreclose the Lien of the Indenture,
fifteen (15) days prior written notice of its intention to initiate such
proceeding and, provided, further, that in the event the Indenture Trustee
shall have validly terminated the Lease (or, in the event of a
reorganization proceeding involving Lessee instituted under Chapter 11 of
the Bankruptcy Code, such Lease is rejected), the Indenture Trustee shall
not, without the consent of the Owner Participant, sell or lease, or
otherwise afford the use of, the Aircraft or any portion thereof to Lessee
or any affiliate thereof. Unless an Event of Default not resulting from or
relating to a Lease Event of Default has occurred and is continuing, the
Owner Participant may bid at any public sale and become the purchaser.
Without limiting any of the foregoing, it is understood and agreed that the
Indenture Trustee may exercise any right of sale of the Aircraft available
to it, even though it shall not have taken possession of the Aircraft and
shall not have possession thereof at the time of such sale.
Anything in this Trust Indenture to the contrary
notwithstanding, the Indenture Trustee shall not be entitled to exercise
any remedy hereunder as a result of an Event of Default which arises solely
by reason of one or more events or circumstances which constitute a Lease
Event of Default unless the Indenture Trustee as security assignee of the
Owner Trustee shall have (i) accelerated the maturity of the Equipment
Notes and (ii) exercised or concurrently be exercising one or more of the
remedies provided for in Section 15 of the Lease to terminate the Lease (in
the event that it is not commercially reasonable to take possession of the
Aircraft) or take possession and/or sell the Aircraft; provided, however,
that such requirement to exercise one or more of such remedies under the
Lease shall not apply in circumstances where the Indenture Trustee is, and
has been, for a continuous period in excess of sixty (60) days subsequent
to the entry of an order for relief or such other period as may be
specified in Section 1110(a)(1)(A) of the Bankruptcy Code (such 60-day or
other period being the "Section 1110 Period"), involuntarily stayed or
prohibited by applicable law or court order from exercising such remedies
under the Lease (a "Continuous Stay Period"); provided further, however,
that the requirement to exercise one or more of such remedies under the
Lease shall nonetheless be applicable during a Continuous Stay Period
subsequent to the expiration of the Section 1110 Period to the extent that
the continuation of such Continuous Stay Period subsequent to the
expiration of the Section 1110 Period (A) results from an agreement by the
trustee or the debtor-in-possession in such proceeding during the Section
1110 Period with the approval of the relevant court to perform the Lease in
accordance with Section 1110(a)(1)(A) of the Bankruptcy Code and Lessee
continues to perform as required by Section 1110(a)(1)(A-B) of the
Bankruptcy Code or (B) is an extension of the Section 1110 Period with the
consent of the Indenture Trustee pursuant to Section 1110(b) of the
Bankruptcy Code or (C) results from Lessee's assumption during the Section
1110 Period with the approval of the relevant court of the Lease pursuant
to Section 365 of the Bankruptcy Code or (D) is the consequence of the
Indenture Trustee's own failure to give any requisite notice to any Person.
In the event that the applicability of Section 1110 of the Bankruptcy Code
to the Aircraft is being contested by Lessee in judicial proceedings, both
the Indenture Trustee and the Owner Trustee shall have the right to
participate in such proceedings.
It is expressly understood and agreed that, subject only to
the immediately preceding paragraph, the inability, described in such
paragraphs, of the Indenture Trustee to exercise any right or remedy under
the Lease shall in no event and under no circumstances prevent the
Indenture Trustee from exercising any or all of its rights, powers and
remedies under this Trust Indenture, including, without limitation, this
Article IV.
(b) If an Event of Default shall have occurred and be
continuing, then and in every such case the Indenture Trustee may (and
shall, upon receipt of a written demand therefor from a Majority in
Interest of Note Holders), subject to Section 4.03 hereof, at any time, by
delivery of written notice or notices to the Owner Trustee and the Owner
Participant, declare all the Equipment Notes to be due and payable,
whereupon the unpaid Principal Amount of all Equipment Notes then
outstanding, together with accrued but unpaid interest thereon (without
Make-Whole Amount) and other amounts due thereunder, shall immediately
become due and payable without presentment, demand, protest or notice, all
of which are hereby waived; provided that if an Event of Default referred
to in clause (g) of Section 4.02 hereof shall have occurred and be
continuing or a Lease Event of Default under Section 14(e) of the Lease
shall have occurred and be continuing, then and in every such case the
unpaid Principal Amount then outstanding, together with accrued but unpaid
interest and all other amounts due thereunder and hereunder shall
immediately and without further act become due and payable without
presentment, demand, protest or notice, all of which are hereby waived;
provided further that in the event of a reorganization proceeding involving
Lessee instituted under Chapter 11 of the Bankruptcy Code, if no other
Lease Event of Default and no other Event of Default (other than the
failure to pay the Principal Amount of the Equipment Notes which by such
declaration have become payable) exists at any time after the consummation
of such proceeding, such declaration shall be automatically rescinded
without any further action on the part of any Note Holder.
This Section 4.04(b), however, is subject to the condition
that, if at any time after the Principal Amount of the Equipment Notes
shall have become so due and payable, and before any judgment or decree for
the payment of the money so due, or any thereof, shall be entered, all
overdue payments of interest upon the Equipment Notes and all other amounts
payable under the Equipment Notes (except the Principal Amount of the
Equipment Notes which by such declaration shall have become payable) shall
have been duly paid, and every other Default and Event of Default with
respect to any covenant or provision of this Trust Indenture shall have
been cured, then and in every such case a Majority in Interest of Note
Holders may (but shall not be obligated to), by written instrument filed
with the Indenture Trustee, rescind and annul the Indenture Trustee's
declaration and its consequences; but no such rescission or annulment shall
extend to or affect any subsequent Default or Event of Default or impair
any right consequent thereon.
Any acceleration pursuant to this Section 4.04(b) shall be
automatically rescinded and any related declaration of an Event of Default
annulled in the event that the Owner Trustee shall have cured, in
accordance with Section 4.03 hereof, the Event of Default that resulted in
such acceleration or declaration.
(c) Any Note Holder shall be entitled, at any sale pursuant to
Section 15 of the Lease or this Section 4.04, to credit against any
purchase price bid at such sale by such holder all or any part of the
unpaid obligations owing to such Note Holder and secured by the Lien of
this Trust Indenture (but only to the extent that such purchase price would
have been paid to such Note Holder pursuant to Article III hereof if such
purchase price were paid in cash and the foregoing provisions of this
subsection (c) were not given effect).
(d) In the event of any sale of the Trust Indenture Estate, or
any part thereof, pursuant to any judgment or decree of any court or
otherwise in connection with the enforcement of any of the terms of this
Trust Indenture, the unpaid Principal Amount of all Equipment Notes then
outstanding, together with accrued interest thereon, and other amounts due
thereunder, shall immediately become due and payable without presentment,
demand, protest or notice, all of which are hereby waived.
(e) Notwithstanding anything contained herein, so long as the
Pass Through Trustee under any Pass Through Trust Agreement or the
Subordination Agent on its behalf is a Note Holder, the Indenture Trustee
will not be authorized or empowered to acquire title to any Mortgaged
Property or take any action with respect to any Mortgaged Property so
acquired by it if such acquisition or action would cause any Trust to fail
to qualify as a "grantor trust" for federal income tax purposes.
SECTION 4.05. Return of Aircraft, Etc.
(a) If an Event of Default shall have occurred and be
continuing, subject to Sections 4.03 and 4.04 hereof and unless the Owner
Trustee or the Owner Participant shall have elected to purchase the
Equipment Notes, at the request of the Indenture Trustee, the Owner Trustee
shall promptly execute and deliver to the Indenture Trustee such
instruments and other documents as the Indenture Trustee may deem necessary
or advisable to enable the Indenture Trustee or an agent or representative
designated by the Indenture Trustee, at such time or times and place or
places as the Indenture Trustee may specify, to obtain possession of all or
any part of the Mortgaged Property included in the Trust Indenture Estate
to which the Indenture Trustee shall at the time be entitled hereunder. If
the Owner Trustee shall for any reason fail to execute and deliver such
instruments and documents after such request by the Indenture Trustee, the
Indenture Trustee may (i) obtain a judgment conferring on the Indenture
Trustee the right to immediate possession and requiring the Owner Trustee
to execute and deliver such instruments and documents to the Indenture
Trustee, to the entry of which judgment the Owner Trustee hereby
specifically consents to the fullest extent permitted by applicable law,
and (ii) pursue all or part of such Mortgaged Property wherever it may be
found and, in the event that a Lease Event of Default has occurred and is
continuing, may enter any of the premises of Lessee wherever such Mortgaged
Property may be or be supposed to be and search for such Mortgaged Property
and take possession of and remove such Mortgaged Property. All expenses of
obtaining such judgment or of pursuing, searching for and taking such
property shall, until paid, be secured by the Lien of this Trust Indenture.
(b) Upon every such taking of possession, the Indenture Trustee
may, from time to time, at the expense of the Mortgaged Property, make all
such expenditures for maintenance, use, operation, storage, insurance,
leasing, control, management, disposition, modifications or alterations to
and of the Mortgaged Property, as it may deem proper. In each such case,
the Indenture Trustee shall have the right to maintain, use, operate,
store, insure, lease, control, manage, dispose of, modify or alter the
Mortgaged Property and to carry on the business and to exercise all rights
and powers of the Owner Participant and the Owner Trustee relating to the
Mortgaged Property, as the Indenture Trustee shall deem best, including the
right to enter into any and all such agreements with respect to the
maintenance, use, operation, storage, insurance, leasing, control,
management, disposition, modification or alteration of the Mortgaged
Property or any part thereof as the Indenture Trustee may determine, and
the Indenture Trustee shall be entitled to collect and receive directly all
tolls, rents (including Rent), revenues, issues, income, products and
profits of the Mortgaged Property and every part thereof, except Excluded
Payments, without prejudice, however, to the right of the Indenture Trustee
under any provision of this Trust Indenture to collect and receive all cash
held by, or required to be deposited with, the Indenture Trustee hereunder
other than Excluded Payments. Such tolls, rents (including Rent),
revenues, issues, income, products and profits shall be applied to pay the
expenses of the maintenance, use, operation, storage, insurance, leasing,
control, management, disposition, improvement, modification or alteration
of the Mortgaged Property and of conducting the business thereof, and to
make all payments which the Indenture Trustee may be required or may elect
to make, if any, for taxes, assessments, insurance or other proper charges
upon the Mortgaged Property or any part thereof (including the employment
of engineers and accountants to examine, inspect and make reports upon the
properties and books and records of the Owner Trustee), and all other
payments which the Indenture Trustee may be required or authorized to make
under any provision of this Trust Indenture, as well as just and reasonable
compensation for the services of the Indenture Trustee, and of all persons
properly engaged and employed by the Indenture Trustee with respect hereto.
SECTION 4.06. Remedies Cumulative.
Each and every right, power and remedy given to the Indenture
Trustee specifically or otherwise in this Trust Indenture shall be
cumulative and shall be in addition to every other right, power and remedy
herein specifically given or now or hereafter existing at law, in equity or
by statute, and each and every right, power and remedy whether specifically
herein given or otherwise existing may be exercised from time to time and
as often and in such order as may be deemed expedient by the Indenture
Trustee, and the exercise or the beginning of the exercise of any power or
remedy shall not be construed to be a waiver of the right to exercise at
the same time or thereafter any other right, power or remedy. No delay or
omission by the Indenture Trustee in the exercise of any right, remedy or
power or in the pursuance of any remedy shall impair any such right, power
or remedy or be construed to be a waiver of any default on the part of the
Owner Trustee or Lessee or to be an acquiescence therein.
SECTION 4.07. Discontinuance of Proceedings.
In case the Indenture Trustee shall have instituted any
proceeding to enforce any right, power or remedy under this Trust Indenture
by foreclosure, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined
adversely to the Indenture Trustee, then and in every such case the Owner
Trustee, the Indenture Trustee and Lessee shall, subject to any
determination in such proceedings, be restored to their former positions
and rights hereunder with respect to the Mortgaged Property, and all
rights, remedies and powers of the Owner Trustee, the Indenture Trustee or
Lessee shall continue as if no such proceedings had been instituted.
SECTION 4.08. Waiver of Past Defaults.
Upon written instruction from a Majority in Interest of Note
Holders, and subject to Section 5.02 the Indenture Trustee shall waive any
past Default hereunder and its consequences and upon any such waiver such
Default shall cease to exist and any Event of Default arising therefrom
shall be deemed to have been cured for every purpose of this Trust
Indenture, but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon; provided, that in the
absence of written instructions from all the Note Holders, the Indenture
Trustee shall not waive any Default (i) in the payment of the Principal
Amount, Make-Whole Amount, if any, and interest and other amounts due under
any Equipment Note then outstanding, or (ii) in respect of a covenant or
provision hereof which, under Article IX hereof, cannot be modified or
amended without the consent of each Note Holder.
SECTION 4.09. Appointment of Receiver.
If an Event of Default shall have occurred and be continuing, the
Indenture Trustee shall, as a matter of right, be entitled to the
appointment of a receiver (who may be the Indenture Trustee or any
successor or nominee thereof) for all or any part of the Mortgaged
Property, whether such receivership be incidental to a proposed sale of the
Mortgaged Property or the taking of possession thereof or otherwise, and
the Owner Trustee hereby consents to the appointment of such a receiver and
will not oppose any such appointment. Any receiver appointed for all or any
part of the Mortgaged Property shall be entitled to exercise all the rights
and powers of the Indenture Trustee with respect to the Mortgaged Property.
SECTION 4.10. Indenture Trustee Authorized to Execute Bills of
Sale, Etc.
The Owner Trustee irrevocably appoints the Indenture Trustee the
true and lawful attorney-in-fact of the Owner Trustee in its name and stead
and on its behalf, for the purpose, if an Event of Default shall have
occurred and be continuing, of effectuating in accordance with applicable
law any sale, assignment, transfer or delivery for the enforcement of the
Lien of this Trust Indenture, whether pursuant to foreclosure or power of
sale, assignments and other instruments as may be necessary or appropriate,
with full power of substitution, the Owner Trustee hereby ratifying and
confirming all that such attorney or any substitute shall do by virtue
hereof in accordance with applicable law. Nevertheless, if so requested by
the Indenture Trustee or any purchaser, the Owner Trustee shall ratify and
confirm any such sale, assignment, transfer or delivery, by executing and
delivering to the Indenture Trustee or such purchaser all bills of sale,
assignments, releases and other proper instruments to effect such
ratification and confirmation as may be designated in any such request.
SECTION 4.11. Rights of Note Holders to Receive Payment.
Notwithstanding any other provision of this Trust Indenture, the
right of any Note Holder to receive payment of principal of, and premium,
if any, and interest on a Equipment Note on or after the respective due
dates expressed in such Equipment Note, or to bring suit for the
enforcement of any such payment on or after such respective dates in
accordance with the terms hereof, shall not be impaired or affected without
the consent of such Note Holder.
ARTICLE V
DUTIES OF THE INDENTURE TRUSTEE
SECTION 5.01. Notice of Event of Default.
If the Indenture Trustee shall have Actual Knowledge of an Event
of Default or of a Default arising from a failure to pay Rent, the
Indenture Trustee shall give prompt written notice thereof to the Owner
Trustee, the Owner Participant, Lessee and each Note Holder. Subject to
the terms of Sections 2.14, 4.03, 4.04, 4.08, 5.02 and 5.03 hereof, the
Indenture Trustee shall take such action, or refrain from taking such
action, with respect to such Event of Default or Default (including with
respect to the exercise of any rights or remedies hereunder) as the
Indenture Trustee shall be instructed in writing by a Majority in Interest
of Note Holders. Subject to the provisions of Section 5.03, if the
Indenture Trustee shall not have received instructions as above provided
within twenty (20) days after mailing notice of such Event of Default to
the Note Holders, the Indenture Trustee may, subject to instructions
thereafter received pursuant to the preceding provisions of this Section
5.01, take such action, or refrain from taking such action, but shall be
under no duty to take or refrain from taking any action, with respect to
such Event of Default or Default as it shall determine advisable in the
best interests of the Note Holders. If the Indenture Trustee shall at any
time declare the Lease to be in default pursuant to Section 15 thereof or
shall elect to foreclose or otherwise enforce this Trust Indenture, the
Indenture Trustee shall forthwith notify the Owner Participant, the Note
Holders, the Owner Trustee and Lessee. For all purposes of this Trust
Indenture, in the absence of Actual Knowledge on the part of the Indenture
Trustee, the Owner Trustee or the Owner Participant, the Indenture Trustee,
the Owner Trustee or the Owner Participant, as the case may be, shall not
be deemed to have knowledge of a Default or an Event of Default (except, in
the case of the Indenture Trustee, the failure of Lessee to pay any
installment of Basic Rent within one (1) Business Day after the same shall
become due, if any portion of such installment was then required to be paid
to the Indenture Trustee, which failure shall constitute knowledge of a
Default) unless notified in writing by Lessee, the Owner Trustee, the Owner
Participant or one or more Note Holders.
SECTION 5.02. Action upon Instructions; Certain Rights and
Limitations.
(a) Subject to the terms of Sections 2.14, 4.03, 4.04(a) and
(b), 4.08, 5.01 and 5.03 hereof, upon the written instructions at any time
and from time to time of a Majority in Interest of Note Holders, the
Indenture Trustee shall, subject to the terms of this Section 5.02, take
such of the following actions as may be specified in such instructions: (i)
give such notice or direction or exercise such right, remedy or power
hereunder as shall be specified in such instructions; (ii) give such notice
or direction or exercise such right, remedy or power under the Lease, the
Participation Agreement, the Purchase Agreement, or any other part of the
Trust Indenture Estate as shall be specified in such instructions; and
(iii) after the occurrence and during the continuance of an Event of
Default, approve as satisfactory to the Indenture Trustee all matters
required by the terms of the Lease to be satisfactory to the Owner Trustee,
it being understood that without the written instructions of a Majority in
Interest of Note Holders, the Indenture Trustee shall not approve any such
matter as satisfactory to the Indenture Trustee; provided, that anything
contained in this Trust Indenture, the Lease or the other Operative
Documents to the contrary notwithstanding:
(1) the Owner Trustee or the Owner Participant may,
without the consent of the Indenture Trustee, demand, collect, sue for
or otherwise obtain all amounts included in Excluded Payments from
Lessee, exercise any election or option or make any decision or
determination or to give or receive any notice, consent, waiver or
approval in respect of any Excluded Payment and seek legal or
equitable remedies to require Lessee to maintain the insurance
coverage referred to in Section 11 of the Lease; provided, that the
rights referred to in this clause (1) shall not be deemed to include
the exercise of any remedies provided for in Section 15 of the Lease
other than the right to proceed by appropriate court action, either at
law or in equity, to enforce payment by Lessee of such amounts
included in Excluded Payments or performance by Lessee of such
insurance covenant, or to recover damages for the breach thereof or
for specific performance of any covenant of Lessee;
(2) the Indenture Trustee shall not, without the consent
of the Owner Trustee and the Owner Participant, which consent shall
not be withheld if no right or interest of the Owner Trustee or the
Owner Participant shall be diminished or impaired thereby, (i) enter
into, execute and deliver amendments, modifications, waivers or
consents in respect of any of the provisions of the Lease or any other
Operative Document, or (ii) approve any accountants, engineers,
appraisers or counsel as satisfactory to render services for or issue
opinions to the Owner Trustee pursuant to the Operative Documents;
(3) whether or not a Default or Event of Default under
the Trust Indenture has occurred and is continuing, the Owner Trustee
and the Owner Participant shall have the right, together with the
Indenture Trustee, (i) to receive from Lessee all notices,
certificates, reports, filings, opinions of counsel and other
documents and all information which any thereof is permitted or
required to give or furnish to the Owner Trustee or Lessor pursuant to
any Operative Document, (ii) to exercise inspection rights pursuant to
Section 12 of the Lease and (iii) to give notices of default under
Section 14 of the Lease;
(4) whether or not a Default or Event of Default under
the Trust Indenture has occurred and is continuing, the Owner Trustee
shall have the right to the exclusion of the Indenture Trustee to (i)
adjust upwards Rent, EBO Amount and Termination Values as provided in
Section 3(c) of the Lease, (ii) to extend the Term, (iii) to retain
all rights with respect to insurance maintained for its own account
which Section 11(b) of the Lease specifically confers on Lessor or the
Owner Participant, (iv) to exercise, to the extent necessary to enable
it to exercise its rights under Section 4.03 hereof, the rights of
Lessor under Section 22 of the Lease and (v) to select counsel with
respect to any opinion relating to tax matters to be delivered solely
to the Owner Participant;
(5) so long as no Indenture Trustee Event has occurred
and is continuing, the Owner Trustee shall have the right, to the
exclusion of the Indenture Trustee, to adjust EBO Amounts and
Termination Values as provided in Section 3(c) of the Lease or to
adjust downward any installment or amount of Basic Rent, EBO Amount or
Termination Value, as such installments and amounts are set forth in
Exhibits B, C and D, respectively, to the Lease, to the extent of the
portion of such installment or amount that would, under Section 3.01,
3.02 or 3.03 hereof, as the case may be, be distributable to the Owner
Trustee or the Owner Participant;
(6) whether or not a Default or Event of Default under
the Trust Indenture has occurred and is continuing, the Owner Trustee
may, without the consent of the Indenture Trustee, (i) solicit and
make bids with respect to the Aircraft under Section 9 of the Lease in
respect of a termination of the Lease by Lessee pursuant to Section 9
thereof, (ii) determine "fair market sales value" and "fair market
rental value" under Section 19 of the Lease for all purposes except
following an Event of Default pursuant to Section 15 of the Lease, and
(iii) make an election pursuant to and in accordance with the
provisions of Section 9(b) of the Lease; and
(7) so long as no Indenture Trustee Event shall have
occurred and be continuing, except as provided in clauses (2) and (3)
above, all other rights of the "Lessor" under the Lease shall be
exercised by the Owner Trustee to the exclusion of the Indenture
Trustee including, without limitation, the right to (i) exercise all
rights with respect to Lessee's use and operation, modification or
maintenance of the Aircraft and any Engine which the Lease
specifically confers on Lessor, and (ii) consent to and approve any
assignment pursuant to Section 13 of the Lease; provided that the
foregoing shall not (A) limit any rights separately granted to the
Indenture Trustee under the Operative Documents, (B) limit the right
of the Indenture Trustee to receive any funds to be delivered to the
"Lessor" under the Lease (except with respect to Excluded Payments)
and under the Purchase Agreement or confer upon the Owner Trustee the
right to adversely affect the validity or enforceability of the Lien
of this Indenture by depriving the Note Holders or other Indenture
Indemnitees of the benefit thereof or (C) confer on the Owner Trustee
the right to agree to any amendment or supplement to the Lease except
in accordance with Article IX.
Notwithstanding anything to the contrary contained herein, the
Indenture Trustee shall have the right, to the exclusion of the Owner
Trustee and the Owner Participant, to (A) declare the Lease to be in
default under Section 15 thereof and (B) subject only to the provisions of
Sections 4.03, 4.04(a) and (b) and 2.14 hereof, exercise the remedies set
forth in such Section 15 (other than in connection with Excluded Payments)
at any time that a Lease Event of Default shall have occurred and be
continuing.
The Indenture Trustee will execute and the Owner Trustee will
file or cause to be filed such continuation statements with respect to
financing statements relating to the security interest created hereunder in
the Trust Indenture Estate as specified by Lessee pursuant to Section 7(d)
of the Participation Agreement or as may be specified from time to time in
written instructions of a Majority in Interest of Note Holders (which
instructions may, by their terms, be operative only at a future date and
which shall be accompanied by the form of such continuation statement so to
be filed). The Indenture Trustee will furnish to each Note Holder (and,
during the continuation of an Indenture Trustee Event, to the Owner Trustee
and Owner Participant), promptly upon receipt thereof, duplicates or copies
of all reports, notices, requests, demands, certificates and other
instruments furnished to the Indenture Trustee under the Lease or
hereunder, including, without limitation, a copy of any Termination Notice
and a copy of each report or notice received pursuant to Sections 9(a) and
11(c) of the Lease, respectively, to the extent that the same shall not
have been furnished to such Note Holder pursuant hereto or to the Lease.
(b) If any Lease Event of Default shall have occurred and be
continuing and the Owner Trustee shall not have cured fully such Lease
Event of Default under and in accordance with Section 4.03 hereof, on
request of a Majority in Interest of Note Holders, the Indenture Trustee
shall declare the Lease to be in default pursuant to Section 15 thereof and
exercise those remedies specified by such Note Holders. The Indenture
Trustee agrees to provide to the Note Holders, the Owner Trustee, the Owner
Participant and Lessee concurrently with such declaration by the Indenture
Trustee, notice of such declaration by the Indenture Trustee.
SECTION 5.03. Indemnification.
The Indenture Trustee shall not be required to take any action or
refrain from taking any action under Section 5.01 (other than the first
sentence thereof), 5.02 or Article IV hereof unless the Indenture Trustee
shall have been indemnified to its reasonable satisfaction against any
liability, cost or expense (including counsel fees) which may be incurred
in connection therewith pursuant to a written agreement with one or more
Note Holders. The Indenture Trustee shall not be under any obligation to
take any action under this Trust Indenture and nothing herein or therein
shall require the Indenture Trustee to expend or risk its own funds or
otherwise incur the risk of any financial liability in the performance of
any of its rights or powers if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it (the written indemnity of
any Note Holder who is a QIB, signed by an authorized officer thereof, in
favor of, delivered to and in form reasonably satisfactory to Indenture
Trustee shall be accepted as reasonable assurance of adequate indemnity).
The Indenture Trustee shall not be required to take any action under
Section 5.01 (other than the first sentence thereof) or 5.02 or Article IV
hereof, nor shall any other provision of this Trust Indenture or any other
Operative Document be deemed to impose a duty on the Indenture Trustee to
take any action, if the Indenture Trustee shall have been advised by
counsel that such action is contrary to the terms hereof or of the Lease or
is otherwise contrary to Law.
SECTION 5.04. No Duties Except as Specified in Trust Indenture
or Instructions.
The Indenture Trustee shall not have any duty or obligation to
use, operate, store, lease, control, manage, sell, dispose of or otherwise
deal with the Aircraft or any other part of the Trust Indenture Estate, or
to otherwise take or refrain from taking any action under, or in connection
with, this Trust Indenture or any part of the Trust Indenture Estate,
except as expressly provided by the terms of this Trust Indenture or as
expressly provided in written instructions from Note Holders as provided in
this Trust Indenture; and no implied duties or obligations shall be read
into this Trust Indenture against the Indenture Trustee. The Indenture
Trustee agrees that it will in its individual capacity and at its own cost
and expense (but without any right of indemnity in respect of any such cost
or expense under Section 7.01 hereof), promptly take such action as may be
necessary duly to discharge all liens and encumbrances on any part of the
Trust Indenture Estate which result from claims against it in its
individual capacity not related to the ownership of the Aircraft or the
administration of the Trust Indenture Estate or any other transaction
pursuant to this Trust Indenture or any document included in the Trust
Indenture Estate.
SECTION 5.05. No Action Except Under Lease, Trust Indenture or
Instructions.
The Owner Trustee and the Indenture Trustee agree that they will
not use, operate, store, lease, control, manage, sell, dispose of or
otherwise deal with the Aircraft or any other part of the Trust Indenture
Estate except (i) as required by the terms of the Lease or (ii) in
accordance with the powers granted to, or the authority conferred upon, the
Owner Trustee and the Indenture Trustee pursuant to this Trust Indenture
and in accordance with the express terms hereof.
SECTION 5.06. Replacement Airframes and Replacement Engines.
At any time an Airframe or Engine is to be replaced under or
pursuant to Section 10 of the Lease by a Replacement Airframe or
Replacement Engine, if no Lease Event of Default is continuing, the Owner
Trustee shall direct the Indenture Trustee to execute and deliver to the
Owner Trustee an appropriate instrument releasing such Airframe and/or
Engine as appropriate from the Lien of this Trust Indenture and the
Indenture Trustee shall execute and deliver such instrument as aforesaid,
but only upon compliance by Lessee with the applicable provisions of
Section 10 of the Lease and upon receipt by the Indenture Trustee of a
written request from the Owner Trustee, requesting such release and
specifically describing the Airframe and/or Engine(s) so to be released.
SECTION 5.07. Indenture Supplements for Replacements.
If a Replacement Airframe or Replacement Engine is being
substituted as contemplated by Section 10 of the Lease, the Owner Trustee
and the Indenture Trustee agree for the benefit of the Note Holders and
Lessee, subject to fulfillment of the conditions precedent and compliance
by Lessee with its obligations set forth in Section 10 of the Lease and the
requirements of Section 5.06 hereof with respect to such Replacement
Airframe or Replacement Engine, to execute and deliver a Lease Supplement
and a Trust Agreement and Indenture Supplement, as applicable, as
contemplated by Section 10 of the Lease.
SECTION 5.08. Effect of Replacement.
In the event of the substitution of an Airframe or of a
Replacement Engine pursuant to Section 10 of the Lease, (a) all provisions
of this Trust Indenture relating to the Airframe or Engine or Engines being
replaced shall be applicable to such Replacement Airframe or Replacement
Engine or Engines with the same force and effect as if such Replacement
Airframe or Replacement Engine or Engines were the same airframe or engine
or engines, as the case may be, as the Airframe or Engine or Engines being
replaced but for the Event of Loss with respect to the Airframe or Engine
or Engines being replaced, and (b) the provisions of this Trust Indenture
shall no longer be applicable to the Airframe or Engine or Engines being
replaced, which shall be released from the Lien of this Indenture.
SECTION 5.09. Investment of Amounts Held by Indenture Trustee.
Any amounts held by the Indenture Trustee as assignee of the
Owner Trustee's rights to hold monies for security pursuant to Section 21
of the Lease shall be held in accordance with the terms of such Section and
the Indenture Trustee agrees, for the benefit of Lessee, to perform the
duties of the Owner Trustee under such Section. Any amounts held by the
Indenture Trustee pursuant to the proviso to the first sentence of Section
3.01, pursuant to Section 3.02, or pursuant to any provision of any other
Operative Document providing for amounts to be held by the Indenture
Trustee which are not distributed pursuant to the other provisions of
Article III hereof shall be invested by the Indenture Trustee from time to
time in Cash Equivalents as directed by Lessee so long as the Indenture
Trustee may acquire the same using its best efforts. Unless otherwise
expressly provided in this Trust Indenture, any income realized as a result
of any such investment, net of the Indenture Trustee's reasonable fees and
expenses in making such investment, shall be held and applied by the
Indenture Trustee in the same manner as the principal amount of such
investment is to be applied and any losses, net of earnings and such
reasonable fees and expenses, shall be charged against the principal amount
invested. The Indenture Trustee shall not be liable for any loss resulting
from any investment required to be made by it under this Trust Indenture
other than by reason of its willful misconduct or gross negligence, and any
such investment may be sold (without regard to its maturity) by the
Indenture Trustee without instructions whenever such sale is necessary to
make a distribution required by this Trust Indenture.
ARTICLE VI
THE OWNER TRUSTEE AND THE INDENTURE TRUSTEE
SECTION 6.01. Acceptance of Trusts and Duties.
The Indenture Trustee accepts the duties hereby created and
applicable to it and agrees to perform the same but only upon the terms of
this Trust Indenture and agrees to receive and disburse all monies
constituting part of the Trust Indenture Estate in accordance with the
terms hereof. The Owner Trustee, in its individual capacity, and the
Indenture Trustee, in its individual capacity, shall not be answerable or
accountable under any circumstances, except (i) for their own willful
misconduct or gross negligence (other than for the handling of funds, for
which the standard of accountability shall be willful misconduct or
negligence), (ii) in the case of the Indenture Trustee, as provided in the
fourth sentence of Section 2.04(a) hereof and the last sentence of Section
5.04 hereof, and (iii) for liabilities that may result, in the case of the
Owner Trustee, from the inaccuracy of any representation or warranty of the
Owner Trustee expressly made in its individual capacity in the
Participation Agreement or in Section 6.03 hereof (or in any certificate
furnished to the Indenture Trustee or any Note Holder in connection with
the transactions contemplated by the Operative Documents) or, in the case
of the Indenture Trustee (in its individual capacity), from the inaccuracy
of any representation or warranty of the Indenture Trustee (in its
individual capacity) in the Participation Agreement or expressly made
hereunder. Neither the Owner Trustee nor the Indenture Trustee shall be
liable for any action or inaction of the other or of the Owner Participant.
SECTION 6.02. Absence of Duties.
In the case of the Indenture Trustee, except in accordance with
written instructions furnished pursuant to Section 5.01 or 5.02 hereof, and
except as provided in, and without limiting the generality of, Sections
5.03 and 5.04 hereof and, in the case of the Owner Trustee, the Owner
Trustee and the Indenture Trustee shall have no duty (i) to see to any
registration of the Aircraft or any recording or filing of the Lease or of
this Trust Indenture or any other document, or to see to the maintenance of
any such registration, recording or filing, (ii) to see to any insurance on
the Aircraft or to effect or maintain any such insurance, whether or not
Lessee shall be in default with respect thereto, (iii) to see to the
payment or discharge of any lien or encumbrance of any kind against any
part of the Trust Estate or the Trust Indenture Estate, (iv) to confirm,
verify or inquire into the failure to receive any financial statements from
Lessee, or (v) to inspect the Aircraft at any time or ascertain or inquire
as to the performance or observance of any of Lessee's covenants under the
Lease with respect to the Aircraft. The Owner Participant shall not have
any duty or responsibility hereunder, including, without limitation, any of
the duties mentioned in clauses (i) through (v) above; provided, that
nothing contained in this sentence shall limit any obligations of the Owner
Participant under the Participation Agreement or relieve the Owner
Participant from any restriction under Section 4.03 hereof.
SECTION 6.03. No Representations or Warranties as to Aircraft
or Documents.
NEITHER THE INDENTURE TRUSTEE IN ITS INDIVIDUAL OR TRUST CAPACITY
NOR THE OWNER TRUSTEE IN ITS INDIVIDUAL CAPACITY OR AS OWNER TRUSTEE UNDER
THE TRUST AGREEMENT, NOR THE OWNER PARTICIPANT MAKES OR SHALL BE DEEMED TO
HAVE MADE AND EACH HEREBY EXPRESSLY DISCLAIMS ANY REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, AIRWORTHINESS, VALUE,
COMPLIANCE WITH SPECIFICATIONS, CONDITION, DESIGN, QUALITY, DURABILITY,
OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR A PARTICULAR PURPOSE OF
THE AIRCRAFT OR ANY ENGINE, AS TO THE ABSENCE OF LATENT OR OTHER DEFECTS,
WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY
PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON
STRICT LIABILITY IN TORT OR ANY OTHER REPRESENTATION OR WARRANTY
WHATSOEVER, except the Owner Trustee in its individual capacity warrants
that (i) the Owner Trustee has received on the Delivery Date whatever title
was conveyed to it by Lessee, and (ii) the Aircraft is free and clear of
Lessor Liens attributable to the Owner Trustee in its individual capacity.
Neither the Owner Trustee, in its individual capacity or as Owner Trustee
under the Trust Agreement, nor the Indenture Trustee, in its individual or
trust capacities, makes or shall be deemed to have made any representation
or warranty as to the validity, legality or enforceability of this Trust
Indenture, the Trust Agreement, the Participation Agreement, the Equipment
Notes, the Lease, the Purchase Agreement, the Purchase Agreement
Assignment, or the Consent and Agreement, or as to the correctness of any
statement contained in any thereof, except for the representations and
warranties of the Owner Trustee made in its individual capacity and the
representations and warranties of the Indenture Trustee, in each case
expressly made in this Trust Indenture or in the Participation Agreement.
The Loan Participants, the Note Holders and the Owner Participant make no
representation or warranty hereunder whatsoever.
SECTION 6.04. No Segregation of Monies; No Interest.
Any monies paid to or retained by the Indenture Trustee pursuant
to any provision hereof and not then required to be distributed to the Note
Holders, Lessee or the Owner Trustee as provided in Article III hereof need
not be segregated in any manner except to the extent required by Law or as
specifically provided in the Lease and Section 5.09 hereof, and may be
deposited under such general conditions as may be prescribed by Law, and
the Indenture Trustee shall not be liable for any interest thereon (except
that the Indenture Trustee shall invest all monies held as directed by
Lessee so long as no Lease Event of Default has occurred and is continuing
(or in the absence of such direction, by the Majority In Interest of Note
Holders)) in Cash Equivalents; provided, however, that any payments
received, or applied hereunder, by the Indenture Trustee shall be accounted
for by the Indenture Trustee so that any portion thereof paid or applied
pursuant hereto shall be identifiable as to the source thereof.
SECTION 6.05. Reliance; Agreements; Advice of Counsel.
Neither the Owner Trustee nor the Indenture Trustee shall incur
any liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or
other document or paper believed by it to be genuine and believed by it to
be signed by the proper party or parties. The Owner Trustee and the
Indenture Trustee may accept a copy of a resolution of the Board of
Directors (or, in the case of the Owner Participant which originally
executed the Participation Agreement, evidence of the approval by the
Executive Committee thereof) of any party to the Participation Agreement,
certified by the Secretary or an Assistant Secretary thereof as duly
adopted and in full force and effect, as conclusive evidence that such
resolution has been duly adopted and that the same is in full force and
effect. As to the aggregate unpaid Principal Amount of Equipment Notes
outstanding as of any date, the Owner Trustee may for all purposes hereof
rely on a certificate signed by any Vice President or other authorized
corporate trust officer of the Indenture Trustee. As to any fact or matter
relating to Lessee the manner of ascertainment of which is not specifically
described herein, the Owner Trustee and the Indenture Trustee may for all
purposes hereof rely on a certificate, signed by a duly authorized officer
of Lessee, as to such fact or matter, and such certificate shall constitute
full protection to the Owner Trustee and the Indenture Trustee for any
action taken or omitted to be taken by them in good faith in reliance
thereon. The Indenture Trustee shall assume, and shall be fully protected
in assuming, that the Owner Trustee is authorized by the Trust Agreement to
enter into this Trust Indenture and to take all action to be taken by it
pursuant to the provisions hereof, and shall not inquire into the
authorization of the Owner Trustee with respect thereto. In the
administration of the trusts hereunder, the Owner Trustee and the Indenture
Trustee each may execute any of the trusts or powers hereof and perform its
powers and duties hereunder directly or through agents or attorneys and may
at the expense of the Trust Indenture Estate, consult with counsel,
accountants and other skilled persons to be selected and retained by it,
and the Owner Trustee and the Indenture Trustee shall not be liable for
anything done, suffered or omitted in good faith by them in accordance with
the advice or opinion of any such counsel, accountants or other skilled
persons.
SECTION 6.06. Capacity in Which Acting.
The Owner Trustee acts hereunder solely as trustee as herein and
in the Trust Agreement provided, and not in its individual capacity, except
as otherwise expressly provided herein, in the Trust Agreement and in the
Participation Agreement.
SECTION 6.07. Compensation.
The Indenture Trustee shall be entitled to reasonable
compensation, including expenses and disbursements (including the
reasonable fees and expenses of counsel), for all services rendered
hereunder and shall, on and subsequent to an Event of Default hereunder,
have a priority claim on the Trust Indenture Estate for the payment of such
compensation, to the extent that such compensation shall not be paid by
Lessee, and shall have the right, on and subsequent to an Event of Default
hereunder, to use or apply any monies held by it hereunder in the Trust
Indenture Estate toward such payments. The Indenture Trustee agrees that
it shall have no right against the Loan Participants, the Note Holders, the
Owner Trustee or the Owner Participant for any fee as compensation for its
services as trustee under this Trust Indenture.
SECTION 6.08. Instructions from Note Holders.
In the administration of the trusts created hereunder, the
Indenture Trustee shall have the right to seek instructions from a Majority
in Interest of Note Holders should any provision of this Trust Indenture
appear to conflict with any other provision herein or should the Indenture
Trustee's duties or obligations hereunder be unclear, and the Indenture
Trustee shall incur no liability in refraining from acting until it
receives such instructions. The Indenture Trustee shall be fully protected
for acting in accordance with any instructions received under this Section
6.08.
ARTICLE VII
INDEMNIFICATION OF INDENTURE TRUSTEE BY OWNER TRUSTEE
SECTION 7.01. Scope of Indemnification.
The Owner Trustee, not in its individual capacity, but solely as
Owner Trustee, hereby agrees, except as otherwise provided in Section 2.03
or 2.04(b) hereof, to assume liability for, and does hereby indemnify,
protect, save and keep harmless the Indenture Trustee (in its individual
and trust capacities), and its successors, assigns, agents and servants,
from and against any and all liabilities, obligations, losses, damages,
penalties, taxes (excluding any taxes payable by the Indenture Trustee on
or measured by any compensation received by the Indenture Trustee for its
services under this Trust Indenture), claims, actions, suits, costs,
expenses or disbursements (including reasonable legal fees and expenses) of
any kind and nature whatsoever, which may be imposed on, incurred by or
asserted against the Indenture Trustee (whether or not also indemnified
against by any other Person under any other document) in any way relating
to or arising out of this Trust Indenture or any other Operative Document
to which it is a party or the enforcement of any of the terms of any
thereof, or in any way relating to or arising out of the manufacture,
purchase, acceptance, non-acceptance, rejection, ownership, delivery,
lease, possession, use, operation, condition, sale, return or other
disposition of the Aircraft or any Engine (including, without limitation,
latent or other defects, whether or not discoverable, and any claim for
patent, trademark or copyright infringement), or in any way relating to or
arising out of the administration of the Trust Indenture Estate or the
action or inaction of the Indenture Trustee hereunder, to the extent not
reimbursed by Lessee. Notwithstanding any provision to the contrary
herein, the scope of the Owner Trustee's indemnity obligations under this
Section 7.01 shall not exceed the scope of the indemnity obligations of
Lessee under the Participation Agreement and the Lease; and the Indenture
Trustee agrees that, prior to seeking indemnification from the Trust
Indenture Estate, it will demand, and take such action as it may determine
to be reasonable to pursue, indemnification available to the Indenture
Trustee under the Lease or the Participation Agreement. Notwithstanding
the foregoing, the Indenture Trustee shall not be entitled to any
indemnification for any Expenses to the extent relating to or arising from
the willful misconduct or gross negligence (or negligence in the case of
handling funds) of the Indenture Trustee in the performance of its duties
hereunder or resulting from the inaccuracy of any representation or
warranty of the Indenture Trustee (in its individual capacity) referred to
in Section 6.03 hereof, or as provided in Section 6.01 hereof or in the
last sentence of Section 5.04 hereof, or as otherwise excluded by the terms
of Sections 6(b) and 6(c) of the Participation Agreement from Lessee's
indemnities under such Sections. In addition, if necessary, the Indenture
Trustee shall be entitled to indemnification from the Trust Indenture
Estate for any liability, obligation, loss, damage, penalty, claim, action,
suit, cost, expense or disbursement indemnified against pursuant to this
Section 7.01 to the extent not reimbursed by Lessee or others, but without
releasing any of them from their respective agreements of reimbursement;
and to secure the same the Indenture Trustee shall have a prior Lien on the
Trust Indenture Estate. The Owner Trustee shall be subrogated to the
Indenture Trustee's rights, if any, to payment from Lessee for amounts paid
by the Owner Trustee under this Section 7.01.
ARTICLE VIII
SUCCESSOR AND SEPARATE TRUSTEES
SECTION 8.01. Notice of Successor Owner Trustee.
In the case of any appointment of a successor to the Owner
Trustee pursuant to the Trust Agreement including upon any merger,
conversion, consolidation or sale of substantially all of the corporate
trust business of the Owner Trustee pursuant to the Trust Agreement, the
successor Owner Trustee shall give prompt written notice thereof to the
Indenture Trustee, Lessee and the Note Holders.
SECTION 8.02. Resignation of Indenture Trustee; Appointment of
Successor.
(a) The Indenture Trustee or any successor thereto may resign at
any time without cause by giving at least 30 days prior written notice to
Lessee, the Owner Trustee, the Owner Participant and each Note Holder, such
resignation to be effective upon the acceptance of the trusteeship by a
successor Indenture Trustee. In addition, a Majority in Interest of Note
Holders may at any time (but only with the consent of Lessee, which consent
shall not be unreasonably withheld, except that such consent shall not be
necessary if a Lease Event of Default shall have occurred and be
continuing) remove the Indenture Trustee without cause by an instrument in
writing delivered to the Owner Trustee, Lessee, the Owner Participant and
the Indenture Trustee, and the Indenture Trustee shall promptly notify each
Note Holder thereof in writing, such removal to be effective upon the
acceptance of the trusteeship by a successor Indenture Trustee. In the
case of the resignation or removal of the Indenture Trustee, a Majority in
Interest of Note Holders may appoint a successor Indenture Trustee by an
instrument signed by such holders, which successor, so long as no Lease
Event of Default shall have occurred and be continuing, shall be subject to
Lessee's reasonable approval. If a successor Indenture Trustee shall not
have been appointed within 30 days after such notice of resignation or
removal, the Indenture Trustee, the Owner Trustee, the Owner Participant or
any Note Holder may apply to any court of competent jurisdiction to appoint
a successor Indenture Trustee to act until such time, if any, as a
successor shall have been appointed as above provided. The successor
Indenture Trustee so appointed by such court shall immediately and without
further act be superseded by any successor Indenture Trustee appointed as
above provided.
(b) Any successor Indenture Trustee, however appointed, shall
execute and deliver to the Owner Trustee, the predecessor Indenture Trustee
and Lessee an instrument accepting such appointment and assuming the
obligations of the Indenture Trustee under the Participation Agreement
arising from and after the time of such appointment, and thereupon such
successor Indenture Trustee, without further act, shall become vested with
all the estates, properties, rights, powers and duties of the predecessor
Indenture Trustee hereunder in the trust hereunder applicable to it with
like effect as if originally named the Indenture Trustee herein; but
nevertheless upon the written request of such successor Indenture Trustee,
such predecessor Indenture Trustee shall execute and deliver an instrument
transferring to such successor Indenture Trustee, upon the trusts herein
expressed applicable to it, all the estates, properties, rights and powers
of such predecessor Indenture Trustee, and such predecessor Indenture
Trustee shall duly assign, transfer, deliver and pay over to such successor
Indenture Trustee all monies or other property then held by such
predecessor Indenture Trustee hereunder.
(c) Any successor Indenture Trustee, however appointed, shall be
a bank or trust company having its principal place of business in the
United States and having (or whose obligations under the Operative
Documents are guaranteed by an affiliated entity having) a combined capital
and surplus of at least $100,000,000, if there be such an institution
willing, able and legally qualified to perform the duties of the Indenture
Trustee hereunder upon reasonable or customary terms.
(d) Any corporation into which the Indenture Trustee may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
the Indenture Trustee shall be a party, or any corporation to which
substantially all the corporate trust business of the Indenture Trustee may
be transferred, shall, subject to the terms of paragraph (c) of this
Section 8.02, be a successor Indenture Trustee and the Indenture Trustee
under this Trust Indenture without further act.
SECTION 8.03. Appointment of Additional and Separate Trustees.
(a) Whenever (i) the Indenture Trustee shall deem it necessary
or desirable in order to conform to any law of any jurisdiction in which
all or any part of the Trust Indenture Estate shall be situated or to make
any claim or bring any suit with respect to or in connection with the Trust
Indenture Estate, this Trust Indenture, any other Indenture Agreement, the
Equipment Notes or any of the transactions contemplated by the
Participation Agreement, (ii) the Indenture Trustee shall be advised by
counsel satisfactory to it that it is so necessary or prudent in the
interests of the Note Holders (and the Indenture Trustee shall so advise
the Owner Trustee and Lessee), or (iii) the Indenture Trustee shall have
been requested to do so by a Majority in Interest of Note Holders, then in
any such case, the Indenture Trustee and, upon the written request of the
Indenture Trustee, the Owner Trustee, shall execute and deliver an
indenture supplemental hereto and such other instruments as may from time
to time be necessary or advisable either (1) to constitute one or more bank
or trust companies or one or more persons approved by the Indenture
Trustee, either to act jointly with the Indenture Trustee as additional
trustee or trustees of all or any part of the Trust Indenture Estate, or to
act as separate trustee or trustees of all or any part of the Trust
Indenture Estate, in each case with such rights, powers, duties and
obligations consistent with this Trust Indenture as may be provided in such
supplemental indenture or other instruments as the Indenture Trustee or a
Majority in Interest of Note Holders may deem necessary or advisable, or
(2) to clarify, add to or subtract from the rights, powers, duties and
obligations theretofore granted any such additional and separate trustee,
subject in each case to the remaining provisions of this Section 8.03. If
the Owner Trustee shall not have taken any action requested of it under
this Section 8.03(a) that is permitted or required by its terms within 15
days after the receipt of a written request from the Indenture Trustee so
to do, or if an Event of Default shall have occurred and be continuing, the
Indenture Trustee may act under the foregoing provisions of this Section
8.03(a) without the concurrence of the Owner Trustee; and the Owner Trustee
hereby irrevocably appoints (which appointment is coupled with an interest)
the Indenture Trustee, its agent and attorney-in-fact to act for it under
the foregoing provisions of this Section 8.03(a) in either of such
contingencies. The Indenture Trustee may, in such capacity, execute,
deliver and perform any such supplemental indenture, or any such
instrument, as may be required for the appointment of any such additional
or separate trustee or for the clarification of, addition to or subtraction
from the rights, powers, duties or obligations theretofore granted to any
such additional or separate trustee. In case any additional or separate
trustee appointed under this Section 8.03(a) shall die, become incapable of
acting, resign or be removed, all the assets, property, rights, powers,
trusts, duties and obligations of such additional or separate trustee shall
revert to the Indenture Trustee until a successor additional or separate
trustee is appointed as provided in this Section 8.03(a).
(b) No additional or separate trustee shall be entitled to
exercise any of the rights, powers, duties and obligations conferred upon
the Indenture Trustee in respect of the custody, investment and payment of
monies and all monies received by any such additional or separate trustee
from or constituting part of the Trust Indenture Estate or otherwise
payable under any Operative Document to the Indenture Trustee shall be
promptly paid over by it to the Indenture Trustee. All other rights,
powers, duties and obligations conferred or imposed upon any additional or
separate trustee shall be exercised or performed by the Indenture Trustee
and such additional or separate trustee jointly except to the extent that
applicable Law of any jurisdiction in which any particular act is to be
performed renders the Indenture Trustee incompetent or unqualified to
perform such act, in which event such rights, powers, duties and
obligations (including the holding of title to all or part of the Trust
Indenture Estate in any such jurisdiction) shall be exercised and performed
by such additional or separate trustee. No additional or separate trustee
shall take any discretionary action except on the instructions of the
Indenture Trustee or a Majority in Interest of Note Holders. No trustee
hereunder shall be personally liable by reason of any act or omission of
any other trustee hereunder, except that the Indenture Trustee shall be
liable for the consequences of its lack of reasonable care in selecting,
and Indenture Trustee's own actions in acting with, any additional or
separate trustee. Each additional or separate trustee appointed pursuant
to this Section 8.03 shall be subject to, and shall have the benefit of
Articles IV through VIII and Article X hereof insofar as they apply to the
Indenture Trustee. The powers of any additional or separate trustee
appointed pursuant to this Section 8.03 shall not in any case exceed those
of the Indenture Trustee hereunder.
(c) If at any time the Indenture Trustee shall deem it no longer
necessary or desirable in order to conform to any such law or take any such
action or shall be advised by such counsel that it is no longer so
necessary or desirable in the interest of the Note Holders, or in the event
that the Indenture Trustee shall have been requested to do so in writing by
a Majority in Interest of Note Holders, the Indenture Trustee and, upon the
written request of the Indenture Trustee, the Owner Trustee, shall execute
and deliver an indenture supplemental hereto and all other instruments and
agreements necessary or proper to remove any additional or separate
trustee. The Indenture Trustee may act on behalf of the Owner Trustee
under this Section 8.03(c) when and to the extent it could so act under
Section 8.03(a) hereof.
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE
AND OTHER DOCUMENTS
SECTION 9.01. Instructions of Majority; Limitations.
(a) Except as expressly provided in Section 5.02 hereof, and
except with respect to Excluded Payments, the Owner Trustee agrees it shall
not enter into any amendment of or supplement to the Lease, the Purchase
Agreement (to the extent assigned in the Purchase Agreement Assignment),
the Purchase Agreement Assignment, the Consent and Agreement, or execute
and deliver any written waiver or modification of, or consent under, the
terms of the Lease, the Purchase Agreement (to the extent assigned in the
Purchase Agreement Assignment), the Purchase Agreement Assignment, the
Consent and Agreement, unless such supplement, amendment, waiver,
modification or consent is consented to in writing by the Indenture Trustee
and a Majority in Interest of Note Holders. Anything to the contrary
contained herein notwithstanding, without the necessity of the consent of
any of the Note Holders or the Indenture Trustee, (i) any Excluded Payments
payable to the Owner Participant may be modified, amended, changed or
waived in such manner as shall be agreed to by the Owner Participant and
Lessee and (ii) the Owner Trustee and Lessee may enter into amendments of
or additions to the Lease to modify Section 5 (except to the extent that
such amendment would affect the rights or exercise of remedies under
Section 15 of the Lease), Section 9, Section 19 or Section 20 of the Lease
so long as such amendments, modifications and changes do not and would not
affect the time of, or reduce the amount of, Rent payments (except to the
extent expressly permitted by Section 5.02) until after the payment in full
of all Secured Obligations or otherwise adversely affect the Note Holders.
(b) Without limiting the provisions of Section 9.01(a) hereof
and subject to Section 5.02(a)(2)(i) hereof, the Indenture Trustee agrees
with the Note Holders that it shall not enter into any amendment, waiver or
modification of, supplement or consent to this Trust Indenture, the Lease,
the Purchase Agreement, the Purchase Agreement Assignment, the Consent and
Agreement or the Participation Agreement, or any other agreement included
in the Trust Indenture Estate, unless such supplement, amendment, waiver,
modification or consent is consented to in writing by a Majority in
Interest of Note Holders, or does not adversely effect the Note Holders,
but upon the written request of a Majority in Interest of Note Holders, the
Indenture Trustee shall from time to time enter into any such supplement or
amendment, or execute and deliver any such waiver, modification or consent,
as may be specified in such request and as may be (in the case of any such
amendment, supplement or modification), to the extent such agreement is
required, agreed to by the Owner Trustee and Lessee or, as may be
appropriate, the Manufacturer; provided, however, that, without the consent
of each holder of an affected Equipment Note then outstanding and each
Liquidity Provider, no such amendment of or supplement to this Trust
Indenture, the Lease, the Purchase Agreement, the Purchase Agreement
Assignment, the Consent and Agreement or the Participation Agreement or
waiver or modification of the terms of, or consent under, any thereof,
shall (i) modify any of the provisions of this Section 9.01, or of Sections
2.02, 2.10, 2.11, 2.15, 4.02, 4.04(c), 4.04(d), 5.02 or 5.06 hereof,
Section 14 (except to add an Event of Default) of the Lease, the
definitions of "Event of Default", "Default", "Lease Event of Default",
"Lease Default", "Majority in Interest of Note Holders", "Make-Whole
Amount" or "Note Holder", or the percentage of Note Holders required to
take or approve any action hereunder, (ii) reduce the amount, or change the
time of payment or method of calculation of any amount, of Principal
Amount, Make-Whole Amount, if any, or interest with respect to any
Equipment Note, or alter or modify the provisions of Article III hereof
with respect to the order of priorities in which distribution thereunder
shall be made as among the Note Holders, the Owner Trustee and Lessee,
(iii) reduce, modify or amend any indemnities in favor of the Note Holders,
(iv) consent to any change in the Trust Indenture or the Lease which would
permit redemption of Equipment Notes earlier than permitted under Section
2.10 or 2.11 hereof or the purchase of the Equipment Notes other than as
permitted by Section 2.14 hereof, (v) modify any of the provisions of
Section 3(c)(v) of the Lease, or modify, amend or supplement the Lease or
consent to any assignment of the Lease, in either case releasing Lessee
from its obligations in respect of the payment of Basic Rent, EBO Amount or
Termination Value for the Aircraft or altering the absolute and
unconditional character of the obligations of Lessee to pay Rent as set
forth in Sections 3 and 19 of the Lease or (vi) permit the creation of any
Lien on the Trust Indenture Estate or any part thereof other than Permitted
Liens or deprive any Note Holder of the benefit of the Lien of this Trust
Indenture on the Trust Indenture Estate, except as provided in connection
with the exercise of remedies under Article IV hereof. Without the consent
of Lessee, no amendment or supplement to this Trust Indenture or waiver or
modification of the terms hereof shall adversely affect Lessee.
(c) At any time after the date hereof, the Owner Trustee and the
Indenture Trustee may enter into one or more agreements supplemental hereto
without the consent of any Note Holder for any of the following purposes:
(i) (a) to cure any defect or inconsistency herein or in the Equipment
Notes, or to make any change not inconsistent with the provisions hereof
(provided that such change does not adversely affect the interests of any
Note Holder in its capacity solely as Note Holder) or (b) to cure any
ambiguity or correct any mistake; (ii) to evidence the succession of
another party as the Owner Trustee in accordance with the terms of the
Trust Agreement or to evidence the succession of a new trustee hereunder
pursuant hereto, the removal of the trustee hereunder or the appointment of
any co-trustee or co-trustees or any separate or additional trustee or
trustees; (iii) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee or to make any other provisions
with respect to matters or questions arising hereunder so long as such
action shall not adversely affect the interests of the Note Holders in its
capacity solely as Note Holder; (iv) to correct or amplify the description
of any property at any time subject to the Lien of this Trust Indenture or
better to assure, convey and confirm unto the Indenture Trustee any
property subject or required to be subject to the Lien of this Trust
Indenture, the Airframe or Engines or any Replacement Airframe or
Replacement Engine; (v) to add to the covenants of the Owner Trustee for
the benefit of the Note Holders, or to surrender any rights or power herein
conferred upon the Owner Trustee, the Owner Participant or Lessee; (vi) to
add to the rights of the Note Holders; and (vii) to include on the
Equipment Notes any legend as may be required by law.
SECTION 9.02. Trustees Protected.
If, in the opinion of the institution acting as Owner Trustee
under the Trust Agreement or the institution acting as Indenture Trustee
hereunder, any document required to be executed by it pursuant to the terms
of Section 9.01 hereof adversely affects any right, duty, immunity or
indemnity with respect to such institution under this Trust Indenture or
the Lease, such institution may in its discretion decline to execute such
document.
SECTION 9.03. Documents Mailed to Note Holders.
Promptly after the execution by the Owner Trustee or the
Indenture Trustee of any document entered into pursuant to Section 9.01
hereof, the Indenture Trustee shall mail, by first class mail, postage
prepaid, a copy thereof to Lessee and to each Note Holder at its address
last set forth in the Equipment Note Register, but the failure of the
Indenture Trustee to mail such copies shall not impair or affect the
validity of such document.
SECTION 9.04. No Request Necessary for Lease Supplement or
Trust Agreement and Indenture Supplement.
No written request or consent of the Indenture Trustee, the Note
Holders or the Owner Participant pursuant to Section 9.01 hereof shall be
required to enable the Owner Trustee to enter into any Lease Supplement
specifically required by the terms of the Lease or to execute and deliver a
Trust Agreement and Indenture Supplement specifically required by the terms
hereof.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Termination of Trust Indenture.
Upon (or at any time after) payment in full of the Principal
Amount of, Make-Whole Amount, if any, and interest on and all other amounts
due under all Equipment Notes and provided that there shall then be no
other Secured Obligations due to the Note Holders, the Indenture
Indemnitees and the Indenture Trustee hereunder or under the Participation
Agreement, the Owner Trustee shall direct the Indenture Trustee to execute
and deliver to or as directed in writing by the Owner Trustee an
appropriate instrument releasing the Aircraft and the Engines from the Lien
of this Trust Indenture and releasing the Lease, the Purchase Agreement,
and the Purchase Agreement Assignment with the Consent and Agreement
attached thereto from the assignment and pledge thereof hereunder and the
Indenture Trustee shall execute and deliver such instrument as aforesaid
and give written notice thereof to Lessee; provided, however, that this
Trust Indenture and the trusts created hereby shall earlier terminate and
this Trust Indenture shall be of no further force or effect upon any sale
or other final disposition by the Indenture Trustee of all property
constituting part of the Trust Indenture Estate and the final distribution
by the Indenture Trustee of all monies or other property or proceeds
constituting part of the Trust Indenture Estate in accordance with the
terms hereof. Except as aforesaid otherwise provided, this Trust Indenture
and the trusts created hereby shall continue in full force and effect in
accordance with the terms hereof.
SECTION 10.02. No Legal Title to Trust Indenture Estate in Note
Holders.
No holder of a Equipment Note shall have legal title to any part
of the Trust Indenture Estate. No transfer, by operation of law or
otherwise, of any Equipment Note or other right, title and interest of any
Note Holder in and to the Trust Indenture Estate or hereunder shall operate
to terminate this Trust Indenture or entitle such holder or any successor
or transferee of such holder to an accounting or to the transfer to it of
any legal title to any part of the Trust Indenture Estate.
SECTION 10.03. Sale of Aircraft by Indenture Trustee Is
Binding.
Any sale or other conveyance of the Trust Indenture Estate, or
any part thereof (including any part thereof or interest therein), by the
Indenture Trustee made pursuant to the terms of this Trust Indenture shall
bind the Note Holders and shall be effective to transfer or convey all
right, title and interest of the Indenture Trustee, the Owner Trustee, the
Owner Participant and such holders in and to such Trust Indenture Estate or
part thereof. No purchaser or other grantee shall be required to inquire
as to the authorization, necessity, expediency or regularity of such sale
or conveyance or as to the application of any sale or other proceeds with
respect thereto by the Indenture Trustee.
SECTION 10.04. Trust Indenture for Benefit of Owner Trustee,
Indenture Trustee, Owner Participant, Lessee, Note Holders and the Other
Indenture Indemnitees.
Nothing in this Trust Indenture, whether express or implied,
shall be construed to give any person other than the Owner Trustee, the
Indenture Trustee, the Owner Participant, Lessee, the Indenture Indemnitees
and the Note Holders, any legal or equitable right, remedy or claim under
or in respect of this Trust Indenture.
SECTION 10.05. Notices.
Unless otherwise expressly specified or permitted by the terms
hereof, all notices, requests, demands, authorizations, directions,
consents, waivers or documents provided or permitted by this Trust
Indenture to be made, given, furnished or filed shall be in writing,
personally delivered or mailed by certified mail, postage prepaid, or by
facsimile or confirmed telex, and (i) if to the Owner Trustee, addressed to
it at its office at 79 South Main Street, Salt Lake City, Utah 84111,
Attention: Corporate Trust Department (Telecopy No. (801) 246-5053), with a
copy to the Owner Participant addressed as provided in clause (iii) below,
(ii) if to the Indenture Trustee, addressed to it at its office at Two
International Place, 4th Floor, Boston, Massachusetts 02110, Attention:
Corporate Trust Department (Telecopy No. (617) 664-5371), (iii) if to any
Participant, Lessee or any Note Holder, addressed to such party at such
address as such party shall have furnished by notice to the Owner Trustee
and the Indenture Trustee, or, until an address is so furnished, addressed
to the address of such party (if any) set forth on the signature pages to
the Participation Agreement or in the Equipment Note Register. Whenever
any notice in writing is required to be given by the Owner Trustee, any
Participant or the Indenture Trustee or any Note Holder or Lessee to any of
the other of them, such notice shall be deemed given and such requirement
satisfied when such notice is received, or if such notice is mailed by
certified mail, postage prepaid, three Business Days after being mailed,
addressed as provided above. Any party hereto may change the address to
which notices to such party will be sent by giving notice of such change to
the other parties to this Trust Indenture.
SECTION 10.06. Severability.
Any provision of this Trust Indenture which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 10.07. No Oral Modification or Continuing Waivers.
No term or provision of this Trust Indenture or the Equipment
Notes may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the Owner Trustee and the Indenture
Trustee, in compliance with Section 9.01 hereof. Any waiver of the terms
hereof or of any Equipment Note shall be effective only in the specific
instance and for the specific purpose given.
SECTION 10.08. Successors and Assigns.
All covenants and agreements contained herein shall be binding
upon, and inure to the benefit of, each of the parties hereto and the
permitted successors and assigns of each, all as herein provided. Any
request, notice, direction, consent, waiver or other instrument or action
by any Note Holder shall bind the successors and assigns of such holder.
This Trust Indenture and the Trust Indenture Estate shall not be affected
by any amendment or supplement to the Trust Agreement or by any other
action taken under or in respect of the Trust Agreement, except that each
reference in this Trust Indenture to the Trust Agreement shall mean the
Trust Agreement as amended and supplemented from time to time to the extent
permitted hereby, thereby and by the Participation Agreement. Each Note
Holder by its acceptance of a Equipment Note agrees to be bound by this
Trust Indenture and all provisions of the Participation Agreement
applicable to a Loan Participant or a Note Holder.
SECTION 10.09. Headings.
The headings of the various Articles and Sections herein and in
the table of contents hereto are for convenience of reference only and
shall not define or limit any of the terms or provisions hereof.
SECTION 10.10. Normal Commercial Relations.
Anything contained in this Trust Indenture to the contrary
notwithstanding, the Owner Trustee, the Indenture Trustee, any Participant
or any bank or other Affiliate of such Participant may conduct any banking
or other financial transactions, and have banking or other commercial
relationships, with Lessee, fully to the same extent as if this Trust
Indenture were not in effect, including without limitation the making of
loans or other extensions of credit to Lessee for any purpose whatsoever,
whether related to any of the transactions contemplated hereby or
otherwise.
SECTION 10.11. Governing Law; Counterpart Form.
THIS TRUST INDENTURE HAS BEEN DELIVERED IN NEW YORK, NEW YORK AND
SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE. THIS TRUST INDENTURE IS BEING
DELIVERED IN THE STATE OF NEW YORK. This Trust Indenture may be executed
by the parties hereto in separate counterparts (or upon separate signature
pages bound together into one or more counterparts), each of which when so
executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 10.12. Voting By Note Holders.
All votes of the Note Holders shall be governed by a vote of a
Majority in Interest of Note Holders, except as otherwise provided herein.
SECTION 10.13. Bankruptcy.
It is the intention of the parties that the Owner Trustee, as
lessor under the Lease (and the Indenture Trustee as assignee of the Owner
Trustee hereunder), shall be entitled to the benefits of Section 1110 with
respect to the right to take possession of the Aircraft, Airframe, Engines
and Parts as provided in the Lease in the event of a case under Chapter 11
of the Bankruptcy Code in which Lessee is a debtor, and in any instance
where more than one construction is possible of the terms and conditions
hereof or any other pertinent Operative Document, each such party agrees
that a construction which would preserve such benefits shall control over
any construction which would not preserve such benefits.
SECTION 10.14. No Action Contrary to Lessee's Rights Under the
Lease.
Notwithstanding any of the provisions of this Trust Indenture or
the Trust Agreement to the contrary, the Indenture Trustee will not take
any action contrary to Lessee's rights under the Lease, including the right
to possession and use of, and the quiet enjoyment of, the Aircraft, except
in accordance with provisions of the Lease.
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Indenture to be duly executed by their respective officers thereof duly
authorized as of the day and year first above written.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION, not in its individual
capacity, except as expressly provided
herein, but solely as Owner Trustee
By:_______________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY, as
Indenture Trustee
By:_______________________________________
Name:
Title:
EXHIBIT A
TO
TRUST INDENTURE AND MORTGAGE
TRUST AGREEMENT AND INDENTURE SUPPLEMENT
(US Airways, Inc. Trust No. N7__UW)
This TRUST AGREEMENT AND INDENTURE SUPPLEMENT (US Airways, Inc.
Trust No. N7__UW) dated _______ __, _____ (herein called this "Trust
Indenture Supplement") of FIRST SECURITY BANK, NATIONAL ASSOCIATION, not in
its individual capacity, but solely as Owner Trustee (herein called the
"Owner Trustee") under that certain Trust Agreement (US Airways, Inc. Trust
No. N7__UW) dated as of ____________ __, 199_ (the "Trust Agreement"),
between the Owner Trustee and the Owner Participant named therein.
W I T N E S S E T H:
WHEREAS, the TRUST INDENTURE AND SECURITY AGREEMENT (US Airways,
Inc. Trust No. N7__UW) dated as of _________ __, 199_ (as amended and
supplemented to the date hereof, the "Trust Indenture") between the Owner
Trustee and STATE STREET BANK AND TRUST COMPANY, as Indenture Trustee (the
"Indenture Trustee"), provides for the execution and delivery of a
supplement thereto substantially in the form hereof, which shall
particularly describe the Aircraft, and shall specifically mortgage such
Aircraft to the Indenture Trustee; and
WHEREAS, the Trust Indenture relates to the Airframe and Engines
described below, and a counterpart of the Trust Indenture is attached
hereto and made a part hereof and this Trust Indenture Supplement, together
with such counterpart of the Trust Indenture, is being filed for
recordation on the date hereof with the FAA as one document;
NOW, THEREFORE, this Trust Indenture Supplement witnesseth that
the Owner Trustee hereby confirms that the Lien of the Trust Indenture on
the Trust Indenture Estate covers all of Owner Trustee's right, title and
interest in and to the following described property:
AIRFRAME
One airframe identified as follows:
FAA Registration Manufacturer's
Manufacturer Model Number Number Serial Number
------------ ------------ ---------------- --------------
Airbus A319
together with all of the Owner Trustee's right, title and interest in and
to all Parts of whatever nature, whether now owned or hereinafter acquired
and which are from time to time incorporated or installed in or attached to
said airframe.
AIRCRAFT ENGINES
Two aircraft engines, each such engine having 750 or more rated
take-off horsepower or the equivalent thereof, identified as follows:
Manufacturer's
Manufacturer Model Number Serial Number
------------ -------------- -------------
together with all of Owner Trustee's right, title and interest in and to
all Parts of whatever nature, whether now owned or hereafter acquired and
which are from time to time incorporated or installed in or attached to any
of such engines.
Together with all of Owner Trustee's right, title and interest in
and to all Parts of whatever nature, which from time to time are included
within the definition of "Airframe" or "Engine", whether now owned or
hereafter acquired, including all substitutions, renewals and replacements
of and additions, improvements, accessions and accumulations to the
Airframe and Engines (other than additions, improvements, accessions and
accumulations which constitute appliances, parts, instruments,
appurtenances, accessories, furnishings or other equipment excluded from
the definition of Parts).
As further security for the obligations referred to above and
secured by the Trust Indenture and hereby, the Owner Trustee has granted,
bargained, sold, assigned, transferred, conveyed, mortgaged, pledged and
confirmed, and does hereby grant, bargain, sell, assign, transfer, convey,
mortgage, pledge and confirm, unto the Indenture Trustee, its successors
and assigns, for the security and benefit of the Loan Participants and of
the Note Holders, in the trust created by the Trust Indenture, all of the
right, title and interest of the Owner Trustee in, to and under the Lease
Supplement [of even date herewith] covering the property described above.
Notwithstanding any provision hereof, no Excluded Payment shall
constitute security for any of the aforementioned obligations.
TO HAVE AND TO HOLD all and singular the aforesaid property unto
the Indenture Trustee, its successors and assigns, in trust for the equal
and proportionate benefit and security of the Note Holders, except as
provided in Section 2.15 and Article III of the Trust Indenture without any
preference, distinction or priority of any one Equipment Note over any
other by reason of priority of time of issue, sale, negotiation, date of
maturity thereof or otherwise for any reason whatsoever, and for the uses
and purposes and subject to the terms and provisions set forth in the Trust
Indenture.
This Trust Indenture Supplement shall be construed as
supplemental to the Trust Indenture and shall form a part thereof. The
Trust Indenture is each hereby incorporated by reference herein and is
hereby ratified, approved and confirmed.
This Trust Indenture Supplement is being delivered in the State
of New York.
AND, FURTHER, the Owner Trustee hereby acknowledges that the
Aircraft referred to in this Trust Indenture Supplement and the aforesaid
Lease Supplement has been delivered to the Owner Trustee and is included in
the property of the Owner Trustee covered by all the terms and conditions
of the Trust Agreement, subject to the pledge and mortgage thereof under
the Trust Indenture.
IN WITNESS WHEREOF, the Owner Trustee has caused this Trust
Indenture Supplement to be duly executed by one of its officers, thereunto
duly authorized, on the day and year first above written.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION, not in its individual
capacity, but solely as Owner Trustee
By:________________________________________
Name:
Title:
SCHEDULE I
Principal Amount Interest Rate Maturity
--------- ------- ------------- --------
Series A %
Series B %
Series C %
Equipment Notes Amortization
SERIES A
Aircraft: _____
SERIES B
Aircraft: _____
SERIES C
Aircraft: _____
SCHEDULE II
PASS THROUGH TRUST AGREEMENT AND PASS THROUGH TRUST SUPPLEMENTS
Pass Through Trust Agreement, dated as of December 4, 1998, between US
Airways, inc. and State Street Bank and Trust Company, as supplemented by
Trust Supplement No. 1998-1A, dated as of December 14, 1998, as
supplemented by Trust Supplement No. 1998-1B, dated as of December 14,
1998, and as supplemented by Trust Supplement No. 1998-1C, dated as of
December 14, 1998.
EXHIBIT 4(a)(xvi)
Doc. No. 2.23
N7__UW
PURCHASE AGREEMENT ASSIGNMENT
(US Airways, Inc. Trust No. N7__UW)
PURCHASE AGREEMENT ASSIGNMENT (US Airways, Inc. Trust No.
N7__UW), dated as of _____________ __, 1998, between US AIRWAYS, INC., a
Delaware corporation (the "Assignor" or "Lessee"), and FIRST SECURITY BANK,
NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner
Trustee ("FSB" or "Lessor") under the Trust Agreement (US Airways, Inc.
Trust No. N7__UW), dated as of _____________ __, 1998, (as amended,
modified or supplemented from time to time, the "Trust Agreement"), between
____________________ (the "Owner Participant") and FSB.
W I T N E S S E T H
WHEREAS, US Airways Group, Inc. ("Parent") and AVSA (as
hereinafter defined) are parties to the Purchase Agreement (as hereinafter
defined), providing, among other things, for the delivery by AVSA to the
Assignor of certain aircraft, including the Aircraft (as hereinafter
defined) covered by the Participation Agreement (as hereinafter defined);
and
WHEREAS, pursuant to a Purchase Agreement Assignment, dated as of
[October 1, 1998], by and between Parent and Lessee (the "Parent
Assignment"), Parent assigned all of its right, title in and interest in
and to the Purchase Agreement to Assignor to the extent such right, title
and interest relate to certain aircraft, including the Aircraft covered by
the Participation Agreement;
WHEREAS, pursuant to a Consent and Agreement of AVSA and
Guarantor (as hereinafter defined), dated as of [October 1, 1998] (the
"Parent Consent and Agreement"), AVSA and Guarantor consented to the
assignment by Parent to Assignor of Parent's right, title in and interest
in and to the Purchase Agreement as provided for in the Parent Assignment;
WHEREAS, pursuant to the Parent Consent and Agreement, Guarantor
confirmed that its guarantee given in the Consent and Guaranty (as
hereinafter defined) remains in full force and effect and, to the extent
the same relates to the aircraft assigned to Lessee pursuant to the Parent
Assignment, it inures to the benefit of the Assignor;
WHEREAS, pursuant to the Consent and Guaranty, the Guarantor has
agreed, among other things, to unconditionally guarantee the due and
punctual performance by AVSA of all of its liabilities and obligations as
set forth in the Purchase Agreement; and
WHEREAS, pursuant to the Lease (as hereinafter defined), the
Lessor will lease the Aircraft to the Assignor; and
WHEREAS, on the terms and conditions hereof and of the Consents
and Agreements (as hereinafter defined), (a) the Assignor desires to assign
to the Lessor certain of the Assignor's remaining rights, title and
interests in, to and under the Purchase Agreement and the Consent and
Guaranty (insofar as they relate to the Purchase Agreement and the
Aircraft) and (b) the Lessor desires to accept the assignments and, except
as otherwise provided herein, to assume the obligations of the "Buyer"
under the Purchase Agreement, to the extent assigned to it pursuant hereto;
and
WHEREAS, pursuant to the Indenture (as hereinafter defined), the
Lessor will assign, inter alia, its rights hereunder to the Indenture
Trustee (as hereinafter defined) to the extent set forth therein; and
WHEREAS, such assignments and acceptances are intended to permit
consummation of the transactions contemplated by the Participation
Agreement; and
WHEREAS, AVSA and the Guarantor are willing to execute and
deliver their respective Consents and Agreements;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Defined Terms. For all purposes of this Assignment, except
as otherwise expressly provided or unless the context otherwise requires,
the following terms shall have the following meanings:
"Aircraft" shall mean the Airbus A319 aircraft, bearing
manufacturer's serial number ___, delivered under the Purchase Agreement,
including the two CFM International Model 56-5 engines installed on such
aircraft on the date of delivery thereof pursuant to the Purchase Agreement
or such other engines as may be substituted therefore under the Lease.
"AVSA" shall mean AVSA, S.A.R.L., a French societe a
responsabilite limitee, and its successors and assigns.
"AVSA Consent and Agreement" shall mean the Consent and Agreement
of AVSA attached hereto, as amended, modified or supplemented from time to
time.
"Consent and Guaranty" shall mean the Consent and Guaranty of the
Guarantor attached to the Purchase Agreement, together with all amendments,
waivers, and consents heretofore entered into or heretofore granted
thereunder.
"Consents and Agreements" shall mean the AVSA Consent and
Agreement and the Guarantor Consent and Agreement.
"Equipment Notes" shall have the meaning ascribed thereto in the
Participation Agreement.
"Guarantor" shall mean Airbus Industrie G.I.E., a French
groupement d'interet economique, and its successors and assigns.
"Guarantor Consent and Agreement" shall mean the Consent and
Agreement of the Guarantor attached hereto, as amended, modified or
supplemented from time to time.
"Indenture" shall mean the Trust Indenture and Security Agreement
(US Airways, Inc. Trust No. N7__UW), dated as of _____________ __, 1998,
between the Lessor and the Indenture Trustee, as amended, modified or
supplemented from time to time.
"Indenture Trustee" shall mean State Street Bank and Trust
Company, a Massachusetts trust company, not in its individual capacity but
solely as Indenture Trustee under the Indenture and each other person which
may from time to time be acting as successor trustee under the Indenture.
"Lease" shall mean the Lease Agreement (US Airways, Inc. Trust
No. N7__UW), dated as of _____________ __, 1998, between the Lessor and the
Assignor, as amended, modified or supplemented from time to time.
"Participation Agreement" shall mean the Participation Agreement
(US Airways, Inc. Trust No. N7__UW), dated as of _____________ __, 1998,
among the Assignor, the Owner Participant, the Pass Through Trustee (as
defined therein), the Lessor, the Indenture Trustee and the Subordination
Agent (as defined therein), as amended, modified or supplemented from time
to time.
"Purchase Agreement" shall mean the Airbus A319/A320/A321
Purchase Agreement, dated as of October 31, 1997, between US Airways Group,
Inc. and AVSA, together with all exhibits, appendices and letter agreements
thereto and all amendments, waivers and consents granted thereunder.
All other terms used herein in capitalized form that are defined
in the Lease shall, when used herein, have the meanings specified in the
Lease.
2. Assignment. (a) Generally. The Assignor has sold,
assigned, transferred and set over and does hereby sell, assign, transfer
and set over unto the Lessor (i) all of the Assignor's right, title and
interest in and to (x) the warranty and service life policy set forth in
Clause 12 of the Purchase Agreement (the "Assigned Warranties") and (y) the
Consent and Guaranty (insofar as such Consent and Guaranty relates to the
Assigned Warranties), as and to the extent that the same relates to the
Aircraft, except to the extent reserved below, including, without
limitation, in such assignment to the Lessor (A) all claims for damages in
respect of such Aircraft arising as a result of any default by AVSA under
Clause 12 of the Purchase Agreement, including, without limitation, all
warranty, service life policy and indemnity provisions contained in Clause
12 of the Purchase Agreement in respect of the Aircraft and all claims
thereunder and under the Consent and Guaranty in respect of the Aircraft
and (B) any and all rights of the Assignor to compel performance of the
terms of Clause 12 of the Purchase Agreement and the Consent and Guaranty
in respect of the Aircraft; reserving to the Assignor, however, all the
Assignor's rights and interests in and to Clause 12 of the Purchase
Agreement and the Consent and Guaranty as and to the extent that Clause 12
of the Purchase Agreement and the Consent and Guaranty relate to aircraft
other than the Aircraft and to the extent that the Purchase Agreement and
the Consent and Guaranty relate to any other matters not directly
pertaining to the Aircraft.
(b) Assignment of Rights. If and so long as there shall not
exist and be continuing an Event of Default and, if an Event of Default is
continuing, so long as Lessee or any Sublessee remains in possession of the
Aircraft, the Lessor hereby authorizes the Lessee, to the exclusion of the
Lessor, to exercise in the Lessee's name all rights and powers related to
the Assigned Warranties and to retain any recovery or benefit resulting
from the enforcement of any of the Assigned Warranties in respect of the
Aircraft, except that the Lessee may not enter into any change order or
other amendment, modification or supplement to the Purchase Agreement
without the written consent or countersignature of the Lessor if such
change order, amendment, modification or supplement would result in any
rescission, cancellation or termination of the Assigned Warranties in
respect of the Aircraft or in any way limit the rights assigned hereunder.
(c) Acceptance of Assignment. Subject to the terms hereof, the
Lessor accepts the assignment contained in this Section 2.
(d) Onward Transfer of Rights. Except as provided in Clause 8
hereunder, the Lessor agrees that it may not sell, assign or otherwise
transfer any of the Assigned Warranties without the prior written consent
of AVSA.
(e) Requirement of Notice to AVSA. For all purposes of this
Assignment, AVSA shall not be deemed to have knowledge of and need not
recognize any Event of Default, unless and until AVSA shall have received
written notice thereof from the Lessor or the Indenture Trustee addressed
to its Chief Executive Officer, 2, Rond Point Maurice Bellonte, 31700
Blagnac, France (telex 521155F) (fax: ________________) and, in acting in
accordance with the terms of the Purchase Agreement and this Assignment,
AVSA may act with acquittance and conclusively rely upon any such notice.
3. Certain Rights and Obligations of the Parties. (a) Assignor
Remains Liable. It is expressly agreed that, anything herein contained to
the contrary notwithstanding: (a) the Assignor shall at all times remain
liable to AVSA under the Purchase Agreement to perform all the duties and
obligations of the "Buyer" thereunder to the same extent as if this
Assignment had not been executed; (b) the exercise by the Lessor of any of
the rights assigned hereunder shall not release the Assignor from any of
its duties or obligations to AVSA under the Purchase Agreement except to
the extent that such exercise by the Lessor shall constitute performance of
such duties and obligations; and (c) except as provided in the next
succeeding paragraph, none of the Lessor, the Indenture Trustee nor any
Participant shall have any obligation or liability under the Purchase
Agreement by reason of, or arising out of, this Assignment or be obligated
to perform any of the obligations or duties of the Assignor under the
Purchase Agreement or to make any payment or to make any inquiry as to the
sufficiency of any payment received by any of them or to present or file
any claim or to take any other action to collect or enforce any claim for
any payment assigned hereunder.
(b) Lessor Bound by Purchase Agreement. Without in any way
releasing the Assignor from any of its duties or obligations under the
Purchase Agreement, the Lessor confirms for the benefit of AVSA that,
insofar as the provisions of the Purchase Agreement relate to the Aircraft,
in exercising any rights under the Purchase Agreement, or in making any
claim with respect to the Aircraft or other goods and services delivered or
to be delivered pursuant to the Purchase Agreement, the terms and
conditions of the Purchase Agreement disclosed to the Lessor in writing
shall apply to, and be binding upon, the Lessor to the extent of its
respective interests assigned hereunder to the same extent as the Assignor.
(c) Limit of Effect of this Assignment. Nothing contained
herein shall (i) subject AVSA or the Guarantor to any liability to which it
would not otherwise be subject under the Purchase Agreement or (ii) modify
in any respect the contractual rights of AVSA or the Guarantor thereunder
(except, in each case, as provided in the attached Consents and
Agreements).
(d) Appointment as Attorney-in-Fact. The Assignor does hereby
constitute, effective at any time after an Event of Default shall have
occurred and be continuing, the Lessor and its successors and permitted
assigns to be the Assignor's true and lawful attorney, irrevocably, with
full power (in the name of the Assignor or otherwise) to ask, require,
demand, receive, compound and give acquittance for any and all monies and
claims for monies due and to become due under, or arising out of, the
Purchase Agreement and the Consent and Guaranty in respect of the Aircraft,
to the extent that the same have been assigned as provided in this
Assignment and, for such period as the Lessor, its successors and assigns may
exercise rights with respect thereto under this Assignment, to endorse
any checks or other instruments or orders in connection therewith and to
file any claims or take any action or institute (or, if previously
commenced, assume control of) any proceedings and to obtain any recovery in
connection therewith which the Lessor, its successors and assigns, may deem
to be necessary or advisable in the premises.
4. Further Assurances. The Assignor and the Lessor each agree
that, at any time and from time to time, upon the written request of any
other party hereto, it will promptly and duly execute and deliver any and
all such further instruments and documents and take such further action as
the other may reasonably request in order to obtain the full benefits of
this Assignment and of the rights and powers herein granted.
5. No Amendment of Purchase Agreement. So long as the Lease is
in effect, the Lessor agrees that it shall not enter into any agreement
that would amend, modify, supplement, rescind, cancel or terminate the
Purchase Agreement or the Consent and Guaranty in any respect or in any way
limit the rights of the Assignor or any of the other rights assigned
hereunder (except as set forth above when there has been an Event of
Default), without the prior written consent of the Assignor.
6. Execution of Assignment. This Assignment is executed by the
Assignor and the Lessor concurrently with the execution and delivery of the
Participation Agreement and the Lease.
7. Confidentiality. The Lessor agrees that it will not
disclose to any third party the terms of the Purchase Agreement or this
Assignment, except (a) as required by applicable law or governmental
regulation, (b) as contemplated in the Lease or the Participation Agreement
(including as set forth in Section 7(o) of the Participation Agreement) or
(c) with the consent of the Assignor, the Guarantor and AVSA.
8. Assignment as Collateral. Each party hereto consents to the
assignment and pledge by the Lessor to the Indenture Trustee, as security
for the Equipment Notes to be issued under the Indenture and the other
obligations secured thereby as specified in the Indenture, of all of the
Lessor's right, title and interest in and to the Purchase Agreement and the
Consent and Guaranty under this Assignment which assignment shall be on
terms identical to this Assignment.
9. Counterparts. This Assignment may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
10. GOVERNING LAW. THIS ASSIGNMENT SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
11. Successors and Assigns. This Assignment shall be binding
upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
12. Notices. All notices with respect to the matters contained
herein shall be delivered (notices with respect to AVSA shall be sent to
the address for AVSA set forth in Section 2(d)) in the manner provided in
Section 12(a) of the Participation Agreement.
13. No Oral Amendments. Neither this Assignment nor any of the
terms hereof may be terminated, amended, supplemented, waived or modified
orally, but only by an instrument in writing signed by the party against
whom the enforcement of such termination, amendment, supplement, waiver or
modification is sought.
* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment to be duly executed as of the day and year first above written.
US AIRWAYS, INC.
By: _________________________________
Name:
Title:
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Lessor
By: ________________________________
Name:
Title:
AIRBUS INDUSTRIE CONSENT AND AGREEMENT
The undersigned, Airbus Industrie G.I.E., a groupement d'interet
economique established under Ordonnance No. 67-821 dated September 23, 1967
of the Republic of France (the "Guarantor"), hereby acknowledges notice of
and consents to all of the terms of the Purchase Agreement Assignment
between US Airways, Inc., a Delaware corporation, and First Security Bank,
National Association, not in its individual capacity, but solely as Lessor,
with respect to US Airways, Inc. Trust No. N7___UW, dated as of
______________ (hereinafter called the "Assignment", the defined terms
therein being hereinafter used with the same meaning), and to the
assignment of the Assigned Warranties to the Indenture Trustee under the
Indenture, dated as of ______________, between ___________ and ____________
(hereinafter called the "Indenture"), and hereby confirms to the Assignor
and the Lessor and their respective successors and assigns that:
(i) except as provided in the Assignment, all representations,
warranties, and agreements of the Guarantor under the Consent and
Guaranty insofar as they relate to the Assigned Warranties with
respect to the Aircraft shall inure to the benefit of the Lessor
and its respective successors and permitted assigns, to the same
extent as if the Lessor and its successors and permitted assigns
had originally been named the "Buyer" of the Aircraft therein;
(ii) the Guarantor will pay to the person or entity entitled to
receive the corresponding payment from AVSA under the terms of
the Assignment all amounts required to be paid by the Guarantor
with respect to the Aircraft;
(iii) the Guarantor consents to the sale of the Aircraft by
Lessee to the Lessor, the assignment of Assignor's rights and
interests under the Purchase Agreement and the Consent and
Guaranty to the Lessor pursuant to the Assignment and to the
assignment of the Lessor's rights and interests in the Assignment
to the Indenture Trustee pursuant to the Indenture and the lease
of the Aircraft by the Lessor to the Assignor under the Lease;
and
(iv) from and after the purchase of the Aircraft pursuant to the
Participation Agreement and payment in full for the Aircraft, the
Guarantor will not assert any lien or claim against the Aircraft
or any part thereof or against the Lessee, the Lessor, the Owner
Participant or the Indenture Trustee arising on or prior to such
purchase or in respect of any work or services performed on or
prior thereto.
The Guarantor hereby represents and warrants that:
(A) the Guarantor is a groupement d'interet economique duly
organized and existing in good standing under the laws of the Republic of
France and has the requisite power and authority to enter into and perform
its obligations under the Consent and Guaranty and this Consent and
Agreement;
(B) the making and performance, in accordance with their terms
of the Consent and Guaranty and this Consent and Agreement have been duly
authorized by all necessary corporate action on the part of the Guarantor,
do not require the consent or approval of the members of the Guarantor, do
not require the consent or approval of,or the giving of notice to, or
registration with, or the taking of any other action in respect of, any
French governmental authority or agency except for those that have already
been obtained and do not contravene any law binding on the Guarantor or
contravene the Guarantor's charter documents or any indenture, credit agreement
or other contractual agreement to which the Guarantor is a party
or by which it is bound;
(C) the Consent and Guaranty constituted, as of the date thereof
and at all times thereafter to and including the date of this Consent and
Agreement, and each of this Consent and Agreement and the Consent and
Guaranty constitutes, binding obligations of the Guarantor enforceable
against the Guarantor in accordance with their respective terms, subject
to: (i) the limitations of applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally; and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at
law), which principles do not make the remedies available at law or in
equity with respect to the Purchase Agreement and this Consent and
Agreement inadequate for the practical realization of the benefits intended
to be provided thereby;
(D) the Consent and Guaranty is in full force and effect; and
(E) this Consent and Agreement is made subject to and with the
benefit of Clause 3 of the Assignment and Section 4.03 of the Indenture.
* * * * * *
THIS CONSENT AND AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.
Dated as of ________________
AIRBUS INDUSTRIE G.I.E.
By: _______________________________
Name:
Title:
AVSA CONSENT AND AGREEMENT
The undersigned, AVSA, S.A.R.L., a societe a responsabilite
limitee organized and existing under the laws of the Republic of France
("AVSA"), hereby acknowledges notice of and consents to all of the terms of
the Purchase Agreement Assignment between US Airways, Inc., a Delaware
corporation, and First Security Bank, National Association, not in its
individual capacity, but solely as Lessor, with respect to US Airways, Inc.
Trust No. N7__UW, dated as of ______________ (hereinafter called the
"Assignment," the defined terms therein being hereinafter used with the
same meaning), and to the assignment of the Assigned Warranties to the
Indenture Trustee under the Indenture, dated as of _____________, between
__________ and _____________ (hereinafter called the "Indenture"), and
hereby confirms to the Assignor and the Lessor and their respective
successors and assigns that:
(i) except as provided in the Assignment, all representations,
warranties, indemnities and agreements of AVSA under the Purchase
Agreement insofar as they relate to the Assigned Warranties with
respect to the Aircraft shall inure to the benefit of the Lessor
and its respective successors and permitted assigns to the same
extent as if the Lessor and its successors and permitted assigns
had originally been named the "Buyer" of the Aircraft therein;
(ii) AVSA will pay to the Assignor all payments required to be
paid by it under the Purchase Agreement, unless and until AVSA
shall have received written notice from the Indenture Trustee or
the Lessor (or, after the Indenture shall have been discharged in
full, the Lessor) addressed to it at the address and in the
manner set forth in the Assignment that an Event of Default has
occurred and is continuing, whereupon AVSA will make any and all
payments thereafter required to be made by it under the Purchase
Agreement, to the extent that the right to receive such payment
has been assigned under the Assignment ("AVSA Payments"),
directly to the Indenture Trustee (or, after the Indenture shall
have been discharged in full, the Lessor) if AVSA shall have
received notice as aforesaid that an Event of Default has
occurred and is continuing;
(iii) The Lessor shall not be liable for any of the obligations
or duties of the Assignor under the Purchase Agreement, nor shall
the Assignment give rise to any duties or obligations whatsoever
on the part of the Lessor owing to AVSA, except for the
agreements of the Lessor set forth in the Assignment, including,
but not limited to Section 3(b) of the Assignment;
(iv) AVSA consents to the sale of the Aircraft by Lessee to
Lessor, assignment of the Lessor's rights and interests in the
Assignment to the Indenture Trustee pursuant to the Indenture and
to the lease of the Aircraft by the Lessor to the Lessee under
the Lease; and
(v) from and after the purchase of the Aircraft pursuant to the
Participation Agreement and payment in full for the Aircraft,
AVSA will not assert any lien or claim against the Aircraft or
any part thereof arising on or prior to such purchase or in
respect of any work or services performed on or prior thereto.
AVSA hereby represents and warrants that:
(A) AVSA is a societe a responsabilite limitee duly organized
and existing in good standing under the laws of the Republic of France and has
the requisite power and authority to enter into and perform its
obligations under the Purchase Agreement and this Consent and Agreement;
(B) the making and performance, in accordance with their terms,
of the Purchase Agreement and this Consent and Agreement have been duly
authorized by all necessary corporate action on the part of AVSA, do not
require any approval of AVSA's shareholders, do not require the consent or
approval of, the giving notice to, or registration with, or the taking of
any other action in respect of, any French governmental authority or agency
except for those that have already been obtained and do not contravene any
law binding on AVSA or contravene AVSA's charter documents or any
indenture, credit agreement or other contractual agreement to which AVSA is
a party or by which it is bound;
(C) each of the Purchase Agreement and this Consent and
Agreement constitutes a binding obligation of AVSA enforceable against AVSA
in accordance with its terms, subject to: (i) the limitations of applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally; and (ii) general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law), which principles do not make the remedies
available at law or in equity with respect to the Purchase Agreement and
this Consent and Agreement inadequate for the practical realization of the
benefits intended to be provided thereby;
(D) the Purchase Agreement is in full force and effect as to
AVSA; and
(E) this Consent and Agreement is made subject to and with the
benefit of Clause 3 of the Assignment and Section 4.03 of the Indenture.
* * * * * *
THIS CONSENT AND AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.
Dated as of ________________
AVSA, S.A.R.L.
By: ________________________________
Name:
Title:
EXHIBIT 4(a)(xvii)
AFFIDAVIT OF CITIZENSHIP
[OWNER PARTICIPANT]
STATE OF _______________ }
} SS.
COUNTY OF ____________ }
I, _______________, being duly sworn, depose and say, that:
1. I am the duly qualified and acting [Assistant] Secretary of [Owner
Participant] (the "Corporation");
2. The Corporation is duly organized under the laws of the State of
__________;
3. The [Chief Executive Officer/President] and two-thirds or more of the
Board of Directors and other managing officers of the Corporation are
individuals who are citizens of the United States of America;
4. At least seventy-five percent (75%) of the voting interest of the
Corporation is owned or controlled by persons or corporations who are
citizens of the United States of America;
5. Accordingly, the Corporation is a "Citizen of the United States" as
defined in Section 40102(a)(15) of Title 49 of the United States Code.
SWORN to this ____ day of __________, 199_.
[OWNER PARTICIPANT]
By:_____________________________
Name:
Title:
SWORN AND SUBSCRIBED TO
before me this ____ day of
__________, 199_
______________________________
Notary Public
My Commission Expires on _________________
===========================================================================
TRUST AGREEMENT
(US Airways, Inc. Trust No. N7__UW)
Dated as of _________ __, 199_
between
[OWNER PARTICIPANT],
Owner Participant
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
Owner Trustee
One Airbus A319 Aircraft
FAA Registration Mark N7__UW
===========================================================================
TRUST AGREEMENT
(US Airways, Inc. Trust No. N7__UW)
This TRUST AGREEMENT (US Airways, Inc. Trust No. N7__UW) dated
as of _________ __, 199_ between [OWNER PARTICIPANT], a __________
corporation (the "Owner Participant"), and FIRST SECURITY BANK, NATIONAL
ASSOCIATION, a national banking association (in its individual capacity,
"FSB") and otherwise not in its individual capacity but solely as trustee
hereunder (herein in such capacity with its permitted successors and
assigns called the "Owner Trustee") (as hereafter from time to time
supplemented or amended, this or the "Trust Agreement");
NOW THEREFORE, in consideration of the mutual covenants and
agreements contained herein, FSB and the Owner Participant hereby agree as
follows:
W I T N E S S E T H:
ARTICLE I
DEFINITIONS AND TERMS
SECTION 1.01 CERTAIN DEFINITIONS. Capitalized terms used but
not defined herein shall have the respective meanings set forth or
incorporated by reference, and shall be construed and interpreted in the
manner described, in Annex A.
ARTICLE II
AUTHORITY TO EXECUTE CERTAIN OPERATIVE DOCUMENTS;
DECLARATION OF TRUST
SECTION 2.01 AUTHORITY TO EXECUTE DOCUMENTS. The Owner
Participant hereby authorizes and directs the Owner Trustee to execute and
deliver the Operative Documents and any other agreements, instruments or
documents to which the Owner Trustee is a party in the respective forms
thereof in which delivered from time to time by the Owner Participant to
the Owner Trustee for execution and delivery and, subject to the terms
hereof, to perform its duties and, upon instructions from the Owner
Participant, exercise its rights under said Operative Documents in
accordance with the terms thereof.
SECTION 2.02 DECLARATION OF TRUST. The Owner Trustee hereby
declares that it shall continue to hold the Trust Estate upon the trusts
hereinafter set forth for the use and benefit of the Owner Participant,
subject, however, to the provisions of and the Lien created by the Trust
Indenture and to the provisions of the Lease.
ARTICLE III
ACCEPTANCE AND DELIVERY OF AIRCRAFT
SECTION 3.01 ACCEPTANCE OF AIRCRAFT. The Owner Participant
hereby authorizes and directs the Owner Trustee to, and the Owner Trustee
agrees for the benefit of the Owner Participant that it will, on the
Delivery Date, subject to due compliance with the terms of Section 3.02
hereof:
(a) purchase the Aircraft pursuant to the Participation
Agreement and the Bill of Sale;
(b) accept from Lessee the delivery of the Bill of Sale and the
FAA Bill of Sale;
(c) cause the Aircraft to be leased to Lessee under the Lease,
and in furtherance thereof execute and deliver a Lease Supplement
covering the Aircraft;
(d) execute and deliver the Trust Supplement covering the
Aircraft;
(e) execute and deliver the financing statements referred to in
Section 4(a)(vi) of the Participation Agreement, together with all
other agreements, documents and instruments referred to in Section 4
of the Participation Agreement to which the Owner Trustee is a party;
and
(f) effect the registration of the Aircraft in the name of the
Owner Trustee by filing or causing to be filed with the FAA: (i) the
FAA Bill of Sale; (ii) an application for registration of the Aircraft
in the name of the Owner Trustee (including without limitation an
affidavit from the Owner Trustee in compliance with the provisions of
14 C.F.R. section 47.7(c)(2)(ii)(1979)); and (iii) the Trust
Agreement.
SECTION 3.02 CONDITIONS PRECEDENT. The right and obligation of
the Owner Trustee to take the action required by Section 3.01 hereof with
respect to the Aircraft shall be subject to the following conditions
precedent:
(a) the Owner Participant shall have made the full amount of its
Commitment set forth in Schedule II of the Participation Agreement
available to the Owner Trustee, in immediately available funds, in
accordance with Section 2 of the Participation Agreement; and
(b) the terms and conditions of Section 4 of the Participation
Agreement, insofar as they relate to the Aircraft, shall have been
complied with in a manner satisfactory to the Owner Participant and
the Owner Trustee.
SECTION 3.03 AUTHORIZATION IN RESPECT OF A TERMINATION OF THE
LEASE AND ASSUMPTION OF THE EQUIPMENT NOTES. The Owner Participant hereby
authorizes and directs the Owner Trustee to, and the Owner Trustee agrees
for the benefit of the Owner Participant that it will, take the actions
specified to be taken by the Owner Trustee in Section 7(u) of the
Participation Agreement upon Lessee's purchasing the Aircraft pursuant to
Section 19(c) of the Lease and upon Lessee's assuming the indebtedness
evidenced by the Equipment Notes in accordance with the provisions of such
Section 7(u).
SECTION 3.04 AUTHORIZATION IN RESPECT OF A REPLACEMENT AIRFRAME
OR REPLACEMENT ENGINES. The Owner Participant hereby authorizes and directs
the Owner Trustee to, and the Owner Trustee agrees for the benefit of the
Owner Participant that it will, in the event of a Replacement Airframe and
Replacement Engines, if any, being substituted pursuant to Section 10(a) of
the Lease, or a Replacement Engine being substituted pursuant to Section
10(b) of the Lease, subject to due compliance with the terms of Section
10(a) or 10(b) of the Lease, as the case may be:
(a) to the extent not previously accomplished by a prior
authorization, authorize a representative or representatives of the
Owner Trustee (who shall be an employee or employees of Lessee) to
accept delivery of the Replacement Airframe and Replacement Engines,
if any, or the Replacement Engines;
(b) accept from Lessee or other vendor of the Replacement
Airframe and Replacement Engines, if any, or the Replacement Engine a
bill of sale or bills of sale (if tendered), and the invoice, if any,
with respect to the Replacement Airframe and Replacement Engines, if
any, or the Replacement Engine being furnished pursuant to Section
10(a) or (b) of the Lease;
(c) in the case of a Replacement Airframe, make application to
the Federal Aviation Administration for the registration in the name
of the Owner Trustee of the Aircraft of which such Replacement
Airframe is a part;
(d) execute and deliver a Lease Supplement and a Trust
Supplement covering (i) the Aircraft of which such Replacement
Airframe is part or (ii) such Replacement Engine, as the case may be;
(e) transfer its interest in (without recourse except as to
obligations in respect of Lessor Liens) and to the Airframe and
Engines (if any) or the Engine being replaced to Lessee;
(f) request in writing that the Indenture Trustee execute and
deliver to Lessee appropriate instruments to release the Airframe and
Engines or engines (if any) or the Engine or engine being replaced
from the lien created under the Trust Indenture and release the
Purchase Agreement and the Purchase Agreement Assignment (solely with
respect to such replaced Airframe and Engines, if any, or Engine) from
the assignment and pledge under the Trust Indenture; and
(g) upon instructions from the Owner Participant, take such
further action as may be contemplated by clauses (A) and (B) of the
third paragraph of Section 10(a) of the Lease or clauses (ii) and
(iii) of Section 10(b) of the Lease, as the case may be.
SECTION 3.05 TRUST AGREEMENT REMAINING IN FULL FORCE AND
EFFECT. In the event of the substitution of a Replacement Airframe for the
Airframe or the substitution of a Replacement Engine for any Engine or
engine, all provisions of this Trust relating to such replaced Airframe or
Engine or engine shall be applicable to such Replacement Airframe or
Replacement Engine with the same force and effect as if such Replacement
Airframe or Replacement Engine were the same airframe or engine as the
Airframe or Engine being replaced but for the Event of Loss with respect to
such Airframe or Engine.
SECTION 3.06 AUTHORIZATION IN RESPECT OF A RETURN OF AN ENGINE.
The Owner Participant hereby authorizes and directs the Owner Trustee to,
and the Owner Trustee agrees for the benefit of the Owner Participant that
it will, in the event of an engine being transferred to the Owner Trustee
pursuant to Section 5 of the Lease, subject to due compliance with the
terms of such Section 5:
(a) accept from Lessee the bill of sale with respect to such
engine contemplated by such Section 5 (if tendered);
(b) transfer its interest in (without recourse except as to
obligations in respect of Lessor Liens) and to an Engine to Lessee as
contemplated by such Section 5; and
(c) request in writing that the Indenture Trustee execute and
deliver to Lessee appropriate instruments to release the Engine being
transferred to Lessee pursuant to such Section 5 from the lien of the
Trust Indenture and to release the Purchase Agreement and the Purchase
Agreement Assignment (solely with respect to such Engine) from the
assignment and pledge under the Trust Indenture.
ARTICLE IV
RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM THE TRUST ESTATE
SECTION 4.01 DISTRIBUTION OF PAYMENTS. (a) Payments to
Indenture Trustee. Until the Trust Indenture shall have been discharged
pursuant to Section 10.01 thereof, all Basic Rent, Supplemental Rent,
insurance proceeds and requisition or other payments of any kind included
in the Trust Estate (other than Excluded Payments) payable to the Owner
Trustee shall be payable directly to the Indenture Trustee (and if any of
the same are received by the Owner Trustee shall upon receipt be paid over
to the Indenture Trustee without deduction, set-off or adjustment of any
kind) for distribution in accordance with the provisions of Article III of
the Trust Indenture.
(b) Payments to Owner Trustee; Other Parties. After the Trust
Indenture shall have been discharged pursuant to Section 10.01 thereof, any
payment of the type referred to in Section 4.01(a) hereof (other than
Excluded Payments) received by the Owner Trustee, any payments received
from the Indenture Trustee other than as specified in Section 4.1(d) hereof
and any other amount received as part of the Trust Estate and for the
application or distribution of which no provision is made herein, shall be
distributed forthwith upon receipt by the Owner Trustee in the following
order of priority: first, so much of such payment as shall be required to
reimburse the Owner Trustee for any expenses not otherwise reimbursed as to
which the Owner Trustee is entitled to be so reimbursed pursuant to the
provisions hereof shall be retained by the Owner Trustee; second, so much
of the remainder for which provision as to the application thereof is
contained in the Lease or any of the other Operative Documents shall be
applied and distributed in accordance with the terms of the Lease or such
other Operative Document; and third, the balance, if any, shall be paid to
the Owner Participant.
(c) Certain Distributions to Owner Participant. All amounts from
time to time distributable by the Indenture Trustee to the Owner
Participant pursuant to the Trust Indenture shall, if paid to the Owner
Trustee, be distributed by the Owner Trustee to the Owner Participant in
accordance with the provisions of Article III of the Trust Indenture.
(d) Excluded Payments. Any Excluded Payments received by the
Owner Trustee shall be paid by the Owner Trustee to the Person to whom such
Excluded Payments are payable under the provisions of the Participation
Agreement, the Tax Indemnity Agreement or the Lease.
SECTION 4.02 METHOD OF PAYMENTS. The Owner Trustee shall make
distributions or cause distributions to be made to the Owner Participant
pursuant to this Article IV by transferring by wire transfer the amount to
be distributed to such account or accounts of the Owner Participant as the
Owner Participant may designate from time to time in writing to the Owner
Trustee. Notwithstanding the foregoing, the Owner Trustee will, if so
requested by the Owner Participant in writing, pay any or all amounts
payable to the Owner Participant pursuant to this Article IV either (i) by
crediting such amount or amounts to an account or accounts maintained by
the Owner Participant with the Owner Trustee in its individual capacity in
immediately available funds, (ii) by payment at the trust office of the
Owner Trustee (the trust office of the Owner Trustee shall be the principal
corporate trust office of the Owner Trustee at 79 South Main Street, Salt
Lake City, Utah 84111, Attention: Corporate Trust Department, or the
principal corporate trust office of any successor Owner Trustee), in
immediately available funds, or (iii) by mailing an official bank check or
checks in such amount or amounts payable to the Owner Participant at such
address as the Owner Participant shall have designated in writing to the
Owner Trustee.
ARTICLE V
DUTIES OF THE OWNER TRUSTEE
SECTION 5.01 NOTICE OF EVENT OF DEFAULT. If the Owner Trustee
shall have knowledge of a Lease Event of Default or an Indenture Event of
Default (or a Least Default or an event which with the passage of time or
the giving of notice or both would constitute an Indenture Event of
Default) the Owner Trustee shall give to the Owner Participant prompt
telephonic or telecopy notice thereof followed by prompt confirmation
thereof by certified mail, postage prepaid, provided that (i) in the case
of an event which, with the passage of time would constitute an Indenture
Event of Default referred to in paragraph (c) of Section 4.02 of the Trust
Indenture, such notice shall in no event be furnished later within ten (10)
days after the Owner Trustee shall first have knowledge of such event and
(ii) in the case of a misrepresentation by the Owner Trustee which with the
passage of time would constitute an Indenture Event of Default referred to
in paragraph (d) of Section 4.02 of the Trust Indenture, such notice shall
in no event be furnished later than ten (10) days after the Owner Trustee
shall first have knowledge of such event. Subject to the terms of Section
5.03 hereof, the Owner Trustee shall take such action or shall refrain from
taking such action, not inconsistent with the provisions of the Trust
Indenture, with respect to such Lease Event of Default, Indenture Event of
Default or other event as the Owner Trustee shall be directed in writing by
the Owner Participant. If the Owner Trustee shall not have received
instructions as above provided within twenty (20) days after the mailing of
such notice to the Owner Participant, the Owner Trustee until instructed
otherwise in accordance with the preceding sentence may, but shall be under
no duty to, take or refrain from taking such action with respect to such
Lease Event of Default, Indenture Event of Default or other event, not
inconsistent with the provisions of the Trust Indenture, as it shall deem
advisable in the best interests of the Owner Participant. For all purposes
of this Trust Agreement, the Lease and the other Operative Documents, in
the absence of actual knowledge by an officer of FSB in the Corporate Trust
Department, the Owner Trustee shall not be deemed to have knowledge of a
Lease Event of Default, an Indenture Event of Default or other event
referred to in this Section 5.01 unless notified in writing by the
Indenture Trustee, the Owner Participant or Lessee.
SECTION 5.02 ACTION UPON INSTRUCTIONS. Subject to the terms of
Sections 5.01 and 5.03 hereof, upon the written instructions at any time
and from time to time of the Owner Participant, the Owner Trustee will take
such of the following actions, not inconsistent with the provisions of the
Trust Indenture, as may be specified in such instructions: (i) give such
notice or direction or exercise such right, remedy or power hereunder or
under any of the Operative Documents to which the Owner Trustee is a party
or in respect of all or any part of the Trust Estate as shall be specified
in such instructions (including entering into agreements referred to in
clause (i) of the definition of "Subsequent Owner Participant"); (ii) take
such action to preserve or protect the Trust Estate (including the
discharge of Liens) as may be specified in such instructions; (iii) approve
as satisfactory to it all matters required by the terms of the Lease or the
other Operative Documents to be satisfactory to the Owner Trustee, it being
understood that without written instructions of the Owner Participant, the
Owner Trustee shall not approve any such matter as satisfactory to it (it
being understood that the provisions of Sections 3.03, 3.04 and 3.06 hereof
do not constitute instructions by the Owner Participant for the Owner
Trustee to approve of or consent to the matters to be approved of or
consented to by the Owner Trustee in the sections of the Lease referred to
in Sections 3.03, 3.04 or 3.06 hereof); and (iv) subject to the rights of
Lessee under the Operative Documents, after the expiration or earlier
termination of the Lease, deliver the Aircraft to the Owner Participant in
accordance with such instructions, convey all of the Owner Trustee's right,
title and interest in and to the Aircraft for such amount, on such terms
and to such purchaser or purchasers as shall be designated in such
instructions, or net lease the Aircraft on such terms and to such lessee or
lessees as shall be designated in such instructions.
SECTION 5.03 INDEMNIFICATION. The Owner Trustee shall not be
required to take any action under Section 5.01 (other than the giving of
the notices referred to therein) or 5.02 hereof unless the Owner Trustee
shall have been indemnified by the Owner Participant, in manner and form
satisfactory to the Owner Trustee, against any liability, cost or expense
(including reasonable counsel fees and disbursements) which may be incurred
in connection therewith; and, if the Owner Participant shall have directed
the Owner Trustee to take any such action or refrain from taking any
action, the Owner Participant agrees to furnish such indemnity as shall be
required and, in addition, to the extent not otherwise paid pursuant to the
provisions of the Lease or the Participation Agreement, to pay the
reasonable compensation of the Owner Trustee for the services performed or
to be performed by it pursuant to such direction and any fees and
disbursements of counsel or agents employed by the Owner Trustee in
connection therewith. The Owner Trustee shall not be required to take any
action under Section 5.01 or 5.02 hereof if the Owner Trustee shall
reasonably determine, or shall have been advised by counsel, that such
action is contrary to the terms of any of the Operative Documents to which
the Owner Trustee is a party, or is otherwise contrary to law.
SECTION 5.04 NO DUTIES EXCEPT AS SPECIFIED IN TRUST AGREEMENT
OR INSTRUCTIONS. The Owner Trustee shall not have any duty or obligation to
manage, control, use, sell, dispose of or otherwise deal with the Aircraft
or any other part of the Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with any of the Operative
Documents to which the Owner Trustee is a party, except as expressly
required by the terms of any of the Operative Documents to which the Owner
Trustee is a party, or (to the extent not inconsistent with the provisions
of the Trust Indenture) as expressly provided by the terms hereof or in
written instructions from the Owner Participant received pursuant to the
terms of Section 5.01 or 5.02, and no implied duties or obligations shall
be read into this Trust Agreement against the Owner Trustee. FSB agrees
that it will, in its individual capacity and at its own cost or expense
(but without any right of indemnity in respect of any such cost or expense
under Section 7.01 hereof) promptly take such action as may be necessary to
duly discharge and satisfy in full all Lessor Liens which it is required to
discharge pursuant to Section 7(f) of the Participation Agreement and
otherwise comply with the terms of said Section binding on it.
SECTION 5.05 SATISFACTION OF CONDITIONS PRECEDENT. Anything
herein to the contrary notwithstanding, the Owner Trustee shall comply with
the provisions of Section 3.01 hereof upon the satisfaction, to the
satisfaction of special counsel for the Owner Trustee, of all the
applicable conditions precedent specified in Section 3.02 hereof and in
Section 4 of the Participation Agreement.
SECTION 5.06 NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR
INSTRUCTIONS. The Owner Trustee shall not have any power, right or
authority to, and the Owner Trustee agrees that it will not, manage,
control, use, sell, dispose of or otherwise deal with the Aircraft or any
other part of the Trust Estate except (i) as expressly required by the
terms of any of the Operative Documents to which the Owner Trustee is a
party, (ii) as expressly provided by the terms hereof, or (iii) as
expressly provided in written instructions from the Owner Participant
pursuant to Section 5.01 or 5.02 hereof.
ARTICLE VI
THE OWNER TRUSTEE
SECTION 6.01 ACCEPTANCE OF TRUSTS AND DUTIES. FSB accepts the
trusts hereby created and agrees to perform the same but only upon the
terms hereof applicable to it. The Owner Trustee also agrees to receive and
disburse all monies received by it constituting part of the Trust Estate
upon the terms hereof. FSB shall not be answerable or accountable under
any circumstances, except (a) for its own willful misconduct or gross
negligence, (b) for performance of the terms of the last sentence of
Section 5.04 hereof, (c) for its or the Owner Trustee's failure to use
ordinary care to disburse funds and (d) for liabilities that may result
from the inaccuracy of any representation or warranty of it (or from the
failure by it to perform any covenant) in Section 6.03 hereof, in Section
6.03 of the Trust Indenture, in Section 4 of the Lease or in Sections 7(a),
7(b), 7(f), 7(g), 7(m), 7(o), 7(p), 7(s) or 7(u) of the Participation
Agreement.
SECTION 6.02 ABSENCE OF CERTAIN DUTIES. Except in accordance
with written instructions furnished pursuant to Section 5.02 hereof and
except as provided in, and without limiting the generality of, Section 5.04
hereof and the last sentence of Section 9.01(b) hereof, neither the Owner
Trustee nor FSB shall have any duty (i) to see to any recording or filing
of any Operative Document or of any supplement to any thereof or to see to
the maintenance of any such recording or filing or any other filing of
reports with the Federal Aviation Administration or other governmental
agencies, except that FSB, in its individual capacity, shall comply with
the reporting requirements set forth in 14 C.F.R. section 47.45 or any
successor provision and the Owner Trustee shall, to the extent that
information for that purpose is supplied by Lessee pursuant to any of the
Operative Documents, complete and timely submit (and furnish the Owner
Participant with a copy of) any and all reports relating to the Aircraft
which may from time to time be required by the Federal Aviation
Administration or any government or governmental authority having
jurisdiction, or (ii) to see to any insurance on the Aircraft or to effect
or maintain any such insurance, whether or not Lessee shall be in default
with respect thereto, other than to forward to the Owner Participant copies
of all reports and other written information which the Owner Trustee
receives from Lessee pursuant to Section 11 of the Lease, (iii) to see to
the payment or discharge of any tax, assessment or other governmental
charge or any lien or encumbrance of any kind owing with respect to,
assessed or levied against any part of the Trust Indenture Estate or the
Trust Estate, except as provided in Section 7 of the Participation
Agreement, or (iv) to inspect Lessee's books and records with respect to
the Aircraft at any time permitted pursuant to the Lease. Notwithstanding
the foregoing, the Owner Trustee will furnish to the Indenture Trustee and
the Owner Participant, promptly upon receipt thereof, duplicates or copies
of all reports, notices, requests, demands, certificates, financial
statements and other instruments furnished to the Owner Trustee under the
Lease or any other Operative Document.
SECTION 6.03 NO REPRESENTATIONS OR WARRANTIES AS TO CERTAIN
MATTERS. NEITHER THE OWNER TRUSTEE NOR FSB MAKES OR SHALL BE DEEMED TO
HAVE MADE (A) ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE
TITLE, VALUE, CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR
USE OF THE AIRCRAFT OR ANY PART THEREOF, OR ANY OTHER REPRESENTATION OR
WARRANTY WITH RESPECT TO THE AIRCRAFT WHATSOEVER, except that FSB in its
individual capacity warrants that on the Delivery Date the Owner Trustee
shall have received whatever title was conveyed to it by Lessee and that
the Aircraft shall during the Term be free of Lessor Liens attributable to
it, or (b) any representation or warranty as to the validity, legality or
enforceability of this Trust Agreement or any Operative Document to which
the Owner Trustee is a party, or any other document or instrument, or as to the
correctness of any statement contained in any thereof except to the
extent that any such statement is expressly made herein or therein as a
representation by FSB in its individual capacity or by the Owner Trustee
and except that FSB in its individual capacity hereby represents and
warrants that this Trust Agreement has been, and (assuming due
authorization, execution and delivery by the Owner Participant of this
Trust Agreement) the Operative Documents to which it or the Owner Trustee
is a party have been (or at the time of execution and delivery of any such
instrument by it or the Owner Trustee hereunder or pursuant to the terms of
the Participation Agreement that such an instrument will be) duly executed
and delivered by one of its officers who is or will be, as the case may be,
duly authorized to execute and deliver such instruments on behalf of itself
or the Owner Trustee, as the case may be.
SECTION 6.04 NO SEGREGATION OF MONIES REQUIRED; NO INTEREST.
Except as provided in Section 23 of the Lease, monies received by the Owner
Trustee hereunder need not be segregated in any manner except to the extent
required by law, and may be deposited under such general conditions as may
be prescribed by law, and the Owner Trustee shall not be liable for any
interest thereon.
SECTION 6.05 RELIANCE UPON CERTIFICATES, COUNSEL AND AGENTS.
The Owner Trustee shall incur no liability to anyone in acting in reliance
upon any signature, instrument, notice, resolution, request, consent,
order, certificate, report, opinion, bond or other document or paper
reasonably believed by it to be genuine and reasonably believed by it to be
signed by the proper party or parties. Unless other evidence in respect
thereof is specifically prescribed herein, any request, direction, order or
demand of the Owner Participant or Lessee mentioned herein or in any of the
Operative Documents to which the Owner Trustee is a party shall be
sufficiently evidenced by written instruments signed by a person purporting
to be the chairman of the board, the president, any executive vice
president, any senior vice president or any vice president or a managing
director and in the name of the Owner Participant or Lessee, as the case
may be. The Owner Trustee may accept a copy of a resolution of the Board of
Directors or Executive Committee of Lessee, certified by the secretary or
any assistant secretary of Lessee as duly adopted and in full force and
effect, as conclusive evidence that such resolution has been duly adopted
by said Board or Committee and that the same is in full force and effect.
As to any fact or matter the manner of ascertainment of which is not
specifically described herein, the Owner Trustee may for all purposes
hereof rely on a certificate signed by a person purporting to be the
chairman of the board, the president, any executive vice president, any
senior vice president or any vice president or a managing director of
Lessee, as to such fact or matter, and such certificate shall constitute
full protection to the Owner Trustee for any action taken or omitted to be
taken by it in good faith in reliance thereon. In the administration of
trusts hereunder, the Owner Trustee may execute any of the trusts or powers
hereof and perform its powers and duties hereunder directly or through
agents or attorneys and may, at the expense of the Trust Estate, consult
with counsel, accountants and other skilled persons to be selected and
employed by it. The Owner Trustee shall not be liable for anything done,
suffered or omitted in good faith by it in accordance with the advice or
opinion of any such counsel, accountants or other skilled persons and the
Owner Trustee shall not be liable for the negligence of any such agent,
attorney, counsel, accountant or other skilled person appointed by it with
due care hereunder.
SECTION 6.06 NOT ACTING IN INDIVIDUAL CAPACITY. In acting
hereunder, the Owner Trustee acts solely as trustee and not in its
individual capacity except as otherwise expressly provided herein; and,
subject to the terms of the Participation Agreement and the Trust
Indenture, all persons, other than the Owner Participant, as provided
herein, having any claim against the Owner Trustee by reason of the
transactions contemplated hereby shall look only to the Trust Estate for
payment or satisfaction thereof.
SECTION 6.07 FEES; COMPENSATION. Except as provided in Section
5.03 or 7.01 hereof, the Owner Trustee agrees that it shall have no right
against the Owner Participant or (subject to the provisions of the Trust
Indenture) the Trust Estate for any fee as compensation for its services
hereunder.
SECTION 6.08 TAX RETURNS. The Owner Trustee shall be
responsible for the keeping of all appropriate books and records relating
to the receipt and disbursement of all monies under this Trust Agreement or
any agreement contemplated hereby. The Owner Participant shall be
responsible for causing to be prepared and filed all income tax returns
required to be filed by the Owner Participant. The Owner Trustee shall be
responsible for causing to be prepared, at the request and expense of the
Owner Participant, all income tax returns required to be filed with respect
to the trust created hereby and shall execute and file such returns. The
Owner Participant or the Owner Trustee, as the case may be, upon request,
will furnish the Owner Trustee or the Owner Participant, as the case may
be, with all such information as may be reasonably required from the Owner
Participant or the Owner Trustee, as the case may be, in connection with
the preparation of such income tax returns.
ARTICLE VII
INDEMNIFICATION OF OWNER TRUSTEE
BY OWNER PARTICIPANT
SECTION 7.01 OWNER PARTICIPANT TO INDEMNIFY OWNER TRUSTEE. The
Owner Participant hereby agrees, whether or not any of the transactions
contemplated hereby shall be consummated, to assume liability for, and
hereby indemnify, protect, save and keep harmless FSB in its individual
capacity and its successors, assigns, legal representatives, agents and
servants, from and against any and all liabilities, obligations, losses,
damages, penalties, taxes (excluding any taxes payable by FSB in its
individual capacity on or measured by any compensation received by FSB in
its individual capacity for its services hereunder or in connection with
the transactions contemplated by the Operative Documents), claims, actions,
suits, costs, expenses or disbursements (including, without limitation,
reasonable ongoing fees of the Owner Trustee, reasonable legal fees and
expenses, and including without limitation any liability of an owner, any
strict liability and any liability without fault) of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against FSB in
its individual capacity (whether or not also indemnified against by Lessee
under the Lease or under the Participation Agreement or also indemnified
against by any other person but only to the extent not otherwise paid or
reimbursed by Lessee or such other person) in any way relating to or
arising out of this Trust Agreement or any of the Operative Documents or
the enforcement of any of the terms of any thereof, or in any way relating
to or arising out of the manufacture, purchase, acceptance, nonacceptance,
rejection, ownership, delivery, lease, possession, use, operation,
condition, sale, return or other disposition of the Aircraft (including,
without limitation, latent and other defects, whether or not discoverable,
and any claim for patent, trademark or copyright infringement), or in any
way relating to or arising out of the administration of the Trust Estate or
the action or inaction of the Owner Trustee or FSB in its individual
capacity hereunder, except (a) in the case of willful misconduct or gross
negligence on the part of the Owner Trustee or FSB in its individual
capacity in the performance or nonperformance of its duties hereunder or
(b) those resulting from the inaccuracy of any representation or warranty
of FSB in its individual capacity (or from the failure of FSB in its
individual capacity to perform any covenant) in Section 6.03 hereof, in Section
6.03 of the Trust Indenture or, with respect to representations or
warranties of FSB in its individual capacity only, in Section 4 of the
Lease, in Sections 7(a), 7(b), 7(f), 7(g), 7(m), 7(o), 7(p), 7(s) or 7(u)
of the Participation Agreement or in any of the other Operative Documents
or (c) as may result from a breach by FSB in its individual capacity of its
covenants in the last sentence of Section 5.04 hereof or (d) in the case of
the failure to use ordinary care on the part of the Owner Trustee or FSB in
its individual capacity in the disbursement of funds. The indemnities
contained in this Section 7.01 extend to FSB only in its individual
capacity and shall not be construed as indemnities of the Trust Indenture
Estate or the Trust Estate (except to the extent, if any, that FSB in its
individual capacity has been reimbursed by the Trust Indenture Estate or
the Trust Estate for amounts covered by the indemnities contained in this
Section 7.01). The indemnities contained in this Section 7.01 shall survive
the termination of this Trust Agreement. In addition, if necessary, FSB in
its individual capacity shall be entitled to indemnification from the Trust
Estate, subject to the Lien of the Trust Indenture, for any liability,
obligation, loss, damage, penalty, tax, claim, action, suit, cost, expense
or disbursement indemnified against pursuant to this Section 7.01 to the
extent not reimbursed by Lessee, the Owner Participant or others, but
without releasing any of them from their respective agreements of
reimbursement; and to secure the same FSB in its individual capacity shall
have a Lien on the Trust Estate, subject to the Lien of the Trust
Indenture, which shal1 be prior to any interest therein of the Owner
Participant. The payor of any indemnity under this Article VII shall be
subrogated to any right of the person indemnified in respect of the matter
as to which such indemnity was paid.
ARTICLE VIII
TRANSFER OF THE OWNER PARTICIPANT'S INTEREST
SECTION 8.01 TRANSFER OF INTERESTS. All provisions of Section
7(k) of the Participation Agreement shall (with the same force and effect
as if set forth in full, mutatis, in this Section 8.01) be applicable to
any assignment, conveyance or other transfer by any Owner Participant of
its right, title or interest in and to the Participation Agreement, the
Trust Estate or this Trust Agreement. In addition to the provisions of
Section 7(k) of the Participation Agreement: (i) any such transfer shall
be effected by a written agreement, in form and substance reasonably
satisfactory to the Owner Trustee in its individual capacity, among such
transferee, its transferor and the Owner Trustee, which shall provide that
such transferee thereby becomes a party to, and beneficiary of, this Trust
Agreement and an Owner Participant for all purposes hereof and that such
transferee assumes all of the obligations of its transferor under this
Trust Agreement; and (ii) so long as the Lease shall be in effect or any
Equipment Notes remain unpaid, such transferee and its transferor shall
have complied with all of the terms of Section 7(k) of the Participation
Agreement.
ARTICLE IX
SUCCESSOR OWNER TRUSTEES; CO-TRUSTEES
SECTION 9.01 RESIGNATION OF OWNER TRUSTEE; APPOINTMENT OF
SUCCESSOR. (a) Resignation or Removal. The Owner Trustee or any successor
Owner Trustee (i) shall resign if required to do so pursuant to Section
7(a) of the Participation Agreement and (ii) may resign at any time without
cause by giving at least sixty (60) days' prior written notice to the Owner
Participant, the Indenture Trustee (so long as the Lien of the Trust
Indenture has not been fully discharged) and Lessee (so long as the Lease
is in effect), such resignation to be effective upon the acceptance of
appointment by the successor Owner Trustee under Section 9.01(b) hereof. In
addition, the Owner Participant may at any time remove the Owner Trustee
without cause by a notice in writing delivered to the Owner Trustee, the
Indenture Trustee (so long as the Lien of the Trust Indenture has not been
fully discharged) and Lessee (so long as the Lease is in effect), such
removal to be effective upon the acceptance of appointment by the successor
Owner Trustee under Section 9.01(b) hereof. In the case of the resignation
or removal of the Owner Trustee, the Owner Participant may appoint a
successor Owner Trustee by an instrument signed by the Owner Participant.
If a successor Owner Trustee shall not have been appointed within thirty
(30) days after such notice of resignation or removal, the Owner Trustee,
the Owner Participant, Lessee or the Indenture Trustee may apply to any
court of competent jurisdiction to appoint a successor Owner Trustee to act
until such time, if any, as a successor shall have been appointed as above
provided. Any successor Owner Trustee so appointed by such court shall
immediately and without further act be superseded by any successor Owner
Trustee appointed as above provided.
(b) Execution and Delivery of Documents, etc. Any successor
Owner Trustee, however appointed, shall execute and deliver to the
predecessor Owner Trustee and the Owner Participant an instrument accepting
such appointment, and thereupon such successor Owner Trustee, without
further act, shall become vested with all the estates, properties, rights,
powers, duties and trusts of the predecessor Owner Trustee in the trusts
hereunder with like effect as if originally named the Owner Trustee herein;
but nevertheless, upon the written request of such successor Owner Trustee,
such predecessor Owner Trustee shall execute and deliver an instrument
transferring to such successor Owner Trustee, upon the trusts herein
expressed, all the estates, properties, rights, powers and trusts of such
predecessor Owner Trustee, and such predecessor Owner Trustee shall duly
assign, transfer, deliver and pay over to such successor Owner Trustee all
monies or other property then held by such predecessor Owner Trustee upon
the trusts herein expressed. Upon the appointment of any successor Owner
Trustee hereunder, the predecessor Owner Trustee will execute such
documents as are provided to it by such successor Owner Trustee and will
take such further actions as are requested of it by such successor Owner
Trustee as are reasonably required to cause registration of the Aircraft
included in the Trust Estate to be transferred upon the records of the
Federal Aviation Administration, or other governmental authority having
jurisdiction, into the name of the successor Owner Trustee.
(c) Qualification. Any successor Owner Trustee, however
appointed, shall be a Citizen of the United States without making use of a
voting trust, voting powers agreement or similar arrangement and shall also
be a bank or trust company organized under the laws of the United States or
any state thereof having a combined capital and surplus of at least
$100,000,000, if there be such an institution willing, able and legally
qualified to perform the duties of the Owner Trustee hereunder upon
reasonable or customary terms.
(d) Merger, etc. Any corporation into which the Owner Trustee
may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
the Owner Trustee shall be a party, or any corporation to which
substantially all the corporate trust business of the Owner Trustee may be
transferred, shall, subject to the terms of Section 9.01(c) hereof, be the
Owner Trustee hereunder without further act.
SECTION 9.02 CO-TRUSTEES AND SEPARATE TRUSTEES. If at any time
it shall be necessary or prudent in order to conform to any law of any
jurisdiction in which all or any part of the Trust Estate is located, or
the Owner Trustee being advised by counsel shall determine that it is so
necessary or prudent in the interest of the Owner Participant or the Owner
Trustee, or the Owner Trustee shall have been directed to do so by the Owner
Participant, the Owner Trustee and the Owner Participant shall
execute and deliver an agreement supplemental hereto and all other
instruments and agreements necessary or proper to constitute another bank
or trust company or one or more persons (any and all of which shall be a
Citizen of the United States without making use of a voting trust, voting
powers agreement or similar arrangement) approved by the Owner Trustee and
the Owner Participant, either to act as co-trustee, jointly with the Owner
Trustee, or to act as separate trustee hereunder (any such co-trustee or
separate trustee being herein sometimes referred to as an "additional
trustee"). In the event an Indenture Event of Default not arising from a
Lease Event of Default shall occur and be continuing, the Owner Trustee may
act under the foregoing provisions of this Section 9.02 without the
concurrence of the Owner Participant; and the Owner Participant hereby
appoints the Owner Trustee its agent and attorney-in-fact to act for it
under the foregoing provisions of this Section 9.02 in such contingency.
Every additional trustee hereunder shall, to the extent permitted
by law, be appointed and act, and the Owner Trustee and its successors
shall act, subject to the following provisions and conditions:
(A) all powers, duties, obligations and rights conferred upon
the Owner Trustee in respect of the custody, control and management of
monies, or documents authorized to be delivered hereunder or under the
Participation Agreement shall be exercised solely by the Owner
Trustee;
(B) all other rights, powers, duties and obligations conferred
or imposed upon the Owner Trustee shall be conferred or imposed upon
and exercised or performed by the Owner Trustee and such additional
trustee jointly, except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
(including the holding of title to the Trust Estate) the Owner Trustee
shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations shall be
exercised and performed by such additional trustee;
(C) no power given to, or which it is provided hereby may be
exercised by, any such additional trustee shall be exercised hereunder
by such additional trustee, except jointly with, or with the consent
in writing of, the Owner Trustee;
(D) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder;
(E) the Owner Participant, at any time, by an instrument in
writing may remove any such additional trustee unless such additional
trustee was appointed by the Owner Trustee without the concurrence of
the Owner Participant during the occurrence of an Indenture Event of
Default not arising from a Lease Event of Default, in which case the
Owner Trustee shall have the power to remove any such additional
trustee without the concurrence of the Owner Participant; and the
Owner Participant hereby appoints the Owner Trustee its agent and
attorney-in-fact for it in such connection in such contingency; and
(F) no appointment of, or action by, any additional trustee will
relieve the Owner Trustee of any of its obligations under, or
otherwise affect any of the terms of, the Trust Indenture or affect
the interests of the Indenture Trustee or the holders of the Equipment
Notes in the Trust Indenture Estate.
ARTICLE X
SUPPLEMENTS AND AMENDMENTS
TO TRUST AGREEMENT AND OTHER DOCUMENTS
SECTION 10.01 SUPPLEMENTS AND AMENDMENTS. (a) Supplements and
Amendments. This Trust Agreement may not be amended, supplemented or
otherwise modified except by an instrument in writing signed by the Owner
Trustee and the Owner Participant. Subject to Section 10.02 hereof and the
first sentence of Section 9 of the Participation Agreement, the Owner
Trustee will execute any amendment, supplement or other modification of
this Trust Agreement or of any other Operative Document to which the Owner
Trustee is a party which it is requested to execute by the Owner
Participant, except that the Owner Trustee shall not execute any such
amendment, supplement or other modification which, by the express
provisions of any of the above documents, requires the consent of any other
party unless such consent shall have been obtained.
(b) Delivery of Amendments and Supplements to Certain Parties. A
signed copy of each amendment or supplement referred to in Section 10.01(a)
hereof shall be delivered by the Owner Trustee to Lessee, the Indenture
Trustee and each holder of a Equipment Note.
SECTION 10.02 DISCRETION AS TO EXECUTION OF DOCUMENTS. Prior to
executing any document required to be executed by it pursuant to the terms
of Section 10.01 hereof, the Owner Trustee shall be entitled to receive an
opinion of its counsel to the effect that the execution of such document is
authorized hereunder. If in the opinion of the Owner Trustee any such
document adversely affects any right, duty, immunity or indemnity in favor
of the Owner Trustee hereunder or under any other Operative Document to
which the Owner Trustee is a party, the Owner Trustee may in its discretion
decline to execute such document.
SECTION 10.03 ABSENCE OF REQUIREMENTS AS TO FORM. It shall not
be necessary for any written request furnished pursuant to Section 10.01
hereof to specify the particular form of the proposed documents to be
executed pursuant to such Section, but it shall be sufficient if such
request shall indicate the substance thereof.
SECTION 10.04 DISTRIBUTION OF DOCUMENTS. Promptly after the
execution by the Owner Trustee of any document entered into pursuant to
Section 10.01 hereof, the Owner Trustee shall mail, by certified mail,
postage prepaid, a conformed copy thereof to the Owner Participant, but the
failure of the Owner Trustee to mail such conformed copy shall not impair
or affect the validity of such document.
SECTION 10.05 NO REQUEST NEEDED AS TO LEASE SUPPLEMENT AND TRUST
SUPPLEMENT. No written request pursuant to Section 10.01 hereof shall be
required to enable the Owner Trustee to enter into the Lease Supplement
covering the Aircraft with Lessee pursuant to the terms of the Lease and
Section 3.01 hereof and the Trust Supplement pursuant to the terms of the
Trust Indenture and Section 3.01 hereof.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 TERMINATION OF TRUST AGREEMENT. This Trust
Agreement and the trusts created hereby shall be of no further force or
effect upon the earlier of (a) both the final discharge of the Trust
Indenture pursuant to Section 10.01 thereof and the sale or other final
disposition by the Owner Trustee of all property constituting part of the
Trust Estate and the final distribution by the Owner Trustee of all monies or
other property or proceeds constituting part of the Trust Estate in
accordance with Article IV hereof, provided that at such time Lessee shall
have fully complied with all of the terms of the Lease and the
Participation Agreement or (b) twenty-one years less one day after the
death of the last survivor of all of the descendants of the grandparents of
Joseph P. Kennedy living on the date of the earliest execution of this
Trust Agreement by any party hereto; otherwise this Trust Agreement and the
trusts created hereby shall continue in full force and effect in accordance
with the terms hereof.
SECTION 11.02 OWNER PARTICIPANT HAS NO LEGAL TITLE IN TRUST
ESTATE. The Owner Participant shall not have legal title to any part of the
Trust Estate. No transfer, by operation of law or otherwise, of any right,
title and interest of the Owner Participant in and to the Trust Estate
hereunder shall operate to terminate this Trust Agreement or the trusts
hereunder or entitle any successors or transferees of the Owner Participant
to an accounting or to the transfer of legal title to any part of the Trust
Estate.
SECTION 11.03 ASSIGNMENT, SALE, ETC. OF AIRCRAFT. Any
assignment, sale, transfer or other conveyance of its interest in the
Aircraft by the Owner Trustee made pursuant to the terms hereof or of the
Lease or the Participation Agreement shall bind the Owner Participant and
shall be effective to transfer or convey all right, title and interest of
the Owner Trustee and the Owner Participant in and to the Aircraft. No
purchaser or other grantee shall be required to inquire as to the
authorization, necessity, expediency or regularity of such assignment,
sale, transfer or conveyance or as to the application of any sale or other
proceeds with respect thereto by the Owner Trustee.
SECTION 11.04 TRUST AGREEMENT FOR BENEFIT OF CERTAIN PARTIES
ONLY. Except for the terms of Section 7(k) of the Participation Agreement
incorporated in Article VIII hereof and except as otherwise provided in
Articles IX and X hereof, nothing herein, whether expressed or implied,
shall be construed to give any Person other than the Owner Trustee and the
Owner Participant any legal or equitable right, remedy or claim under or in
respect of this Trust Agreement; but this Trust Agreement shall be held to
be for the sole and exclusive benefit of the Owner Trustee and the Owner
Participant.
SECTION 11.05 NOTICES; CONSENT TO JURISDICTION. (a) All notices,
demands, instructions and other communications required or permitted to be
given to or made upon any party hereto shall be in writing and shall be
personally delivered or sent by registered or certified mail, postage
prepaid, or by telecopier, or by prepaid courier service, and shall be
deemed to be given for purposes of this Trust Agreement on the day that
such writing is delivered or sent to the intended recipient thereof in
accordance with the provisions of this Section 11.05(a). Unless otherwise
specified in a notice sent or delivered in accordance with the foregoing
provisions of this Section 11.05(a), notices, demands, instructions and
other communications in writing shall be given to or made upon the
respective parties hereto at their respective addresses (or to their
respective telecopier numbers) as follows: (A) if to Lessee, the Owner
Trustee, the Loan Participants, the Indenture Trustee or the Owner
Participant, to the respective addresses set forth below the signatures of
such parties on the signature page of the Participation Agreement, or (B)
if to a Subsequent Owner Participant, addressed to such Subsequent Owner
Participant at such address as such Subsequent Owner Participant shall have
furnished by notice to the parties hereto or (C) if to any subsequent
Certificate Holder, addressed to such Certificate Holder at its address set
forth in the Equipment Note register maintained pursuant to Section 2.07 of
the Trust Indenture.
(b) Each of the parties hereto (A) hereby irrevocably submits
itself to the non-exclusive jurisdiction of the United States District
Court for the Southern District of New York and to the non-exclusive
jurisdiction of the Supreme Court of the State of New York, New York
County, for the purposes of any suit, action or other proceeding arising
out of this Trust Agreement, the Participation Agreement, the Lease, the
Tax Indemnity Agreement or any other Operative Document, the subject matter
of any thereof or any of the transactions contemplated hereby or thereby
brought by any party or parties thereto, or their successors or assigns,
and (B) hereby waives, and agrees not to assert, by way of motion, as a
defense, or otherwise, in any such suit, action or proceeding, to the
extent permitted by applicable law, that the suit, action or proceeding is
brought in an inconvenient forum, that the venue of the suit, action or
proceeding is improper, or that the Participation Agreement, the Lease, the
Tax Indemnity Agreement or any other Operative Document or the subject
matter of any thereof or any of the transactions contemplated hereby or
thereby may not be enforced in or by such courts.
SECTION 11.06 SEVERABILITY. Any provision hereof which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
SECTION 11.07 WAIVERS, ETC. No term or provision hereof may be
changed, waived, discharged or terminated orally, but only by an instrument
in writing entered into in compliance with the terms of Article X hereof;
and any waiver of the terms hereof shall be effective only in the specific
instance and for the specific purpose given.
SECTION 11.08 COUNTERPARTS. This Trust Agreement may be executed
by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 11.09 BINDING EFFECT, ETC. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the
Owner Trustee and its successors and assigns, and the Owner Participant,
its successors and, to the extent permitted by Article VIII hereof, its
assigns. Any request, notice, direction, consent, waiver or other
instrument or action by the Owner Participant shall bind its successors and
assigns. Any Owner Participant which shall cease to have any ownership
interest shall thereupon cease to be a party hereto or an Owner Participant
for any reason and shall have no further obligations hereunder.
SECTION 11.10 HEADINGS; REFERENCES. The headings of the various
Articles and Sections herein are for convenience of reference only and
shall not define or limit any of the terms or provisions hereof.
SECTION 11.11 GOVERNING LAW. THIS TRUST AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF UTAH, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE.
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
[OWNER PARTICIPANT]
BY_____________________________
Name:
Title:
FIRST SECURITY BANK,
NATIONAL ASSOCIATION
BY____________________________
Name:
Title:
EXHIBIT 4(a)(xviii) Owned Aircraft
Participation Agreement
N7__UW
- ------------------------------------------------------------------------------
PARTICIPATION AGREEMENT
(N7__UW)
Dated as of
_________ __, 199_
By and Between
US AIRWAYS, INC.,
Owner
and
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity except
as expressly provided herein, but solely as
Pass Through Trustee under each of the
Pass Through Trust Agreements,
Subordination Agent and Indenture Trustee
------------------------
One Airbus A319 Aircraft
U.S. Registration No. N7__UW
- ------------------------------------------------------------------------------
INDEX TO PARTICIPATION AGREEMENT
SECTION 1. Definitions and Construction............................2
SECTION 2. Participation by Pass Through Trustees in Owner's
Cost of the Aircraft....................................2
(a) Participation by Pass Through Trustees on the
Delivery Date; Issuance of Equipment Notes........2
(b) Owner's Notice of Delivery Date...................3
(c) Closing...........................................3
(d) Postponement of Scheduled Delivery Date...........3
SECTION 3. [Reserved...............................................4
SECTION 4. Conditions Precedent....................................4
(a) Conditions Precedent to Purchase of Equipment
Notes ............................................4
(b) Conditions Precedent to the Obligations
of Owner.........................................10
SECTION 5. [Reserved.]............................................12
SECTION 6. Representations and Warranties of Owner; Indemnities...12
(a) Representations and Warranties...................12
(b) General Indemnity................................15
SECTION 7. Representations, Warranties and Covenants..............19
(a) Securities Act...................................19
(b) Reregistration...................................19
(c) Quiet Enjoyment..................................21
(d) Equipment Notes Acquired for Investment..........21
(e) Owner Merger Covenant............................21
(f) Representations, Warranties and Covenants
of the Indenture Trustee.........................23
(g) Quiet Enjoyment..................................24
(h) Loan Participant Liens...........................24
(i) Indenture Trustee Liens..........................25
(j) Further Assurances...............................25
(k) Transfer of Equipment Notes......................25
(l) Representations and Warranties of Pass Through
Trustee..........................................25
(m) Representations and Warranties of Subordination
Agent............................................28
SECTION 8. Reliance of Liquidity Provider.........................30
SECTION 9. Other Documents........................................30
SECTION 10. Certain Covenants of Owner.............................30
(a) Further Assurances...............................31
(b) Filings..........................................31
SECTION 11. [Reserved].............................................31
SECTION 12. Notices; Consent to Jurisdiction.......................31
(a) Notices..........................................31
(b) Consent to Jurisdiction..........................31
SECTION 13. [Reserved.]............................................32
SECTION 14. Miscellaneous..........................................32
(a) Survival.........................................32
(b) Counterparts.....................................32
(c) Amendments and Waivers...........................32
(d) Successors and Assigns...........................33
(e) Governing Law....................................33
ANNEXES
ANNEX A - Definitions
SCHEDULES
SCHEDULE I - Names and Addresses
SCHEDULE II - Commitments
SCHEDULE III - Pass Through Trust Agreement and Pass Through Trust
Supplements
EXHIBITS
Exhibit A - Schedule of Countries Authorized for Reregistration
Exhibit B-1 - Form of Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
and Affiliates, special counsel for Owner
Exhibit B-2 - Form of Opinion of Owner's Legal Department
Exhibit C - Form of Opinion of_____________, special counsel for the
Manufacturer
Exhibit D - Form of Opinion of Crowe & Dunlevy, P.C., special FAA Counsel
Exhibit E - Form of Opinion of Bingham Dana LLP, special counsel for the
Indenture Trustee
Exhibit F - Form of Opinion of Bingham Dana LLP, special counsel for the
Pass Through Trustee
Exhibit G - Form of Opinion of Bingham Dana LLP, special counsel for the
Subordination Agent
PARTICIPATION AGREEMENT
(N7__UW)
THIS PARTICIPATION AGREEMENT (N7__UW) dated as of _______ ___,
199_ (as amended, supplemented or otherwise modified from time to time,
this "Agreement") by and between US AIRWAYS, INC., a Delaware corporation
(together with its successors and permitted assigns, the "Owner"), and
STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company, not in
its individual capacity except as otherwise provided herein, but solely as
pass through trustee under each of three separate Pass Through Trust
Agreements (in such capacity, together with its successors and permitted
assigns, the "Pass Through Trustee"), subordination agent and trustee under
the Intercreditor Agreement (in such capacity, together with its successors
and permitted assigns, the "Subordination Agent"), and Indenture Trustee
under the Indenture (in such capacity, together with any successor
indenture trustee, the "Indenture Trustee");
W I T N E S S E T H:
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Indenture Trustee and the Owner are entering into the
Indenture pursuant to which the Owner will issue to the Pass Through
Trustee for each Pass Through Trust Equipment Notes in three series, which
Equipment Notes are to be secured by the mortgage and security interests
created by the Owner in favor of the Indenture Trustee;
WHEREAS, concurrently with the execution and delivery of this
Agreement, Owner will execute and deliver an Indenture Supplement covering
the Aircraft, supplementing the Indenture;
WHEREAS, the proceeds from the issuance and sale of the Pass
Through Certificates by each Pass Through Trust will be applied in part by
the Pass Through Trustee on the Delivery Date to purchase from Owner, on
behalf of each Pass Through Trust, all of the Equipment Notes bearing the
same interest rate as the Certificates issued by such Pass Through Trust;
WHEREAS, the Equipment Notes will be held by the Subordination
Agent pursuant to the Intercreditor Agreement on behalf of the Pass
Through Trusts;
NOW, THEREFORE, in consideration of the mutual agreements
herein contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS AND CONSTRUCTION.
Capitalized terms used but not defined herein shall have the
respective meanings set forth or incorporated by reference, and shall be
construed and interpreted in the manner described, in Annex A.
SECTION 2. PARTICIPATION BY PASS THROUGH TRUSTEES IN OWNER'S
COST OF THE AIRCRAFT.
(a) Participation by Pass Through Trustees on the Delivery
Date; Issuance of Equipment Notes. Subject to the terms and conditions of
this Agreement, the Pass Through Trustee for each Pass Through Trust agrees
to make a secured loan to Owner on the Delivery Date to finance, in part,
Owner's payment of Owner's Cost for the Aircraft by paying to Owner the
aggregate purchase price of the Equipment Notes being issued to such Pass
Through Trustee as set forth on Schedule II opposite the name of such Pass
Through Trust. The Pass Through Trustees shall make such payments to Owner
on a date to be designated pursuant to Section 2(b) but in no event later
than __________________, by transferring to the account of Owner at State
Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts
02110, ABA No. 011-00- 0028, Account No. 9903-990-1, Reference: US Airways,
Inc. 1998 EETC/N7__UW), not later than 9:30 a.m., New York City time, on
the Delivery Date in immediately available funds in Dollars, the amount set
forth opposite the name of such Pass Through Trust on Schedule II hereto.
Upon the occurrence of the above transfers by the Pass Through
Trustee for each Pass Through Trust to Owner, Owner shall issue pursuant to
Article II of the Indenture, to the Subordination Agent on behalf of the
Pass Through Trustee for each of the Pass Through Trusts, Equipment Notes
of the maturity and aggregate principal amount, bearing the interest rate
and for the purchase price set forth on Schedule II opposite the name of
such Pass Through Trust.
(b) Owner's Notice of Delivery Date. Owner agrees to give the
Indenture Trustee, the Pass Through Trustee and the Subordination Agent at
least three (3) Business Days written or facsimile notice prior to the
Delivery Date, which notice shall specify Owner's Cost for the Aircraft,
the Delivery Date for the Aircraft, the serial number of the Airframe and
each Engine, and the United States registration number for the Aircraft.
(c) Closing. The closing of the transactions referred to in
this Agreement shall take place commencing at 9:30 a.m. local time, on the
Delivery Date, at the offices of Skadden, Arps, Slate, Meagher & Flom LLP
in Washington, D.C.
(d) Postponement of Scheduled Delivery Date.
(i) If for any reason whatsoever the closing of the
transactions contemplated hereby is not consummated on the Delivery
Date provided for pursuant to Section 2(b) (the "Scheduled Delivery
Date"), the closing shall be deemed adjourned to the next Business
Day or to such other Business Day on or prior to _______________ as
Owner shall specify by written notice to the Pass Through Trustee and
the Indenture Trustee, in which case the Pass Through Trustee shall
comply with its obligations under Section 1.01 of each applicable
Pass Through Trust Supplement.
(ii) If the closing fails to occur on the Scheduled Delivery
Date, Owner shall cause the Indenture Trustee to promptly return to
the Pass Through Trustees any funds provided by any such Pass Through
Trustee, together with interest or income earned thereon.
(iii) If the closing fails to occur on the Scheduled Delivery
Date and funds are not returned to each Pass Through Trustee that
made funds available as provided by clause (ii) above, Owner shall
use reasonable efforts to cause the Indenture Trustee to invest, at
the risk of Owner, the funds received by it from such Pass Through
Trustees in Cash Equivalents. Any such obligations purchased by
Owner, whether directly or through a repurchase agreement, shall be
held in trust by the Indenture Trustee for the benefit of the
respective Pass Through Trustees that provided such funds.
(iv) If the closing fails to occur on the Scheduled Delivery
Date, unless Owner shall cause the Indenture Trustee to return all
funds to the Pass Through Trustee by 2:00 p.m., New York City time,
on the Scheduled Delivery Date, Owner shall reimburse each Pass
Through Trustee that has made funds available pursuant to this
Section 2 for the loss of the use of its funds an amount equal to the
excess, if any, of (x) interest at the Debt Rate on the amount of
such funds for the period from and including the Scheduled Delivery
Date to but excluding the actual Delivery Date or, if earlier, the
day on which such Pass Through Trustee's funds are returned if such
return is made by 2:00 p.m., New York City time (or to but excluding
the next following Business Day if such return is not made by such
time) over (y) any amount paid to such Pass Through Trustee in
respect of interest or income earned by Owner pursuant to clause
(iii) above.
(v) On the Delivery Date or on the date funds are required to
be returned to the Pass Through Trustees pursuant to clause (ii)
above, Owner shall reimburse the Pass Through Trustees that provided
funds which are invested by Owner pursuant to this subsection (d),
for any losses incurred on such investments. All income and profits
on the investment of such funds shall be for the respective accounts
of such Pass Through Trustee, and Owner shall not be liable for
failure to invest such funds or for any losses incurred on such
investments, except for its own negligence or willful misconduct.
SECTION 3. [RESERVED.]
SECTION 4. CONDITIONS PRECEDENT.
(a) Conditions Precedent to Purchase of Equipment Notes. It is
agreed that the obligations of the Indenture Trustee, the Subordination
Agent and the Pass Through Trustee on behalf of each Pass Through Trust to
participate in the transaction contemplated hereby on the Delivery Date are
subject to the fulfillment to the satisfaction of each party (or waiver by
such party), prior to or on the Delivery Date of the following conditions
precedent:
(i) At least three (3) Business Days prior to the Delivery
Date, each of the parties hereto shall have received the Delivery
Notice pursuant to Section
2(b) hereof.
(ii) On the Delivery Date, no change shall have occurred after
the date of the execution and delivery of this Agreement in
applicable law or regulations or guidelines or interpretations
thereof by appropriate regulatory authorities which would make it a
violation of law or regulations or guidelines for the Pass Through
Trustee to make its Commitment available in accordance with Section
2.
(iii) The following documents shall have been duly authorized,
executed and delivered by the respective party or parties thereto,
shall each be satisfactory in form and substance to the Indenture
Trustee, the Pass Through Trustee and the Subordination Agent and
shall be in full force and effect and executed counterparts shall
have been delivered to the Indenture Trustee, the Pass Through
Trustee and the Subordination Agent, or their respective counsel,
provided that only the Subordination Agent on behalf of each Pass
Through Trustee shall receive an executed original of such Pass
Through Trustee's respective Equipment Note and provided, further,
that an excerpted copy of the Purchase Agreement shall only be
delivered to and retained by the Indenture Trustee, which copy may be
inspected by the Indenture Trustee if and only if there shall occur
and be continuing an Event of Default:
(1) an excerpted copy of the Purchase Agreement
(insofar as it relates to the Aircraft);
(2) the Trust Indenture;
(3) the Indenture Supplement; and
(4) the Equipment Notes.
(iv) A Uniform Commercial Code financing statement or
statements covering all the security interests created by or pursuant
to the Granting Clause of the Indenture that are not covered by the
recording system established by the Transportation Code shall have
been executed and delivered by Owner, and such financing statement or
statements shall have been duly filed in all places necessary or
advisable, and any additional Uniform Commercial Code financing
statements deemed advisable by the Pass Through Trustee shall have
been executed and delivered by Owner and duly filed.
(v) The Indenture Trustee, the Pass Through Trustee and the
Subordination Agent shall have received the following, in each case
in form and substance satisfactory to it (except it shall not be a
condition to the obligation of any such party that it receive a
certificate or other document required to be delivered by it):
(A) (1) an incumbency certificate of Owner as to the person or
persons authorized to execute and deliver the Operative
Documents to which Owner is a party and any other documents to
be executed on behalf of Owner in connection with the
transactions contemplated hereby and the signatures of such
person or persons;
(2) a copy of the resolutions of the board of directors
of Owner or Owner's executive committee, certified by the
Secretary or an Assistant Secretary of Owner, duly authorizing
the transactions contemplated hereby and the execution and
delivery of each of the documents required to be executed and
delivered on behalf of Owner in connection with the
transactions contemplated hereby; and
(3) a copy of the certificate of incorporation of Owner,
certified by the Secretary of State of the State of Delaware,
and a copy of the by-laws of Owner certified by the Secretary
or Assistant Secretary of Owner, and a certificate or other
evidence from the Secretary of State of the State of Delaware,
dated as to the due incorporation and good standing of Owner in
such state.
(B) (1) an incumbency certificate of the Indenture Trustee as
to the person or persons authorized to execute and deliver the
Operative Documents to which the Indenture Trustee is a party
and any other documents to be executed on behalf of the
Indenture Trustee in connection with the transactions
contemplated hereby and the signatures of such person or
persons;
(2) a copy of the resolutions of the board of directors
of the Indenture Trustee, certified by the Secretary or an
Assistant Secretary of the Indenture Trustee, duly authorizing
the transactions contemplated hereby and the execution and
delivery of each of the documents required to be executed and
delivered on behalf of the Indenture Trustee in connection with
the transactions contemplated hereby;
(3) a copy of the articles of association and by-laws of
the Indenture Trustee, each certified by the Secretary or an
Assistant Secretary of the Indenture Trustee; and
(4) a certificate signed by an authorized officer of the
Indenture Trustee, dated the Delivery Date, certifying that the
representations and warranties contained herein of the
Indenture Trustee are correct in all material respects as
though made on and as of the Delivery Date, except to the
extent that such representations and warranties relate solely
to an earlier date (in which case such representations and
warranties are correct on and as of such earlier date).
(vi) All appropriate action required to have been taken prior
to the Delivery Date in connection with the transactions contemplated
by this Agreement shall have been taken by the Federal Aviation
Administration, or any governmental or political agency, subdivision
or instrumentality of the United States, and all orders, permits,
waivers, authorizations, exemptions and approvals of such entities
required to be in effect on the Delivery Date in connection with the
transactions contemplated by this Agreement shall have been issued,
and all such orders, permits, waivers, authorizations, exemptions and
approvals shall be in full force and effect on the Delivery Date.
(vii) The Indenture Trustee, the Pass Through Trustee and the
Subordination Agent shall have received a certificate signed by an
authorized officer of Owner to the effect that:
(1) the Aircraft has been duly certified by the Federal
Aviation Administration as to type and has a current
certificate of airworthiness;
(2) the Indenture and the Indenture Supplement covering
the Aircraft shall have been duly filed for recordation (or
shall be in the process of being so duly filed for recordation)
with the Federal Aviation Administration;
(3) the representations and warranties contained herein
of Owner are correct in all material respects as though made on
and as of the Delivery Date, except to the extent that such
representations and warranties relate solely to an earlier date
(in which case such representations and warranties were correct
on and as of such earlier date).
(viii) [Reserved.]
(ix) The Indenture Trustee, the Pass Through Trustee and the
Subordination Agent shall have received, addressed to each such
party, and reasonably satisfactory as to scope and substance to each
addressee thereof, opinions dated the Delivery Date substantially in
the form of Exhibit B-1 hereto from Skadden, Arps, Slate, Meagher &
Flom LLP and Affiliates, special counsel for Owner, and an opinion
dated the Delivery Date substantially in the form of Exhibit B-2
hereto from Owner's legal department.
(x) The Pass Through Trustee shall have received, addressed to
the Pass Through Trustee, the Indenture Trustee and Owner and
reasonably satisfactory as to scope and substance to the Pass Through
Trustee and Owner,
an opinion dated the Delivery Date substantially in the form of
Exhibit C hereto from _________________, special counsel to the
Manufacturer, with respect to the Manufacturer Documents.
(xi) [Reserved.]
(xii) [Reserved.]
(xiii)The Indenture Trustee, the Pass Through Trustee and the
Subordination Agent shall have received, addressed to each such
party, and reasonably satisfactory as to scope and substance to each
addressee thereof, an opinion dated the Delivery Date substantially
in the form of Exhibit D hereto from Crowe & Dunlevy, P.C., special
FAA counsel.
(xiv) The Pass Through Trustee and the Subordination Agent
shall have received, addressed to each such party, and reasonably
satisfactory as to scope and substance to each addressee thereof, an
opinion dated the Delivery Date substantially in the form of Exhibit
E from Bingham Dana LLP, special counsel for the Indenture Trustee.
(xv) [Reserved.]
(xvi) The Indenture Trustee, the Pass Through Trustee and the
Subordination Agent shall have received an independent insurance
broker's report, in form and substance satisfactory to the Indenture
Trustee, as to the due compliance with the terms of Section 11 of the
Lease relating to insurance with respect to the Aircraft.
(xvii) [Reserved.]
(xviii) No action or proceeding shall have been instituted nor
shall governmental action be threatened before any court or
governmental agency, nor shall any order, judgment or decree have
been issued or proposed to be issued by any court or governmental
agency at the time of the Delivery Date to set aside, restrain,
enjoin or prevent the completion and consummation of this Agreement
or the transactions contemplated hereby.
(xix) [Reserved.]
(xx) [Reserved.]
(xxi) The Indenture Trustee and the Subordination Agent shall
have received (A) a certificate signed by an authorized officer of
the Pass Through Trustee, dated the Delivery Date, certifying that
the representations and warranties contained herein of the Pass
Through Trustee are correct in all material respects as though made
on and as of the Delivery Date, except to the extent that such
representations and warranties relate solely to an earlier date (in
which case such representations and warranties are correct on and as
of such earlier date), (B) an opinion dated the Delivery Date
substantially in the form of Exhibit F hereto addressed to each such
party of Bingham Dana LLP, special counsel for the Pass Through
Trustee, and reasonably satisfactory as to scope and substance to
each addressee thereof, and (C) such other documents and evidence
with respect to the Pass Through Trustee as it may reasonably request
in order to establish the due consummation of the transactions
contemplated by this Agreement, the taking of all necessary corporate
action in connection therewith and compliance with the conditions
herein set forth.
(xxii) The Indenture Trustee and the Pass Through Trustee shall
have received, addressed to each such party, and reasonably
satisfactory as to scope and substance, to each addressee thereof, an
opinion dated the Delivery Date substantially in the form of Exhibit
G hereto.
Promptly upon the recording of the Indenture and the Indenture
Supplement covering the Aircraft pursuant to the Transportation Code, Owner
will cause Crowe & Dunlevy, P.C., special FAA counsel in Oklahoma City,
Oklahoma, to deliver to the Pass Through Trustee, the Indenture Trustee and
Owner an opinion as to the due recording of the Indenture and such
Indenture Supplement and the lack of filing of any intervening documents
with respect to the Aircraft.
(b) Conditions Precedent to the Obligations of Owner. It is
agreed that the obligations of Owner to enter into the Operative Documents
on the Delivery Date are all subject to the fulfillment to the satisfaction
of Owner prior to the Delivery Date of the following conditions precedent:
(i) All appropriate action required to have been taken on or
prior to the Delivery Date in connection with the transactions
contemplated by this Agreement shall have been taken by the Federal
Aviation Administration, or any governmental or political agency,
subdivision or instrumentality of the United States, and all orders,
permits, waivers, exemptions, authorizations and approvals of such
entities required to be in effect on the Delivery Date in connection
with the transactions contemplated by this Agreement shall have been
issued, and all such orders, permits, waivers, exemptions,
authorizations and approvals shall be in full force and effect on the
Delivery Date.
(ii) The conditions specified in Sections 4(a)(ii) hereof shall
have been satisfied.
(iii) Those documents described in Section 4(a)(iii) shall have
been duly authorized, executed and delivered by the respective party
or parties thereto (other than Owner) in the manner specified in
Section 4(a)(iii), shall each be satisfactory in form and substance
to Owner, shall be in full force and effect on the Delivery Date, and
an executed counterpart of each thereof (other than the Equipment
Notes) shall have been delivered to Owner or its special counsel.
(iv) Owner shall have received (A) each certificate referred to
in Section 4(a)(v) (other than the certificate referred to in clause
(A) thereof), (B) the certificate referred to in Section
4(a)(xxi)(A), and (C) such other documents and evidence with respect
to the Pass Through Trustee as Owner or its special counsel may
reasonably request in order to establish the due consummation of the
transactions contemplated by this Agreement, the taking of all
corporate proceedings in connection therewith and compliance with the
conditions herein set forth.
(v) Owner shall have received the opinions set forth in
Sections 4(a)(x), 4(a)(xiii), 4(a)(xiv), 4(a)(xxi)(B), and 4(a)(xxii)
in each case addressed to Owner and dated the Delivery Date and in
each case in scope and substance reasonably satisfactory to Owner and
its special counsel.
(vi) No action or proceeding shall have been instituted nor
shall governmental action be threatened before any court or
governmental agency, nor shall any order, judgment or decree have
been issued or proposed to be issued by any court or governmental
agency at the time of the Delivery Date to set aside, restrain,
enjoin or prevent the completion and consummation of this Agreement
or the transactions contemplated hereby.
(vii) No change shall have occurred after the date of the
execution and delivery of this Agreement in applicable law or
regulations or guidelines or interpretations by appropriate
regulatory authorities which would make it a violation of law or
regulations or guidelines for Owner to enter into any transaction
contemplated by the Operative Documents.
(viii) Owner shall have been paid by the Pass Through
Trustees for the issuance of the Equipment Notes.
SECTION 5. [Reserved.]
SECTION 6. REPRESENTATIONS AND WARRANTIES OF OWNER;
INDEMNITIES.
(a) Representations and Warranties. Owner represents and
warrants to the Pass Through Trustee, the Indenture Trustee and the
Subordination Agent that:
(i) Owner is a corporation duly organized, validly existing and
in good standing under the laws of the state of its incorporation,
has the corporate power and authority to own or hold under lease its
properties, has, or had on the respective dates of execution thereof,
the corporate power and authority to enter into and perform its
obligations under Owner Documents, the Pass Through Trust Agreements
and the other Operative Documents to which it is a party, and is duly
qualified to do business as a foreign corporation in each state in
which its operations or the nature of its business requires other
than failures to so qualify which would not have a material adverse
effect on the condition (financial or otherwise), business or
properties of Owner and its subsidiaries considered as one
enterprise;
(ii) Owner is a Certificated Air Carrier, and its chief
executive office (as such term is used in Article 9 of the Uniform
Commercial Code in effect in the State of Virginia) is located at
Arlington, Virginia;
(iii) the execution and delivery by Owner of Owner Documents,
the Pass Through Trust Agreements and each other Operative Document
to which Owner is a party, and the performance of the obligations of
Owner under Owner Documents, the Pass Through Trust Agreements and
each other Operative Document to which Owner is a party, have been
duly authorized by all necessary corporate action on the part of
Owner, do not require any stockholder approval, or approval or
consent of any trustee or holder of any material indebtedness or
material obligations of Owner, except such as have been duly obtained
and are in full force and effect, and do not contravene any law,
governmental rule, regulation or order binding on Owner or the
certificate of incorporation or by-laws of Owner, or contravene the
provisions of, or constitute a default under, or result in the
creation of any Lien (other than Permitted Liens) upon the property
of Owner under, any indenture, mortgage, contract or other agreement
to which Owner is a party or by which it may be bound or affected
which contravention, default or Lien, individually or in the
aggregate, would be reasonably likely to have a material adverse
effect on the condition (financial or otherwise), business or
properties of Owner and its subsidiaries considered as one
enterprise;
(iv) neither the execution and delivery by Owner of Owner
Documents, the Pass Through Trust Agreements or any other Operative
Document to which Owner is a party, nor the performance of the
obligations of Owner under Owner Documents, the Pass Through Trust
Agreements or the other Operative Documents to which Owner is a
party, requires the consent or approval of, the giving of notice to,
the registration with, or the taking of any other action in respect
of, the Department of Transportation, the FAA, or any other Federal,
state or foreign governmental authority having jurisdiction over
Owner, other than (A) the registration of the Pass Through Trust
Certificates under the Securities Act of 1933, as amended, and under
the securities laws of any state in which the Pass Through Trust
Certificates may be offered for sale if the laws of such state
require such action, (B) the qualification of the Pass Through Trust
Agreements under the Trust Indenture Act of 1939, as amended,
pursuant to an order of the Securities and Exchange Commission, (C)
the orders, permits, waivers, exemptions, authorizations and
approvals of the regulatory authorities having jurisdiction over the
operation of the Aircraft by Owner required to be obtained on or
prior to the Delivery Date, which orders, permits, waivers,
exemptions, authorizations and approvals have been, or on the
Delivery Date will be, duly obtained and are, or on the Delivery Date
will be, in full force and effect, (D) the registrations and filings
referred to in Section 6(a)(vi), and (E) authorizations, consents,
approvals, actions, notices and filings required to be obtained,
taken, given or made either only after the date hereof or the failure
of which to obtain, take, give or make would not be reasonably likely
to have a material adverse effect on the condition (financial or
otherwise), business or properties of Owner and its subsidiaries
considered as one enterprise;
(v) this Agreement, each of the other Owner Documents and the
Pass Through Trust Agreements to which Owner is a party constitute
(or, in the case of documents to be executed on the Delivery Date,
will constitute) the legal, valid and binding obligations of Owner
enforceable against Owner in accordance with their respective terms,
except as the same may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or
similar laws affecting the rights of creditors or lessors generally
and by general principles of equity, whether considered in a
proceeding at law or in equity;
(vi) (A) the filing for recording pursuant to the
Transportation Code of the Indenture and the Indenture Supplement
attached thereto and made a part thereof and (B) the filing of
financing statements (and continuation statements at periodic
intervals) with respect to the security interests created by such
documents under the Uniform Commercial Code of Virginia and such
other states as may be specified in the opinion furnished pursuant to
Section 4(a)(xi) hereof, no further filing or recording of any
document (including any financing statement in respect thereof under
Article 9 of the Uniform Commercial Code of any applicable
jurisdiction) or other action is necessary under the laws of the
United States of America or any State thereof in order to perfect the
security interest in favor of the Indenture Trustee in the Aircraft
(with respect to such portion of the Aircraft as is covered by the
recording system established by the FAA pursuant to 49 U.S.C. Section
44107);
(vii) neither Owner nor any of its Affiliates has directly or
indirectly offered the Pass Through Trust Certificates for sale to
any Person other than in a manner permitted by the Securities Act of
1933, as amended, and by the rules and regulations thereunder;
(viii) Owner is not an "investment company" within the meaning
of the Investment Company Act of 1940, as amended;
(ix) no event has occurred and is continuing which constitutes
a Default or an Event of Default;
(x) no event has occurred and is continuing which constitutes
an Event of Loss or would constitute an Event of Loss with the lapse
of time;
(xi) Owner is solvent and has no intention or belief that it is
about to incur debts beyond its ability to pay as they mature;
(xii) none of the proceeds from the issuance of the Equipment
Notes will be used directly or indirectly by Owner to purchase or
carry any "margin security" as such term is defined in Regulation U
of the Board of Governors of the Federal Reserve System; and
(xiii) except as may have been disclosed in Owner's reports
filed with the Securities Exchange Commission, there are no pending
or threatened actions or proceedings that individually or in the
aggregate are expected to have a material adverse effect on the
condition (financial or otherwise), business or properties of Owner
and its subsidiaries considered as one enterprise.
(b) General Indemnity. Owner hereby agrees to indemnify each
Indemnitee against, and agrees to protect, save and keep harmless each of
them from (whether or not the transactions contemplated herein or in any of
the other Operative Documents are consummated), any and all expenses
imposed on, incurred by or asserted against any Indemnitee, in any way
relating to, based on or arising out of (A) the execution, delivery and
performance of the Operative Documents or the Pass Through Documents and
the transactions contemplated thereby; (B) the manufacture, purchase,
acceptance or rejection of the Airframe or any Engine or Parts; (C) the
Aircraft (or any portion thereof) or any engine installed on the Airframe
or any airframe on which an Engine is installed whether or not arising out
of the manufacture, purchase, registration, reregistration, financing,
refinancing, ownership, delivery, nondelivery, inspection, lease, sublease,
possession, storage, use or non-use, operation, maintenance, overhaul,
modification, alteration, condition, replacement, repair, substitution,
sale, return or other disposition of the Aircraft including, without
limitation, any violation of law relating to the Aircraft (including
environmental laws), latent or other defects, whether or not discoverable,
strict tort liability and any claim for patent, trademark or copyright
infringement; or (D) the offer or sale of any interest in the Equipment
Notes or the Pass Through Certificates (or other evidence of the debt
relating to the Aircraft) on the Delivery Date or in connection with a
refinancing in accordance with the terms hereof (including any violation of
securities laws or ERISA); provided, that the foregoing indemnity shall not
extend to an Indemnitee with respect to any Expense to the extent such
Expense is attributable to one or more of the following: (1) any
representation or warranty by such Indemnitee in the Operative Documents or
the Pass Through Documents being incorrect, or (2) the failure by such
Indemnitee to perform or observe any of its agreements, covenants or
conditions in any of the Operative Documents or the Pass Through Documents,
or (3) the willful misconduct or the gross negligence of such Indemnitee,
or (4) (A) in the case of any Indemnitee, the offer, sale or other
disposition (voluntary or involuntary) by such Indemnitee of all or any
part of its interest in the Airframe or any Engine, (B) in the case of a
Note Holder, the offer, sale or other disposition (voluntary or
involuntary) by such Note Holder of all or any part of its interest in any
Equipment Note or (C) in the case of any Indemnitee, the offer, sale or
other disposition by such Indemnitee of all or any part of such
Indemnitee's interest in the Operative Documents, or (5) any Tax, or (6) in
the case of the Indenture Trustee in its individual and trust capacities,
failure on the part of the Indenture Trustee to distribute in accordance
with the Trust Indenture any amounts distributable by it thereunder, or (7)
in the case of any Pass Through Trustee or the Subordination Agent, failure
on the part of such Pass Through Trustee or the Subordination Agent to
distribute in accordance with the Intercreditor Agreement and the Pass
Through Trust Agreement amounts received and distributable thereunder, or
(8) the authorization or giving or withholding of any future amendments,
supplements, waivers or consents with respect to any of the Operative
Documents which amendments, supplements, waivers or consents are not
requested by Owner or are not occasioned by a specific requirement of the
Operative Documents, or (9) any amount which any Indemnitee expressly
agrees to pay under any Operative Document or any amount which is expressly
stated to be an expense that is not reimbursable by Owner under the
Operative Documents, or (10) any amount that is an ordinary and usual
operating or overhead expense of any Indemnitee (it being understood
out-of-pocket expenses payable to third parties do not constitute "ordinary
and usual operating and overhead expenses"), or (11) any amounts
attributable to any Lien which such Indemnitee is required to remove
pursuant to the terms of the Operative Documents or the Pass Through
Documents, or (12) any loss of tax benefits or increases in tax liability
or (13) any amount that constitutes principal of, or interest or premium on
the Equipment Notes.
Owner's indemnity obligation to an Indemnitee under this
Section 6(b) shall equal the amount which, after taking into account any
Tax imposed upon the receipt or accrual of the amounts payable under this
Section 6(b) and any tax benefits realized by such Indemnitee as a result
of the accrual or payment of such Expense shall equal the amount of the
Expense indemnifiable under this Section 6(b).
If any Indemnitee shall realize a tax savings by reason of any
Tax paid or indemnified by Owner pursuant to this Section 6(b) (whether
such tax savings shall be by means of a foreign tax credit, depreciation or
cost recovery deduction or otherwise) and such savings is not otherwise
taken into account in computing such payment or indemnity such Indemnitee
shall pay to Owner an amount equal to the lesser of (i) the amount of such
tax savings, plus any additional tax savings recognized as the result of
any payment made pursuant to this sentence, when, as if, and to the extent,
realized or (ii) the amount of all payments pursuant to this Section 6(b)
by Owner to such Indemnitee (less any payments previously made by such
Indemnitee to Owner pursuant to this Section 6(b)) (and the excess, if any,
of the amount described in clause (i) over the amount described in clause
(ii) shall be carried forward and applied to reduce pro tanto any
subsequent obligations of Owner to make payments to such Indemnitee
pursuant to this Section 6(b)).
If a claim is made against an Indemnitee involving one or more
expenses and such Indemnitee has notice thereof, such Indemnitee shall
promptly after receiving such notice give notice of such claim to Owner;
provided that the failure to give such notice shall not affect the
obligations of Owner hereunder except to the extent Owner is prejudiced by
such failure or Owner's indemnification obligations are increased as a
result of such failure. Owner shall be entitled, at its sole cost and
expense, acting through counsel reasonably acceptable to the respective
Indemnitee, (A) in any judicial or administrative proceeding that involves
solely a claim for one or more expenses, to assume responsibility for and
control thereof, (B) in any judicial or administrative proceeding involving
a claim for one or more expenses and other claims related or unrelated to
the transactions contemplated by the Operative Documents, to assume
responsibility for and control of such claim for Expenses to the extent
that the same may be and is severed from such other claims (and such
Indemnitee shall use its best efforts to obtain such severance), and (C) in
any other case, to be consulted by such Indemnitee with respect to judicial
proceedings subject to the control of such Indemnitee and to be allowed, at
Owner's sole expense, to participate therein. Notwithstanding any of the
foregoing to the contrary, Owner shall not be entitled to assume
responsibility for and control of, or participate in or be consulted with
respect to any such judicial or administrative proceedings if such
proceedings will involve a material risk of the sale, forfeiture or loss
of, or the creation of any Lien (other than a Permitted Lien) on, the
Aircraft, the Trust Indenture Estate or any part thereof unless in such an
event Owner shall have posted a bond or other security satisfactory to the
relevant Indemnitees in respect to such risk. The Indemnitee may
participate at its own expense and with its own counsel in any judicial
proceeding controlled by Owner pursuant to the preceding provisions.
The Indemnitee shall supply Owner with such information
reasonably requested by Owner as is necessary or advisable for Owner to
control or participate in any proceeding to the extent permitted by this
Section 6(b). Such Indemnitee shall not enter into a settlement or other
compromise with respect to any Expense without the prior written consent of
Owner, which consent shall not be unreasonably withheld or delayed, unless
such Indemnitee waives its right to be indemnified with respect to such
Expense under this Section 6(b).
Owner shall supply the Indemnitee with such information
reasonably requested by the Indemnitee as is necessary or advisable for the
Indemnitee to control or participate in any proceeding to the extent
permitted by this
Section 6(b).
Upon payment of any Expense pursuant to this Section 6(b),
Owner, without any further action, shall be subrogated to any claims the
Indemnitee may have relating thereto. The Indemnitee agrees to give such
further assurances or agreements and to cooperate with Owner to permit
Owner to pursue such claims, if any, to the extent reasonably requested by
Owner.
If an Indemnitee is reimbursed, in whole or in part, with
respect to any Expense paid by Owner hereunder, it will promptly pay the
amount refunded, including interest received thereto (but not an amount in
excess of the amount Owner or any of its insurers has paid in respect of
such Expense pursuant to this Section 6(b)) over to Owner.
To the extent permitted by applicable law, interest at the Base
Rate plus one percent (1.0%) shall be paid, on demand, on any amount or
indemnity not paid when due pursuant to this Section 6 until the same shall
be paid. Such interest shall be paid in the same manner as the unpaid
amount in respect of which such interest is due.
Any amount which is payable to Owner by any Person pursuant to
this Section 6 (b) shall not be paid to Owner if an Event of Default has
occurred and is continuing or if any payment is due and owing by Owner to
such Person under any Operative Document. Any such amount shall be held by
such Person (Owner hereby granting a security interest in such amount to
such Person) and shall be applied against Owner's obligations hereunder to
such Person as and when due (and, to the extent that Owner has no
obligations hereunder to such Person, such amount shall be paid to Owner).
(d) Special Indemnity. If a Class C Special Indemnity Event
shall be continuing at any time, then on the final maturity date of the
Equipment Notes, Owner shall pay to the Pass Through Trustee on behalf of
the US Airways Pass Through Trust 1998-C the amount which has accrued
during the period in which the Equipment Notes were outstanding in
accordance with the following sentence and which remains unpaid on such
final maturity date (such amount, the "Class C Special Indemnity Payment").
The Class C Special Indemnity Payment shall accrue at a daily rate equal to
the Multiplier, in effect from time to time during the period in which the
Equipment Notes were outstanding, multiplied by the aggregate principal
amount of the Series C Equipment Notes outstanding on such date divided by
360. The Pass Through Trustee agrees that it will accept and receive the
Class C Special Indemnity Payment on behalf of the US Airways Pass Through
Trust 1998-C and that it will distribute the Class C Special Indemnity
Payment in accordance with the Trust Agreement for the US Airways Pass
Through Trust 1998-C.
SECTION 7. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) Securities Act. Each Loan Participant represents and
warrants that neither it nor anyone acting in its behalf has offered any
Equipment Notes for sale to, or solicited any offer to buy any Equipment
Note from, any person or entity other than in a manner in compliance with,
and which does not require registration under, the Securities Act of 1933,
as amended, or the rules and regulations thereunder.
(b) Reregistration. The Indenture Trustee and each Loan
Participant agree that, at any time after the Depreciation Period, so long
as no Event of Default shall have occurred and be continuing, Owner may
elect to effect a change in registration of the Aircraft, at Owner's cost
and expense, so long as the country of registry of the Aircraft is a
country listed on Exhibit A. Upon the request of the Lessee, Exhibit A
shall be amended from time to time to include any other country which the
Indenture Trustee have determined, acting reasonably, would provide
substantially equivalent protection for the rights of lenders in similar
transactions as provided under the laws of the United States of America and
the states thereof. In order for Owner to effect a change in the country of
registry of the Aircraft, Owner shall deliver to the Indenture Trustee the
following:
(I) an Officer's Certificate to the effect that (A) the insurance
or self-insurance required by Section 7.04 shall be in full
force and effect at the time of such change in registration
after giving effect to such change in registration, (B) all
indemnities in favor of the Indenture Trustee under any
Operative Document afford each such party substantially the
same protection as provided prior to such change of registry,
(C) the Lien of the Trust Indenture in favor of the Indenture
Trustee will continue as a first priority lien following such
change of registry, (D) such change will not result in the
imposition of, or increase in the amount of, any Tax for which
Owner is not required to indemnify, or is not then willing to
enter into a binding agreement to indemnify, the Certificate
Holders or the Indenture Trustee, pursuant to this Agreement,
and (E) that the new country of registry imposes aircraft
maintenance standards not materially different from those of
any Permitted Foreign Air Authority; and
(II) a favorable opinion (subject to customary exceptions) of
counsel (reasonably acceptable to the Indenture Trustee)
addressed to the Indenture Trustee, from counsel of recognized
reputation qualified in the laws of the relevant jurisdiction
to the effect that: (A) it is not necessary, solely as a
consequence of such change in registration and without giving
effect to any other activity of the Indenture Trustee (or any
Affiliate thereof) for the Indenture Trustee to register or
qualify to do business in such jurisdiction; (B) there is no
tort liability of Owner of an aircraft not in possession
thereof under the laws of such jurisdiction (it being agreed
that, in the event such latter opinion cannot be given in a
form satisfactory to the Indenture Trustee, such opinion shall
be waived if insurance reasonably satisfactory to the Indenture
Trustee is provided to cover such risk); (C) unless Owner shall
have agreed to provide insurance covering the risk of
requisition of use of such Aircraft by the government of such
jurisdiction so long as such Aircraft is registered under the
laws of such jurisdiction, the laws of such jurisdiction
require fair compensation by the government of such
jurisdiction payable in currency freely convertible into
Dollars for the loss of use of such Aircraft in the event of
the requisition by such government of such use; and (D) after
giving effect to such change in registration, the Lien of the
Trust Indenture on Owner's right, title and interest in and to
the Aircraft shall continue as a valid and duly perfected first
priority security interest and all filing, recording or other
action necessary to protect the same shall have been
accomplished (or, if such opinion cannot be given at the time
of such proposed change in registration because such change in
registration is not yet effective, (1) the opinion shall detail
what filing, recording or other action is necessary, and (2)
the Indenture Trustee shall have received a certificate from
Owner that all possible preparations to accomplish such filing,
recording and other action shall have been done, and such
filing, recording and other action shall be accomplished and a
supplemental opinion to that effect shall be delivered to the
Indenture Trustee on or prior to the effective date of such
change in registration).
Owner shall pay all reasonable costs, expenses, fees, recording
and registration taxes, including the reasonable fees and expenses of
counsel to the Indenture Trustee, and other charges in connection with any
such change in registration.
(c) Quiet Enjoyment. Each Loan Participant and each of the
Indenture Trustee, the Subordination Agent and the Pass Through Trustee
covenants and agrees that, so long as no Event of Default shall have
occurred and be continuing and Owner has not been duly declared in default
and, notwithstanding default by any Loan Participant, the Indenture
Trustee, the Pass Through Trustee or the Subordination Agent, that such
Person shall not (and shall not permit any Affiliate or other Person
claiming by, through or under it to) interfere with Owner's continued
possession, use and operation of, and quiet enjoyment of, the Aircraft.
(d) Equipment Notes Acquired for Investment. Each Loan
Participant represents and warrants that the Equipment Note to be issued to
it pursuant to the Indenture is being acquired by it for investment and not
with a view to resale or distribution (it being understood that such Loan
Participant may pledge or assign as security its interest in each Equipment
Note issued to it), except that the Loan Participants may sell, transfer or
otherwise dispose of any Equipment Note or any portion thereof, or grant
participations therein, in a manner which in itself does not require
registration under the Securities Act.
(e) Owner Merger Covenant. Owner will not consolidate with or
merge into any other corporation or convey, transfer or lease substantially
all of its assets as an entirety to any Person unless:
(i) the corporation formed by such consolidation or into which
Owner is merged or the Person which acquires by conveyance, transfer
or lease substantially all of the assets of Owner as an entirety
shall be (i) organized and validly existing under the laws of the
United States of America or any state thereof or the District of
Columbia, (ii) a "citizen of the United States" as defined in 49
U.S.C. Section 40102(a)(15), as amended, and (iii) a Certificated Air
Carrier, if and so long as such status is a condition of entitlement
to the benefits of Section 1110 of the Bankruptcy Code with respect
to the Lien of the Indenture;
(ii) the corporation formed by such consolidation or into which
Owner is merged or the Person which acquires by conveyance, transfer
or lease substantially all of the assets of Owner as an entirety
shall execute and deliver to Indenture Trustee an agreement in form
and substance reasonably satisfactory to the Indenture Trustee a duly
authorized, valid, binding and enforceable agreement containing an
assumption by such successor corporation or Person of the due and
punctual performance and observance of each covenant and condition of
the Operative Documents to which Owner is a party to be performed or
observed by Owner;
(iii) immediately after giving effect to such transaction, no
Event of Default shall have occurred and be continuing; and
(iv) Owner shall have delivered to the Indenture Trustee a
certificate signed by the President, any Executive Vice President,
any Senior Vice President or any Vice President and by the Secretary
or an Assistant Secretary of Owner, and an opinion of counsel (which
may be Owner's General Counsel, Deputy General Counsel, Assistant
General Counsel or Associate General Counsel) reasonably satisfactory
to the Indenture Trustee, each stating that such consolidation,
merger, conveyance, transfer or lease and the assumption agreement
mentioned in clause (ii) above comply with this Section 7(e) and that
all conditions precedent herein provided for relating to such
transaction have been complied with.
Upon any such consolidation or merger or any such conveyance,
transfer or lease of substantially all of the assets of Owner as an
entirety in accordance with this Section 7(e), the successor corporation or
Person formed by such consolidation or into which Owner is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, Owner under
this Agreement with the same effect as if such successor corporation or
Person had been named as Owner herein. No such conveyance, transfer or
lease of substantially all of the assets of Owner as an entirety shall have
the effect of releasing Owner or any successor corporation or Person which
shall theretofore have become such in the manner prescribed in this Section
7(v) from its liability in respect of any Operative Document to which it is
a party.
(f) Representations, Warranties and Covenants of the Indenture
Trustee. State Street Bank and Trust Company represents, warrants (as of
the Delivery Date) and covenants, in its individual capacity, to Owner, the
Pass Through Trustee and the Subordination Agent, as follows:
(i) the Indenture Trustee is a Massachusetts trust company duly
incorporated, validly existing and in good standing under the laws of
the Commonwealth of Massachusetts, is a Citizen of the United States
(without making use of any voting trust, voting powers agreement or
similar arrangement), will notify promptly all parties to this
Agreement if in its reasonable opinion its status as a Citizen of the
United States (without making use of any voting trust, voting powers
agreement or similar arrangement) is likely to change and will resign
as Indenture Trustee as provided in Section 9.02 of the Trust
Indenture promptly after it obtains actual knowledge that it has
ceased to be such a Citizen of the United States (without making use
of a voting trust, voting powers agreement or similar arrangement),
and has the full corporate power, authority and legal right under the
laws of the Commonwealth of Massachusetts and the United States
pertaining to its banking, trust and fiduciary powers to execute and
deliver each of this Agreement, the Indenture and each other
Operative Document to which it is a party and to carry out its
obligations under this Agreement, the Indenture, each other Operative
Document to which it is a party and to authenticate the Equipment
Notes;
(ii) the execution and delivery by the Indenture Trustee of the
Indenture Trustee Documents and the authentication of the Equipment
Notes and the performance by the Indenture Trustee of its obligations
under the Indenture Trustee Documents have been duly authorized by
the Indenture Trustee and will not violate its articles of
association or by-laws or the provisions of any indenture, mortgage,
contract or other agreement to which it is a party or by which it is
bound;
(iii) this Agreement and each of the other Indenture Trustee
Documents constitute the legal, valid and binding obligations of the
Indenture Trustee enforceable against it in accordance with their
respective terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and by general principles
of equity, whether considered in a proceeding at law or in equity;
(iv) there are no pending or, to its knowledge, threatened
actions or proceedings against the Indenture Trustee, either in its
individual capacity or as Indenture Trustee, before any court or
administrative agency which, if determined adversely to it, would
materially adversely affect the ability of the Indenture Trustee, in
its individual capacity or as Indenture Trustee as the case may be,
to perform its obligations under the Operative Documents to which it
is a party; and
(v) there are no Indenture Trustee Liens on the Aircraft.
(g) Confidentiality of Purchase Agreement. The Indenture
Trustee agrees for the benefit of the Seller, the Manufacturer and Owner
that it will not disclose or suffer to be disclosed the terms of the
Purchase Agreement to any third party except (A) as may be required by any
applicable statute, court or administrative order or decree or governmental
ruling or regulation or to any regulatory authorities having official
jurisdiction over them, (B) in connection with the financing of the
Aircraft and the other transactions contemplated by the Operative Documents
(including any transfer of Equipment Notes (including by way of
participation or assignment of an interest, provided such participant or
assignee agrees to hold such terms confidential to the same extent as
herein provided) and any exercise of remedies under the Indenture), (C)
with the prior written consent of the Manufacturer, the Seller and Owner or
(D) to the Indenture Trustee's counsel or special counsel, independent
insurance brokers or other agents who agree to hold such information
confidential.
(h) Loan Participant Liens. Each Loan Participant covenants and
agrees that it shall not cause or permit to exist a Loan Participant Lien
attributable to it with respect to the Aircraft. Each Loan Participant
agrees that it will promptly, at its own expense, take such other action as
may be necessary duly to discharge such Loan Participant Lien attributable
to it. Each Loan Participant agrees to make restitution to Owner for any
actual diminution of the assets of Owner resulting from such Loan
Participant Lien attributable to it.
(i) Indenture Trustee Liens. State Street Bank and Trust
Company, in its individual capacity, covenants and agrees that it shall not
cause or permit to exist any Indenture Trustee's Liens with respect to the
Indenture Estate. State Street Bank and Trust Company, in its individual
capacity, agrees that it will promptly, at its own expense, take such
action as may be necessary duly to discharge such Indenture Trustee's
Liens. State Street Bank and Trust Company, in its individual capacity,
agrees to make restitution to Owner for any actual diminution of the assets
of the Indenture Estate resulting from such Indenture Trustee's Liens.
(j) Further Assurances. Owner, at its expense, will take, or
cause to be taken, such action with respect to the recording, filing,
re-recording and refiling of the Indenture, the Indenture Supplement and
any financing statements or other instruments as are necessary to maintain,
so long as the Indenture is in effect, the perfection of the security
interests created by the Indenture or will furnish to the Indenture Trustee
timely notice of the necessity of such action, together with such
instruments, in execution form, and such other information as may be
required to enable them to take such action. Owner will notify the
Indenture Trustee of any change in the location of its chief executive
office (as such term is used in Article 9 of the Uniform Commercial Code)
promptly after making such change or in any event within the period of time
necessary under applicable law to prevent the lapse of perfection (absent
refiling) of financing statements filed under the Operative Documents.
(k) Transfer of Equipment Notes. Each Loan Participant hereby
represents, warrants and agrees that it shall not transfer any interest in
any Equipment Note unless and until the transferee agrees in writing
(copies of which shall be provided by the Indenture Trustee to Owner) to
make the representations contemplated to be made by a Loan Participant in
this Agreement and to be bound by the terms of this Agreement and the
Indenture.
(l) Representations and Warranties of Pass Through Trustee. The
Pass Through Trustee represents and warrants to Owner, the Indenture
Trustee and the Subordination Agent, in its capacity as such and in its
individual capacity, as follows:
(i) the Pass Through Trustee is a state chartered trust company
duly organized, validly existing and in good standing under the laws
of the Commonwealth of Massachusetts, and has the full corporate
power, authority and legal right under the laws of the Commonwealth
of Massachusetts and the United States pertaining to its banking,
trust and fiduciary powers to execute and deliver each of the Pass
Through Trust Agreements, the Intercreditor Agreement and this
Agreement and to perform its obligations under the Pass Through Trust
Agreements, the Intercreditor Agreement and this Agreement;
(ii) this Agreement, each of the Pass Through Trust Agreements
and the Intercreditor Agreement have been duly authorized, executed
and delivered by the Pass Through Trustee; this Agreement, each of
the Pass Through Trust Agreements and the Intercreditor Agreement
constitute the legal, valid and binding obligations of the Pass
Through Trustee enforceable against it in accordance with their
respective terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and by general principles
of equity, whether considered in a proceeding at law or in equity;
(iii) none of the execution, delivery and performance by the
Pass Through Trustee of any of the Pass Through Trust Agreements, the
Intercreditor Agreement or this Agreement, the purchase by the Pass
Through Trustee of the Equipment Notes pursuant to this Agreement, or
the issuance of the Certificates pursuant to the Pass Through Trust
Agreements, contravenes any law, rule or regulation of the
Commonwealth of Massachusetts or any United States governmental
authority or agency regulating the Pass Through Trustee's banking,
trust or fiduciary powers or any judgment or order applicable to or
binding on the Pass Through Trustee and does not contravene or result
in any breach of, or constitute a default under, the Pass Through
Trustee's articles of association or by-laws or any agreement or
instrument to which the Pass Through Trustee is a party or by which
it or any of its properties may be bound;
(iv) neither the execution and delivery by the Pass Through
Trustee of any of the Pass Through Trust Agreements, the
Intercreditor Agreement or this Agreement, nor the consummation by
the Pass Through Trustee of any of the transactions contemplated
hereby or thereby, requires the consent or approval of, the giving of
notice to, the registration with, or the taking of any other action
with respect to, any Massachusetts governmental authority or agency
or any Federal governmental authority or agency regulating the Pass
Through Trustee's banking, trust or fiduciary powers;
(v) there are no Taxes payable by the Pass Through Trustee
imposed by the Commonwealth of Massachusetts or any political
subdivision or taxing authority thereof in connection with the
execution, delivery and performance by the Pass Through Trustee of
this Agreement, any of the Pass Through Trust Agreements or the
Intercreditor Agreement (other than franchise or other taxes based on
or measured by any fees or compensation received by the Pass Through
Trustee for services rendered in connection with the transactions
contemplated by any of the Pass Through Trust Agreements), and there
are no Taxes payable by the Pass Through Trustee imposed by the
Commonwealth of Massachusetts or any political subdivision thereof in
connection with the acquisition, possession or ownership by the Pass
Through Trustee of any of the Equipment Notes (other than franchise
or other taxes based on or measured by any fees or compensation
received by the Pass Through Trustee for services rendered in
connection with the transactions contemplated by any of the Pass
Through Trust Agreements), and, assuming that the trusts created by
the Pass Through Trust Agreements will not be taxable as
corporations, but rather, each will be characterized either as a
grantor trust under subpart E, Part I, of Subchapter J of the Code or
as a partnership, such trusts will not be subject to any Taxes
imposed by the Commonwealth of Massachusetts or any political
subdivision thereof;
(vi) there are no pending or threatened actions or proceedings
against the Pass Through Trustee before any court or administrative
agency which individually or in the aggregate, if determined
adversely to it, would materially adversely affect the ability of the
Pass Through Trustee to perform its obligations under this Agreement,
the Intercreditor Agreement or any Pass Through Trust Agreement;
(vii) except for the issue and sale of the Pass Through Trust
Certificates contemplated hereby, the Pass Through Trustee has not
directly or indirectly offered any Equipment Note for sale to any
Person or solicited any offer to acquire any Equipment Notes from any
Person, nor has the Pass Through Trustee authorized anyone to act on
its behalf to offer directly or indirectly any Equipment Note for
sale to any Person, or to solicit any offer to acquire any Equipment
Note from any Person; and the Pass Through Trustee is not in default
under any Pass Through Trust Agreement; and
(viii) the Pass Through Trustee is not directly or indirectly
controlling, controlled by or under common control with Owner.
(m) Representations and Warranties of Subordination Agent. The
Subordination Agent represents and warrants to Owner, the Indenture Trustee
and the Pass Through Trustee, in its capacity as such and in its individual
capacity, as follows:
(i) the Subordination Agent is a state chartered trust company
duly organized, validly existing and in good standing under the laws
of the Commonwealth of Massachusetts, and has the full corporate
power, authority and legal right under the laws of the Commonwealth
of Massachusetts and the United States pertaining to its banking,
trust and fiduciary powers to execute and deliver this Agreement, the
Liquidity Facilities and the Intercreditor Agreement and to perform
its obligations under this Agreement, the Liquidity Facilities and
the Intercreditor Agreement;
(ii) this Agreement, each of the Liquidity Facilities and the
Intercreditor Agreement have been duly authorized, executed and
delivered by the Subordination Agent; this Agreement, each of the
Liquidity Facilities and the Intercreditor Agreement constitute the
legal, valid and binding obligations of the Subordination Agent
enforceable against it in accordance with their respective terms,
except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
rights of creditors generally and by general principles of equity,
whether considered in a proceeding at law or in equity;
(iii) none of the execution, delivery and performance by the
Subordination Agent of each of the Liquidity Facilities, the
Intercreditor Agreement or this Agreement contravenes any law, rule
or regulation of the Commonwealth of Massachusetts or any United
States governmental authority or agency regulating the Subordination
Agent's banking, trust or fiduciary powers or any judgment or order
applicable to or binding on the Subordination Agent and do not
contravene or result in any breach of, or constitute a default under,
the Subordination Agent's articles of association or by-laws or any
agreement or instrument to which the Subordination Agent is a party
or by which it or any of its properties may be bound;
(iv) neither the execution and delivery by the Subordination
Agent of any of the Liquidity Facilities, the Intercreditor Agreement
or this Agreement nor the consummation by the Subordination Agent of
any of the transactions contemplated hereby or thereby requires the
consent or approval of, the giving of notice to, the registration
with, or the taking of any other action with respect to, any
Massachusetts governmental authority or agency or any Federal
governmental authority or agency regulating the Subordination Agent's
banking, trust or fiduciary powers;
(v) there are no Taxes payable by the Subordination Agent
imposed by the Commonwealth of Massachusetts or any political
subdivision or taxing authority thereof in connection with the
execution, delivery and performance by the Subordination Agent of
this Agreement, any of the Liquidity Facilities or the Intercreditor
Agreement (other than franchise or other taxes based on or measured
by any fees or compensation received by the Subordination Agent for
services rendered in connection with the transactions contemplated by
the Intercreditor Agreement or any of the Liquidity Facilities), and
there are no Taxes payable by the Subordination Agent imposed by the
Commonwealth of Massachusetts or any political subdivision thereof in
connection with the acquisition, possession or ownership by the
Subordination Agent of any of the Equipment Notes (other than
franchise or other taxes based on or measured by any fees or
compensation received by the Subordination Agent for services
rendered in connection with the transactions contemplated by the
Intercreditor Agreement or any of the Liquidity Facilities);
(vi) there are no pending or threatened actions or proceedings
against the Subordination Agent before any court or administrative
agency which individually or in the aggregate, if determined
adversely to it, would materially adversely affect the ability of the
Subordination Agent to perform its obligations under this Agreement,
the Intercreditor Agreement or any Liquidity Facility;
(vii) the Subordination Agent has not directly or indirectly
offered any Equipment Note for sale to any Person or solicited any
offer to acquire any Equipment Notes from any Person, nor has the
Subordination Agent authorized anyone to act on its behalf to offer
directly or indirectly any Equipment Note for sale to any Person, or
to solicit any offer to acquire any Equipment Note from any Person;
and the Subordination Agent is not in default under any Liquidity
Facility; and
(viii) the Subordination Agent is not directly or indirectly
controlling, controlled by or under common control with Owner.
SECTION 8. RELIANCE OF LIQUIDITY PROVIDER. Each of the parties hereto
agrees and acknowledges that the Liquidity Provider shall be a third party
beneficiary of each of the representations, warranties and covenants made
herein by such party, and that the Liquidity Provider may rely on such
representations and warranties to the same extent as if such
representations and warranties were made to the Liquidity Provider
directly. Owner agrees and acknowledges that the Liquidity Provider shall
be a third party beneficiary of the indemnities contained in Section 6(b)
hereof, and may rely on such indemnities to the same extent as if such
indemnities were made to the Liquidity Provider directly.
SECTION 9. OTHER DOCUMENTS. So long as the Lien of the Trust
Indenture has not been terminated, the Pass Through Trustee, the
Subordination Agent and the Indenture Trustee hereby agree for the benefit
of Owner that without Owner's consent, each such party will not amend any
other provision of any Operative Document or Pass Through Document in a
manner adversely affecting Owner. Each of the Indenture Trustee, the
Subordination Agent and the Pass Through Trustee agree to promptly furnish
to Owner copies of any supplement, amendment, waiver or modification of any
of the Operative Documents or Pass Through Documents to which Owner is not
a party. Each Loan Participant agrees that it will not take any action in
respect of the Indenture Estate except through the Indenture Trustee
pursuant to the Indenture or as otherwise permitted by the Indenture.
SECTION 10. CERTAIN COVENANTS OF OWNER. Owner covenants and agrees
with each of the Loan Participants and the Indenture Trustee, as follows:
(a) Further Assurances. Owner will cause to be done, executed,
acknowledged and delivered all and every such further acts, conveyances and
assurances as the Indenture Trustee shall reasonably require for
accomplishing the purposes of this Agreement and the other Operative
Documents; provided that any instrument or other document so executed by
Owner will not expand any obligations or limit any rights of Owner in
respect of the transactions contemplated by any Operative Documents.
(b) Filings. Owner, at its expense, will cause the Indenture,
all supplements and amendments to the Indenture and this Agreement to be
promptly filed and recorded, or filed for recording, to the extent
permitted under the Transportation Code, or required unde any other
applicable law. Upon the execution and delivery of the Indenture, the
Indenture and the Indenture Supplement shall be filed for recording with
the Federal Aviation Administration.
SECTION 11. [RESERVED.]
SECTION 12. NOTICES; CONSENT TO JURISDICTION.
(a) Notices. All notices, demands, instructions and other
communications required or permitted to be given to or made upon any party
hereto shall be in writing and shall be personally delivered or sent by
registered or certified mail, postage prepaid, or by telecopier, or by
prepaid courier service, and shall be deemed to be given for purposes of
this Agreement on the day that such writing is delivered to the recipient
thereof in accordance with the provisions of this Section 12(a). Unless
otherwise specified in a notice sent or delivered in accordance with the
foregoing provisions of this Section 12(a), notices, demands, instructions
and other communications in writing shall be given to or made upon the
respective parties hereto at their respective addresses (or to their
respective telecopier numbers) as follows: (A) if to Owner, the Pass
Through Trustee, the Subordination Agent or the Indenture Trustee to the
respective addresses set forth below the signatures of such parties at the
foot of this Agreement, or (B) if to any subsequent Note Holder, addressed
to such Note Holder at its address set forth in the Equipment Note register
maintained pursuant to Section 2.07 of the Indenture.
(b) Consent to Jurisdiction. Each of the parties hereto (A)
hereby irrevocably submits itself to the non-exclusive jurisdiction of the
United States District Court for the Southern District of New York and to
the non-exclusive jurisdiction of the Supreme Court of the State of New
York, New York County, for the purposes of any suit, action or other
proceeding arising out of this Agreement or any other Operative Document,
the subject matter of any thereof or any of the transactions contemplated
hereby or thereby brought by any party or parties thereto, or their
successors or assigns, and (B) hereby waives, and agrees not to assert, by
way of motion, as a defense, or otherwise, in any such suit, action or
proceeding, to the extent permitted by applicable law, that the suit,
action or proceeding is brought in an inconvenient forum, that the venue of
the suit, action or proceeding is improper, or that this Agreement or any
other Operative Document or the subject matter of any thereof or any of the
transactions contemplated hereby or thereby may not be enforced in or by
such courts; provided, however that the foregoing shall not apply to the
right any party may have to seek removal of such suit, action or proceeding
to federal court or to seek consolidation of any separate actions, suits or
proceedings brought by one or more of the other parties in the same or
different jurisdictions. The agreement set forth in this Section 12(b) is
given solely for the benefit of the parties hereto and shall not inure to
the benefit of any other Person.
SECTION 13. [RESERVED.]
SECTION 14. MISCELLANEOUS.
(a) Survival. The representations, warranties, indemnities and
agreements of Owner, the Indenture Trustee, the Subordination Agent, and
the Pass Through Trustee provided for in this Agreement or any other
Operative Document, and Owner's, the Indenture Trustee's, the Subordination
Agent's and the Pass Through Trustee's obligations under any and all
thereof, shall survive the making available of the respective Commitments
by the Pass Through Trustee, the transfer of any interest by any Loan
Participant in any Equipment Note or the Trust Indenture Estate and the
expiration or other termination of this Agreement or any other Operative
Document.
(b) Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
(c) Amendments and Waivers. Neither this Agreement nor any of
the terms hereof may be terminated, amended, supplemented, waived or
modified, except by an instrument in writing signed by the party against
which the enforcement of the termination, amendment, supplement, waiver or
modification is sought; and no such termination, amendment, supplement,
waiver or modification shall be effective unless a signed copy thereof
shall have been delivered to the Indenture Trustee.
(d) Successors and Assigns. The terms of this Agreement shall
be binding upon, and inure to the benefit of, Owner and, subject to the
terms of this Agreement, its successors and permitted assigns, the Pass
Through Trustee and its successors as Pass Through Trustee (and any
additional trustee appointed) under any of the Pass Through Trust
Agreements, each Note Holder and its successors and registered assigns and
the Indenture Trustee and its successors as Indenture Trustee under the
Trust Indenture. The terms of this Agreement shall inure to the benefit of
the Liquidity Provider, its successors and permitted assigns.
(e) Governing Law. THIS AGREEMENT SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
US AIRWAYS, INC.,
Owner
By:________________________________
Name:
Title:
Address: 2345 Crystal Drive
Arlington, Virginia 22227
STATE STREET BANK AND
TRUST COMPANY,
not in its individual capacity
except as otherwise provided herein,
but solely as Indenture Trustee
By:_________________________________
Name:
Title:
Address: Two International Place, 4th Floor
Boston, Massachusetts 02110
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity, except
as otherwise provided herein, but solely
as Pass Through Trustee
By:_________________________________
Name:
Title:
Address: Two International Place, 4th Floor
Boston, Massachusetts 02110
STATE STREET BANK AND
TRUST COMPANY, not in its
individual capacity, except as otherwise
provided herein, but solely as Subordination
Agent
By:__________________________________
Name:
Title:
Address: Two International Place, 4th Floor
Boston, Massachusetts 02110
SCHEDULE I
NAMES AND ADDRESSES
Owner: US Airways, Inc.
U.S. MAIL
2345 Crystal Drive
Arlington, Virginia 22227
OVERNIGHT COURIER
____________________________
____________________________
Attn:
Telecopy No.: (___) ___-____
WIRE TRANSFER
____________________________
ABA No._________________
Acct. No._________________
Indenture Trustee, State Street Bank and Trust Company
Subordination Agent
and Pass Through U.S. MAIL
Trustee:
Two International Place, 4th Floor
Boston, Massachusetts 02110
Attn: Corporate Trust Department
Ruth A. Smith
Telecopy No.: (617) 664-5371
OVERNIGHT COURIER
____________________________
____________________________
Attn:
Telecopy No.: (___) ___-____
WIRE TRANSFER
State Street Bank and Trust Company
ABA No. 011-00-0028
for credit to State Street Bank and Trust
Company
Acct. No. 9903-990-1
Attn: Corporate Trust Department
Reference: U.S. Airways, Inc. 1998-1 EETC/
N7__UW
U.S. MAIL
Two International Place, 4th Floor
Boston, Massachusetts 02110
Attn: Corporate Trust Department
Ruth A. Smith
Telecopy No.: (617) 664-5371
OVERNIGHT COURIER
____________________________
____________________________
Attn:_________________________
Telecopy No.: (___) ___ - ____
Subordination Agent
and Pass Through
Trustees:
SCHEDULE II
COMMITMENTS
PERCENTAGE OF
PURCHASERS INTEREST RATE
LESSOR'S COST AND MATURITY PURCHASE PRICE
------------- ------------- --------------
US Airways, Inc.
Pass Through Trust:
1998-1A _____% Series A Secured $__________
_______% Certificates due -----, ----
1998-1B _____% Series B Secured $__________
_______% Certificates due -----, ----
1998-1C _____% Series C Secured $__________
______% Certificates due -----, ----
SCHEDULE III
PASS THROUGH TRUST AGREEMENTS
Pass Through Trust Agreement, dated as of December 4, 1998, between
US Airways, Inc. and State Street Bank and Trust Company, as
supplemented by Trust Supplement No. 1998-1A, dated as of December
14, 1998, as supplemented by Trust Supplement No. 1998-1B, dated as
of December 14, 1998, and as supplemented by Trust Supplement No.
1998-1C, dated as of December 14, 1998.
EXHIBIT A
TO PARTICIPATION AGREEMENT
(N7__UW)
SCHEDULE OF COUNTRIES FOR REREGISTRATION
Australia Malta
Austria Mexico
Bahamas Netherlands
Belgium New Zealand
Bermuda Norway
Brazil People's Republic of China
Canada Philippines
Denmark Portugal
Finland Republic of China (Taiwan)*
France Singapore
Germany South Korea
Grenada Spain
Greece Sweden
Iceland Switzerland
India Thailand
Ireland Tobago
Italy Trinidad
Jamaica Turkey
Japan United Kingdom
Luxembourg Venezuela
Malaysia
*So long as on the date of registration such country and the
United States have diplomatic relations at least as good as those in effect
on the Delivery Date.
Owned Aircraft Form Definitions
N7__UW
ANNEX A
DEFINITIONS
(N7__UW)
The following terms shall have the following meanings for all
purposes of the Operative Documents referred to below, unless otherwise
defined in an Operative Document or the context thereof shall otherwise
require and such meanings shall be equally applicable to both the singular
and the plural forms of the terms herein defined. In the case of any
conflict between the provisions of this Annex A and the provisions of the
main body of any Operative Document, the provisions of the main body of
such Operative Document shall control the construction of such Operative
Document.
Except as otherwise provided herein, all references to any
agreement defined in this Annex A shall be deemed to include such agreement
as the same may from time to time be amended, supplemented or otherwise
modified in accordance with its terms and, where applicable, the terms of
the other Operative Documents. All references to statutes, rules and
regulations shall be deemed to include all amendments, replacements and
successors thereto unless otherwise specified herein.
"Acceptable Alternate Engine" means (i) a CFM International Model
56-5 (or improved type) engine having not less than 1,500 cycles left
before such engine's next scheduled maintenance overhaul or (ii) an engine
of the same or another manufacturer suitable for use on the Airframe and
having a value and utility equal to or greater than a CFM Model 56-5 type
engine, assuming such engine is in the condition required by the Lease.
"Actual Knowledge" means actual knowledge of a Responsible
Officer in the Corporate Trust Office of the Indenture Trustee.
"Additional Insured" means the Indenture Trustee, the Pass
Through Trustee, the Liquidity Provider, Owner in its capacity as lessor
under any Lease, and each of their respective Affiliates, successors and
permitted assigns, and the respective directors, officers, employees and
agents of the foregoing.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control
with such Person. For the purposes of this definition, "control"
(including "controlled by" and "under common control with") shall mean the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person whether through the ownership of
voting securities or by contract or otherwise.
"AIFS" means Airbus Industrie Financial Services, a corporation
formed under the laws of Ireland.
"Aircraft" means the Airframe to be subject to the Lien of the
Indenture (or any airframe from time to time substituted for such Airframe
pursuant to Section 5.06 of the Indenture) together with the two Engines
initially subject to the Lien of the Indenture (or any engine substituted
for either of such Engines pursuant to the terms of the Indenture), in each
case as specified in the applicable Indenture Supplement, whether or not
any of such initial or substituted Engines may from time to time be
installed on such initial or substituted Airframe or may be installed on
any other airframe or on any other aircraft.
"Airframe" means: (i) the Airbus aircraft (except Engines or
engines from time to time installed thereon) specified in the initial
Indenture Supplement, and any aircraft (except Engines or engines from
time to time installed thereon) which may from time to time be substituted
for such aircraft (except Engines or engines from time to time installed
thereon) pursuant to Section 5.06 of the Indenture; and (ii) any and all
Parts so long as the same shall be incorporated or installed in or attached
to such aircraft (except Engines or engines from time to time installed
thereon); provided, however, that at such time as an aircraft (except
Engines or engines from time to time installed thereon) shall be deemed
part of the property subject to the Lien of the Indenture in substitution
for the Airframe pursuant to the applicable provisions of the Lease, the
replaced Airframe shall cease to be an Airframe subject to the Lien of the
Indenture; provided further that the Airframe shall not include Passenger
Convenience Equipment.
"Amortization Amount" means, with respect to any Principal Amount
Repayment Date, the amount set forth opposite such Date as the Principal
Amount to be repaid on the Amortization Schedule.
"Amortization Schedule" means the amortization schedule for the
Equipment Notes delivered pursuant to Section 2.02 of the Indenture.
"Applicable Rate" means as of any date the weighted average of
the interest rates borne by the Equipment Notes then outstanding and, if no
Equipment Notes shall be outstanding, the Base Rate.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as
amended, or any subsequent legislation that amends, supplements or
supersedes such provisions.
"Base Rate" means the rate of interest announced publicly by
Chase Manhattan, N.A. in New York, New York from time to time as its base
rate.
"Business Day" means any day other than a Saturday or Sunday or a
day on which commercial banks are required or authorized to close in the
City of New York, New York, Boston, Massachusetts or Pittsburgh,
Pennsylvania.
"Cash Equivalents" means (i) direct obligations of the United
States of America and agencies guaranteed by the United States government
having a final maturity of ninety (90) days or less from date of purchase
thereof; (ii) certificates of deposit issued by, bankers' acceptances of,
or time deposits with, any bank, trust company or national banking
association incorporated under the laws of the United States of America or
one of the states thereof having combined capital and surplus and retained
earnings as of its last report of condition of at least $500,000,000 and
having a rating of Aa or better by Moody's Investors Service, Inc.
("Moody's") or AA or better by Standard & Poor's Corporation ("S&P") and
having a final maturity of ninety (90) days or less from date of purchase
thereof; and (iii) commercial paper of any holding company of a bank, trust
company or national banking association described in (ii) and commercial
paper of any corporation or finance company incorporated or doing business
under the laws of the United States of America or any state thereof having
a rating assigned to such commercial paper of A1 by S&P or P1 by Moody's
and having a final maturity of ninety (90) days or less from the date of
purchase thereof; provided, however, that the aggregate amount at any one
time so invested in certificates of deposit issued by any one bank shall
not be in excess of 5% of such bank's capital and surplus.
"Certificated Air Carrier" means a Citizen of the United States
holding a carrier operating certificate issued by the Secretary of
Transportation pursuant to Chapter 447 of Title 49, United States Code, for
aircraft capable of carrying ten or more individuals or 6,000 pounds or
more of cargo or that otherwise is certified or registered to the extent
required to fall within the purview of 11 U.S.C. Section 1110 or any
analogous successor provision of the Bankruptcy Code.
"Citizen of the United States" has the meaning specified for such
term in Section 40102(a)(15) of Title 49 of the United States Code or any
similar legislation of the United States of America enacted in substitution
or replacement therefor.
"Civil Reserve Air Fleet Program" means the Civil Reserve Air
Fleet Program currently administered by the United States Air Force Air
Mobility Command pursuant to Executive Order No. 11490, as amended, or any
substantially similar program.
"Class A Liquidity Provider" means ABN AMRO Bank, N.V., a bank
organized under the laws of the Netherlands acting through its Chicago
branch, or any successor thereto.
"Class B Liquidity Provider" means ABN AMRO Bank, N.V., a bank
organized under the laws of the Netherlands acting through its Chicago
branch, or any successor thereto.
"Class C Liquidity Provider" means ABN AMRO Bank, N.V., a bank
organized under the laws of the Netherlands acting through its Chicago
branch, or any successor thereto.
"Class C Purchase Agreement" means that certain Purchase
Agreement, dated as of December 14, 1998, by and between Owner and AIFS.
"Class C Special Indemnity Event" means the existence of any
condition or event which, pursuant to Section 3 of the Registration
Agreement, requires US Airways, Inc. to pay liquidated damages to the US
Airways Pass Through Trust 1998-C in accordance with such Section 3,
subject to the last sentence of the first paragraph of Section 3 of the
Registration Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commitment" means the commitment pursuant to the Participation
Agreement of a Pass Through Trustee to finance Owner's Cost for the
Aircraft.
"Consent and Agreement" means the Consent and Agreement (N7__UW),
dated as of the date of the Participation Agreement, executed by the
Seller, as the same may be amended, modified or supplemented from time to
time in accordance with the applicable provisions thereof.
"Continuous Stay Period" has the meaning specified for such term
in Section 4.04(a) of the Indenture.
"Corporate Trust Office" means the principal office of the
Indenture Trustee located at Two International Place, 4th Floor, Boston,
Massachusetts 02110, Attention: Corporate Trust Department, or such other
office at which the Indenture Trustee's corporate trust business shall be
administered which the Indenture Trustee shall have specified by notice in
writing to Owner, the Loan Participants and each Note Holder.
"Debt" means any liability for borrowed money, or any liability
for the payment of money in connection with any letter of credit
transaction, or other liabilities evidenced or to be evidenced by bonds,
debentures, notes or other similar instruments or for the deferred purchase
price of property, goods or services.
"Debt Rate" means, with respect to any Series, the rate per annum
specified for such Series under the heading "Interest Rate" in Schedule I
to the Indenture.
"Default" means any event or condition that with the giving of
notice or the lapse of time or both would become an Event of Default.
"Delivery Date" means the date of the initial Indenture
Supplement for the Aircraft.
"Delivery Notice" means the notice of delivery delivered pursuant
to Section 2(c) of the Participation Agreement.
"Depositaries" means collectively, Credit Suisse First Boston,
New York Branch and Citibank, N.A.
"Designated Interest Rate" has the meaning specified for such
term in Section 2.02 of the Indenture.
"Dollars" and "$" mean the lawful currency of the United States
of America.
"Enforcement Date" has the meaning specified for such term in
Section 4.03 of the Indenture.
"Engine" means (i) each of the two CFM International 56-5 type
engines listed by manufacturer's serial number in the initial Indenture
Supplement, whether or not from time to time thereafter installed on the
Airframe or installed on any other airframe or on any other aircraft; and
(ii) any Acceptable Alternate Engine that may from time to time be
substituted, pursuant to the terms of the Indenture, for either of such two
engines, together in each case with any and all Parts incorporated or
installed in or attached thereto or any and all Parts removed there from;
provided, however, that at such time as an engine shall be deemed part of
the property leased under the Indenture in substitution for an Engine
pursuant to the applicable provisions of the Indenture, the replaced Engine
shall cease to be an Engine under the Indenture. The term "Engines" means,
as of any date of determination, all Engines then subject to the Lien of
the Indenture.
"Equipment Note Holder" has the meaning specified for such term
in Section 2.07 of the Indenture.
"Equipment Notes" means and include any Equipment Notes issued
under the Indenture, and issued in exchange therefor or replacement
thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of the Participation Agreement and any subsequent
provisions of ERISA, amendatory thereof, supplemental thereto or
substituted therefor.
"Event of Default" has the meaning specified for such term in
Section 4.02 of the Indenture.
"Event of Loss" means, with respect to the Aircraft, Airframe or
any Engine, any of the following events with respect to such property: (i)
the loss of such property or of the use thereof due to the destruction of
or damage to such property which renders repair uneconomic or which renders
such property permanently unfit for normal use by Owner (or any Lessee) for
any reason whatsoever; (ii) any damage to such property which results in an
insurance settlement with respect to such property on the basis of a total
loss, or a constructive or compromised total loss; (iii) the theft or
disappearance of such property for a period in excess of one hundred eighty
(180) days or, if earlier, the expiration of the Term; (iv) the requisition
for use of such property by any governmental authority (other than a
requisition for use by the United States Government or any government of
registry of the Aircraft or any agency or instrumentality thereof) that
shall have resulted in the loss of possession of such property by Owner (or
any Lessee) for a period in excess of one hundred eighty (180) consecutive
days or, if earlier, the expiration of the Term; (v) the requisition for
use by the United States Government or any government of registry of the
Aircraft or any instrumentality or agency thereof, which shall have
occurred during the Basic Term (or any Renewal Term) and shall have
continued for a period of thirty (30) days beyond the Term; (vi)
condemnation, confiscation, requisition or taking of title of the Aircraft
or the Airframe for more than thirty (30) days, or if earlier, the
expiration of the Term; (vii) as a result of any law, rule, regulation,
order or other action by the Federal Aviation Administration or other
governmental body of the government of registry of the Aircraft having
jurisdiction, the use of such property in the normal course of the business
of air transportation shall have been prohibited for a period of one
hundred eighty (180) consecutive days, unless Owner (or Lessee) shall have
undertaken and shall be diligently carrying forward all steps which are
necessary or desirable to permit the normal use of such property by Owner
(or such Lessee), but in any event an "Event of Loss" shall occur if such
"grounding" extends for a period of more than three hundred sixty (360)
days (or, if earlier, the expiration of the Term); provided that no Event
of Loss shall be deemed to occur if such "grounding" is applicable to
Owner's entire fleet of A319 aircraft and Owner, prior to the expiration of
one year from the prohibition of such use, shall have conformed at least
one such aircraft in its fleet to the requirements of any such law, rule,
regulation, order or other action and commenced regular commercial use of
the same in such jurisdiction and shall be diligently carrying forward, on
a non-discriminatory basis, all steps which are necessary or desirable to
permit the normal use of the Aircraft by Owner (or such Lessee), but in any
event an "Event of Loss" shall be deemed to have occurred if such use shall
have been prohibited for a period of two consecutive years or such use
shall be prohibited at the expiration of the Term; and (viii) with respect
to an Engine only, any divestiture of title to or interest in an Engine or
any event with respect to an Engine that is deemed to be an Event of Loss
with respect to such Engine pursuant to Section 7(b) of the Lease. An
Event of Loss with respect to the Aircraft shall be deemed to have occurred
if an Event of Loss occurs with respect to the Airframe.
"Expenses" means all liabilities, obligations, losses, damages,
settlements, penalties, claims, actions, suits, costs, expenses and
disbursements (including, without limitation, reasonable fees and
disbursements of legal counsel, accountants, appraisers, inspectors or
other professionals and reasonable costs of investigation).
"Federal Aviation Administration" and "FAA" mean the United
States Federal Aviation Administration and any agency or instrumentality of
the United States government succeeding to their functions.
"Federal Funds Rate" means a fluctuating interest rate per annum
in effect from time to time, which rate per annum shall at all times be
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank of
New York, or if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day for such
transactions received by State Street from three Federal funds brokers of
recognized standing selected by it.
"Foreign Air Carrier" means any air carrier which is not a U.S.
Air Carrier and which performs, or contracts for the performance of,
maintenance, preventative maintenance and inspections for the Aircraft,
Airframe and/or any Engine or engine to standards which are approved by, or
which are substantially equivalent to those required by, the Federal
Aviation Administration or any Permitted Foreign Air Authority.
"Government Entity" means (a) any federal, state, provincial or
similar government, and any body, board, department, commission, court,
tribunal, authority, agency or other instrumentality of any such government
or otherwise exercising any executive, legislative, judicial,
administrative or regulatory functions of such government or (b) any other
government entity having jurisdiction over any matter contemplated by the
Operative Documents or relating to the observance or performance of the
obligations of any of the parties to the Operative Documents.
"Indemnitee" means (i) the Indenture Trustee, (ii) the Loan
Participants and each other Note Holder, (iii) the Subordination Agent,
(iv) the Liquidity Provider, (v) the Pass Through Trustees, (vi) each
Affiliate of the Persons described in clauses (i) through (v), inclusive,
(vii) the respective directors, officers, employees, agents and servants of
each of the Persons described in clauses (i) through (vi), inclusive, and
(viii) the successors and permitted assigns of the Persons described in
clauses (i) through (vii), inclusive.
"Indemnity Agreements" means each of (i) that certain Indemnity
Agreement, dated as of December 14, 1998, between Citibank, N.A. and Owner
and (ii) that certain Indemnity Agreement, dated as of December 14, 1998,
between Credit Suisse First Boston, New York Branch, and Owner.
"Indenture" means that certain Indenture and Security Agreement
(N7__UW), dated as of the date of the Participation Agreement, between
Owner and the Indenture Trustee, as it may from time to time be
supplemented or amended as therein provided, including supplementing by the
Indenture Supplement pursuant to the Indenture.
"Indenture Agreements" means the Participation Agreement, the
Purchase Agreement, the Purchase Agreement Assignment, the Consent and
Agreement and any other contract, agreement or instrument from time to time
assigned or pledged under the Indenture.
"Indenture Estate" means all estate, right, title and interest of
the Indenture Trustee in and to the properties referred to in the Granting
Clause of the Indenture.
"Indenture Excess Amount" has the meaning specified for such term
in Section 2.03(b) of the Indenture.
"Indenture Indemnitees" means (i) State Street and the Indenture
Trustee, (ii) each separate or additional trustee appointed pursuant to the
Indenture, (iii) the Subordination Agent, (iv) the Liquidity Provider, (v)
each Pass Through Trustee, and (vi) each of the respective directors,
officers, employees, agents and servants of each of the Persons described
in clauses (i) through (v), inclusive.
"Indenture Supplement" means a supplement to the Indenture,
substantially in the form of Exhibit A to the Indenture, which shall
particularly describe the Aircraft, and any Replacement Airframe and
Replacement Engine included in the property subject to the Lien of the
Indenture.
"Indenture Trustee" means State Street Bank and Trust Company, a
Massachusetts trust company, not in its individual capacity, but solely as
Indenture Trustee, and any entity which may from time to time be acting as
indenture trustee under the Indenture.
"Indenture Trustee Documents" means the Participation Agreement
and the Indenture and any other agreements between the Indenture Trustee
and any other party to the Participation Agreement relating to the
Transactions, delivered on the Delivery Date.
"Indenture Trustee's Liens" means any Lien which arises as a
result of (A) claims against the Indenture Trustee not related to its
interest in the Aircraft, (B) acts of the Indenture Trustee not permitted
by, or failure of the Indenture Trustee to take any action required by, the
Operative Documents to the extent such acts arise or such failure arises
from or constitutes gross negligence or willful misconduct, (C) claims
against the Indenture Trustee relating to Taxes or Expenses which are
excluded from the indemnification provided by Section 6 of the
Participation Agreement pursuant to said Section 6, or (D) claims against
the Indenture Trustee arising out of the transfer by the Indenture Trustee
of all or any portion of its interest in the Aircraft, the Indenture Estate
or the Operative Documents other than a transfer of the Aircraft pursuant
to Article IV or V of the Indenture.
"Intercreditor Agreement" means that certain Intercreditor
Agreement, dated as of the date of the Indenture, among the Pass Through
Trustees, the Liquidity Provider and the Subordination Agent.
"Law" means (a) any constitution, treaty, statute, law,
regulation, order, rule or directive of any Government Entity, and (b) any
judicial or administrative interpretation or application of, or decision
under, any of the foregoing.
"Lease" means any sublease permitted by the terms of Section
7(b)(x) of the Lease.
"Lessee" means any Person for so long, but only so long, as such
Person is in possession of the Airframe and/or any Engine pursuant to the
terms of a Lease which is then in effect pursuant to Section 7.03(c) of the
Indenture.
"Lien" means any mortgage, pledge, lien, charge, claim,
encumbrance, lease, sublease, sub-sublease or security interest.
"Liquidity Facilities" means the three Revolving Credit
Agreements between the Subordination Agent, as borrower, and the Liquidity
Provider, and any replacement thereof, in each case as the same may be
amended, modified or supplemented.
"Liquidity Provider" means ABN AMRO Bank, N.V., a bank organized
under the laws of the Netherlands acting through its Chicago branch, as
Class A Liquidity Provider, Class B Liquidity Provider and Class C
Liquidity Provider under the Liquidity Facilities, or any successor
thereto.
"Loan Participant" means each Purchaser and its respective
successors and registered assigns, including any Note Holder.
"Loan Participant Liens" means any Lien which arises from acts or
claims against any Loan Participant not related to the transactions
contemplated by the Operative Documents.
"Majority in Interest of Note Holders" as of a particular date of
determination means the holders of more than a majority in aggregate unpaid
Principal Amount of all Equipment Notes outstanding as of such date
(excluding any Equipment Notes held by Owner or any Affiliate thereof).
"Make-Whole Amount" means, with respect to any Equipment Note,
the amount (as determined by an independent investment banker selected by
Owner and reasonably acceptable to the Indenture Trustee) by which (a) the
present value of the remaining scheduled payments of principal and interest
from the redemption date to maturity of such Equipment Note computed by
discounting each such payment on a semiannual basis from its respective
Payment Date (assuming a 360-day year of twelve 30-day months) using a
discount rate equal to the Treasury Yield exceeds (b) the outstanding
principal amount of such Equipment Note plus accrued interest. For
purposes of determining the Make-Whole Amount, "Treasury Yield" means, at
the time of determination, the interest rate (expressed as a semiannual
equivalent and as a decimal and, in the case of United States Treasury
bills, converted to a bond equivalent yield) determined to be the per annum
rate equal to the semiannual yield to maturity for United States Treasury
securities maturing on the Average Life Date and trading in the public
securities market either as determined by interpolation between the most
recent weekly average yield to maturity for two series of United States
Treasury securities, trading in the public securities markets, (A) one
maturing as close as possible to, but earlier than, the Average Life Date
and (B) the other maturing as close as possible to, but later than, the
Average Life Date, in each case as published in the most recent H.15(519)
or, if a weekly average yield to maturity for United States Treasury
securities maturing on the Average Life Date is reported on the most recent
H.15(519), such weekly average yield to maturity as published in such
H.15(519). "H.15(519)" means the weekly statistical release designated as
such, or any successor publication, published by the Board of Governors of
the Federal Reserve System. The date of determination of a Make-Whole
Amount shall be the third Business Day prior to the applicable redemption
date and the "most recent H.15(519)" means the H.15(519) published prior to
the close of business on the third Business Day prior to the applicable
redemption date. "Average Life Date" means, for each Equipment Note to be
redeemed, the date which follows the redemption date by a period equal to
the Remaining Weighted Average Life at the redemption date of such
Equipment Note.
"Manufacturer" means Airbus Industrie G.I.E., a groupement
d'interet economique established under Ordonnance No. 67-821 dated
September 23, 1967 of the Republic of France, and its successors and
assigns.
"Manufacturer Documents" means the Purchase Agreement and the
Consent and Agreement.
"Mortgaged Property" has the meaning specified for such term in
Section 3.03 of the Indenture.
"Multiplier" means (i) on any date when no Class C Special
Indemnity Event is continuing , 0.00, (ii) on each day during the first
ninety (90)-day period immediately following the occurrence of a Class C
Special Indemnity Event, 0.0025, and (iii) thereafter, on each day during
each subsequent ninety (90)-day period for so long as such Class C Special
Indemnity Event exists, the Multiplier in effect for the immediately
preceding ninety (90)-day period plus 0.0025; provided, that (a)
notwithstanding the foregoing, the maximum Multiplier shall be 0.01, and
(b) the Multiplier shall reset after such Class C Special Indemnity Event
has ceased or no longer exists and clause (i) shall apply again to any
subsequent Class C Special Indemnity Event.
"Net Interest and Related Charges" has the meaning specified for
such term in Section 2.02 of the Indenture.
"Note Holder" means any holder from time to time of one or more
Equipment Notes.
"Note Purchase Agreement" means the Note Purchase Agreement dated
as of the Pass Through Trust Closing Date among Owner, the Pass Through
Trustee for the Class A, Class B and Class C Pass Through Trusts, the
Subordination Agent, First Security Bank, National Association, as Escrow
Agent, and State Street Bank and Trust Company, as Paying Agent.
"Obsolete Parts" has the meaning specified for such term in
Section 7.03(c) of the Indenture.
"Operative Documents" means, collectively, the Participation
Agreement, the Indenture, the Indenture Supplement covering the Aircraft,
the Equipment Notes, the Purchase Agreement (insofar as it relates to the
Aircraft), the Purchase Agreement Assignment and the Consent and Agreement
(each, an "Operative Document").
"Operative Indentures" means each of the indentures under which
notes have been issued and purchased by the Pass Through Trustees.
"Owner" means US Airways, Inc., a Delaware corporation.
"Participants" means the Loan Participants (each individually, a
"Participant").
"Participation Agreement" means that certain Participation
Agreement (N7__UW), dated as of , 199 in, among
the Subordination Agent, the Indenture Trustee, Owner and the Pass Through
Trustee, as the same may from time to time be supplemented or further
amended, or the terms thereof waived or modified, to the extent permitted
by, and in accordance with, the terms thereof.
"Parts" means all appliances, parts, instruments, appurtenances,
accessories, furnishings and other equipment of whatever nature (other than
(a) complete Engines or engines, (b) any items leased by Owner from a third
party and (c) cargo containers) which may from time to time be incorporated
or installed in or attached to the Airframe or any Engine or so long such
items remain subject to the Lien of the Indenture as after removal
therefrom; provided that "Parts" shall not include Passenger Convenience
Equipment.
"Pass Through Certificates" means the pass through certificates
to be issued by the Pass Through Trustee in connection with the
Transactions.
"Pass Through Documents" means the Participation Agreement, the
Pass Through Trust Agreements and the Intercreditor Agreement.
"Pass Through Indemnitees" means (i) the Subordination Agent, the
Liquidity Provider and the Pass Through Trustee, (ii) each Affiliate of a
Person described in the preceding clause (i), (iii) the respective
directors, officers, employees, agents and servants of each of the Persons
described in the preceding clauses (i) and (ii), and (iv) the successors
and permitted assigns of the Persons described in the preceding clauses
(i), (ii) and (iii).
"Pass Through Trust" means, collectively, the three separate
grantor trusts set forth in Schedule III to the Participation Agreement
created, pursuant to the Pass Through Trust Agreements and each of the Pass
Through Trust Supplements set forth in Schedule III to the Participation
Agreement, to facilitate certain of the transactions contemplated by the
Operative Documents.
"Pass Through Trust Agreement" means the pass through trust
agreement and each of the three separate pass through trust supplements
referred to on Schedule III to the Participation Agreement.
"Pass Through Trust Closing Date" means December 14, 1998.
"Pass Through Trustee" means State Street Bank and Trust Company,
a Massachusetts trust company, in its capacity as trustee under each Pass
Through Trust Agreement, and each other Person that may from time to time
be acting as successor trustee under any such Pass Through Trust Agreement.
"Passenger Convenience Equipment" means available components or
systems installed on or affixed to the Airframe that are used to provide
individual telecommunications or electronic entertainment to passengers
aboard the Aircraft.
"Past Due Rate" means a rate per annum equal to 1% over the Debt
Rate.
"Payment Date" means each January 30 and July 30, commencing on
________ 30, ____ (or, if any such day is not a Business Day, the
immediately succeeding Business Day) until the Equipment Notes have been
paid in full.
"Permitted Foreign Air Authority" means the Civil Aviation
Authority of the United Kingdom, the Direction Generale de l'Aviation
Civile of the French Republic, the Luftfahrt Bundesamt of the Federal
Republic of Germany, the Rijflauchtraatdienst of the Kingdom of the
Netherlands, the Ministry of Transportation of Japan or the Federal
Ministry of Transport of Canada (and any agency or instrumentality of the
applicable government succeeding to the functions of any of the foregoing
entities).
"Permitted Lien" means any Lien referred to in clauses (i)
through (viii) of Section 7.01 of the Indenture.
"Permitted Lessee" means any entity domiciled in a country listed
in Exhibit C to the Indenture as in effect from time to time and as may be
modified in accordance with Section 7(d) of the Participation Agreement.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Principal Amount", with respect to a Equipment Note, means the
stated original principal amount of such Equipment Note and, with respect
to all Equipment Notes, means the aggregate stated original principal
amounts of all Equipment Notes.
"Principal Amount Repayment Date" means each Payment Date on
which any portion of the Principal Amount is due and payable in accordance
with the Amortization Schedule.
"Purchase Agreement" means the Sale and Purchase Agreement, dated
as of October 31, 1997, between the Seller and US Airways Group, Inc., as
the same has been assigned to Owner, relating to the purchase by Owner of
the Aircraft, as originally executed or as modified, amended or
supplemented in accordance with the terms thereof, but only insofar as the
foregoing relates to the Aircraft.
"Purchase Agreement Assignment" means the Purchase Agreement
Assignment (N7 UW), dated as of the date of the Participation Agreement,
between Owner and the Indenture Trustee, as the same may be amended,
supplemented or modified from time to time, with a form of Consent and
Agreement to be executed by the Seller attached thereto.
"Purchasers" means the Pass Through Trustees under each Pass
Through Trust Agreement.
"QIB" has the meaning specified for such term in Section 2.08 of
the Indenture.
"Registration Agreement" means the Registration Agreement dated
December 14, 1998 by Owner, and confirmed and accepted by AIFS, in respect
of the 6.82% Pass Through Certificates, Series 1998-1, Class C, as such
Registration Agreement may be amended, modified and supplemented from time
to time in accordance with the provisions thereof.
"Related Indemnitee Group" means, with respect to any Indemnitee,
any officer, director, servant, employee, agent or Affiliate thereof.
"Remaining Weighted Average Life" of a Equipment Note, at the
redemption date of such Equipment Note, means the number of days equal to
the quotient obtained by dividing (a) the sum of the products obtained by
multiplying (i) the amount of each then remaining installment of principal,
including the payment due on the maturity date of such Equipment Note, by
(ii) the number of days from and including the redemption date to but
excluding the scheduled payment date of such principal installment; by (b)
the then unpaid principal amount of such Equipment Note.
"Replacement Airframe" means any airframe substituted for the
Airframe pursuant to Section 5.06 of the Indenture.
"Replacement Engine" means any engine substituted for an Engine
pursuant to Section 5.06 of the Indenture.
"Responsible Officer" means a responsible officer in the
Corporate Trust Office of the Indenture Trustee.
"Scheduled Delivery Date" has the meaning specified for such term
in Section 2(f) of the Participation Agreement.
"Secured Obligations" has the meaning specified for such term in
the Granting Clause of the Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" means AVSA, S.A.R.L., a societE a responsabilite limitee
organized and existing under the laws of the Republic of France.
"Senior Holder" has the meaning specified for such term in
Section 2.15(c) of the Indenture.
"Series A" or "Series A Equipment Notes" means Equipment Notes
issued and designated as "Series A" under the Indenture, in the Principal
Amount and maturities and bearing interest as specified in Schedule I to
the Indenture under the heading "Series A."
"Series B" or "Series B Equipment Notes" means Equipment Notes
issued and designated as "Series B" under the Indenture, in the Principal
Amount and maturities and bearing interest as specified in Schedule I to
the Indenture under the heading "Series B."
"Series C" or "Series C Equipment Notes" means Equipment Notes
issued and designated as "Series C" under the Indenture, in the Principal
Amount and maturities and bearing interest as specified in Schedule I to
the Indenture under the heading "Series C."
"State Street" means State Street Bank and Trust Company, a
Massachusetts trust company, not in its capacity as Indenture Trustee under
the Indenture, but in its individual capacity.
"Subordination Agent" means State Street Bank and Trust Company,
a Massachusetts trust company, as subordination agent under the
Intercreditor Agreement, or any successor thereto.
"Taxes" means any and all fees (including, without limitation,
license, recording, documentation and registration fees), taxes (including,
without limitation, income, gross receipts, sales, rental, use, turnover,
value added, property (tangible and intangible), excise and stamp taxes),
license, levies, imposts, duties, recording charges and assessments of any
kind whatsoever that are in the nature of taxes or other governmental
charges including interest, penalties and additions to tax (each,
individually a "Tax").
"Transaction Expenses" means: all of the reasonable out-of-
pocket costs, fees and expenses incurred by Owner, the Pass Through
Trustee, the Subordination Agent and the Indenture Trustee in connection
with the transactions contemplated by the Participation Agreement, the
other Operative Documents, the Pass Through Trust Agreements, the Pass
Through Documents, the Intercreditor Agreement, the Liquidity Facilities
and the Underwriting Agreement (except, in each case, as otherwise provided
therein) including, without limitation:
(a) the reasonable and actual fees, expenses and disbursements of (A)
Bingham, Dana & Gould LLP, special counsel for the Pass Through
Trustee, the Subordination Agent and the Indenture Trustee, (B)
Shearman & Sterling, special counsel for the Underwriters, and
(C) Crowe & Dunlevy, P.C., special counsel in Oklahoma City,
Oklahoma and (D) Simpson Thacher & Bartlett, special counsel to
AIFS;
(b) the initial fee and reasonable and actual disbursements of the
Indenture Trustee under the Indenture;
(c) the initial fees and expenses of the Liquidity Provider, the Pass
Through Trustee and the Subordination Agent;
(d) underwriting fees and commissions;
(e) the fees and expenses with respect to the appraisal of the
Aircraft;
(f) the fees, expenses and disbursements of Skadden, Arps, Slate,
Meagher & Flom LLP and its affiliates, special counsel for Owner;
(g) the costs of filing and recording documents with the FAA and
filing Uniform Commercial Code statements in the United States;
(h) the reasonable fees, expenses and disbursements of special
counsel to the Liquidity Provider;
(i) the expenses of the Depositaries payable under Section 10(a) of
each Indemnity Agreement; and
(j) the reasonable fees, expenses and disbursements of, special
counsel to the Seller and the Manufacturer.
"Transactions" means the transactions contemplated by the
Participation Agreement and the other Operative Documents.
"Transportation Code" means that portion of the United States
Code comprising those provisions formerly referred to as the Federal
Aviation Act of 1958, as amended, or any subsequent legislation that
amends, supplements or supersedes such provisions.
"Underwriters" means Morgan Stanley & Co. Incorporated, Salomon Smith
Barney Inc., Lehman Brothers Inc. and Credit Suisse First Boston Corporation.
"U.S. Air Carrier" means any Certificated Air Carrier as to which
there is in force an air carrier operating certificate issued pursuant to
Part 121 of the regulations under the Transportation Code, or which may
operate as an air carrier by certification or otherwise under any successor
or substitute provisions therefor or in the absence thereof.
"Wet Lease" means any arrangement whereby the Owner (or any
Lessee) agrees to furnish the Airframe and Engines or engines installed
thereon to a third party pursuant to which such Airframe and Engines or
engines (i) shall be operated solely by regular employees of Owner (or any
Lessee) possessing all current certificates and licenses that would be
required under the Transportation Code, or, if the Aircraft is not
registered in the United States, all certificates and licenses required by
the laws of the jurisdiction of registry, for the performance by such
employees of similar functions within the United States of America or such
other jurisdiction of registry (it is understood that cabin attendants need
not be regular employees of Owner (or any Lessee)) and (ii) shall be
maintained by Owner (or any Lessee) in accordance with its normal
maintenance practices.
EXHIBIT 4(a)(xix)
Owned Aircraft Indenture
N7__UW
===========================================================================
INDENTURE AND SECURITY AGREEMENT
(N7__UW)
Dated as of __________ __, 199_
Between
US AIRWAYS, INC.
Owner
and
STATE STREET BANK AND TRUST COMPANY
Indenture Trustee
===========================================================================
EQUIPMENT NOTES COVERING
ONE AIRBUS A319-___ AIRCRAFT
BEARING U.S. REGISTRATION MARK N7__UW
OWNED BY US AIRWAYS, INC.
===========================================================================
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . 5
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II
THE EQUIPMENT NOTES . . . . . . . . . . . . . 6
SECTION 2.01. Form of Equipment Notes . . . . . . . . . . . . . . . . . 6
SECTION 2.02. Issuance and Terms of Equipment Notes . . . . . . . . . 11
SECTION 2.03. [Reserved] . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.04. Method of Payment . . . . . . . . . . . . . . . . . . . 13
SECTION 2.05. Application of Payments . . . . . . . . . . . . . . . . 16
SECTION 2.06. Termination of Interest in Indenture Estate . . . . . . 17
SECTION 2.07. Registration, Transfer and Exchange of Equipment Notes . 17
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Equipment
Notes . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.09. Payment of Expenses on Transfer; Cancellation . . . . . 19
SECTION 2.10. Mandatory Redemptions of Equipment Notes . . . . . . . . 20
SECTION 2.11. Voluntary Redemptions of Equipment Notes . . . . . . . . 20
SECTION 2.12. Redemptions; Notice of Redemption . . . . . . . . . . . 20
SECTION 2.13. [Reserved] . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.14. [Reserved] . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.15. Subordination . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE INDENTURE ESTATE . . . . . . . . 22
SECTION 3.01. Basic Distributions. . . . . . . . . . . . . . . . . . . 22
SECTION 3.02. Event of Loss; Optional Redemption . . . . . . . . . . . 22
SECTION 3.03. Payments After Event of Default . . . . . . . . . . . . 23
SECTION 3.04. Certain Payments . . . . . . . . . . . . . . . . . . . . 26
SECTION 3.05. Other Payments . . . . . . . . . . . . . . . . . . . . . 26
SECTION 3.06. Payments to Owner . . . . . . . . . . . . . . . . . . . 27
ARTICLE IV
CERTAIN COVENANTS OF OWNER; EVENTS OF
DEFAULT; REMEDIES OF INDENTURE TRUSTEE . . . . . . . 27
SECTION 4.01. Certain Covenants of Owner . . . . . . . . . . . . . . . 27
SECTION 4.02. Event of Default . . . . . . . . . . . . . . . . . . . . 27
SECTION 4.03. [Reserved] . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.04. Remedies . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.05. Return of Aircraft, Etc . . . . . . . . . . . . . . . . 31
SECTION 4.06. Remedies Cumulative . . . . . . . . . . . . . . . . . . 33
SECTION 4.07. Discontinuance of Proceedings . . . . . . . . . . . . . 33
SECTION 4.08. Waiver of Past Defaults . . . . . . . . . . . . . . . . 33
SECTION 4.09. Appointment of Receiver . . . . . . . . . . . . . . . . 34
SECTION 4.10. Indenture Trustee Authorized to Execute Bills of
Sale, Etc . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 4.11. Rights of Note Holders to Receive Payment . . . . . . . 35
ARTICLE V
DUTIES OF THE INDENTURE TRUSTEE . . . . . . . . . 35
SECTION 5.01. Notice of Event of Default . . . . . . . . . . . . . . . 35
SECTION 5.02. Action upon Instructions; Certain Rights and
Limitations . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.03. Indemnification . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.04. No Duties Except as Specified in Indenture or
Instructions . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.05. No Action Except Under Indenture or
Instructions . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.06. Replacement Airframes and Replacement Engines . . . . . 38
SECTION 5.07. Indenture Supplements for Replacements . . . . . . . . . 40
SECTION 5.08. Effect of Replacement . . . . . . . . . . . . . . . . . 40
SECTION 5.09. Investment of Amounts Held by Indenture Trustee . . . . 41
ARTICLE VI
THE INDENTURE TRUSTEE . . . . . . . . . . . 41
SECTION 6.01. Acceptance of Trusts and Duties . . . . . . . . . . . . 41
SECTION 6.02. Absence of Duties . . . . . . . . . . . . . . . . . . . 42
SECTION 6.03. No Representations or Warranties as to Aircraft
or Documents . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.04. No Segregation of Monies; No Interest . . . . . . . . . 43
SECTION 6.05. Reliance; Agreements; Advice of Counsel . . . . . . . . 43
SECTION 6.06. [Reserved] . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.07. Compensation . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.08. Instructions from Note Holders . . . . . . . . . . . . . 44
ARTICLE VII
OPERATING COVENANTS OF THE OWNER . . . . . . . . 45
SECTION 7.01. Liens . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 7.02. Registration, Maintenance, Operation and
Registration; Possession and Leases; Insignia . . . . . 45
SECTION 7.03. Replacement and Pooling of Parts; Alterations,
Modifications and Additions . . . . . . . . . . . . . . 51
SECTION 7.04. Insurance . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 7.05. Inspection . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 7.06. Filings; Delivery of Financial Statements . . . . . . . 55
ARTICLE VIII
INDEMNIFICATION OF INDENTURE TRUSTEE BY OWNER . . . . . 56
SECTION 8.01. Scope of Indemnification . . . . . . . . . . . . . . . . 56
ARTICLE IX
SUCCESSOR AND SEPARATE TRUSTEES . . . . . . . . . 57
SECTION 9.01. [Reserved.] . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 9.02. Resignation of Indenture Trustee; Appointment of
Successor. . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 9.03. Appointment of Additional and Separate Trustees . . . . 59
ARTICLE X
SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE
AND OTHER DOCUMENTS . . . . . . . . . . . 61
SECTION 10.01. Instructions of Majority; Limitations. . . . . . . . . . 61
SECTION 10.02. Trustees Protected. . . . . . . . . . . . . . . . . . . 63
SECTION 10.03. Documents Mailed to Note Holders. . . . . . . . . . . . 63
SECTION 10.04. No Request Necessary for Indenture Supplement. . . . . . 63
ARTICLE XI
MISCELLANEOUS . . . . . . . . . . . . . 63
SECTION 11.01. Termination of Indenture. . . . . . . . . . . . . . . . 63
SECTION 11.02. No Legal Title to Indenture Estate in Note Holders. . . 64
SECTION 11.03. Sale of Aircraft by Indenture Trustee Is Binding. . . . 64
SECTION 11.04. Indenture for Benefit of Owner, Indenture . . . . . . . 65
SECTION 11.05. Notices. . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 11.06. Severability. . . . . . . . . . . . . . . . . . . . . . 65
SECTION 11.07. No Oral Modification or Continuing Waivers. . . . . . . 66
SECTION 11.08. Successors and Assigns. . . . . . . . . . . . . . . . . 66
SECTION 11.09. Headings. . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 11.10. Normal Commercial Relations. . . . . . . . . . . . . . 66
SECTION 11.11. Governing Law; Counterpart Form. . . . . . . . . . . . 67
SECTION 11.12. Voting By Note Holders. . . . . . . . . . . . . . . . . 67
SECTION 11.13. Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . 67
EXHIBIT A INDENTURE SUPPLEMENT . . . . . . . . . . . . . . . EXHIBIT A-1
EXHIBIT B INSURANCE . . . . . . . . . . . . . . . . . . . . . EXHIBIT B-1
SCHEDULE I SERIES A . . . . . . . . . . . . . . . . . . . SCHEDULE I-2
SERIES B . . . . . . . . . . . . . . . . . . . SCHEDULE I-3
SERIES C . . . . . . . . . . . . . . . . . . . SCHEDULE I-4
SCHEDULE II PASS THROUGH TRUST AGREEMENT AND PASS
THROUGH TRUST SUPPLEMENTS . . . . . . . . . . SCHEDULE II-1
INDENTURE AND SECURITY AGREEMENT
(N7__UW)
INDENTURE AND SECURITY AGREEMENT (N7__UW), dated as of
_________ __, 199_ ("Indenture") between US AIRWAYS, INC., a Delaware
corporation (together with its successors and permitted assigns, "Owner"),
and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company, as
Indenture Trustee hereunder (together with its successors hereunder, the
"Indenture Trustee").
W I T N E S S E T H
WHEREAS, the parties desire by this Indenture, among other
things, (i) to provide for the issuance by Owner to the Pass Through
Trustees (or their designee) of the Equipment Notes evidencing the
participation of the Pass Through Trustees in the payment of Owner's Cost
for the Aircraft, as provided in the Participation Agreement and (ii) to
provide for the assignment, mortgage and pledge by Owner to the Indenture
Trustee, as part of the Indenture Estate hereunder, among other things, of
all of Owner's right, title and interest in and to the Aircraft, as
security for, among other things, Owner's obligations to the Indenture
Trustee, for the ratable benefit and security of the Note Holders, subject
to Section 2.15 and Article III hereof;
WHEREAS, all things have been done to make the Equipment Notes,
when executed by Owner and authenticated and delivered by the Indenture
Trustee hereunder, the valid, binding and enforceable obligations of Owner;
and
WHEREAS, all things necessary to make this Indenture the valid,
binding and legal obligation of Owner for the uses and purposes herein set
forth, in accordance with its terms, have been done and performed and have
happened:
GRANTING CLAUSE
NOW, THEREFORE, THIS INDENTURE AND SECURITY AGREEMENT
WITNESSETH, that, to secure (i) the prompt payment of the Principal Amount
of, interest on, Make-Whole Amount, if any, and all other amounts due with
respect to, all Equipment Notes from time to time outstanding hereunder and
(ii) the performance and observance by Owner of all the agreements,
covenants and provisions herein and in the Participation Agreement and the
Equipment Notes contained, for the benefit of the Note Holders, the Loan
Participants and each of the Indenture Indemnitees and the prompt payment
of all amounts from time to time owing hereunder and under the
Participation Agreement to the Note Holders, the Loan Participants or any
Indenture Indemnitee by Owner (the "Secured Obligations") and for the uses
and purposes and subject to the terms and provisions hereof, and in
consideration of the premises and of the covenants herein contained, and of
the acceptance of the Equipment Notes by the holders thereof, and for other
good and valuable consideration the receipt and adequacy whereof are hereby
acknowledged, Owner has granted, bargained, sold, assigned, transferred,
conveyed, mortgaged, pledged and confirmed, and does hereby grant, bargain,
sell, assign, transfer, convey, mortgage, pledge and confirm, unto the
Indenture Trustee, its successors in trust and assigns, for the security
and benefit of the Note Holders, a first priority security interest in and
mortgage lien on all right, title and interest of Owner in, to and under
the following described property, rights and privileges, to wit:
(1) the Aircraft (including the Airframe and the Engines and
all replacements thereof and substitutions therefor to which Owner shall
from time to time acquire title as provided herein), all as more
particularly described in the Indenture Supplement executed and delivered
with respect to the Aircraft or any such replacements or substitutions
therefor, as provided in this Indenture;
(2) the Purchase Agreement (to the extent specified in the
Purchase Agreement Assignment), the Purchase Agreement Assignment, the
Consent and Agreement and the Bill of Sale;
(3) all rents, issues, profits, revenues and other income of
the property subjected or required to be subjected to the Lien of this
Indenture;
(4) all insurance and requisition proceeds with respect to the
Aircraft, including but not limited to the insurance required under Section
7.04;
(5) all monies and securities from time to time deposited or
required to be deposited with the Indenture Trustee pursuant to any terms
of this Indenture or required hereby to be held by the Indenture Trustee
hereunder; and
(6) all proceeds of the foregoing.
Concurrently with the delivery hereof, Owner is delivering to
the Indenture Trustee executed copies of the Participation Agreement and
the Purchase Agreement Assignment with the Consent and Agreement attached
thereto.
TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Indenture Trustee, and its successors and assigns, in trust for
the benefit and security of the Note Holders and the Indenture Indemnitees
except as provided in Section 2.15 and Article III hereof without any
preference, distinction or priority of any one Equipment Note over any
other by reason of priority of time of issue, sale, negotiation, date of
maturity thereof or otherwise for any reason whatsoever, and for the uses
and purposes and in all cases and as to all property specified in
paragraphs (1) through (6) inclusive above, subject to the terms and
provisions set forth in this Indenture.
It is expressly agreed that anything herein contained to the
contrary notwithstanding, Owner shall remain liable under each of the
Indenture Agreements to which it is a party to perform all of the
obligations assumed by it thereunder, except to the extent prohibited or
excluded from doing so pursuant to the terms and provisions thereof, and
the Indenture Indemnitees, Indenture Trustee and the Note Holders shall
have no obligation or liability under the Indenture Agreements, by reason
of or arising out of the assignment hereunder, nor shall the Indenture
Indemnitees, Indenture Trustee or the Note Holders be required or obligated
in any manner to perform or fulfill any obligations of Owner under or
pursuant to any of the Indenture Agreements to which it is a party, or,
except as herein expressly provided, to make any payment, or to make any
inquiry as to the nature or sufficiency of any payment received by it, or
present or file any claim, or take any action to collect or enforce the
payment of any amounts which may have been assigned to it or to which it
may be entitled at any time or times.
Owner does hereby constitute the Indenture Trustee the true and
lawful attorney of Owner, irrevocably, granted for good and valuable
consideration and coupled with an interest and with full power of
substitution, and with full power (in the name of Owner or otherwise) to
ask for, require, demand, receive, compound and give acquittance for any
and all monies and claims for monies (in each case including insurance and
requisition proceeds) due and to become due under or arising out of the
Indenture Agreements, and all other property which now or hereafter
constitutes part of the Indenture Estate, to endorse any checks or other
instruments or orders in connection therewith and to file any claims or to
take any action or to institute any proceedings which the Indenture Trustee
may deem to be necessary or advisable in the premises. Without limiting the
generality of the foregoing, but subject to the rights of Owner hereunder,
during the continuance of any Event of Default under this Indenture, the
Indenture Trustee shall have the right under such power of attorney to
accept any offer in connection with the exercise of remedies as set forth
herein of any purchaser to purchase the Airframe and Engines and upon such
purchase to execute and deliver in the name of and on behalf of Owner an
appropriate bill of sale and other instruments of transfer relating to the
Airframe and Engines, when purchased by such purchaser, and to perform all
other necessary or appropriate acts with respect to any such purchase, and
in its discretion to file any claim or take any other action or
proceedings, either in its own name or in the name of Owner or otherwise,
which the Indenture Trustee may deem necessary or appropriate to protect
and preserve the right, title and interest of the Indenture Trustee in and
to such rents and other sums and the security intended to be afforded
hereby; provided, however, that no action of the Indenture Trustee pursuant
to this paragraph shall increase the obligations or liabilities of Owner to
any Person beyond those obligations and liabilities specifically set forth
in this Indenture and in the other Operative Documents. Owner agrees that
promptly upon receipt thereof, it will transfer to the Indenture Trustee
any and all monies from time to time received by it constituting part of
the Indenture Estate, for distribution by the Indenture Trustee pursuant to
this Indenture.
Owner agrees that at any time and from time to time, upon the
written request of the Indenture Trustee, Owner will promptly and duly
execute and deliver or cause to be duly executed and delivered any and all
such further instruments and documents as the Indenture Trustee may
reasonably deem necessary or desirable to perfect, preserve or protect the
mortgage, security interests and assignments created or intended to be
created hereby or to obtain for the Indenture Trustee the full benefits of
the assignment hereunder and of the rights and powers herein granted.
Owner does hereby warrant and represent that it has not
assigned or pledged, and hereby covenants and agrees that it will not
assign or pledge, so long as the assignment hereunder shall remain in
effect, and the Lien hereof shall not have been released pursuant to
Section 11.01 hereof, any of its right, title or interest hereby assigned,
to anyone other than the Indenture Trustee, and that it will not, except as
otherwise provided in this Indenture, (i) enter into any agreement amending
or supplementing any Indenture Agreement, (ii) execute any waiver or
modification of, or consent under, the terms of, or exercise any rights,
powers or privileges under, any Indenture Agreement, (iii) settle or
compromise any claim arising under any Indenture Agreement or (iv) submit
or consent to the submission of any dispute, difference or other matter
arising under or in respect of any Indenture Agreement to arbitration
thereunder.
Owner does hereby further agree that it will not without the
written consent of the Indenture Trustee sell, mortgage, transfer, assign
or hypothecate (other than to the Indenture Trustee hereunder) its interest
in the Airframe and Engines or any part thereof or in any amount to be
received by it from the use or disposition of the Airframe and Engines,
other than amounts distributed to it pursuant to Article III hereof.
It is hereby further agreed that any and all property described
or referred to in the granting clauses hereof which is hereafter acquired
by Owner shall ipso facto, and without any further conveyance, assignment
or act on the part of Owner or the Indenture Trustee, become and be subject
to the Lien herein granted as fully and completely as though specifically
described herein, but nothing contained in this paragraph shall be deemed
to modify or change the obligations of Owner contained in the foregoing
paragraphs.
Owner does hereby agree that it will not violate any covenant
or agreement made by it therein, herein or in any of the other Owner
Documents.
IT IS HEREBY COVENANTED AND AGREED by and between the parties
hereto as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. For all purposes of this Indenture,
capitalized terms used but not defined herein shall have the respective
meanings set forth or incorporated by reference, and shall be construed and
interpreted in the manner described, in Annex A.
ARTICLE II
THE EQUIPMENT NOTES
SECTION 2.01. Form of Equipment Notes.
The Equipment Notes shall be substantially in the form set forth
below:
THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR PURSUANT TO THE
SECURITIES LAWS OF ANY STATE. ACCORDINGLY, THIS EQUIPMENT NOTE MAY
NOT BE SOLD UNLESS EITHER REGISTERED UNDER THE ACT AND SUCH
APPLICABLE STATE LAWS OR AN EXEMPTION FROM SUCH REGISTRATIONS IS
AVAILABLE.
US AIRWAYS, INC. SERIES [___] NON-RECOURSE EQUIPMENT NOTE DUE [___]
ISSUED IN CONNECTION WITH THE AIRBUS A- AIRCRAFT BEARING UNITED
STATES REGISTRATION NUMBER _____.
No.____ Date: [______,__] $________________
INTEREST RATE MATURITY DATE
[____] [___________,_____]
US AIRWAYS, INC., hereby promises to pay to ___________, or the
registered assignee thereof, the principal sum of $_________ (the
"Principal Amount"), together with interest on the amount of the Principal
Amount remaining unpaid from time to time (calculated on the basis of a
year of 360 days comprised of twelve 30-day months) from the date hereof
until paid in full at a rate per annum equal to the Interest Rate indicated
above. The Principal Amount of this Equipment Note shall be payable on the
dates and in the installments as set forth in Schedule I hereto. Accrued
but unpaid interest shall be due and payable in semi-annual installments
commencing _______ __, ____, and thereafter on _______ __ and ______ __ of
each year, to and including _______, _____. Notwithstanding the foregoing,
the final payment made on this Equipment Note shall be in an amount
sufficient to discharge in full the unpaid Principal Amount and all accrued
and unpaid interest on, and any other amounts due under, this Equipment
Note. Notwithstanding anything to the contrary contained herein, if any
date on which a payment under this Equipment Note becomes due and payable
is not a Business Day then such payment shall not be made on such scheduled
date but shall be made on the next succeeding Business Day with the same
force and effect as if made on such scheduled date and if such payment is
made on such next succeeding Business Day, no interest shall accrue on the
amount of such payment from and after such scheduled date.
For purposes hereof, the term "Indenture" means the Indenture and
Security Agreement (N7__UW), dated as of ___________ __, 199_, between
Owner and State Street Bank and Trust Company (the "Indenture Trustee"), as
the same may be amended or supplemented from time to time. All other
capitalized terms used in this Equipment Note and not defined herein shall
have the respective meanings assigned in the Indenture.
This Equipment Note shall bear interest, payable on demand, at the
Past Due Rate (calculated on the basis of a year of 360 days comprised of
twelve 30-day months) on any overdue Principal Amount, any overdue Make-
Whole Amount, if any, and (to the extent permitted by applicable law) any
overdue interest and any other amounts payable hereunder which are overdue,
in each case for the period the same is overdue. Amounts shall be overdue
if not paid when due (whether at stated maturity, by acceleration or
otherwise).
There shall be maintained a Equipment Note Register for the purpose
of registering transfers and exchanges of Equipment Notes at the Corporate
Trust Office of the Indenture Trustee or at the office of any successor in
the manner provided in Section 2.07 of the Indenture.
The Principal Amount and interest and other amounts due hereunder
shall be payable in Dollars in immediately available funds at the Corporate
Trust Office of the Indenture Trustee, or as otherwise provided in the
Indenture. Each such payment shall be made on the date such payment is due
and without any presentment or surrender of this Equipment Note, except
that in the case of any final payment with respect to this Equipment Note,
the Equipment Note shall be surrendered promptly thereafter to the
Indenture Trustee for cancellation.
The holder hereof, by its acceptance of this Equipment Note, agrees
that, except as provided in the Indenture, each payment of an installment
of the Principal Amount, Make-Whole Premium, if any, and interest received
by it hereunder shall be applied, first, to the payment of accrued interest
on this Equipment Note (as well as any interest on any overdue Principal
Amount, any overdue Make-Whole Amount, if any, or, to the extent permitted
by Law, any overdue interest and other amounts hereunder) to the date of
such payment, second, to the payment of the Principal Amount of this
Equipment Note (or portion hereof) then due (other than by reason of
redemption), third, to the payment of Make-Whole Amount, if any, and any
other amount due hereunder or under the Indenture, and fourth, the balance,
if any, remaining thereafter, to the payment of the Principal Amount hereof
remaining unpaid and due by reason of redemption. The amounts paid
pursuant to clause fourth of the preceding sentence shall be applied to
installments of the Principal Amount of this Equipment Note remaining
unpaid in the inverse order of their normal maturity.
This Equipment Note is one of the Equipment Notes referred to in
the Indenture which have been or are to be issued by Owner pursuant to the
terms of the Indenture. The Indenture Estate is held by the Indenture
Trustee as security, in part, for the Equipment Notes. The provisions of
this Equipment Note are subject to the Indenture. Reference is hereby made
to the Indenture and the Participation Agreement for a complete statement
of the rights and obligations of the holder of, and the nature and extent
of the security for, this Equipment Note and the rights and obligations of
the holders of, and the nature and extent of the security for, any other
Equipment Notes executed and delivered under the Indenture, as well as for
a statement of the terms and conditions of the Trust created by the
Indenture, to all of which terms and conditions in the Indenture and the
Participation Agreement each holder hereof agrees by its acceptance of this
Equipment Note.
As provided in the Indenture and subject to certain limitations
therein set forth, this Equipment Note is exchangeable for a like aggregate
Principal Amount of Equipment Notes of different authorized denominations,
as requested by the holder surrendering the same.
Prior to the due presentment for registration of transfer of this
Equipment Note, Owner and the Indenture Trustee shall deem and treat the
Person in whose name this Equipment Note is registered on the Equipment
Note Register as the absolute owner and holder hereof for the purpose of
receiving all amounts payable with respect to this Equipment Note and for
all purposes, and neither of Owner nor the Indenture Trustee shall be
affected by notice to the contrary.
This Equipment Note is subject to redemption as provided in
Sections 2.10, 2.11 and 2.12 of the Indenture but not otherwise.
[The indebtedness evidenced by this Equipment Note is, to the
extent and in the manner provided in the Indenture, subordinate and subject
in right of payment to the prior payment in full of the Secured Obligations
(as defined in the Indenture) in respect of [Series A Equipment Notes](1)
[Series A and Series B Equipment Notes](2) , and this Equipment Note is issued
subject to such provisions. The Note Holder of this Equipment Note, by
accepting the same, (a) agrees to and shall be bound by such provisions,
(b) authorizes and directs the Indenture Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination
as provided in the Indenture and (c) appoints the Indenture Trustee his
attorney-in-fact for such purpose.](3)
--------------------------
(1) To be inserted in the case of a Series B Equipment Note.
(2) To be inserted in the case of a Series C Equipment Note.
(3) To be inserted for each Equipment Note other than any
Series A Equipment Note.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Indenture Trustee by manual signature, this
Equipment Note shall not be entitled to any benefit under the Indenture or
be valid or obligatory for any purpose.
THIS EQUIPMENT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
* * *
IN WITNESS WHEREOF, Owner has caused this Equipment Note to be
executed in its corporate name by its officer thereunto duly authorized on
the date hereof.
US AIRWAYS, INC.
By: ____________________________
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OFAUTHENTICATION
This is one of the Equipment Notes referred to in the within-
mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity but
solely as Indenture Trustee
By: ____________________________
Name:
Title:
SCHEDULE I
EQUIPMENT NOTES AMORTIZATION
Payment Date Principal Amount to be Paid
------------ ---------------------------
[SEE SCHEDULE I TO INDENTURE
WHICH IS INSERTED UPON ISSUANCE]
* * *
SECTION 2.02. Issuance and Terms of Equipment Notes.
The Equipment Notes shall be dated the date of issuance thereof,
shall be issued in three separate series consisting of Series A, Series B
and Series C and in the maturities and principal amounts and shall bear
interest as specified in Schedule I hereto. On the date hereof, each
Equipment Note shall be issued to the Pass Through Trustees (or their
designee) under the Pass Through Agreements as set forth in Schedule II
hereto in connection therewith. The Equipment Notes shall be issued in
registered form only. The Equipment Notes shall be issued in denominations
of $1,000 and integral multiples thereof, except that one Equipment Note of
each Series may be in an amount that is not an integral multiple of $1,000.
Each Equipment Note shall bear interest at the Debt Rate
(calculated on the basis of a year of 360 days comprised of twelve 30-day
months) on the unpaid Principal Amount thereof from time to time
outstanding, payable in arrears on ________ __, ____, and on each ______ __
and ______ __ thereafter until maturity. The Principal Amount of each
Equipment Note shall be payable on the dates and in the installments which
shall be attached as Schedule I to the Equipment Notes. Notwithstanding
the foregoing, the final payment made under each Equipment Note shall be in
an amount sufficient to discharge in full the unpaid Principal Amount and
all accrued and unpaid interest on, and any other amounts due under, such
Equipment Note. Each Equipment Note shall bear interest at the Past Due
Rate (calculated on the basis of a year of 360 days comprised of twelve 30-
day months) on any part of the Principal Amount, Make-Whole Amount, if any,
and to the extent permitted by applicable law, interest and any other
amounts payable thereunder not paid when due for any period during which
the same shall be overdue, in each case for the period the same is overdue.
Amounts shall be overdue if not paid when due (whether at stated maturity,
by acceleration or otherwise). Notwithstanding anything to the contrary
contained herein, if any date on which a payment under any Equipment Note
becomes due and payable is not a Business Day then such payment shall not
be made on such scheduled date but shall be made on the next succeeding
Business Day with the same force and effect as if made on such scheduled
date and if such payment is made on such next succeeding Business Day, no
interest shall accrue on the amount of such payment from and after such
scheduled date.
Owner agrees to pay to the Indenture Trustee for distribution in
accordance with Section 3.04 hereof (i) to the extent not payable (whether or
not in fact paid) under Section 7(a) of the Note Purchase Agreement (as
originally in effect or as amended with the consent of the Owner) an amount
or amounts equal to the fees payable to the Liquidity Provider under
Section 2.03 of each Liquidity Facility and the related Fee Letter (as
defined in the Intercreditor Agreement) multiplied by a fraction the
numerator of which shall be the then outstanding aggregate principal amount
of the Series A Equipment Notes, Series B Equipment Notes and Series C
Equipment Notes and the denominator of which shall be the then outstanding
aggregate principal amount of all "Series A Equipment Notes", "Series B
Equipment Notes" and "Series C Equipment Notes" (in each case as defined in
the relevant Operative Indenture) issued under the Operative Indentures;
(ii) (x) the amount equal to interest on any Downgrade Advance (other than
any Applied Downgrade Advance) payable under Section 3.07 of each Liquidity
Facility minus Investment Earning from such Downgrade Advance multiplied by
(y) the fraction specified in the foregoing clause (i); (iii) (x) the
amount equal to interest on any Non-Extension Advance (other than any
Applied Non-Extension Advance) payable under Section 3.07 of each Liquidity
Facility minus Investment Earnings from such Non-Extension Advance
multiplied by (y) the fraction specified in the foregoing clause (i); (iv)
if any payment default shall have occurred and be continuing with respect
to interest on any Series A Equipment Note, Series B Equipment Note or
Series C Equipment Note, (x) the excess, if any, of (1) the amount equal to
interest on any Unpaid Advance, Applied Downgrade Advance or Applied Non-
Extension Advance payable under Section 3.07 of each Liquidity Facility
over (2) the sum of Investment Earnings from any Final Advance plus any
amount of interest at the Past Due Rate actually payable (whether or not
in fact paid) by Owner in respect of the overdue scheduled interest on the
Equipment Notes in respect of which such Unpaid Advance, Applied Downgrade
Advance or Applied Non-Extension Advance was made multiplied by (y) a
fraction the numerator of which shall be the then aggregate overdue amounts
of interest on the Series A Equipment Notes, Series B Equipment Notes and
Series C Equipment Notes (other than interest becoming due and payable
solely as a result of acceleration of any such Equipment Notes) and the
denominator of which shall be the then aggregate overdue amounts of
interest on all "Series A Equipment Notes", "Series B Equipment Notes" and
"Series C Equipment Notes" (in each case as defined in the relevant
Operative Indentures) issued under the Operative Indentures (other than
interest becoming due and payable solely as a result of acceleration of any
such "Equipment Notes") and (v) any other amounts owed to the Liquidity
Provider by the Subordination Agent as borrower under each Liquidity
Facility (other than amounts due as repayment of advances thereunder or as
interest on such advances), except to the extent payable pursuant to clause
(i), (ii), (iii) or (iv) above multiplied by the fraction specified in the
foregoing clause (i). For purposes of this paragraph, the terms "Applied
Downgrade Advance", "Applied Non-Extension Advance", "Cash Collateral
Account", "Downgrade Advance", "Final Advance", "Investment Earnings",
"Non-Extension Advance" and "Unpaid Advance" shall have the meanings
specified in each Liquidity Facility or the Intercreditor Agreement.
The Equipment Notes shall be executed on behalf of Owner by its
President or one of its Vice Presidents, Assistant Vice Presidents or
Assistant Secretaries or other authorized officer. Equipment Notes bearing
the signatures of individuals who were at any time the proper officers of
Owner shall bind Owner, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and
delivery of such Equipment Notes or did not hold such offices at the
respective dates of such Equipment Notes. Owner may from time to time
execute and deliver Equipment Notes with respect to the Aircraft to the
Indenture Trustee for authentication upon original issue and such Equipment
Notes shall thereupon be authenticated and delivered by the Indenture
Trustee upon the written request of Owner signed by a Vice President or
Assistant Vice President or other authorized officer of Owner; provided,
however, that each such request shall specify the aggregate Principal
Amount of all Equipment Notes to be authenticated hereunder on original
issue with respect to the Aircraft. No Equipment Note shall be secured by
or entitled to any benefit under this Indenture or be valid or obligatory
for any purposes, unless there appears on such Equipment Note a certificate
of authentication in the form provided for herein executed by the Indenture
Trustee by the manual signature of one of its authorized officers and such
certificate upon any Equipment Notes shall be conclusive evidence, and the
only evidence, that such Equipment Note has been duly authenticated and
delivered hereunder.
SECTION 2.03. [Reserved].
SECTION 2.04. Method of Payment.
(a) The Principal Amount of, interest on, Make-Whole Amount, if
any, and other amounts due under each Equipment Note or hereunder will be
payable in Dollars by wire transfer of immediately available funds not
later than 11:00 a.m., New York City time, on the due date of payment to
the Indenture Trustee at the Corporate Trust Office for distribution among
the Note Holders in the manner provided herein. Owner shall not have any
responsibility for the distribution of such payment to any Note Holder.
Notwithstanding the foregoing or any provision in any Equipment Note to the
contrary, the Indenture Trustee will use reasonable efforts to pay or cause
to be paid, if so directed in writing by any Note Holder (with a copy to
Owner), all amounts paid by Owner hereunder and under such holder's
Equipment Note or Equipment Notes to such holder or a nominee therefor
(including all amounts distributed pursuant to Article III of this
Indenture) by transferring, or causing to be transferred, by wire transfer
of immediately available funds in Dollars, prior to 2:00 p.m., New York
City time, on the due date of payment, to an account maintained by such
holder with a bank located in the continental United States the amount to
be distributed to such holder, for credit to the account of such holder
maintained at such bank. If the Indenture Trustee shall fail to make any
such payment as provided in the immediately preceding sentence after its
receipt of funds at the place and prior to the time specified above, the
Indenture Trustee, in its individual capacity and not as trustee, agrees to
compensate such holders for loss of use of funds at the Federal Funds Rate
until such payment is made and the Indenture Trustee shall be entitled to
any interest earned on such funds until such payment is made. Any payment
made hereunder shall be made without any presentment or surrender of any
Equipment Note, except that, in the case of the final payment in respect of
any Equipment Note, such Equipment Note shall be surrendered to the
Indenture Trustee for cancellation promptly after such payment.
Notwithstanding any other provision of this Indenture to the contrary, the
Indenture Trustee shall not be required to make, or cause to be made, wire
transfers as aforesaid prior to the first Business Day on which it is
practicable for the Indenture Trustee to do so in view of the time of day
when the funds to be so transferred were received by it if such funds were
received after 11:00 a.m., New York City time, at the place of payment.
Prior to the due presentment for registration of transfer of any Equipment
Note, Owner and the Indenture Trustee shall deem and treat the Person in
whose name any Equipment Note is registered on the Equipment Note Register
as the absolute owner and holder of such Equipment Note for the purpose of
receiving payment of all amounts payable with respect to such Equipment
Note and for all other purposes, and neither Owner nor the Indenture
Trustee shall be affected by any notice to the contrary. So long as any
signatory to the Participation Agreement or nominee thereof shall be a
registered Note Holder, all payments to it shall be made to the account of
such Note Holder specified in Schedule I thereto and otherwise in the
manner provided in or pursuant to the Participation Agreement unless it
shall have specified some other account or manner of payment by notice to
the Indenture Trustee consistent with this Section 2.04.
(b) The Indenture Trustee, as agent for Owner, shall exclude and
withhold at the appropriate rate from each payment of Principal Amount of,
interest on, Make-Whole Amount, if any, and other amounts due hereunder or
under each Equipment Note (and such exclusion and withholding shall
constitute payment in respect of such Equipment Note) any and all United
States withholding taxes applicable thereto as required by Law. The
Indenture Trustee agrees to act as such withholding agent and, in
connection therewith, whenever any present or future United States taxes or
similar charges are required to be withheld with respect to any amounts
payable hereunder or in respect of the Equipment Notes, to withhold such
amounts (and such withholding shall constitute payment in respect of such
Equipment Note) and timely pay the same to the appropriate authority in the
name of and on behalf of the Note Holders, that it will file any necessary
United States withholding tax returns or statements when due, and that as
promptly as possible after the payment thereof it will deliver to each Note
Holder (with a copy to Owner) appropriate receipts showing the payment
thereof, together with such additional documentary evidence as any such
Note Holder may reasonably request from time to time.
If a Note Holder which is a Non-U.S. Person has furnished to the
Indenture Trustee a properly completed and currently effective U.S.
Internal Revenue Service Form 1001 or W-8 (or such successor form or forms
as may be required by the United States Treasury Department) during the
calendar year in which the payment hereunder or under the Equipment Note(s)
held by such holder is made (but prior to the making of such payment), or
in either of the two preceding calendar years, and has not notified the
Indenture Trustee of the withdrawal or inaccuracy of such form prior to the
date of such payment (and the Indenture Trustee has no reason to know that
any information set forth in such form is inaccurate), the Indenture
Trustee shall withhold only the amount, if any, required by Law (after
taking into account any applicable exemptions claimed by the Note Holder)
to be withheld from payments hereunder or under the Equipment Notes held by
such holder in respect of United States federal income tax (and such
withholding shall constitute payment in respect of such Equipment Note).
If a Note Holder (x) which is a Non-U.S. Person has furnished to the
Indenture Trustee a properly completed and currently effective U.S.
Internal Revenue Service Form 4224 in duplicate (or such successor
certificate, form or forms as may be required by the United States Treasury
Department as necessary in order to avoid withholding of United States
federal income tax), during the calendar year in which the payment is made
(but prior to the making of such payment), and has not notified the
Indenture Trustee of the withdrawal or inaccuracy of such certificate or
form prior to the date of such payment (and the Indenture Trustee has no
reason to know that any information set forth in such form is inaccurate)
or (y) which is a U.S. Person has furnished to the Indenture Trustee a
properly completed and currently effective U.S. Internal Revenue Service
Form W-9, if applicable, prior to a payment hereunder or under the
Equipment Notes held by such holder, no amount shall be withheld from
payments in respect of United States federal income tax. If any Note
Holder has notified the Indenture Trustee that any of the foregoing forms
or certificates is withdrawn or inaccurate, or if such holder has not filed
a form claiming an exemption from United States withholding tax or if the
Code or the regulations thereunder or the administrative interpretation
thereof are at any time after the date hereof amended to require such
withholding of United States federal income taxes from payments under the
Equipment Notes held by such holder, the Indenture Trustee agrees to
withhold from each payment due to the relevant Note Holder withholding
taxes at the appropriate rate under Law and will, on a timely basis as more
fully provided above, deposit such amounts with an authorized depository
and make such returns, statements, receipts and other documentary evidence
in connection therewith as required by applicable law. Owner shall not be
liable if the Indenture Trustee fails to withhold withholding taxes in
accordance with this Section 2.04 or if any Note Holder provides false or
inaccurate information on any form required to be delivered under this
Section 2.04.
SECTION 2.05. Application of Payments.
In the case of each Equipment Note, each payment of Principal
Amount, Make-Whole Amount, if any, and interest or other amounts due
thereon shall be applied:
First: to the payment of accrued interest on such Equipment Note
(as well as any interest on any overdue Principal Amount, any overdue Make-
Whole Amount, if any, and to the extent permitted by Law, any overdue
interest and any other overdue amounts thereunder) to the date of such
payment;
Second: to the payment of the Principal Amount of such Equipment
Note (or a portion thereof) then due thereunder (other than by reason of
redemption);
Third: to the payment of Make-Whole Amount, if any, and any
other amount due hereunder or under such Equipment Note; and
Fourth: the balance, if any, remaining thereafter, to the
payment of the Principal Amount of such Equipment Note remaining unpaid and
due by reason of redemption (provided that such Equipment Note shall not be
subject to redemption except as provided in Sections 2.10, 2.11 and 2.12
hereof).
The amounts paid pursuant to clause "Fourth" above shall be
applied to the installments of Principal Amount of such Equipment Note in
the inverse order of their normal maturity.
SECTION 2.06. Termination of Interest in Indenture Estate.
A Note Holder and Indenture Indemnitees shall not, as such, have
any further interest in, or other right with respect to, the Indenture
Estate when and if the Secured Obligations due to such Note Holder or
Indenture Indemnitee shall have been paid in full.
SECTION 2.07. Registration, Transfer and Exchange of Equipment
Notes.
The Indenture Trustee shall keep a register (the "Equipment Note
Register") in which the Indenture Trustee shall provide for the
registration of Equipment Notes and the registration of transfers of
Equipment Notes. No such transfer shall be given effect unless and until
registration hereunder shall have occurred. The Equipment Note Register
shall be kept at the Corporate Trust Office of the Indenture Trustee. The
Indenture Trustee is hereby appointed "Equipment Note Registrar" for the
purpose of registering Equipment Notes and transfers of Equipment Notes as
herein provided. A holder of any Equipment Note intending to exchange such
Equipment Note shall surrender such Equipment Note to the Indenture Trustee
at the Corporate Trust Office, together with a written request from the
registered holder thereof for the issuance of a new Equipment Note,
specifying, in the case of a surrender for transfer, the name and address
of the new holder or holders. Upon surrender for registration of transfer
of any Equipment Note, Owner shall execute, and the Indenture Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Equipment Notes of a like aggregate Principal
Amount and of the same series. At the option of the Note Holder, Equipment
Notes may be exchanged for other Equipment Notes of any authorized
denominations of a like aggregate Principal Amount, upon surrender of the
Equipment Notes to be exchanged to the Indenture Trustee at the Corporate
Trust Office. Whenever any Equipment Notes are so surrendered for
exchange, Owner shall execute, and the Indenture Trustee shall authenticate
and deliver, the Equipment Notes which the Note Holder making the exchange
is entitled to receive. All Equipment Notes issued upon any registration
of transfer or exchange of Equipment Notes (whether under this Section 2.07
or under Section 2.08 hereof or otherwise under this Indenture) shall be
the valid obligations of Owner evidencing the same respective obligations,
and entitled to the same security and benefits under this Indenture, as the
Equipment Notes surrendered upon such registration of transfer or exchange.
Every Equipment Note presented or surrendered for registration of transfer,
shall (if so required by the Indenture Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by the Note Holder or such holder's
attorney duly authorized in writing, and the Indenture Trustee shall
require evidence satisfactory to it as to the compliance of any such
transfer with the Securities Act, and the securities Laws of any applicable
state. The Indenture Trustee shall make a notation on each new Equipment
Note of the amount of all payments of Principal Amount previously made on
the old Equipment Note or Equipment Notes with respect to which such new
Equipment Note is issued and the date to which interest on such old
Equipment Note or Equipment Notes has been paid. Interest shall be deemed
to have been paid on such new Equipment Note to the date on which interest
shall have been paid on such old Equipment Note, and all payments of the
Principal Amount marked on such new Equipment Note, as provided above,
shall be deemed to have been made thereon. Owner shall not be required to
exchange any surrendered Equipment Notes as provided above during the ten-
day period preceding the due date of any payment on such Equipment Note.
Owner shall in all cases deem the Person in whose name any Equipment Note
shall have been issued and registered as the absolute owner and holder of
such Equipment Note for the purpose of receiving payment of all amounts
payable by Owner with respect to such Equipment Note and for all purposes
until a notice stating otherwise is received from the Indenture Trustee and
such change is reflected on the Equipment Note Register. The Indenture
Trustee will promptly notify Owner of each registration of a transfer of a
Equipment Note. Any such transferee of a Equipment Note, by its acceptance
of a Equipment Note, agrees to the provisions of the Participation
Agreement applicable to Note Holders, and shall be deemed to have
represented and warranted (except as provided above), and covenanted, to
the parties to the Participation Agreement as to the matters represented,
warranted and covenanted by the Purchasers in the Participation Agreement.
Subject to compliance by the Note Holder and its transferee (if any) of the
requirements set forth in this Section 2.07, the Indenture Trustee and the
Owner shall use all reasonable efforts to issue new Equipment Notes upon
transfer or exchange within ten (10) Business Days of the date a Equipment
Note is surrendered for transfer or exchange.
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Equipment
Notes.
If any Equipment Note shall become mutilated, destroyed, lost or
stolen, Owner shall, upon the written request of the holder of such
Equipment Note, execute and the Indenture Trustee shall authenticate and
deliver in replacement thereof a new Equipment Note, payable in the same
Principal Amount dated the same date and captioned as issued in connection
with the Aircraft. If the Equipment Note being replaced has become
mutilated, such Equipment Note shall be surrendered to the Indenture
Trustee and a photocopy thereof shall be furnished to Owner. If the
Equipment Note being replaced has been destroyed, lost or stolen, the
holder of such Equipment Note shall furnish to Owner and the Indenture
Trustee such security or indemnity as may be required by them to save Owner
and the Indenture Trustee harmless and evidence satisfactory to Owner and
the Indenture Trustee of the destruction, loss or theft of such Equipment
Note and of the ownership thereof. If a "qualified institutional buyer" of
the type referred to in paragraph (a)(l)(i)(A), (B), (D) or (E) of Rule
144A under the Securities Act (a "QIB") is the holder of any such
destroyed, lost or stolen Equipment Note, then the written indemnity of
such QIB, signed by an authorized officer thereof, in favor of, delivered
to and in form reasonably satisfactory to Owner and the Indenture Trustee
shall be accepted as satisfactory indemnity and security and no further
indemnity or security shall be required as a condition to the execution and
delivery of such new Equipment Note. Subject to compliance by the Note
Holder of the requirements set forth in this Section 2.08, the Indenture
Trustee and Owner shall use all reasonable efforts to issue new Equipment
Notes within ten (10) Business Days of the date of the written request
therefor from the Note Holder.
SECTION 2.09. Payment of Expenses on Transfer; Cancellation.
(a) No service charge shall be made to a Note Holder for any
registration of transfer or exchange of Equipment Notes, but the Indenture
Trustee, as Equipment Note Registrar, may require payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Equipment Notes.
(b) The Indenture Trustee shall cancel all Equipment Notes
surrendered for replacement, redemption, transfer, exchange, payment or
cancellation and shall destroy the canceled Equipment Notes.
SECTION 2.10. Mandatory Redemptions of Equipment Notes.
On the date on which Owner is required pursuant to Section 5.06
to make payment for an Event of Loss with respect to the Aircraft, all of
the Equipment Notes shall be redeemed in whole at a redemption price equal
to 100% of the unpaid Principal Amount thereof, together with all accrued
interest thereon to the date of redemption and all other amounts payable
hereunder or under the Participation Agreement to the Note Holders but
without the Make-Whole Amount.
SECTION 2.11. Voluntary Redemptions of Equipment Notes.
All, but not less than all, of the Equipment Notes may be
redeemed by Owner upon at least twenty (20) days' revocable prior written
notice to the Indenture Trustee, and the Equipment Notes shall be redeemed
in whole at a redemption price equal to 100% of the unpaid Principal Amount
thereof, together with accrued interest thereon to the date of redemption
and all other amounts payable hereunder or under the Participation
Agreement to the Note Holders plus the Make-Whole Amount, if any.
SECTION 2.12. Redemptions; Notice of Redemption.
(a) Neither any redemption of any Equipment Note nor any
purchase by Owner of any Equipment Note may be made except to the extent
and in the manner expressly permitted by this Indenture. No purchase of
any Equipment Note may be made by the Indenture Trustee.
(b) Notice of redemption or purchase with respect to the
Equipment Notes shall be given by the Indenture Trustee by first-class
mail, postage prepaid, mailed not less than fifteen (15) nor more than
sixty (60) days prior to the applicable redemption date, to each Note
Holder of such Equipment Notes to be redeemed or purchased, at such Note
Holder's address appearing in the Equipment Note Register. All notices of
redemption shall state: (1) the redemption date, (2) the applicable basis
for determining the redemption price, (3) that on the redemption date, the
redemption price will become due and payable upon each such Equipment Note,
and that, if any such Equipment Notes are then outstanding, interest on
such Equipment Notes shall cease to accrue on and after such redemption
date, and (4) the place or places where such Equipment Notes are to be
surrendered for payment of the redemption price.
(c) On or before the redemption date, Owner (or any person on
behalf of Owner) shall, to the extent an amount equal to the redemption
price for the Equipment Notes to be redeemed or purchased on the redemption
date shall not then be held in the Indenture Estate, deposit or cause to be
deposited with the Indenture Trustee by 11:00 a.m. New York City time on
the redemption date in immediately available funds the redemption price of
the Equipment Notes to be redeemed or purchased.
(d) Notice of redemption or purchase having been given as
aforesaid, the Equipment Notes to be redeemed or purchased shall, on the
redemption date, become due and payable at the Corporate Trust Office of
the Indenture Trustee or at any office or agency maintained for such
purposes pursuant to Section 2.07, and from and after such redemption date
(unless there shall be a default in the payment of the redemption price)
any such Equipment Notes then outstanding shall cease to bear interest.
Upon surrender of any such Equipment Note for redemption or purchase in
accordance with said notice, such Equipment Note shall be redeemed at the
redemption price. If any Equipment Note called for redemption or purchase
shall not be so paid upon surrender thereof for redemption, the principal
amount thereof shall, until paid, continue to bear interest from the
applicable redemption date at the interest rate in effect for such
Equipment Note as of such redemption date.
SECTION 2.13. [Reserved].
SECTION 2.14. [Reserved].
SECTION 2.15. Subordination.
(a) Owner and, by acceptance of its Equipment Notes of any
Series, each Note Holder of such Series, hereby agree that no payment or
distribution shall be made on or in respect of the Secured Obligations owed
to such Note Holder of such Series, including any payment or distribution
of cash, property or securities after the commencement of a proceeding of
the type referred to in Section 4.02(e) hereof, except as expressly
provided in Article III hereof.
(b) By the acceptance of its Equipment Notes of any Series
(other than Series A), each Note Holder of such Series agrees that in the
event that such Note Holder, in its capacity as a Note Holder, shall
receive any payment or distribution on any Secured Obligations in respect
of such Series which it is not entitled to receive under this Section 2.15
or Article III hereof, it will hold any amount so received in trust for the
Senior Holder (as defined in Section 2.15(c) hereof) and will forthwith
turn over such payment to the Indenture Trustee in the form received to be
applied as provided in Article III hereof.
(c) As used in this Section 2.15, the term "Senior Holder" shall
mean, (i) the Note Holders of Series A until the Secured Obligations in
respect of Series A Equipment Notes have been paid in full and (ii) after
the Secured Obligations in respect of Series A Equipment Notes have been
paid in full, the Note Holders of Series B until the Secured Obligations in
respect of Series B Equipment Notes have been paid in full.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE INDENTURE ESTATE
SECTION 3.01. Basic Distributions
Except as otherwise provided in Sections 3.02 and 3.03 hereof, each
periodic payment of principal or interest on the Equipment Notes received by the
Indenture Trustee shall be promptly distributed in the following order of
priority: (i) so much of such installment or payment as shall be required
to pay in full the aggregate amount of the payment or payments of Principal
Amount and interest and other amounts (as well as any interest on any overdue
Principal Amount and, to the extent permitted by applicable law, on any overdue
interest and any other overdue amounts) then due under all Series A Equipment
Notes shall be distributed to the Noteholders of Series A ratably, without
priority of one over the other, in the proportion that the amount of such
payment or payments then due under each Series A Equipment Note bears to the
aggregate amount of the payments then due under all Series A Equipment Notes;
(ii) after giving effect to paragraph (i) above, so much of such installment
or payment remaining as shall be required to pay in full the aggregate amount
of the payment or payments of Principal Amount and interest and other amounts
(as well as any interest on any overdue Principal Amount and, to the extent
permitted by applicable law, on any overdue interest and other overdue amounts)
then due under all Series B Equipment Notes shall be distributed to the
Noteholders of Series B ratably, without priority of one over the other, in the
proportion that the amount of such payment or payments then due under each
Series B Equipment Note bears to the aggregate amount of the payments then due
under all Series B Equipment Notes; and (iii) after giving effect to paragraph
(ii) above, so much of such installment or payment remaining as shall be
required to pay in full the aggregate amount of the payment or payments of
Principal Amount and interest and other amounts (as well as any interest on any
overdue Principal Amount and, to the extent permitted by applicable law, on any
overdue interest and any other overdue amounts) then due under all Series C
Equipment Notes shall be distributed to the Noteholders of Series C ratably,
without priority of one over the other, in the proportion that the amount of
such payment or payments then due under each Series C Equipment Note bears to
the aggregate amount of the payments then due under all Series C Equipment
Notes.
SECTION 3.02. Event of Loss; Optional Redemption.
Except as otherwise provided in Section 3.03 hereof, any payments
received by the Indenture Trustee with respect to the Aircraft (i) as the
result of an Event of Loss or (ii) in connection with any optional
redemption of the Equipment Notes effected in accordance with the Operative
Documents, shall be applied to redemption of the Equipment Notes, to
payment of the Secured Obligations or to the Indenture Trustee or any Note
Holder under the Participation Agreement by applying such funds in the
following order of priority:
First, (i) to reimburse the Indenture Trustee and the Note
Holders for any reasonable costs or expenses incurred in connection with
such redemption for which they are entitled to reimbursement, or indemnity
by Owner, under the Operative Documents and then (ii) to pay any other
amounts then due to the Indenture Trustee and the Note Holders under this
Indenture, the Participation Agreement or the Equipment Notes; and
Second, (i) to pay the amounts specified in paragraph (i) of
clause "Third" of Section 3.03 hereof plus Make-Whole Amount, if any, then
due and payable in respect of the Series A Equipment Notes; (ii) after
giving effect to paragraph (i) above, to pay the amounts specified in
paragraph (ii) of clause "Third" of Section 3.03 hereof plus Make-Whole
Amount, if any, then due and payable in respect of the Series B Equipment
Notes; and (iii) after giving effect to paragraph (ii) above, to pay the
amounts specified in paragraph (iii) of clause "Third" of Section 3.03
hereof plus Make-Whole Amount, if any, then due and payable in respect of
the Series C Equipment Notes.
SECTION 3.03. Payments After Event of Default.
Except as otherwise provided in Section 3.04 hereof, all payments
received and amounts held or realized by the Indenture Trustee (including
any amounts realized by the Indenture Trustee from the exercise of any
remedies pursuant to Article IV hereof) after both an Event of Default
shall have occurred and be continuing and the Equipment Notes shall have
become due and payable pursuant to Section 4.04(b) hereof, as well as all
payments or amounts then held by the Indenture Trustee as part of the
Indenture Estate, shall be promptly distributed by the Indenture Trustee in
the following order of priority:
First, so much of such payments or amounts as shall be required
to reimburse the Indenture Trustee for any tax, expense or other loss
(including, without limitation, all amounts to be expended at the expense
of, or charged upon the tolls, rents, revenues, issues, products and
profits of, the property included in the Indenture Estate (all such
property being herein called the "Mortgaged Property") pursuant to Section
4.05(b) hereof) incurred by the Indenture Trustee (to the extent not
previously reimbursed), the expenses of any sale, taking or other
proceeding, reasonable attorneys' fees and expenses, court costs, and any
other expenditures incurred or expenditures or advances made by the
Indenture Trustee or the Note Holders in the protection, exercise or
enforcement of any right, power or remedy or any damages sustained by the
Indenture Trustee or any Note Holder, liquidated or otherwise, upon such
Event of Default shall be applied by the Indenture Trustee as between
itself and the Note Holders in reimbursement of such expenses and any other
expenses for which the Indenture Trustee or the Note Holders are entitled
to reimbursement under any Operative Document and all amounts payable to
the other Indenture Indemnitees hereunder and under the Participation
Agreement excluding those amounts described in clauses "Second" and "Third"
below, and in the case the aggregate amount to be so distributed is
insufficient to pay as aforesaid, then ratably, without priority of one
over the other, in proportion to the amounts owed each hereunder;
Second, so much of such payments or amounts remaining as shall be
required to reimburse the then existing or prior Note Holders for payments
made pursuant to Section 5.03 hereof (to the extent not previously
reimbursed) shall be distributed to such then existing or prior Note
Holders ratably, without priority of one over the other, in accordance with
the amount of the payment or payments made by each such then existing or
prior Note Holder pursuant to said Section 5.03 hereof; and
Third, (i) so much of such payments or amounts remaining as
shall be required to pay in full the aggregate unpaid Principal Amount of
all Series A Equipment Notes, and the accrued but unpaid interest and other
amounts due thereon and all other Secured Obligations in respect of the
Series A Equipment Notes to the date of distribution, shall be distributed
to the Note Holders of Series A, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid, then
ratably, without priority of one over the other, in the proportion that the
aggregate unpaid Principal Amount of all Series A Equipment Notes held by
each holder plus the accrued but unpaid interest and other amounts due
hereunder or thereunder to the date of distribution, bears to the aggregate
unpaid Principal Amount of all Series A Equipment Notes held by all such
holders plus the accrued but unpaid interest and other amounts due thereon
to the date of distribution; (ii) after giving effect to paragraph (i)
above, so much of such payments or amounts remaining as shall be required
to pay in full the aggregate unpaid Principal Amount of all Series B
Equipment Notes, and the accrued but unpaid interest and other amounts due
thereon and all other Secured Obligations in respect of the Series B
Equipment Notes to the date of distribution, shall be distributed to the
Note Holders of Series B, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid, then
ratably, without priority of one over the other, in the proportion that the
aggregate unpaid Principal Amount of all Series B Equipment Notes held by
each holder plus the accrued but unpaid interest and other amounts due
hereunder or thereunder to the date of distribution, bears to the aggregate
unpaid Principal Amount of all Series B Equipment Notes held by all such
holders plus the accrued but unpaid interest and other amounts due thereon
to the date of distribution; and (iii) after giving effect to paragraph
(ii) above, so much of such payments or amounts remaining as shall be
required to pay in full the aggregate unpaid Principal Amount of all Series
C Equipment Notes, and the accrued but unpaid interest and other amounts
due thereon and all other Secured Obligations in respect of the Series C
Equipment Notes to the date of distribution, shall be distributed to the
Note Holders of Series C, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid, then
ratably, without priority of one over the other, in the proportion that the
aggregate unpaid Principal Amount of all Series C Equipment Notes held by
each holder plus the accrued but unpaid interest and other amounts due
hereunder or thereunder to the date of distribution, bears to the aggregate
unpaid Principal Amount of all Series C Equipment Notes held by all such
holders plus the accrued but unpaid interest and other amounts due thereon
to the date of distribution.
No Make-Whole Amount shall be due and payable on the Equipment
Notes as a consequence of the acceleration of the Equipment Notes.
SECTION 3.04. Certain Payments.
(a) Any payments received by the Indenture Trustee for which no
provision as to the application thereof is made in this Indenture and for
which such provision is made in the Participation Agreement or any other
Operative Document shall be applied forthwith to the purpose for which such
payment was made in accordance with the terms of the Participation
Agreement or such other Operative Document, as the case may be.
(b) The Indenture Trustee will distribute promptly upon receipt
any indemnity payment received by it from Owner in respect of (i) the
Indenture Trustee in its individual capacity or any other Indenture
Indemnitees, (ii) any Note Holder, (iii) the Subordination Agent, (iv) the
Liquidity Provider, and (v) the Pass Through Trustees, in each case
pursuant to Section 6 of the Participation Agreement, directly to the
Person entitled thereto. Any payment received by the Indenture Trustee
under clause (b) of the third paragraph of Section 2.02 shall be
distributed to the Subordination Agent to be distributed in accordance with
the terms of the Intercreditor Agreement, and any payment received by the
Indenture Trustee under clause (c) of the third paragraph of Section 2.02
shall be distributed directly to the Persons entitled thereto.
SECTION 3.05. Other Payments.
Any payments received by the Indenture Trustee for which no
provision as to the application thereof is made in the Participation
Agreement, elsewhere in this Indenture or in any other Operative Document
shall be distributed by the Indenture Trustee in the manner provided in
clause "First" of Section 3.03 hereof. Further, and except as otherwise
provided in Sections 3.02, 3.03 and 3.04 hereof, all payments received and
amounts realized by the Indenture Trustee with respect to the Aircraft, to
the extent received or realized at any time after payment in full of all
Secured Obligations due the Note Holders, shall be distributed by the
Indenture Trustee to Owner.
Second, in the manner provided in clause "Fourth" of Section
3.03 hereof.
SECTION 3.06. Payments to Owner.
Any amounts distributed hereunder by the Indenture Trustee to
Owner shall be paid to Owner (within the time limits contemplated by
Section 2.04(a)) by wire transfer of funds of the type received by the
Indenture Trustee at such office and to such account or accounts of such
entity or entities as shall be designated by notice from Owner to the
Indenture Trustee from time to time.
ARTICLE IV
CERTAIN COVENANTS OF OWNER; EVENTS OF
DEFAULT; REMEDIES OF INDENTURE TRUSTEE
SECTION 4.01. Certain Covenants of Owner.
Owner hereby covenants and agrees that it will duly and
punctually pay the Principal Amount of, Make-Whole Amount, if any, and
interest on and other amounts due under the Equipment Notes and hereunder
in accordance with the terms of the Equipment Notes and this Indenture and
all amounts, if any, payable by it to the Note Holders under the
Participation Agreement.
SECTION 4.02. Event of Default.
"Event of Default" means any of the following events (whatever
the reason for such Event of Default and whether such event shall be
voluntary or involuntary or come about or be effected by operation of Law
or pursuant to or in compliance with any judgment, decree or order of any
court or any order, rule or regulation of any administrative or
governmental body):
(a) the failure of Owner to pay when due any payment of
Principal Amount of, interest on, Make-Whole Amount, if any, or other
amount due and payable under any Equipment Note or hereunder and such
failure shall have continued unremedied for ten Business Days in the case
of any payment of Principal Amount or interest or Make-Whole Amount, if
any, thereon and, in the case of any other amount, for ten Business Days
after Owner receives written demand from the Indenture Trustee or any Note
Holder; or
(b) any representation or warranty made by Owner herein, in the
Participation Agreement or in any certificate furnished by Owner to the
Indenture Trustee or any Note Holder in connection with the transactions
contemplated by the Operative Documents shall prove to have been false or
incorrect when made in any material respect and continues to be material
and adverse to the interests of the Indenture Trustee or the Note Holders;
and if such misrepresentation is capable of being corrected and if such
correction is being sought diligently, such misrepresentation shall not
have been corrected within sixty (60) days following notice thereof from
the Indenture Trustee or any Note Holder to the Owner; or
(c) other than as provided in (d) below, any failure by Owner to
observe or perform any other covenant or obligation of the Owner for the
benefit of the Indenture Trustee or the Note Holders contained in the
Participation Agreement, the Equipment Notes or this Indenture which is not
remedied within a period of sixty (60) days after notice thereof has been
given to Owner; or
(d) if at any time when the Aircraft is registered under the
laws of the United States, Owner shall not be a Citizen of the United
States, and as the result thereof the registration of the Aircraft under
the Transportation Code, and regulations then applicable thereunder, shall
cease to be effective; provided that no Event of Default shall be deemed to
have occurred under this paragraph (f) unless such circumstances continue
unremedied for more than sixty (60) days after Owner has Actual Knowledge
of the state of facts that resulted in such ineffectiveness and of such
loss of citizenship; or
(e) at any time either (i) the commencement of an involuntary
case or other proceeding in respect of Owner under the federal bankruptcy
Laws, as now constituted or hereafter amended, or any other applicable
federal or state bankruptcy, insolvency or other similar Law in the United
States or seeking the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of Owner or for all
or substantially all of its property, or seeking the winding-up or
liquidation of its affairs and the continuation of any such case or other
proceeding undismissed and unstayed for a period of ninety (90) consecutive
days; or (ii) the commencement by Owner of a voluntary case or proceeding
under the federal bankruptcy Laws, as now constituted or hereafter amended,
or any other applicable federal or state bankruptcy, insolvency or other
similar Law in the United States, or the consent by Owner to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) of Owner or
for all or substantially all of its property, or the making by Owner of any
assignment for the benefit of creditors or Owner shall take any action to
authorize any of the foregoing; or
(f) Owner shall fail to carry and maintain or with respect to
the Aircraft (or cause to be carried or maintained) insurance required to
be maintained in accordance with Section 7.04 hereof.
SECTION 4.03. [Reserved].
SECTION 4.04. Remedies.
(a) Subject to the provisions of Section 2.14 hereof, if an
Event of Default shall have occurred and be continuing and so long as the
same shall continue unremedied, then and in every such case the Indenture
Trustee may, subject to the second paragraph of this Section 4.04(a),
exercise any or all of the rights and powers and pursue any and all of the
remedies pursuant to this Article IV and shall have and may exercise all of
the rights and remedies of a secured party under the Uniform Commercial
Code and may take possession of all or any part of the properties covered
or intended to be covered by the Lien created hereby or pursuant hereto and
may exclude Owner and all persons claiming under Owner wholly or partly
therefrom; provided, however, that during any period the Aircraft is
subject to the Civil Reserve Air Fleet Program and in possession of the
United States Government or an agency or instrumentality of the United
States, the Indenture Trustee shall not, on account of any Event of
Default, be entitled to exercise or pursue any of the powers, rights or
remedies described in this Section 4.04 in such manner as to limit Owner's
control (or any Lessee's control under any Lease) of any Airframe or any
Engines installed thereon, unless at least sixty (60) days (or such lesser
period as may then be applicable under the Air Mobility Command program of
the United States Government) written notice of default hereunder shall
have been given by the Indenture Trustee by registered or certified mail to
Owner (and any Lessee) with a copy addressed to the Contracting Office
Representative of the Air Mobility Command of the United States Air Force
under any contract with Owner (or any Lessee) relating to the Aircraft;
provided further, that the Indenture Trustee shall give Owner twenty (20)
days' prior written notice of its intention to sell the Aircraft. Without
limiting any of the foregoing, it is understood and agreed that the
Indenture Trustee may exercise any right of sale of the Aircraft available
to it, even though it shall not have taken possession of the Aircraft and
shall not have possession thereof at the time of such sale.
(b) If an Event of Default shall have occurred and be
continuing, then and in every such case the Indenture Trustee may (and
shall, upon receipt of a written demand therefor from a Majority in
Interest of Note Holders), subject to Section 4.03 hereof, at any time, by
delivery of written notice or notices to Owner, declare all the Equipment
Notes to be due and payable, whereupon the unpaid Principal Amount of all
Equipment Notes then outstanding, together with accrued but unpaid interest
thereon (without Make-Whole Amount) and other amounts due thereunder, shall
immediately become due and payable without presentment, demand, protest or
notice, all of which are hereby waived; provided that if an Event of
Default referred to in clause (e) of Section 4.02 hereof shall have
occurred and be continuing, then and in every such case the unpaid
Principal Amount then outstanding, together with accrued but unpaid
interest and all other amounts due thereunder and hereunder shall
immediately and without further act become due and payable without
presentment, demand, protest or notice, all of which are hereby waived.
This Section 4.04(b), however, is subject to the condition
that, if at any time after the Principal Amount of the Equipment Notes
shall have become so due and payable, and before any judgment or decree for
the payment of the money so due, or any thereof, shall be entered, all
overdue payments of interest upon the Equipment Notes and all other amounts
payable under the Equipment Notes (except the Principal Amount of the
Equipment Notes which by such declaration shall have become payable) shall
have been duly paid, and every other Default and Event of Default with
respect to any covenant or provision of this Indenture shall have been
cured, then and in every such case a Majority in Interest of Note Holders
may (but shall not be obligated to), by written instrument filed with the
Indenture Trustee, rescind and annul the Indenture Trustee's declaration
and its consequences; but no such rescission or annulment shall extend to
or affect any subsequent Default or Event of Default or impair any right
consequent thereon.
(c) Any Note Holder shall be entitled, at any sale pursuant to
this Section 4.04, to credit against any purchase price bid at such sale by
such holder all or any part of the unpaid obligations owing to such Note
Holder and secured by the Lien of this Indenture (but only to the extent
that such purchase price would have been paid to such Note Holder pursuant
to Article III hereof if such purchase price were paid in cash and the
foregoing provisions of this subsection (c) were not given effect).
(d) In the event of any sale of the Indenture Estate, or any
part thereof, pursuant to any judgment or decree of any court or otherwise
in connection with the enforcement of any of the terms of this Indenture,
the unpaid Principal Amount of all Equipment Notes then outstanding,
together with accrued interest thereon, and other amounts due thereunder,
shall immediately become due and payable without presentment, demand,
protest or notice, all of which are hereby waived.
(e) Notwithstanding anything contained herein, so long as the
Pass Through Trustee under any Pass Through Trust Agreement or the
Subordination Agent on its behalf is a Note Holder, the Indenture Trustee
will not be authorized or empowered to acquire title to any Mortgaged
Property or take any action with respect to any Mortgaged Property so
acquired by it if such acquisition or action would cause any Pass Through
Trust to fail to qualify as a "grantor trust" for federal income tax
purposes.
SECTION 4.05. Return of Aircraft, Etc.
(a) If an Event of Default shall have occurred and be
continuing, subject to Sections 4.03 and 4.04 hereof, at the request of the
Indenture Trustee, Owner shall promptly execute and deliver to the
Indenture Trustee such instruments and other documents as the Indenture
Trustee may deem necessary or advisable to enable the Indenture Trustee or
an agent or representative designated by the Indenture Trustee, at such
time or times and place or places as the Indenture Trustee may specify, to
obtain possession of all or any part of the Mortgaged Property included in
the Indenture Estate to which the Indenture Trustee shall at the time be
entitled hereunder. If Owner shall for any reason fail to execute and
deliver such instruments and documents after such request by the Indenture
Trustee, the Indenture Trustee may (i) obtain a judgment conferring on the
Indenture Trustee the right to immediate possession and requiring the Owner
to execute and deliver such instruments and documents to the Indenture
Trustee, to the entry of which judgment Owner hereby specifically consents
to the fullest extent permitted by applicable law, and (ii) pursue all or
part of such Mortgaged Property wherever it may be found and may enter any
of the premises of Owner wherever such Mortgaged Property may be or be
supposed to be and search for such Mortgaged Property and take possession
of and remove such Mortgaged Property. All expenses of obtaining such
judgment or of pursuing, searching for and taking such property shall,
until paid, be secured by the Lien of this Indenture.
(b) Upon every such taking of possession, the Indenture Trustee
may, from time to time, at the expense of the Mortgaged Property, make all
such expenditures for maintenance, use, operation, storage, insurance,
leasing, control, management, disposition, modifications or alterations to
and of the Mortgaged Property, as it may deem proper. In each such case,
the Indenture Trustee shall have the right to maintain, use, operate,
store, insure, lease, control, manage, dispose of, modify or alter the
Mortgaged Property and to carry on the business and to exercise all rights
and powers of Owner relating to the Mortgaged Property, as the Indenture
Trustee shall deem best, including the right to enter into any and all such
agreements with respect to the maintenance, use, operation, storage,
insurance, leasing, control, management, disposition, modification or
alteration of the Mortgaged Property or any part thereof as the Indenture
Trustee may determine, and the Indenture Trustee shall be entitled to
collect and receive directly all tolls, rents, revenues, issues, income,
products and profits of the Mortgaged Property and every part thereof,
except Excluded Payments, without prejudice, however, to the right of the
Indenture Trustee under any provision of this Indenture to collect and
receive all cash held by, or required to be deposited with, the Indenture
Trustee hereunder other than Excluded Payments. Such tolls, rents,
revenues, issues, income, products and profits shall be applied to pay the
expenses of the maintenance, use, operation, storage, insurance, leasing,
control, management, disposition, improvement, modification or alteration
of the Mortgaged Property and of conducting the business thereof, and to
make all payments which the Indenture Trustee may be required or may elect
to make, if any, for taxes, assessments, insurance or other proper charges
upon the Mortgaged Property or any part thereof, and all other payments
which the Indenture Trustee may be required or authorized to make under any
provision of this Indenture, as well as just and reasonable compensation
for the services of the Indenture Trustee, and of all persons properly
engaged and employed by the Indenture Trustee with respect hereto.
SECTION 4.06. Remedies Cumulative.
Each and every right, power and remedy given to the Indenture
Trustee specifically or otherwise in this Indenture shall be cumulative and
shall be in addition to every other right, power and remedy herein
specifically given or now or hereafter existing at law, in equity or by
statute, and each and every right, power and remedy whether specifically
herein given or otherwise existing may be exercised from time to time and
as often and in such order as may be deemed expedient by the Indenture
Trustee, and the exercise or the beginning of the exercise of any power or
remedy shall not be construed to be a waiver of the right to exercise at
the same time or thereafter any other right, power or remedy. No delay or
omission by the Indenture Trustee in the exercise of any right, remedy or
power or in the pursuance of any remedy shall impair any such right, power
or remedy or be construed to be a waiver of any default on the part of
Owner or to be an acquiescence therein.
SECTION 4.07. Discontinuance of Proceedings.
In case the Indenture Trustee shall have instituted any
proceeding to enforce any right, power or remedy under this Indenture by
foreclosure, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined
adversely to the Indenture Trustee, then and in every such case Owner and
the Indenture Trustee shall, subject to any determination in such
proceedings, be restored to their former positions and rights hereunder
with respect to the Mortgaged Property, and all rights, remedies and powers
of the Indenture Trustee or Owner shall continue as if no such proceedings
had been instituted.
SECTION 4.08. Waiver of Past Defaults.
Upon written instruction from a Majority in Interest of Note
Holders, the Indenture Trustee shall waive any past Default hereunder and
its consequences and upon any such waiver such Default shall cease to exist
and any Event of Default arising therefrom shall be deemed to have been
cured for every purpose of this Indenture, but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon;
provided, that in the absence of written instructions from all the Note
Holders, the Indenture Trustee shall not waive any Default (i) in the
payment of the Principal Amount, Make-Whole Amount, if any, and interest
and other amounts due under any Equipment Note then outstanding, or (ii) in
respect of a covenant or provision hereof which, under Article IX hereof,
cannot be modified or amended without the consent of each Note Holder.
SECTION 4.09. Appointment of Receiver.
If an Event of Default shall have occurred and be continuing, the
Indenture Trustee shall, as a matter of right, be entitled to the
appointment of a receiver (who may be the Indenture Trustee or any
successor or nominee thereof) for all or any part of the Mortgaged
Property, whether such receivership be incidental to a proposed sale of the
Mortgaged Property or the taking of possession thereof or otherwise, and
Owner hereby consents to the appointment of such a receiver and will not
oppose any such appointment. Any receiver appointed for all or any part of
the Mortgaged Property shall be entitled to exercise all the rights and
powers of the Indenture Trustee with respect to the Mortgaged Property.
SECTION 4.10. Indenture Trustee Authorized to Execute Bills of
Sale, Etc.
Owner irrevocably appoints the Indenture Trustee the true and
lawful attorney-in-fact of Owner in its name and stead and on its behalf,
for the purpose, if an Event of Default shall have occurred and be
continuing, of effectuating in accordance with applicable law any sale,
assignment, transfer or delivery for the enforcement of the Lien of this
Indenture, whether pursuant to foreclosure or power of sale, assignments
and other instruments as may be necessary or appropriate, with full power
of substitution, Owner hereby ratifying and confirming all that such
attorney or any substitute shall do by virtue hereof in accordance with
applicable law. Nevertheless, if so requested by the Indenture Trustee or
any purchaser, Owner shall ratify and confirm any such sale, assignment,
transfer or delivery, by executing and delivering to the Indenture Trustee
or such purchaser all bills of sale, assignments, releases and other proper
instruments to effect such ratification and confirmation as may be
designated in any such request.
SECTION 4.11. Rights of Note Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right
of any Note Holder to receive payment of principal of, and premium, if any,
and interest on a Equipment Note on or after the respective due dates
expressed in such Equipment Note, or to bring suit for the enforcement of
any such payment on or after such respective dates in accordance with the
terms hereof, shall not be impaired or affected without the consent of such
Note Holder.
ARTICLE V
DUTIES OF THE INDENTURE TRUSTEE
SECTION 5.01. Notice of Event of Default.
If the Indenture Trustee shall have Actual Knowledge of an Event
of Default or of a Default arising from a failure by Owner to pay when due
any payment of Principal Amount of, interest on, or Make-Whole Amount, if
any, due and payable under any Equipment Note, the Indenture Trustee shall
give prompt written notice thereof to the Owner and each Note Holder.
Subject to the terms of Sections 2.14, 4.04, 4.08, 5.02 and 5.03 hereof,
the Indenture Trustee shall take such action, or refrain from taking such
action, with respect to such Event of Default or Default (including with
respect to the exercise of any rights or remedies hereunder) as the
Indenture Trustee shall be instructed in writing by a Majority in Interest
of Note Holders. Subject to the provisions of Section 5.03, if the
Indenture Trustee shall not have received instructions as above provided
within twenty (20) days after mailing notice of such Event of Default to
the Note Holders, the Indenture Trustee may, subject to instructions
thereafter received pursuant to the preceding provisions of this Section
5.01, take such action, or refrain from taking such action, but shall be
under no duty to take or refrain from taking any action, with respect to
such Event of Default or Default as it shall determine advisable in the
best interests of the Note Holders.
SECTION 5.02. Action upon Instructions; Certain Rights and
Limitations.
Subject to the terms of Sections 4.04(a) and (b), 4.08, 5.01 and
5.03 hereof, upon the written instructions at any time and from time to
time of a Majority in Interest of Note Holders, the Indenture Trustee
shall, subject to the terms of this Section 5.02, take such of the
following actions as may be specified in such instructions: (i) give such
notice or direction or exercise such right, remedy or power hereunder as
shall be specified in such instructions; and (ii) give such notice or
direction or exercise such right, remedy or power under the Participation
Agreement, the Purchase Agreement, or any other part of the Indenture
Estate as shall be specified in such instructions.
The Indenture Trustee will execute and Owner will file or cause
to be filed such continuation statements with respect to financing
statements relating to the security interest created hereunder in the
Indenture Estate as specified by Owner pursuant to Section 7(d) of the
Participation Agreement or as may be specified from time to time in written
instructions of a Majority in Interest of Note Holders (which instructions
may, by their terms, be operative only at a future date and which shall be
accompanied by the form of such continuation statement so to be filed). The
Indenture Trustee will furnish to each Note Holder, promptly upon receipt
thereof, duplicates or copies of all reports, notices, requests, demands,
certificates and other instruments furnished to the Indenture Trustee
hereunder.
SECTION 5.03. Indemnification.
The Indenture Trustee shall not be required to take any action or
refrain from taking any action under Sections 5.01 (other than the first
sentence thereof) or 5.02 or Article IV hereof unless the Indenture Trustee
shall have been indemnified to its reasonable satisfaction against any
liability, cost or expense (including counsel fees) which may be incurred
in connection therewith pursuant to a written agreement with one or more
Note Holders. The Indenture Trustee shall not be under any obligation to
take any action under this Indenture and nothing herein or therein shall
require the Indenture Trustee to expend or risk its own funds or otherwise
incur the risk of any financial liability in the performance of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it (the written indemnity of any
Note Holder who is a QIB, signed by an authorized officer thereof, in favor
of, delivered to and in form reasonably satisfactory to Indenture Trustee
shall be accepted as reasonable assurance of adequate indemnity). The
Indenture Trustee shall not be required to take any action under Section
5.01 (other than the first sentence thereof) or 5.02 or Article IV hereof,
nor shall any other provision of this Indenture or any other Operative
Document be deemed to impose a duty on the Indenture Trustee to take any
action, if the Indenture Trustee shall have been advised by counsel that
such action is contrary to the terms hereof or is otherwise contrary to
Law.
SECTION 5.04. No Duties Except as Specified in Indenture or
Instructions.
The Indenture Trustee shall not have any duty or obligation to
use, operate, store, lease, control, manage, sell, dispose of or otherwise
deal with the Aircraft or any other part of the Indenture Estate, or to
otherwise take or refrain from taking any action under, or in connection
with, this Indenture or any part of the Indenture Estate, except as
expressly provided by the terms of this Indenture or as expressly provided
in written instructions from Note Holders as provided in this Indenture;
and no implied duties or obligations shall be read into this Indenture
against the Indenture Trustee. The Indenture Trustee agrees that it will
in its individual capacity and at its own cost and expense (but without any
right of indemnity in respect of any such cost or expense under Section
8.01 hereof), promptly take such action as may be necessary duly to
discharge all liens and encumbrances on any part of the Indenture Estate
which result from claims against it in its individual capacity not related
to the ownership of the Aircraft or the administration of the Indenture
Estate or any other transaction pursuant to this Indenture or any document
included in the Indenture Estate.
SECTION 5.05. No Action Except Under Indenture or
Instructions.
The Indenture Trustee agrees that it will not use, operate,
store, lease, control, manage, sell, dispose of or otherwise deal with the
Aircraft or any other part of the Indenture Estate except in accordance
with the powers granted to, or the authority conferred upon, the Indenture
Trustee pursuant to this Indenture and in accordance with the express terms
hereof.
SECTION 5.06. Replacement Airframes and Replacement Engines.
(a) Event of Loss with Respect to the Aircraft. Upon the
occurrence of an Event of Loss with respect to the Airframe or the Airframe
and the Engines and/or engines then installed thereon, Owner shall
forthwith (and in any event, within fifteen (15) days after such
occurrence) give the Indenture Trustee written notice of such Event of
Loss, and, within sixty (60) days after such Event of Loss, Owner shall
give the Indenture Trustee written notice of its election to perform one of
the following options (it being agreed that if Owner shall not have given
such notice of election within such period, Owner shall be deemed to have
elected the option set forth in clause (i) below). Owner may elect either
to:
(i) redeem the Equipment Notes in the manner
set forth in Section 2.10(a) on the earlier of (x) the Business
Day next succeeding the 120th day following the occurrence of
such Event of Loss or (y) an earlier Business Day irrevocably
specified fifteen (15) days in advance by notice from Owner to
the Indenture Trustee; or
(ii) substitute an aircraft or an airframe or
an airframe and one or more engines, as the case may be; provided
that, if Owner does not perform its obligation to effect such
substitution in accordance with this Section 5.06(a), during the
period of time provided herein, then Owner shall redeem the
Equipment Notes in the manner set forth in Section 2.10(a) on the
Business Day next succeeding the 120th day following the
occurrence of such Event of Loss.
In the event Owner shall elect to substitute an aircraft (or an
airframe or an airframe and one or more engines, as the case may be) Owner
shall, at its sole expense, not later than the Business Day next succeeding
the 120th day following the occurrence of such Event of Loss, (1) furnish
the Indenture Trustee with such evidence as the Indenture Trustee may
reasonably request that Owner holds title to such aircraft (or such
airframe or such airframe and one or more engines which, together with the
Engines constituting a part of the Aircraft but not installed thereon at
the time of such Event of Loss, constitute the Aircraft) free and clear of
all Liens (other than Permitted Liens) and having a value, utility and
remaining useful life at least equal to the Aircraft subject to such Event
of Loss assuming that the Aircraft had been maintained in accordance with
the requirements of this Indenture, and Owner shall cause an Indenture
Supplement to be duly executed by Owner and filed for recording pursuant to
the Transportation Code, or the applicable laws, rules and regulations of
any other jurisdiction in which the Airframe may then be registered as
permitted by Section 7(d) of the Participation Agreement with respect to
such substituted property, (2) cause a financing statement or statements
with respect to such substituted property to be filed in such place or
places as are deemed necessary or desirable by the Indenture Trustee to
perfect the Indenture Trustee's interest therein, (3) furnish the Indenture
Trustee with such evidence of compliance with the insurance provisions
hereof with respect to such substituted property as the Indenture Trustee
may reasonably request and (4) furnish the Indenture Trustee with an
opinion of counsel (which shall be Skadden, Arps, Slate, Meagher & Flom LLP
or Skadden, Arps, Slate, Meagher & Flom (Illinois) and, if not, other
counsel chosen by Owner and reasonably acceptable to the Indenture Trustee)
reasonably satisfactory to the Indenture Trustee to the effect that the
Indenture Trustee will be entitled to the benefits of Section 1110 of the
U.S. Bankruptcy Code with respect to the substitute aircraft, provided that
such opinion need not be delivered to the extent that immediately prior to
such substitution the benefits of Section 1110 of the U.S. Bankruptcy Code
were not, solely by reason of a change in law or governmental
interpretation thereof, available to the Indenture Trustee with respect to
the Aircraft. For all purposes hereof, the property so substituted shall
be deemed part of the property subject to the Lien of this Indenture and
shall be deemed an "Aircraft", "Airframe" and "Engine", as the case may be,
as defined herein.
(b) Event of Loss with Respect to an Engine. Upon the
occurrence of an Event of Loss with respect to an Engine under
circumstances in which there has not occurred an Event of Loss with respect
to the Airframe, Owner shall forthwith (and in any event, within fifteen
days after such occurrence) give the Indenture Trustee written notice
thereof and shall, within one hundred twenty (120) days after the
occurrence of such Event of Loss, (i) cause an Indenture Supplement to be
duly executed by Owner and to be filed for recording pursuant to the
Transportation Code, or the applicable laws, rules and regulations of any
other jurisdiction in which the Airframe may then be registered as
permitted by Section 7(d) of the Participation Agreement with respect to an
Acceptable Alternative Engine and, (ii) furnish the Indenture Trustee with
such evidence of compliance with the insurance provisions hereof with
respect to such replacement engine as the Indenture Trustee may reasonably
request. For all purposes hereof, each such replacement engine shall,
after such conveyance, be deemed part of the property subject to the Lien
of this Indenture hereunder, and shall be deemed an "Engine".
(c) Requisition for Use of an Engine by the United States
Government or the Government of Registry of the Aircraft. In the event of
the requisition for use of an Engine by the United States Government or any
other government of registry of the Aircraft or any agency or
instrumentality of any thereof, Owner shall replace such Engine hereunder
by complying (or causing any Lessee to comply) with the terms of Section
5.06(b) to the same extent as if an Event of Loss had occurred with respect
thereto, and, upon compliance with Section 5.06(b), any payments received
by Owner from such government with respect to such requisition shall be
paid over to, or retained by, Owner.
(d) Application of Payments During Existence of Event of
Default. Any amount referred to in this Section 5.06 which is payable to
or retainable by Owner shall not be paid to or retained by Owner if at the
time of such payment or retention an Event of Default shall have occurred
and be continuing, but shall be held by or paid over to the Indenture
Trustee as security for the obligations of Owner hereunder and, if an Event
of Default has occurred and is continuing hereunder, applied against
Owner's obligations hereunder as and when due. At such time as there shall
not be continuing any such Event of Default, such amount shall be paid to
Owner to the extent not previously applied in accordance with the preceding
sentence.
SECTION 5.07. Indenture Supplements for Replacements.
If a Replacement Airframe or Replacement Engine is being
substituted as contemplated by Section 5.06, Owner and the Indenture
Trustee agree for the benefit of the Note Holders and Owner, subject to
fulfillment of the conditions precedent and compliance by Owner with the
requirements of Section 5.06 hereof with respect to such Replacement
Airframe or Replacement Engine, to execute and deliver an Indenture
Supplement.
SECTION 5.08. Effect of Replacement.
In the event of the substitution of an Airframe or of a
Replacement Engine pursuant to Section 5.06, (a) all provisions of this
Indenture relating to the Airframe or Engine or Engines being replaced
shall be applicable to such Replacement Airframe or Replacement Engine or
Engines with the same force and effect as if such Replacement Airframe or
Replacement Engine or Engines were the same airframe or engine or engines,
as the case may be, as the Airframe or Engine or Engines being replaced but
for the Event of Loss with respect to the Airframe or Engine or Engines
being replaced, and (b) the provisions of this Indenture shall no longer be
applicable to the Airframe or Engine or Engines being replaced, which shall
be released from the Lien of this Indenture.
SECTION 5.09. Investment of Amounts Held by Indenture Trustee.
Any amounts held by the Indenture Trustee pursuant to Section
3.02 or pursuant to any provision of any other Operative Document providing
for amounts to be held by the Indenture Trustee which are not distributed
pursuant to the other provisions of Article III hereof shall be invested by
the Indenture Trustee from time to time in Cash Equivalents as directed by
Owner so long as the Indenture Trustee may acquire the same using its best
efforts. Unless otherwise expressly provided in this Indenture, any income
realized as a result of any such investment, net of the Indenture Trustee's
reasonable fees and expenses in making such investment, shall be held and
applied by the Indenture Trustee in the same manner as the principal amount
of such investment is to be applied and any losses, net of earnings and
such reasonable fees and expenses, shall be charged against the principal
amount invested. The Indenture Trustee shall not be liable for any loss
resulting from any investment required to be made by it under this
Indenture other than by reason of its willful misconduct or gross
negligence, and any such investment may be sold (without regard to its
maturity) by the Indenture Trustee without instructions whenever such sale
is necessary to make a distribution required by this Indenture.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. Acceptance of Trusts and Duties.
The Indenture Trustee accepts the duties hereby created and
applicable to it and agrees to perform the same but only upon the terms of
this Indenture and agrees to receive and disburse all monies constituting
part of the Indenture Estate in accordance with the terms hereof. The
Indenture Trustee, in its individual capacity, shall not be answerable or
accountable under any circumstances, except (i) for willful misconduct or
gross negligence (other than for the handling of funds, for which the
standard of accountability shall be willful misconduct or negligence), (ii)
as provided in the fourth sentence of Section 2.04(a) hereof and the last
sentence of Section 5.04 hereof, and (iii) for liabilities that may result
from the inaccuracy of any representation or warranty of the Indenture
Trustee (in its individual capacity) in the Participation Agreement or
expressly made hereunder.
SECTION 6.02. Absence of Duties.
Except in accordance with written instructions furnished pursuant
to Section 5.01 or 5.02 hereof, and except as provided in, and without
limiting the generality of, Sections 5.03 and 5.04 hereof, the Indenture
Trustee shall have no duty (i) to see to any registration of the Aircraft
or any recording or filing of this Indenture or any other document, or to
see to the maintenance of any such registration, recording or filing, (ii)
to see to any insurance on the Aircraft or to effect or maintain any such
insurance, whether or not Owner shall be in default with respect thereto,
(iii) to see to the payment or discharge of any lien or encumbrance of any
kind against any part of the Indenture Estate, or (iv) to inspect the
Aircraft at any time or ascertain or inquire as to the performance or
observance of any of Owner's covenants hereunder with respect to the
Aircraft.
SECTION 6.03. No Representations or Warranties as to Aircraft
or Documents.
THE INDENTURE TRUSTEE IN ITS INDIVIDUAL OR TRUST CAPACITY DOES
NOT MAKES AND SHALL NOT BE DEEMED TO HAVE MADE AND HEREBY EXPRESSLY
DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE
TITLE, AIRWORTHINESS, VALUE, COMPLIANCE WITH SPECIFICATIONS, CONDITION,
DESIGN, QUALITY, DURABILITY, OPERATION, MERCHANTABILITY OR FITNESS FOR USE
FOR A PARTICULAR PURPOSE OF THE AIRCRAFT OR ANY ENGINE, AS TO THE ABSENCE
OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE
OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE
ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER
REPRESENTATION OR WARRANTY WHATSOEVER. The Indenture Trustee, in its
individual or trust capacity, does not make and shall not be deemed to have
made any representation or warranty as to the validity, legality or
enforceability of this Indenture, the Participation Agreement, the
Equipment Notes, the Purchase Agreement, the Purchase Agreement Assignment,
or the Consent and Agreement, or as to the correctness of any statement
contained in any thereof.
SECTION 6.04. No Segregation of Monies; No Interest.
Any monies paid to or retained by the Indenture Trustee pursuant
to any provision hereof and not then required to be distributed to the Note
Holders or the Owner as provided in Article III hereof need not be
segregated in any manner except to the extent required by Law and Section
5.09 hereof, and may be deposited under such general conditions as may be
prescribed by Law, and the Indenture Trustee shall not be liable for any
interest thereon (except that the Indenture Trustee shall invest all monies
held as directed by Owner so long as no Event of Default has occurred and
is continuing (or in the absence of such direction, by the Majority In
Interest of Note Holders) in Cash Equivalents; provided, however, that any
payments received, or applied hereunder, by the Indenture Trustee shall be
accounted for by the Indenture Trustee so that any portion thereof paid or
applied pursuant hereto shall be identifiable as to the source thereof.
SECTION 6.05. Reliance; Agreements; Advice of Counsel.
The Indenture Trustee shall not incur any liability to anyone in
acting upon any signature, instrument, notice, resolution, request,
consent, order, certificate, report, opinion, bond or other document or
paper believed by it to be genuine and believed by it to be signed by the
proper party or parties. The Indenture Trustee may accept a copy of a
resolution of the Board of Directors of any party to the Participation
Agreement, certified by the Secretary or an Assistant Secretary thereof as
duly adopted and in full force and effect, as conclusive evidence that such
resolution has been duly adopted and that the same is in full force and
effect. As to the aggregate unpaid Principal Amount of Equipment Notes
outstanding as of any date, Owner may for all purposes hereof rely on a
certificate signed by any Vice President or other authorized corporate
trust officer of the Indenture Trustee. As to any fact or matter relating
to the Owner the manner of ascertainment of which is not specifically
described herein, the Indenture Trustee may for all purposes hereof rely on
a certificate, signed by a duly authorized officer of Owner, as to such
fact or matter, and such certificate shall constitute full protection to
the Indenture Trustee for any action taken or omitted to be taken by them
in good faith in reliance thereon. In the administration of the trusts
hereunder, the Indenture Trustee may execute any of the trusts or powers
hereof and perform its powers and duties hereunder directly or through
agents or attorneys and may at the expense of the Indenture Estate, consult
with counsel, accountants and other skilled persons to be selected and
retained by it, and the Indenture Trustee shall not be liable for anything
done, suffered or omitted in good faith by them in accordance with the
advice or opinion of any such counsel, accountants or other skilled
persons.
SECTION 6.06. [Reserved].
SECTION 6.07. Compensation.
The Indenture Trustee shall be entitled to reasonable
compensation, including expenses and disbursements (including the
reasonable fees and expenses of counsel), for all services rendered
hereunder and shall, on and subsequent to an Event of Default hereunder,
have a priority claim on the Indenture Estate for the payment of such
compensation, to the extent that such compensation shall not be paid by
Owner, and shall have the right, on and subsequent to an Event of Default
hereunder, to use or apply any monies held by it hereunder in the Indenture
Estate toward such payments. The Indenture Trustee agrees that it shall
have no right against the Loan Participants or the Note Holders for any fee
as compensation for its services as trustee under this Indenture.
SECTION 6.08. Instructions from Note Holders.
In the administration of the trusts created hereunder, the
Indenture Trustee shall have the right to seek instructions from a Majority
in Interest of Note Holders should any provision of this Indenture appear
to conflict with any other provision herein or should the Indenture
Trustee's duties or obligations hereunder be unclear, and the Indenture
Trustee shall incur no liability in refraining from acting until it
receives such instructions. The Indenture Trustee shall be fully protected
for acting in accordance with any instructions received under this Section
6.08.
ARTICLE VII
OPERATING COVENANTS OF THE OWNER
SECTION 7.01. Liens. Owner will not directly or indirectly
create, incur, assume or suffer to exist any Lien on or with respect to the
Aircraft, title thereto or any interest therein, except (i) the Lien of the
Indenture, the rights of any Lessee under a Lease permitted hereunder and
any other rights of any Person existing pursuant to the Operative
Documents, (ii) the rights of others under agreements or arrangements to
the extent permitted by the terms of Sections 7.02 and 7.03, (iii) Loan
Participant Liens and Indenture Trustee's Liens, (iv) Liens for Taxes of
Owner (or any Lessee) either not yet due or being contested in good faith
by appropriate proceedings so long as such proceedings do not involve any
material risk of the sale, forfeiture or loss of the Airframe or any Engine
or any interest therein, (v) materialmen's, mechanics', workmen's,
repairmen's, employees' or other like Liens arising in the ordinary course
of Owner's (or, if a Lease is then in effect, Lessee's) business (including
those arising under maintenance agreements entered into in the ordinary
course of business) securing obligations that are not overdue for a period
of more than sixty (60) days or are being contested in good faith by
appropriate proceedings so long as such proceedings do not involve any
material risk of the sale, forfeiture or loss of the Airframe or any Engine
or any interest therein, (vi) Liens arising out of any judgment or award
against Owner (or any Lessee), unless the judgment secured shall not,
within sixty (60) days after the entry thereof, have been discharged,
vacated, reversed or execution thereof stayed pending appeal or shall not
have been discharged, vacated or reversed within sixty (60) days after the
expiration of such stay, (vii) any other Lien with respect to which Owner
(or any Lessee) shall have provided a bond, cash collateral or other
security adequate in the reasonable opinion of the Indenture Trustee, and
(viii) Liens approved in writing by the Indenture Trustee. Owner will
promptly, at its own expense, take (or cause to be taken) such actions as
may be necessary duly to discharge any such Lien not excepted above if the
same shall arise at any time.
SECTION 7.02. Registration, Maintenance, Operation and
Registration; Possession and Leases; Insignia.
(a) Registration, Maintenance, Operation and Registration.
(i) Registration and Maintenance. Owner, at
its own cost and expense, shall (or shall cause any Lessee to):
(A) cause the Aircraft to be duly registered in the name of Owner
(or any Lessee), and, subject to clause (ii) of this Section
7.02(a) and Section 7(d) of the Participation Agreement, to
remain duly registered in the name of Owner (or any Lessee) under
the Transportation Code, and shall not register the Aircraft or
permit the Aircraft to be registered under any laws other than
the Transportation Code at any time except as provided in Section
7(d) of the Participation Agreement and, shall cause the Trust
Indenture to be duly recorded and maintained of record as a first
mortgage on the Aircraft; (B) maintain, service, repair and/or
overhaul (or cause to be maintained, serviced, repaired and/or
overhauled) the Aircraft so as to keep the Aircraft in as good an
operating condition as when delivered by the Seller to Owner,
ordinary wear and tear excepted, and as may be necessary to
enable the applicable airworthiness certification for the
Aircraft to be maintained in good standing at all times (other
than during temporary periods of storage or during maintenance or
modification permitted hereunder) under the Transportation Code,
except when all Airbus Model A319 aircraft powered by engines of
the same type as those with which the Airframe shall be equipped
at the time of such grounding and registered in the United States
have been grounded by the FAA (although such certification need
actually be maintained only during such periods as the Aircraft
is registered in the United States), or the applicable laws of
any other jurisdiction in which the Aircraft may then be
registered from time to time in accordance with Section 7(d) of
the Participation Agreement, utilizing, except during any period
that a Lease is in effect, the same manner and standard of
maintenance, service, repair or overhaul used by Owner with
respect to similar aircraft operated by Owner in similar
circumstances and utilizing, during any period that a Lease is in
effect, the same manner and standard of maintenance (including
inspections), service, repair or overhaul used by the Lessee with
respect to similar aircraft operated by the Lessee in similar
circumstances; and (C) maintain or cause to be maintained in
English all records, logs and other materials required to be
maintained in respect of the Aircraft by the FAA or the
applicable regulatory agency or body of any other jurisdiction in
which the Aircraft may then be registered.
(ii) Operation. Owner will not maintain,
use, service, repair, overhaul or operate the Aircraft (or permit
any Lessee to maintain, use, service, repair, overhaul or operate
the Aircraft) in violation of any law or any rule, regulation,
order or certificate of any government or governmental authority
(domestic or foreign) having jurisdiction over the Aircraft, or
in violation of any airworthiness certificate, license or
registration relating to the Aircraft issued by any such
authority, except to the extent Owner (or, if a Lease is then in
effect, any Lessee) is contesting in good faith the validity or
application of any such law, rule, regulation or order in any
reasonable manner which does not involve any material risk of
sale, forfeiture or loss of the Aircraft. Owner will not operate
the Aircraft, or permit any Lessee to operate the Aircraft, in
any area excluded from coverage by any insurance required by the
terms of Section 7.04; provided, however, that the failure of
Owner to comply with the provisions of this sentence shall not
give rise to an Event of Default hereunder if indemnification
complying with Section 7.04 has been provided or where such
failure is attributable to extraordinary circumstances involving
an isolated occurrence or series of incidents not in the ordinary
course of the regular operations of Owner (or any Lessee) such as
a hijacking, medical emergency, equipment malfunction, weather
condition, navigational error or other causes beyond the
reasonable control of Owner (or any Lessee).
(b) Possession and Leases. Owner will not, without the prior
written consent of the Indenture Trustee, lease or otherwise in any manner
deliver, transfer or relinquish possession of the Airframe or any Engine or
install or permit any Engine to be installed on any airframe other than the
Airframe or enter into any Wet Lease, and so long as Owner (or any Lessee)
shall comply with the provisions of Section 7.02(a) and Section 7.04
hereof, Owner may (or may permit any Lessee to), without the prior written
consent of the Indenture Trustee:
(i) subject the Airframe and the Engines or
engines then installed thereon to interchange agreements or any
Engine to pooling or similar arrangements, in each case customary
in the airline industry and entered into by Owner (or, if a Lease
is then in effect, by Lessee) in the ordinary course of its
business;
(ii) deliver possession of the Airframe or
any Engine to the manufacturer thereof (or for delivery thereto)
or to any organization (or for delivery thereto) for testing,
service, repair, maintenance or overhaul work on the Airframe or
Engine or any part of any thereof or for alterations or
modifications in or additions to such Airframe or Engine to the
extent required or permitted by the terms of Section 7.03 hereof;
(iii) install an Engine on an airframe owned
by Owner (or any Lessee) free and clear of all Liens, except:
(A) Permitted Liens and those which apply only to the engines
(other than Engines), appliances, parts, instruments,
appurtenances, accessories, furnishings and other equipment
(other than Parts) installed on such airframe (but not to the
airframe as an entirety), (B) the rights of third parties under
interchange agreements or pooling or similar arrangements which
would be permitted under clause (i) above, provided that the
first priority Lien of the Indenture shall not be divested or
impaired as a result thereof and (C) mortgage liens or other
security interests, provided that (as regards this clause (C))
the documents creating such mortgage liens or other security
interests (or, if applicable, another written agreement governing
such mortgage liens or other security interests) effectively
provide that such Engine shall not become subject to the lien of
such mortgage or security interest, notwithstanding the
installation thereof on such airframe;
(iv) install an Engine on an airframe leased
to Owner (or any Lessee) or purchased by Owner (or any Lessee)
subject to a conditional sale or other security agreement,
provided that (x) such airframe is free and clear of all Liens,
except: (A) the rights of the parties to the lease or conditional
sale or other security agreement covering such airframe, or their
assignees, and (B) Liens of the type permitted by clause (iii) of
this paragraph (b) and (y) such lease, conditional sale or other
security agreement effectively provides that such Engine shall
not become subject to the lien of such lease, conditional sale or
other security agreement, notwithstanding the installation
thereof on such airframe;
(v) install an Engine on an airframe owned
by Owner (or any Lessee), leased to Owner (or any Lessee) or
purchased by Owner (or any Lessee) subject to a conditional sale
or other security agreement under circumstances where neither
clause (iii) nor clause (iv) of this paragraph (b) is applicable,
provided that such installation shall be deemed an Event of Loss
with respect to such Engine and Owner shall (or shall cause any
Lessee to) comply with Section 5.06(b) in respect thereof;
(vi) [Reserved.]
(vii) subject (or permit any Lessee to
subject) the Airframe or any Engine to the Civil Reserve Air
Fleet Program and transfer (or permit any Lessee to transfer)
possession of the Airframe or any Engine to the United States
Government or any instrumentality or agency thereof pursuant to
the Civil Reserve Air Fleet Program, so long as Owner (or any
Lessee) shall (A) promptly notify the Indenture Trustee upon
subjecting the Airframe or any Engine to the Civil Reserve Air
Fleet Program in any contract year and provide the Indenture
Trustee with the name and address of the Contracting Office
Representative for the Air Mobility Command of the United States
Air Force to whom notice must be given pursuant to Section
4.04(a) hereof, and (B) promptly notify the Indenture Trustee
upon transferring possession of the Airframe or any Engine to the
United States of America or any agency or instrumentality thereof
pursuant to such program;
(viii) [Reserved.]
(ix) transfer possession of the Airframe or
any Engine to the United States Government or any instrumentality
or agency thereof pursuant to a contract, a copy of which shall
be provided to the Indenture Trustee; or
(x) enter into any Lease with (A) any U.S.
Domiciled Person, (B) any Permitted Sublessee or (C) any other
Person approved in writing by the Indenture Trustee, which
approval shall not be unreasonably withheld; provided, however,
that no Lease entered into pursuant to this clause (x) shall (i)
be to a Lessee that, at the time of entering into such Lease, is
subject to bankruptcy, insolvency, liquidation, reorganization,
dissolution or similar proceedings; and provided, further, with
respect to a sublease under subclauses (B) or (C) of this clause
(x), Owner shall deliver to the Indenture Trustee an opinion of
counsel to the effect that (I) the terms of the Lease, including
the subordination provisions thereof, constitute valid and
binding obligations of the Lessee and (subject to customary
bankruptcy and equitable remedies exceptions and to other similar
exceptions customary in such opinions) enforceable against Lessee
(it being understood that such opinion may be an opinion as to
the form of the Lease only and may assume due authorization,
execution, delivery, requisite approvals and absence of conflicts
with laws, contracts or organizational documents) under the laws
of the jurisdiction governing the sublease, (II) that there is no
tort liability of the owner of an aircraft not in possession
thereof under the laws of the jurisdiction of the proposed Lessee
other than tort liability which might have been imposed on such
owner under the laws of the United States or any state thereof
(it being understood that in the event such opinion cannot be
given such opinion requirement shall be waived if insurance
reasonably satisfactory to the Indenture Trustee, in its
individual capacity, is proved at Lessee's expense), and (III)
unless Owner shall have agreed to provide insurance covering the
risk of requisition of use of the Aircraft by the government of
the jurisdiction of the proposed Lessee, that the laws of such
jurisdiction require fair compensation by the government of such
jurisdiction payable in currency freely convertible into Dollars
for the loss of use of the Aircraft in the event of the
requisition by such government of such use.
The rights of any Lessee or other transferee who receives
possession by reason of a transfer permitted by this paragraph (b) (other
than the transfer of an Engine which is deemed an Event of Loss) shall be
subject and subordinate to, and any Lease permitted by this paragraph (b)
shall be expressly subject and subordinate to the Indenture Trustee's
rights to repossess and to void such Lease upon such repossession, and
Owner shall remain primarily liable hereunder for the performance of all of
the terms of this Indenture and the terms of any such Lease shall not
permit any Lessee to take any action not permitted to be taken by Owner
hereunder with respect to the Aircraft. No pooling agreement, sublease or
other relinquishment of possession of the Airframe or any Engine or Wet
Lease shall in any way discharge or diminish any of Owner's obligations
hereunder or constitute a waiver of the Indenture Trustee's rights or
remedies hereunder.
Any Wet Lease or similar arrangement under which Owner maintains
operational control of the Aircraft shall not constitute a delivery,
transfer or relinquishment of possession of the Aircraft for purposes of
this section.
(c) Insignia. On or prior to the Delivery Date, or as soon as
practicable thereafter, Owner agrees to affix and maintain (or cause to be
affixed and maintained), at its expense, in the cockpit of the Airframe
adjacent to the airworthiness certificate therein and on each Engine a
nameplate bearing the inscription:
Mortgaged To
State Street Bank and Trust Company,
as Indenture Trustee
(such nameplate to be replaced, if necessary, with a nameplate reflecting
the name of any successor Indenture Trustee, as permitted under the
Operative Documents). Except as above provided, Owner will not allow the
name of any Person to be placed on the Airframe or on any Engine as a
designation that might be interpreted as a claim of ownership; provided
that nothing herein contained shall prohibit Owner (or any Lessee) from
placing its customary colors and insignia on the Airframe or any Engine.
SECTION 7.03. Replacement and Pooling of Parts; Alterations,
Modifications and Additions.
(a) Replacement of Parts. Owner, at its own cost and expense,
will promptly replace or cause to be replaced all Parts which may from time
to time be incorporated or installed in or attached to the Airframe or any
Engine and which may from time to time become worn out, lost, stolen,
destroyed, seized, confiscated, damaged beyond repair or permanently
rendered unfit for use for any reason whatsoever, except as otherwise
provided in paragraph (c) of this Section 7.03 or if the Airframe or an
Engine to which a Part relates has suffered an Event of Loss. In addition,
Owner (or any Lessee) may, at its own cost and expense, remove in the
ordinary course of maintenance, service, repair, overhaul or testing, any
Parts, whether or not worn out, lost, stolen, destroyed, seized,
confiscated, damaged beyond repair or permanently rendered unfit for use,
provided that Owner (or any Lessee), except as otherwise provided in
paragraph (c) of this Section 7.03, will, at its own cost and expense,
replace such Parts as promptly as practicable. All replacement Parts shall
be free and clear of all Liens (except for Permitted Liens and except in
the case of replacement property temporarily installed on an emergency
basis) and shall be in as good operating condition as, and shall have a
value and utility at least equal to, the Parts replaced assuming such
replaced Parts were in the condition and repair required to be maintained
by the terms hereof. Except as otherwise provided in paragraph (c) of this
Section 7.03, all Parts at any time removed from the Airframe or any Engine
shall remain the property of Owner, no matter where located. Immediately
upon any replacement part becoming incorporated or installed in or attached
to the Airframe or any Engine as above provided, without further act
(subject only to Permitted Liens and any pooling arrangement to the extent
permitted by paragraph (b) of this Section 7.03 and except in the case of
replacement property temporarily installed on an emergency basis), such
replacement Part shall become subject to the Lien of this Indenture and be
deemed part of the Airframe or such Engine for all purposes hereof to the
same extent as the Parts originally incorporated or installed in or
attached to the Airframe or such Engine, and title to the replaced Part
shall thereupon vest in Owner (or, if a Lease is then in effect, any
Lessee), free and clear of the Lien of this Indenture and shall no longer
be deemed a Part hereunder.
(b) Pooling of Parts. Any Part removed from the Airframe or any
Engine as provided in paragraph (a) of this Section 7.03 may be subjected
by Owner (or any Lessee) to a normal pooling arrangement customary in the
airline industry of which Owner (or, if a Lease is then in effect, any
Lessee) is a party entered into in the ordinary course of Owner's (or any
Lessee's) business; provided that the Part replacing such removed Part
shall be incorporated or installed in or attached to such Airframe or
Engine in accordance with such paragraph (a) as promptly as practicable
after the removal of such removed Part. In addition, any replacement Part
when incorporated or installed in or attached to the Airframe or any Engine
in accordance with such paragraph (a) may be owned by any third party
subject to such a normal pooling arrangement, provided that Owner (or any
Lessee), at its expense, as promptly thereafter as practicable, either (i)
causes title to such replacement Part to vest in Owner in accordance with
such paragraph (a) free and clear of all Liens except Permitted Liens
(other than pooling arrangements) or (ii) replaces such replacement Part by
incorporating or installing in or attaching to the Airframe or Engine a
further replacement Part owned by Owner (or any Lessee) free and clear of
all Liens except Permitted Liens (other than pooling arrangements) and by
causing title to such further replacement Part to vest in Owner in
accordance with such paragraph (a).
(c) Alterations, Modifications and Additions. Owner, at its own
expense, will make (or cause to be made) such alterations and modifications
in and additions to the Airframe and Engines as may be required from time
to time to meet the applicable standards of the FAA or any applicable
regulatory agency or body of any other jurisdiction in which the Aircraft
may then be registered as permitted by Section 7(d) of the Participation
Agreement; provided, however, that Owner (or, if a Lease is then in effect,
any Lessee) may, in good faith, contest the validity or application of any
such law, rule, regulation or order in any reasonable manner which does not
adversely affect the Indenture Trustee. In addition, Owner (or any
Lessee), at its own expense, may from time to time add further parts or
accessories and make such alterations and modifications in and additions to
the Airframe or any Engine as Owner (or any Lessee) may deem desirable in
the proper conduct of its business, including, without limitation, removal
of Parts which Owner (or any Lessee) has determined in its reasonable
judgment to be obsolete or no longer suitable or appropriate for use on the
Airframe or such Engine (such parts, "Obsolete Parts"); provided that no
such alteration, modification or addition shall materially diminish the
value, utility or remaining useful life of the Airframe or such Engine
below the value, utility or remaining useful life thereof immediately prior
to such alteration, modification or addition (it being agreed that the
modification that makes an Engine a CFM 56-5B-5/P engine shall be deemed
not to diminish the value, utility and remaining useful life of an Engine),
assuming the Airframe or such Engine was then in the condition required to
be maintained by the terms of this Indenture, except that the value (but
not the utility or remaining useful life) of the Airframe or any Engine may
be reduced by the value of Obsolete Parts which shall have been removed so
long as the aggregate value of all Obsolete Parts which shall have been
removed and not replaced shall not exceed $350,000 in aggregate value at
the time of removal. Owner (or any Lessee) may remove or suffer to be
removed any Part incorporated or installed in or attached or added to the
Airframe or an Engine as the result of any such alteration or modification,
provided that such additional Part (i) is in addition to, and not in
replacement of or substitution for, any Part originally incorporated or
installed in or attached to the Airframe or any Engine at the time of
delivery thereof hereunder or any Part in replacement of, or substitution
for, any such Part, (ii) is not required to be incorporated or installed in
or attached or added to the Airframe or any Engine pursuant to the terms of
Section 7.02 or the first sentence of this paragraph (c) and (iii) can be
removed from the Airframe or such Engine without diminishing or impairing
the value, utility or remaining useful life which the Airframe or such
Engine would have had at the time of removal had such alteration,
modification or addition not occurred.
(d) Certain Matters Regarding Passenger Convenience Equipment.
Owner may install on the Airframe, subject to the requirements of Section
7.03(c) above, Passenger Convenience Equipment that is (i) owned by another
Person and leased to Owner, (ii) sold to Owner by another Person subject to
a conditional sale contract or other retained security interest,
(iii) leased to Owner pursuant to a lease which is subject to a security
interest in favor of another Person or (iv) installed on the Aircraft
subject to a license granted to Owner by another Person, and in any such
case (A) the Indenture Trustee will not acquire or claim, as against any
such other Person, any right, title or interest in any such Passenger
Convenience Equipment solely as a result of its installation on the
Airframe, (B) Owner shall notify such Person of the Indenture Trustee's
respective interest in the Aircraft, and (C) upon the occurrence of any
default under the applicable lease, conditional sale agreement, security
agreement or license, such Person shall not be entitled to repossess such
Passenger Convenience Equipment unless it shall, in connection with such
repossession, undertake to restore the Aircraft to the condition it would
have been in had the installation of such Passenger Convenience Equipment
not occurred.
SECTION 7.04. Insurance.
(a) Owner's Obligation to Insure. Owner shall comply with, or
cause to be complied with, each of the provisions of Exhibit B, which
provisions are hereby incorporated by this reference as if set forth in
full herein.
(b) [Reserved.]
(c) Indemnification by Government in Lieu of Insurance.
Notwithstanding any provisions of this Section 7.04 requiring insurance,
the Indenture Trustee agrees to accept, in lieu of insurance against any
risk with respect to the Aircraft, indemnification from, or insurance
provided by, the United States Government or any agency or instrumentality
thereof, or, upon the written consent of the Indenture Trustee, other
government of registry of the Aircraft or agency or instrumentality
thereof, against such risk in an amount which, when added to the amount of
insurance against such risk maintained by Owner (or any Lessee) shall be at
least equal to the amount of insurance against such risk otherwise required
by this Section 7.04 (taking into account self-insurance permitted by
Exhibit B hereto).
(d) Application of Payments During Existence of an Event of
Default. Any amount referred to in paragraph (b) of Exhibit B hereto which
is payable to or retainable by Owner (or any Lessee) shall not be paid to
or retained by Owner (or any Lessee) if at the time of such payment or
retention an Event of Default shall have occurred and be continuing, but
shall be held by or paid over to the Indenture Trustee as security for the
obligations of Owner hereunder if the Indenture Trustee declares this
Indenture to be in default pursuant to Section 4.02 hereof, applied against
Owner's obligations hereunder as and when due. At such time as there shall
not be continuing any such Event of Default, such amount shall be paid to
Owner to the extent not previously applied in accordance with the preceding
sentence.
SECTION 7.05. Inspection.
At all reasonable times and upon at least 15 days' prior written
notice to Owner, the Indenture Trustee, or its authorized representatives,
may inspect the Aircraft and inspect and make copies of the books and
records of Owner and any Lessee required to be maintained by the FAA or the
regulatory agency or body of another jurisdiction in which the Aircraft is
then registered relating to the maintenance of the Aircraft (the Indenture
Trustee's risk and expense) and shall keep any information or copies
obtained thereby confidential and shall not disclose the same to any
Person, except (A) to the Certificate Holders and to prospective and
permitted transferees of the Certificate Holders' or the Indenture
Trustee's interest (and such prospective and permitted transferee's
counsel, independent insurance advisors or other agents) who agree to hold
such information confidential, (B) to the Certificate Holders' or the
Indenture Trustee's counsel, independent insurance advisors or other agents
who agree to hold such information confidential, or (C) as may be required
by any statute, court or administrative order or decree or governmental
ruling or regulation, provided, however, that any and all disclosures
permitted by clause (C) above shall be made only to the extent necessary to
meet the specific requirements or needs of the Persons for whom such
disclosures are hereby permitted. Any such inspection of the Aircraft
shall be subject to Owner's safety and security rules applicable to the
location of the Aircraft, shall be a visual, walk-around inspection of the
interior and exterior of the Aircraft and shall not include opening any
panels, bays or the like without the express consent of Owner (except in
connection with a heavy maintenance visit when a panel, bay or the like is
scheduled or required to be opened), which consent Owner may in its sole
discretion withhold; provided that no exercise of such inspection right
shall interfere with the normal operation or maintenance of the Aircraft
by, or the business of, Owner (or any Lessee). The Indenture Trustee shall
not have any duty to make any such inspection nor shall it incur any
liability or obligation by reason of not making such inspection. Except
during the continuance of an Event of Default, all inspections by the
Indenture Trustee and its authorized representatives provided for under
this Section 7.05 shall be limited to one (1) inspection of any kind
contemplated by this Section 7.05 during any calendar year.
SECTION 7.06. Filings; Delivery of Financial Statements.
Forthwith upon the execution and delivery of each Indenture
Supplement from time to time required by the terms hereof and upon
execution and delivery of any amendment to this Indenture, Owner will cause
such Indenture Supplement (and, in the case of the initial Indenture
Supplement and the Indenture as well) or amendment to be duly filed and
recorded, and maintained of record, in accordance with the applicable laws
of the government of registry of the Aircraft. Owner agrees to furnish to
the Indenture Trustee promptly after execution and delivery of any
supplement and amendment hereto (except for any such supplement or
amendment which does not require or receive the approval of Owner pursuant
to the Operative Documents and is not required pursuant to the terms of the
Operative Documents), an opinion of counsel (which may be Owner's General
Counsel, Deputy General Counsel, Assistant General Counsel or Associate
General Counsel) reasonably satisfactory to the Indenture Trustee as to the
due recording or filing of such supplement or amendment. Owner will
deliver to the Indenture Trustee (a) within sixty (60) days after the end
of each of the first three quarterly periods of each fiscal year of Owner,
the publicly filed Form 10-Q report of Owner; and (b) within one hundred
twenty (120) days after the close of such fiscal year, the publicly filed
annual report and Form 10-K report of Owner.
ARTICLE VIII
INDEMNIFICATION OF INDENTURE TRUSTEE BY OWNER
SECTION 8.01. Scope of Indemnification.
Owner hereby agrees, except as otherwise provided in Section
2.04(b) hereof, to assume liability for, and does hereby indemnify,
protect, save and keep harmless the Indenture Trustee (in its individual
and trust capacities), and its successors, assigns, agents and servants,
from and against any and all liabilities, obligations, losses, damages,
penalties, taxes (excluding any taxes payable by the Indenture Trustee on
or measured by any compensation received by the Indenture Trustee for its
services under this Indenture), claims, actions, suits, costs, expenses or
disbursements (including reasonable legal fees and expenses) of any kind
and nature whatsoever, which may be imposed on, incurred by or asserted
against the Indenture Trustee (whether or not also indemnified against by
any other Person under any other document) in any way relating to or
arising out of this Indenture or any other Operative Document to which it
is a party or the enforcement of any of the terms of any thereof, or in any
way relating to or arising out of the manufacture, purchase, acceptance,
non-acceptance, rejection, ownership, delivery, lease, possession, use,
operation, condition, sale, return or other disposition of the Aircraft or
any Engine (including, without limitation, latent or other defects, whether
or not discoverable, and any claim for patent, trademark or copyright
infringement), or in any way relating to or arising out of the
administration of the Indenture Estate or the action or inaction of the
Indenture Trustee hereunder. Notwithstanding the foregoing, the Indenture
Trustee shall not be entitled to any indemnification for any Expenses to
the extent relating to or arising from the willful misconduct or gross
negligence (or negligence in the case of handling funds) of the Indenture
Trustee in the performance of its duties hereunder or resulting from the
inaccuracy of any representation or warranty of the Indenture Trustee (in
its individual capacity) referred to in Section 6.03 hereof, or as provided
in Section 6.01 hereof or in the last sentence of Section 5.04 hereof, or
as otherwise excluded by the terms of Section 6(b) of the Participation
Agreement from Owner's indemnities under such Section. In addition, if
necessary, the Indenture Trustee shall be entitled to indemnification from
the Indenture Estate for any liability, obligation, loss, damage, penalty,
claim, action, suit, cost, expense or disbursement indemnified against
pursuant to this Section 7.01 to the extent not reimbursed by Owner or
others, but without releasing any of them from their respective agreements
of reimbursement; and to secure the same the Indenture Trustee shall have a
prior Lien on the Indenture Estate. Owner shall be subrogated to the
Indenture Trustee's rights, if any, to payment from Owner for amounts
payable by the Owner under this Section 7.01.
ARTICLE IX
SUCCESSOR AND SEPARATE TRUSTEES
SECTION 9.01. [Reserved.]
SECTION 9.02. Resignation of Indenture Trustee; Appointment of
Successor.
(a) The Indenture Trustee or any successor thereto may resign at
any time without cause by giving at least 30 days' prior written notice to
Owner and each Note Holder, such resignation to be effective upon the
acceptance of the trusteeship by a successor Indenture Trustee. In
addition, a Majority in Interest of Note Holders may at any time (but only
with the consent of Owner, which consent shall not be unreasonably
withheld, except that such consent shall not be necessary if an Event of
Default shall have occurred and be continuing) remove the Indenture Trustee
without cause by an instrument in writing delivered to Owner and the
Indenture Trustee, and the Indenture Trustee shall promptly notify each
Note Holder thereof in writing, such removal to be effective upon the
acceptance of the trusteeship by a successor Indenture Trustee. In the
case of the resignation or removal of the Indenture Trustee, a Majority in
Interest of Note Holders may appoint a successor Indenture Trustee by an
instrument signed by such holders, which successor, so long as no Event of
Default shall have occurred and be continuing, shall be subject to Owner's
reasonable approval. If a successor Indenture Trustee shall not have been
appointed within 30 days after such notice of resignation or removal, the
Indenture Trustee, Owner or any Note Holder may apply to any court of
competent jurisdiction to appoint a successor Indenture Trustee to act
until such time, if any, as a successor shall have been appointed as above
provided. The successor Indenture Trustee so appointed by such court shall
immediately and without further act be superseded by any successor
Indenture Trustee appointed as above provided.
(b) Any successor Indenture Trustee, however appointed, shall
execute and deliver to the predecessor Indenture Trustee and Owner an
instrument accepting such appointment and assuming the obligations of the
Indenture Trustee under the Participation Agreement arising from and after
the time of such appointment, and thereupon such successor Indenture
Trustee, without further act, shall become vested with all the estates,
properties, rights, powers and duties of the predecessor Indenture Trustee
hereunder in the trust hereunder applicable to it with like effect as if
originally named the Indenture Trustee herein; but nevertheless upon the
written request of such successor Indenture Trustee, such predecessor
Indenture Trustee shall execute and deliver an instrument transferring to
such successor Indenture Trustee, upon the trusts herein expressed
applicable to it, all the estates, properties, rights and powers of such
predecessor Indenture Trustee, and such predecessor Indenture Trustee shall
duly assign, transfer, deliver and pay over to such successor Indenture
Trustee all monies or other property then held by such predecessor
Indenture Trustee hereunder.
(c) Any successor Indenture Trustee, however appointed, shall be
a bank or trust company having its principal place of business in the
United States and having (or whose obligations under the Operative
Documents are guaranteed by an affiliated entity having) a combined capital
and surplus of at least $100,000,000, if there be such an institution
willing, able and legally qualified to perform the duties of the Indenture
Trustee hereunder upon reasonable or customary terms.
(d) Any corporation into which the Indenture Trustee may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
the Indenture Trustee shall be a party, or any corporation to which
substantially all the corporate trust business of the Indenture Trustee may
be transferred, shall, subject to the terms of paragraph (c) of this
Section 9.02, be a successor Indenture Trustee and the Indenture Trustee
under this Indenture without further act.
SECTION 9.03. Appointment of Additional and Separate Trustees.
(a) Whenever (i) the Indenture Trustee shall deem it necessary
or desirable in order to conform to any law of any jurisdiction in which
all or any part of the Indenture Estate shall be situated or to make any
claim or bring any suit with respect to or in connection with the Indenture
Estate, this Indenture, any other Indenture Agreement, the Equipment Notes
or any of the transactions contemplated by the Participation Agreement,
(ii) the Indenture Trustee shall be advised by counsel satisfactory to it
that it is so necessary or prudent in the interests of the Note Holders
(and the Indenture Trustee shall so advise Owner), or (iii) the Indenture
Trustee shall have been requested to do so by a Majority in Interest of
Note Holders, then in any such case, the Indenture Trustee and, upon the
written request of the Indenture Trustee, Owner, shall execute and deliver
an indenture supplemental hereto and such other instruments as may from
time to time be necessary or advisable either (1) to constitute one or more
bank or trust companies or one or more persons approved by the Indenture
Trustee, either to act jointly with the Indenture Trustee as additional
trustee or trustees of all or any part of the Indenture Estate, or to act
as separate trustee or trustees of all or any part of the Indenture Estate,
in each case with such rights, powers, duties and obligations consistent
with this Indenture as may be provided in such supplemental indenture or
other instruments as the Indenture Trustee or a Majority in Interest of
Note Holders may deem necessary or advisable, or (2) to clarify, add to or
subtract from the rights, powers, duties and obligations theretofore
granted any such additional and separate trustee, subject in each case to
the remaining provisions of this Section 9.03. If Owner shall not have
taken any action requested of it under this Section 9.03(a) that is
permitted or required by its terms within 15 days after the receipt of a
written request from the Indenture Trustee so to do, or if an Event of
Default shall have occurred and be continuing, the Indenture Trustee may
act under the foregoing provisions of this Section 9.03(a) without the
concurrence of Owner; and Owner hereby irrevocably appoints (which
appointment is coupled with an interest) the Indenture Trustee, its agent
and attorney-in-fact to act for it under the foregoing provisions of this
Section 9.03(a) in either of such contingencies. The Indenture Trustee
may, in such capacity, execute, deliver and perform any such supplemental
indenture, or any such instrument, as may be required for the appointment
of any such additional or separate trustee or for the clarification of,
addition to or subtraction from the rights, powers, duties or obligations
theretofore granted to any such additional or separate trustee. In case
any additional or separate trustee appointed under this Section 9.03(a)
shall die, become incapable of acting, resign or be removed, all the
assets, property, rights, powers, trusts, duties and obligations of such
additional or separate trustee shall revert to the Indenture Trustee until
a successor additional or separate trustee is appointed as provided in this
Section 9.03(a).
(b) No additional or separate trustee shall be entitled to
exercise any of the rights, powers, duties and obligations conferred upon
the Indenture Trustee in respect of the custody, investment and payment of
monies and all monies received by any such additional or separate trustee
from or constituting part of the Indenture Estate or otherwise payable
under any Operative Document to the Indenture Trustee shall be promptly
paid over by it to the Indenture Trustee. All other rights, powers, duties
and obligations conferred or imposed upon any additional or separate
trustee shall be exercised or performed by the Indenture Trustee and such
additional or separate trustee jointly except to the extent that applicable
Law of any jurisdiction in which any particular act is to be performed
renders the Indenture Trustee incompetent or unqualified to perform such
act, in which event such rights, powers, duties and obligations (including
the holding of title to all or part of the Indenture Estate in any such
jurisdiction) shall be exercised and performed by such additional or
separate trustee. No additional or separate trustee shall take any
discretionary action except on the instructions of the Indenture Trustee or
a Majority in Interest of Note Holders. No trustee hereunder shall be
personally liable by reason of any act or omission of any other trustee
hereunder, except that the Indenture Trustee shall be liable for the
consequences of its lack of reasonable care in selecting, and Indenture
Trustee's own actions in acting with, any additional or separate trustee.
Each additional or separate trustee appointed pursuant to this Section 9.03
shall be subject to, and shall have the benefit of Articles IV through IX
and Article XI hereof insofar as they apply to the Indenture Trustee. The
powers of any additional or separate trustee appointed pursuant to this
Section 9.03 shall not in any case exceed those of the Indenture Trustee
hereunder.
(c) If at any time the Indenture Trustee shall deem it no longer
necessary or desirable in order to conform to any such law or take any such
action or shall be advised by such counsel that it is no longer so
necessary or desirable in the interest of the Note Holders, or in the event
that the Indenture Trustee shall have been requested to do so in writing by
a Majority in Interest of Note Holders, the Indenture Trustee and, upon the
written request of the Indenture Trustee, Owner, shall execute and deliver
an indenture supplemental hereto and all other instruments and agreements
necessary or proper to remove any additional or separate trustee. The
Indenture Trustee may act on behalf of Owner under this Section 9.03(c)
when and to the extent it could so act under Section 9.03(a) hereof.
ARTICLE X
SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE
AND OTHER DOCUMENTS
SECTION 10.01. Instructions of Majority; Limitations.
(a) Except with respect to Excluded Payments, Owner agrees it
shall not enter into any amendment of or supplement to Article 12 of the
Purchase Agreement (to the extent assigned by the Purchase Agreement
Assignment), the Purchase Agreement Assignment, the Consent and Agreement,
or execute and deliver any written waiver or modification of, or consent
under, the terms of the Lease, the Purchase Agreement (to the extent
assigned by the Purchase Agreement Assignment), the Purchase Agreement
Assignment, the Consent and Agreement, unless such supplement, amendment,
waiver, modification or consent is consented to in writing by the Indenture
Trustee and a Majority in Interest of Note Holders.
(b) Without limiting the provisions of Section 10.01(a) hereof
the Indenture Trustee agrees with the Note Holders that it shall not enter
into any amendment, waiver or modification of, supplement or consent to
this Indenture, the Purchase Agreement (to the extent assigned by the
Purchase Agreement Assignment), the Purchase Agreement Assignment, the
Consent and Agreement or the Participation Agreement, or any other
agreement included in the Indenture Estate, unless such supplement,
amendment, waiver, modification or consent is consented to in writing by a
Majority in Interest of Note Holders, or does not adversely effect the Note
Holders, but upon the written request of a Majority in Interest of Note
Holders, the Indenture Trustee shall from time to time enter into any such
supplement or amendment, or execute and deliver any such waiver,
modification or consent, as may be specified in such request and as may be
(in the case of any such amendment, supplement or modification), to the
extent such agreement is required, agreed to by Owner or, as may be
appropriate, the Manufacturer; provided, however, that, without the consent
of each holder of an affected Equipment Note then outstanding, no such
amendment of or supplement to this Indenture, the Purchase Agreement (to
the extent assigned by the Purchase Agreement Assignment), the Purchase
Agreement Assignment, the Consent and Agreement or the Participation
Agreement or waiver or modification of the terms of, or consent under, any
thereof, shall (i) modify any of the provisions of this Section 10.01, or
of Sections 2.02, 2.10, 2.11, 2.15, 4.02, 4.04(c), 4.04(d), 5.02 or 5.06
hereof, the definitions of "Event of Default", "Default", "Majority in
Interest of Note Holders", "Make-Whole Amount" or "Note Holder", or the
percentage of Note Holders required to take or approve any action
hereunder, (ii) reduce the amount, or change the time of payment or method
of calculation of any amount, of Principal Amount, Make-Whole Amount, if
any, or interest with respect to any Equipment Note, or alter or modify the
provisions of Article III hereof with respect to the order of priorities in
which distribution thereunder shall be made as among the Note Holders and
Owner, (iii) reduce, modify or amend any indemnities in favor of the Note
Holders, (iv) consent to any change in the Indenture which would permit
redemption of Equipment Notes earlier than permitted under Section 2.10 or
2.11 hereof or the purchase of the Equipment Notes or (v) permit the
creation of any Lien on the Indenture Estate or any part thereof other than
Permitted Liens or deprive any Note Holder of the benefit of the Lien of
this Indenture on the Indenture Estate, except as provided in connection
with the exercise of remedies under Article IV hereof. Without the consent
of Owner, no amendment or supplement to this Indenture or waiver or
modification of the terms hereof shall adversely affect Owner.
(c) At any time after the date hereof, Owner and the Indenture
Trustee may enter into one or more agreements supplemental hereto without
the consent of any Note Holder for any of the following purposes: (i) (a)
to cure any defect or inconsistency herein or in the Equipment Notes, or to
make any change not inconsistent with the provisions hereof (provided that
such change does not adversely affect the interests of any Note Holder in
its capacity solely as Note Holder) or (b) to cure any ambiguity or correct
any mistake; (ii) to evidence the succession of a new trustee hereunder
pursuant hereto, the removal of the trustee hereunder or the appointment of
any co-trustee or co-trustees or any separate or additional trustee or
trustees; (iii) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee or to make any other provisions
with respect to matters or questions arising hereunder so long as such
action shall not adversely affect the interests of the Note Holders in its
capacity solely as Note Holder; (iv) to correct or amplify the description
of any property at any time subject to the Lien of this Indenture or better
to assure, convey and confirm unto the Indenture Trustee any property
subject or required to be subject to the Lien of this Indenture, the
Airframe or Engines or any Replacement Airframe or Replacement Engine; (v)
to add to the covenants of Owner for the benefit of the Note Holders, or to
surrender any rights or power herein conferred upon Owner; (vi) to add to
the rights of the Note Holders; and (vii) to include on the Equipment Notes
any legend as may be required by law.
SECTION 10.02. Trustees Protected.
If, in the opinion of the institution acting as Indenture Trustee
hereunder, any document required to be executed by it pursuant to the terms
of Section 10.01 hereof adversely affects any right, duty, immunity or
indemnity with respect to such institution under this Indenture, such
institution may in its discretion decline to execute such document.
SECTION 10.03. Documents Mailed to Note Holders.
Promptly after the execution by the Owner or the Indenture
Trustee of any document entered into pursuant to Section 10.01 hereof, the
Indenture Trustee shall mail, by first class mail, postage prepaid, a copy
thereof to Owner and to each Note Holder at its address last set forth in
the Equipment Note Register, but the failure of the Indenture Trustee to
mail such copies shall not impair or affect the validity of such document.
SECTION 10.04. No Request Necessary for Indenture Supplement.
No written request or consent of the Indenture Trustee or the
Note Holders pursuant to Section 10.01 hereof shall be required to enable
Owner to enter into any Indenture Supplement specifically required by the
terms hereof.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Termination of Indenture.
Upon (or at any time after) payment in full of the Principal
Amount of, Make-Whole Amount, if any, and interest on and all other amounts
due under all Equipment Notes and provided that there shall then be no
other Secured Obligations due to the Note Holders, the Indenture
Indemnitees and the Indenture Trustee hereunder or under the Participation
Agreement, Owner shall direct the Indenture Trustee to execute and deliver
to or as directed in writing by Owner an appropriate instrument releasing
the Aircraft and the Engines from the Lien of this Indenture and releasing
the Purchase Agreement and the Purchase Agreement Assignment with the
Consent and Agreement attached thereto from the assignment and pledge
thereof hereunder and the Indenture Trustee shall execute and deliver such
instrument as aforesaid and give written notice thereof to Owner; provided,
however, that this Indenture and the trusts created hereby shall earlier
terminate and this Indenture shall be of no further force or effect upon
any sale or other final disposition by the Indenture Trustee of all
property constituting part of the Indenture Estate and the final
distribution by the Indenture Trustee of all monies or other property or
proceeds constituting part of the Indenture Estate in accordance with the
terms hereof. Except as aforesaid otherwise provided, this Indenture and
the trusts created hereby shall continue in full force and effect in
accordance with the terms hereof.
SECTION 11.02. No Legal Title to Indenture Estate in Note
Holders.
No holder of a Equipment Note shall have legal title to any part
of the Indenture Estate. No transfer, by operation of law or otherwise, of
any Equipment Note or other right, title and interest of any Note Holder in
and to the Indenture Estate or hereunder shall operate to terminate this
Indenture or entitle such holder or any successor or transferee of such
holder to an accounting or to the transfer to it of any legal title to any
part of the Indenture Estate.
SECTION 11.03. Sale of Aircraft by Indenture Trustee Is
Binding.
Any sale or other conveyance of the Indenture Estate, or any part
thereof (including any part thereof or interest therein), by the Indenture
Trustee made pursuant to the terms of this Indenture shall bind the Note
Holders and shall be effective to transfer or convey all right, title and
interest of the Indenture Trustee, Owner and such holders in and to such
Indenture Estate or part thereof. No purchaser or other grantee shall be
required to inquire as to the authorization, necessity, expediency or
regularity of such sale or conveyance or as to the application of any sale
or other proceeds with respect thereto by the Indenture Trustee.
SECTION 11.04. Indenture for Benefit of Owner, Indenture
Trustee, Note Holders and the Other Indenture Indemnitees.
Nothing in this Indenture, whether express or implied, shall be
construed to give any person other than Owner, the Indenture Trustee, the
Indenture Indemnitees and the Note Holders, any legal or equitable right,
remedy or claim under or in respect of this Indenture.
SECTION 11.05. Notices.
Unless otherwise expressly specified or permitted by the terms
hereof, all notices, requests, demands, authorizations, directions,
consents, waivers or documents provided or permitted by this Indenture to
be made, given, furnished or filed shall be in writing, personally
delivered or mailed by certified mail, postage prepaid, or by facsimile or
confirmed telex, and (i) if to Owner, addressed to it at its office at
, (ii) if to the Indenture Trustee, addressed to it at its office
at Two International Place, 4th Floor, Boston, Massachusetts 02110,
Attention: Corporate Trust Department (Telecopy No. (617) 664-5371), (iii)
if to any Participant, Owner or any Note Holder, addressed to such party at
such address as such party shall have furnished by notice to the Owner and
the Indenture Trustee, or, until an address is so furnished, addressed to
the address of such party (if any) set forth on the signature pages to the
Participation Agreement or in the Equipment Note Register. Whenever any
notice in writing is required to be given by Owner, any Participant, the
Indenture Trustee or any Note Holder to any of the other of them, such
notice shall be deemed given and such requirement satisfied when such
notice is received, or if such notice is mailed by certified mail, postage
prepaid, three Business Days after being mailed, addressed as provided
above. Any party hereto may change the address to which notices to such
party will be sent by giving notice of such change to the other parties to
this Indenture.
SECTION 11.06. Severability.
Any provision of this Indenture which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 11.07. No Oral Modification or Continuing Waivers.
No term or provision of this Indenture or the Equipment Notes may
be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by Owner and the Indenture Trustee, in
compliance with Section 10.01 hereof. Any waiver of the terms hereof or of
any Equipment Note shall be effective only in the specific instance and for
the specific purpose given.
SECTION 11.08. Successors and Assigns.
All covenants and agreements contained herein shall be binding
upon, and inure to the benefit of, each of the parties hereto and the
permitted successors and assigns of each, all as herein provided. Any
request, notice, direction, consent, waiver or other instrument or action
by any Note Holder shall bind the successors and assigns of such holder.
Each Note Holder by its acceptance of a Equipment Note agrees to be bound
by this Indenture and all provisions of the Participation Agreement
applicable to a Loan Participant or a Note Holder.
SECTION 11.09. Headings.
The headings of the various Articles and Sections herein and in
the table of contents hereto are for convenience of reference only and
shall not define or limit any of the terms or provisions hereof.
SECTION 11.10. Normal Commercial Relations.
Anything contained in this Indenture to the contrary
notwithstanding, the Indenture Trustee, any Participant or any bank or
other Affiliate of such Participant may conduct any banking or other
financial transactions, and have banking or other commercial relationships,
with Owner, fully to the same extent as if this Indenture were not in
effect, including without limitation the making of loans or other
extensions of credit to Owner for any purpose whatsoever, whether related
to any of the transactions contemplated hereby or otherwise.
SECTION 11.11. Governing Law; Counterpart Form.
THIS INDENTURE HAS BEEN DELIVERED IN NEW YORK, NEW YORK AND SHALL
IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE. THIS INDENTURE IS BEING DELIVERED
IN THE STATE OF NEW YORK. This Indenture may be executed by the parties
hereto in separate counterparts (or upon separate signature pages bound
together into one or more counterparts), each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.12. Voting By Note Holders.
All votes of the Note Holders shall be governed by a vote of a
Majority in Interest of Note Holders, except as otherwise provided herein.
SECTION 11.13. Bankruptcy.
It is the intention of the parties that the Indenture Trustee
shall be entitled to the benefits of Section 1110 with respect to the right
to take possession of the Aircraft, Airframe, Engines and Parts in the
event of a case under Chapter 11 of the Bankruptcy Code in which Owner is a
debtor, and in any instance where more than one construction is possible of
the terms and conditions hereof or any other pertinent Operative Document,
each such party agrees that a construction which would preserve such
benefits shall control over any construction which would not preserve such
benefits.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed by their respective officers thereof duly authorized as
of the day and year first above written.
US AIRWAYS, INC.
By:___________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY, as
Indenture Trustee
By:____________________________________
Name:
Title:
============================
EXHIBIT A
TO
INDENTURE AND SECURITY AGREEMENT
============================
INDENTURE SUPPLEMENT
(No. N7__UW)
This Indenture Supplement N7__UW) dated _______ __, _____ (herein
called this "Indenture Supplement") of US Airways, Inc.
W I T N E S S E T H:
WHEREAS, the Indenture and Security Agreement N7__UW) dated as of
_________ __, 199_ (as amended and supplemented to the date hereof, the
"Indenture") between Owner and STATE STREET BANK AND TRUST COMPANY, as
Indenture Trustee (the "Indenture Trustee"), provides for the execution and
delivery of a supplement thereto substantially in the form hereof, which
shall particularly describe the Aircraft, and shall specifically mortgage
such Aircraft to the Indenture Trustee; and
WHEREAS, the Indenture relates to the Airframe and Engines
described below, and a counterpart of the Indenture is attached hereto and
made a part hereof and this Indenture Supplement, together with such
counterpart of the Indenture, is being filed for recordation on the date
hereof with the FAA as one document;
NOW, THEREFORE, this Indenture Supplement witnesseth that Owner
hereby confirms that the Lien of the Indenture on the Indenture Estate
covers all of Owner's right, title and interest in and to the following
described property:
AIRFRAME
One airframe identified as follows:
FAA Registration Manufacturer's
Manufacturer Model Number Number Serial Number
------------ ------------ ---------------- --------------
Airbus A319
together with all of Owner's right, title and interest in and to all Parts
of whatever nature, whether now owned or hereinafter acquired and which are
from time to time incorporated or installed in or attached to said
airframe.
AIRCRAFT ENGINES
Two aircraft engines, each such engine having 750 or more rated
take-off horsepower or the equivalent thereof, identified as follows:
Manufacturer's
Manufacturer Model Number Serial Number
------------ -------------- -------------
together with all of Owner's right, title and interest in and to all Parts
of whatever nature, whether now owned or hereafter acquired and which are
from time to time incorporated or installed in or attached to any of such
engines.
Together with all of Owner's right, title and interest in and to
all Parts of whatever nature, which from time to time are included within
the definition of "Airframe" or "Engine", whether now owned or hereafter
acquired, including all substitutions, renewals and replacements of and
additions, improvements, accessions and accumulations to the Airframe and
Engines (other than additions, improvements, accessions and accumulations
which constitute appliances, parts, instruments, appurtenances,
accessories, furnishings or other equipment excluded from the definition of
Parts).
As further security for the obligations referred to above and
secured by the Indenture and hereby, the Owner has granted, bargained,
sold, assigned, transferred, conveyed, mortgaged, pledged and confirmed,
and does hereby grant, bargain, sell, assign, transfer, convey, mortgage,
pledge and confirm, unto the Indenture Trustee, its successors and assigns,
for the security and benefit of the Loan Participants and of the Note
Holders, in the trust created by the Indenture, all of the right, title and
interest of Owner in, to and under the Lease Supplement [of even date
herewith] covering the property described above.
TO HAVE AND TO HOLD all and singular the aforesaid property unto
the Indenture Trustee, its successors and assigns, in trust for the equal
and proportionate benefit and security of the Note Holders, except as
provided in Section 2.15 and Article III of the Indenture without any
preference, distinction or priority of any one Equipment Note over any
other by reason of priority of time of issue, sale, negotiation, date of
maturity thereof or otherwise for any reason whatsoever, and for the uses
and purposes and subject to the terms and provisions set forth in the
Indenture.
This Indenture Supplement shall be construed as supplemental to
the Indenture and shall form a part thereof. The Indenture is each hereby
incorporated by reference herein and is hereby ratified, approved and
confirmed.
This Indenture Supplement is being delivered in the State of New
York.
AND, FURTHER, Owner hereby acknowledges that the Aircraft
referred to in this Indenture Supplement has been delivered to Owner and is
included in the property of Owner covered by all the terms and conditions
of the Trust Agreement, subject to the pledge and mortgage thereof under
the Indenture.
IN WITNESS WHEREOF, Owner has caused this Indenture Supplement to
be duly executed by one of its officers, thereunto duly authorized, on the
day and year first above written.
US AIRWAYS, INC.
By:_________________________________
Name:
Title:
===================================
EXHIBIT B
TO
INDENTURE AND SECURITY AGREEMENT
===================================
INSURANCE
The portion of this Exhibit appearing below this text will be
intentionally deleted from the FAA filing counterpart as the parties hereto
deem it to contain confidential information.
(a) Public Liability and Property Damage Insurance. (1) Except
as provided in clause (2) of this Paragraph (a), and subject to self-
insurance to the extent permitted by subsection (d) of this Exhibit B,
Owner will carry or cause to be carried with respect to the Aircraft at its
or any Lessee's expense (i) comprehensive airline liability (including,
without limitation, passenger, contractual, bodily injury and property
damage liability) insurance (exclusive of manufacturer's product liability
insurance) and (ii) cargo liability insurance, (A) in an amount not less
than the greater of (x) the amounts of comprehensive airline liability
insurance from time to time applicable to aircraft owned or leased, and
operated by Owner (or, if a Lease is then in effect, by Lessee) of the same
type as the Aircraft and (y) $300 million per occurrence, (B) of the type
and covering the same risks as from time to time applicable to aircraft
owned or leased and operated by Owner of the same type as the Aircraft, and
(C) which is maintained in effect with insurers of recognized reputation
and responsibility; provided, however, that Owner need not maintain such
cargo liability insurance, or may maintain such cargo liability insurance
in an amount less than $300 million per occurrence, so long as the amount
of cargo liability insurance, if any, maintained with respect to the
Aircraft is not less than the cargo liability insurance, if any, maintained
for other Airbus Model A319 aircraft owned or leased and operated by Owner.
(2) During any period that the Airframe or an Engine, as the case
may be, is on the ground and not in operation, Owner may carry or cause to
be carried as to such non-operating property, in lieu of the insurance
required by clause (1) above, and subject to the self-insurance to the
extent permitted by subsection (d) hereof, insurance by insurers of
recognized reputation and responsibility otherwise conforming with the
provisions of said clause (1) except that (A) the amounts of coverage shall
not be required to exceed the amounts of comprehensive airline liability
from time to time applicable to property owned or leased by Owner of the
same type as such non-operating property and which is on the ground and not
in operation; and (B) the scope of the risks covered and the type of
insurance shall be the same as from time to time shall be applicable to
aircraft owned or leased by Owner of the same type as such non-operating
property and which is on the ground and not in operation.
(b) Insurance Against Loss or Damage to the Aircraft.
(1) Except as provided in clause (2) of this subsection (b), and subject to
the provisions of subsection (d) of this Exhibit B permitting the self-
insurance, Owner shall maintain or cause to be maintained in effect, at its
or any Lessee's expense, with insurers of recognized responsibility, all-
risk aircraft hull insurance covering the Aircraft and fire and extended
coverage and all-risk aircraft hull insurance covering Engines and Parts
while temporarily removed from the Aircraft and not replaced by similar
components; provided that such insurance shall at all times while the
Aircraft is subject to this Lease be for an amount (taking into account the
self-insurance to the extent permitted by subsection (d) of this Exhibit B)
not less than the Termination Value for the Aircraft; provided further,
that, subject to compliance with subsection (d) of this Exhibit B, such
all-risk property damage insurance covering Engines and Parts temporarily
removed from an Airframe or an airframe or (in the case of Parts) an Engine
need be obtained only to the extent available at reasonable cost (as
reasonably determined by Owner). In the case of a Loss with respect to an
engine (other than an Engine) installed on the airframe in circumstances
which do not constitute an Event of Loss with respect to the Airframe, the
Indenture Trustee shall promptly remit any payment made to it of any
insurance proceeds in respect of such Loss to Owner or any other third
party that is entitled to receive such proceeds.
Unless an Event of Default has occurred and is continuing, all
losses will be adjusted by Owner with the insurers. As between the
Indenture Trustee and Owner, it is agreed that all insurance payments
received as the result of the occurrence of an Event of Loss will be
applied as follows:
(x) if such payments are received with respect to the
Airframe (or the Airframe and the Engines installed thereon), (i)
unless such property is replaced pursuant to the last paragraph
of Section 5.06(a), so much of such payments remaining, after
reimbursement of the Indenture Trustee for reasonable costs and
expenses, as shall not exceed the amounts payable pursuant to
Section 5.06(a) hereof, shall be paid over to, or retained by,
Owner (or if directed by Owner, any Lessee); or (ii) if such
property is replaced pursuant to the last paragraph of Section
5.06(a), such payments shall be paid over to, or retained by,
Owner (or if directed by Owner, any Lessee), provided that Owner
shall have fully performed or, concurrently therewith, will fully
perform the terms of the last paragraph of Section 5.06(a) with
respect to the Event of Loss for which such payments are made;
and
(y) if such payments are received with respect to an Engine
under the circumstances contemplated by Section 5.06(b) hereof,
so much of such payments remaining after reimbursement of the
Indenture Trustee for reasonable costs and expenses, shall be
paid over to, or retained by, Owner (or if directed by Owner, any
Lessee), provided that Owner shall have fully performed or
concurrently therewith will fully perform the terms of Section
5.06(b) with respect to the Event of Loss for which such payments
are made.
As between the Indenture Trustee and Owner, the insurance
payments for any property damage loss to the Airframe or any engine not
constituting an Event of Loss with respect thereto will be applied in
payment for repairs or for replacement property in accordance with the
terms of Sections 7.02 and 7.03, if not already paid for by Owner (or any
Lessee), and any balance (or if already paid for by Owner (or any Lessee),
all such insurance proceeds) remaining after compliance with such Sections
with respect to such loss shall be paid to Owner (or any Lessee if directed
by Owner).
(2) During any period that the Aircraft is on the ground and not
in operation, Owner may carry or cause to be carried, in lieu of the
insurance required by clause (1) above, and subject to self-insurance to
the extent permitted by subsection (d) of this Exhibit B, insurance
otherwise conforming with the provisions of said clause (1) except that the
scope of the risks and the type of insurance shall be the same as from time
to time applicable to aircraft owned or leased by Owner (or, if a Lease is
then in effect, by Lessee) of the same type as the Aircraft similarly on
the ground and not in operation, provided that, subject to self-insurance
to the extent permitted by subsection (d) of this Exhibit B, Owner shall
maintain insurance against risk of loss or damage to the Aircraft in an
amount at least equal to the 100% of the amounts payable upon the
occurrence of an Event of Loss pursuant to Section 5.06(a) hereof during
such period that the Aircraft is on the ground and not in operation.
(3) If Owner (or any Lessee) shall at any time operate or
propose to operate the Aircraft, Airframe or any Engine (i) in any area of
recognized hostilities or (ii) on international routes, and war-risk,
hijacking or allied perils insurance is maintained by Owner (or any Lessee)
with respect to other aircraft owned and operated by Owner (or any Lessee)
on such routes or in such areas, Owner shall maintain or cause to be
maintained war-risk, hijacking and related perils insurance of
substantially the same type carried by major United States commercial air
carriers operating the same or comparable models of aircraft on similar
routes or in such areas and in no event in an amount less than 100% of the
amounts payable upon the occurrence of an Event of Loss pursuant to Section
5.06(a) hereof.
(c) Reports, etc. Owner will furnish, or cause to be furnished,
to the Indenture Trustee and the Pass Through Trustee, on or before the
Delivery Date and on each annual anniversary date of Owner's applicable
insurance, a report, signed by Owner's regular insurance broker or any
other independent firm of insurance brokers reasonably acceptable to the
Indenture Trustee which brokers may be in the regular employ of Owner (the
"Insurance Brokers"), describing in reasonable detail the hull and
liability insurance (and property insurance for detached engines and parts)
then carried and maintained with respect to the Aircraft and stating the
opinion of such firm that the insurance complies with the terms hereof;
provided, that all information contained in the foregoing report shall not
be made available by the Indenture Trustee or the Pass Through Trustee to
anyone except (i) to prospective and permitted transferees of the Indenture
Trustee's or the Pass Through Trustee's interest or their respective
counsel, independent certified public accountants and independent insurance
brokers or other agents, who agree to hold such information confidential,
(ii) the Indenture Trustee's or the Pass Through Trustee's counsel or
independent certified public accountants, independent insurance brokers or
agents who agree to hold such information confidential or (iii) as may be
required by any statute, court or administrative order or decree or
governmental ruling or regulation; provided, however that any disclosure
permitted by clause (iii) above shall be made only to the extent necessary
to meet the specific requirements or needs of the Persons to whom such
disclosures are hereby permitted. Owner will cause such Insurance Broker
to agree to advise the Indenture and the Pass Through Trustee in writing of
any act or omission on the part of Owner of which it has knowledge and
which might invalidate or render unenforceable, in whole or in part, any
insurance on the Aircraft and to advise in writing at least thirty (30)
days (seven (7) days in the case of war risk and allied perils coverage)
and ten (10) days notice with respect to the Electronic Date Recognition
Exclusion Limited Coverage Endorsement, prior to the cancellation or
material adverse change of any insurance maintained pursuant to Section
7.04, provided that if the notice period specified above is not reasonably
obtainable, the Insurance Broker shall provide for as long a period of
prior notice as shall then be reasonably obtainable. In addition, Owner
will also cause such Insurance Brokers to deliver to the Indenture Trustee
and the Pass Through Trustee, on or prior to the date of expiration of any
insurance policy referenced in a previously delivered certificate of
insurance, a new certificate of insurance, substantially in the same form
as delivered by Owner to such parties on the Delivery Date except for such
changes in the report or the coverage consistent with the terms hereof. In
the event that Owner or any Lessee shall fail to maintain or cause to be
maintained insurance as herein provided, the Indenture Trustee may at its
sole option, but shall be under no duty to, provide such insurance and, in
such event, Owner shall, upon demand, reimburse the Indenture Trustee for
the cost thereof to the Indenture Trustee.
(d) Self-Insurance. Owner may self-insure by way of deductible,
premium adjustment or franchise provisions or otherwise (including, with
respect to insurance maintained pursuant to subsection (b) of this Exhibit
B, insuring for an amount that is less than 100% of the amounts payable
upon the occurrence of an Event of Loss pursuant to Section 5.06(a) hereof)
the risks required to be insured against pursuant to Section 7.04 under a
program applicable to all aircraft (whether owned or leased) in Owner's
fleet, but in no case shall the aggregate amount of self-insurance in
regard to subsection (a) and (b) of this Exhibit B exceed for any policy
year, with respect to all of the aircraft (whether owned or leased) in
Owner's fleet (including, without limitation, the Aircraft), the lesser of
(i) 50% of the highest replacement value of any single aircraft in Owner's
fleet or (ii) 1-1/2% of the average aggregate insurable value (during the
preceding policy year) of all aircraft (including, without limitation, the
Aircraft) on which Owner carries insurance, unless an insurance broker of
national standing shall certify that the standard among all other major
United States airlines is a higher level of self-insurance, in which case
Owner may insure the Aircraft to such higher level. In addition to the
foregoing right to self-insure, Owner (and any Lessee) may self-insure to
the extent of any applicable mandatory minimum per aircraft (or, if
applicable, per annum or other period) hull or liability insurance
deductible customary in the airline industry imposed by the aircraft hull
or liability insurer.
(e) Terms of Policies. Any policies of insurance carried in
accordance with subsection (a) or (b) of this Exhibit B and any policies
taken out in substitution or replacement for any of such policies (A) shall
be amended to name the Additional Insureds as their respective interests
may appear, (B) may provide for the self-insurance to the extent permitted
in subsection (d) of this Exhibit B, (C) shall provide that if the insurers
cancel such insurance for any reason whatever or if any material change is
made in such insurance which adversely affects the interest of the
Additional Insureds, or such insurance shall lapse for non-payment of
premium, such cancellation, lapse or change shall not be effective as to
the Additional Insureds for thirty (30) days (ten (10) days in the case of
war risk and allied perils coverage) after issuance to the Additional
Insureds, respectively, of written notice by such insurers of such
cancellation, lapse or change; provided, however, that if any notice period
specified above is not reasonably obtainable, such policies shall provide
for as long a period of prior notice as shall then be reasonably
obtainable, (D) shall provide that in respect of the respective interests
of the Additional Insureds in such policies the insurance shall not be
invalidated by any action or inaction of Owner (or, if any Lease is then in
effect, any Lessee) or any other Person and shall insure the Additional
Insureds regardless of any breach or violation of any warranty, declaration
or condition contained in such policies by Owner (or, if any Lease is then
in effect, any Lessee), (E) shall be primary without right of contribution
from any other insurance which is carried by any Additional Insured, (F)
shall expressly provide that all of the provisions thereof, except the
limits of liability, shall operate in the same manner as if there were a
separate policy covering each insured, (G) shall waive any right of the
insurers to any set-off or counterclaim or any other deduction, whether by
attachment or otherwise, in respect of any liability of any Additional
Insured to the extent of any moneys due to any Additional Insured, and (H)
shall provide that (i) in the event of a loss involving proceeds in excess
of $5,000,000, the proceeds in respect of such loss up to an amount equal
to100% of the amounts payable upon the occurrence of an Event of Loss
pursuant to Section 5.06(a) hereof to the Note Holders shall be payable to
the Indenture Trustee (so long as the Trust Indenture shall not have been
discharged) in the manner set forth in Sections 2.10 and 2.12 (except in
the case of a loss with respect to an Engine installed on an airframe other
than the Airframe, in which case Owner (or any Lessee) shall arrange for
any payment of insurance proceeds in respect of such loss to be held for
the account of the Indenture Trustee (so long as the Trust Indenture shall
not have been discharged) whether such payment is made to Owner (or any
Lessee) or any third party), it being understood and agreed that in the
case of any payment to the Indenture Trustee otherwise than in respect of
an Event of Loss, the Indenture Trustee shall, upon receipt of evidence
satisfactory to it that the damage giving rise to such payment shall have
been repaired or that such payment shall then be required to pay for
repairs then being made, pay the amount of such payment (and all earnings
thereon) to Owner or its order, and (ii) the entire amount of any loss
involving proceeds of $5,000,000 or less or the amount of any proceeds of
any loss in excess of 100% of the amounts payable upon the occurrence of an
Event of Loss pursuant to Section 5.06(a) hereof shall be paid to Owner or
its order unless an Event of Default shall have occurred and be continuing
and the insurers have been notified thereof by the Indenture Trustee.
================================
EXHIBIT C
TO
INDENTURE AND SECURITY AGREEMENT
================================
SCHEDULE OF DOMICILES OF PERMITTED SUBLESSEES
Australia Malta
Austria Mexico
Bahamas Netherlands
Belgium New Zealand
Bermuda Norway
Brazil People's Republic of China
Canada Philippines
Denmark Portugal
Finland Republic of China (Taiwan)*
France Singapore
Germany South Korea
Grenada Spain
Greece Sweden
Iceland Switzerland
India Thailand
Ireland Tobago
Italy Trinidad
Jamaica Turkey
Japan United Kingdom
Luxembourg Venezuela
Malaysia
*So long as on the date of the Sublease such country and the
United States have diplomatic relations at least as good as those in effect
on the Delivery Date.
SCHEDULE I
Principal Amount Interest Rate
--------- ------ -------------
Series A %
Series B %
Series C %
Equipment Notes Amortization
SERIES A
Aircraft: _____
SERIES B
Aircraft: _____
SERIES C
Aircraft: _____
SCHEDULE II
PASS THROUGH TRUST AGREEMENT AND
PASS THROUGH TRUST SUPPLEMENTS
Pass Through Trust Agreement, dated as of December 4, 1998, between US
Airways, Inc. and State Street Bank and Trust Company, as supplemented by
Trust Supplement No. 1998-1A, dated as of December 14, 1998, as
supplemented by Trust Supplement No. 1998-1B, dated as of December 14,
1998, and as supplemented by Trust Supplement No. 1998-1C, dated as of
December 14, 1998
EXHIBIT 4(a)(xx) CUSIP No. 90332U AA 1
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 the registered owner
hereof, Cede & Co., has an interest herein.
US AIRWAYS PASS THROUGH TRUST 1998-1A
6.85% US Airways Pass Through Certificate, Series 1998-1A
Issuance Date: December 14, 1998
Final Expected Distribution Date: January 30, 2018
Evidencing A Fractional Undivided Interest In The US Airways
Pass Through Trust 1998-1A, The Property Of Which Includes
Certain Equipment Notes Each Secured By An Aircraft Leased
To Or Owned By US Airways, Inc.
Certificate
No. 1 $200,000,000 Fractional Undivided Interest representing
0.000272862% of the Trust per $1,000 face amount
THIS CERTIFIES THAT Cede & Co., for value received, is the registered
owner of a $200,000,000 (Two Hundred Million Dollars) Fractional Undivided
Interest in the US Airways Pass Through Trust 1998-1A (the "Trust") created
by State Street Bank and Trust Company, as trustee (the "Trustee"), pursuant
to a Pass Through Trust Agreement, dated as of December 4, 1998 (the "Basic
Agreement"), between the Trustee and US Airways, Inc., a Delaware corporation
(the "Company"), as supplemented by Trust Supplement No. 1998-1A thereto,
dated as of December 14, 1998 (the "Trust Supplement" and, together with the
Basic Agreement, the "Agreement"), between the Trustee and 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 "6.85% US Airways Pass
Through Certificates, Series 1998-1A" (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 the Intercreditor Agreement. The
property of the Trust includes certain Equipment Notes and all rights of the
Trust to receive payments under the Intercreditor Agreement and any Liquidity
Facility (the "Trust Property"). Each issue of the Equipment Notes is
secured by, among other things, a security interest in an 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 the
Intercreditor Agreement, from funds then available to the Trustee, there will
be distributed on each January 30 and July 30 (a "Regular Distribution Date")
commencing January 30, 1999, 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 the Intercreditor Agreement, in the event that
Special Payments on the Equipment Notes are received by the Trustee, from
funds then available to the Trustee, there shall be distributed on the
applicable Special Distribution Date, to the Person in whose name this
Certificate is registered at the close of business on the 15th day preceding
the Special Distribution Date, an amount in respect of such Special Payments
on the Equipment Notes, the receipt of which has been confirmed by the
Trustee, equal to the product of the percentage interest in the Trust
evidenced by this Certificate and an amount equal to the sum of such Special
Payments so received. If a Regular Distribution Date or Special Distribution
Date is not a Business Day, distribution shall be made on the immediately
following Business Day with the same force and effect as if made on such
Regular Distribution Date or Special Distribution Date and no interest shall
accrue during the intervening period. The Trustee shall mail notice of each
Special Payment and the Special Distribution Date therefor to the
Certificateholder of this Certificate.
Distributions on this Certificate will be made by the Trustee by check
mailed to the Person entitled thereto, without presentation or surrender of
this Certificate or the making of any notation hereon, except that with
respect to Certificates registered on the Record Date in the name of a
Clearing Agency (or its nominee), such distribution shall be made by wire
transfer. Except as otherwise provided in the Agreement and notwithstanding
the above, the final distribution on this Certificate will be made after
notice mailed by the Trustee of the pendency of such distribution and only
upon presentation and surrender of this Certificate at the office or agency
of the Trustee specified in such notice.
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company or the Trustee or
any affiliate thereof. The Certificates are limited in right or payment, all
as more specifically set forth on the face hereof and in the Agreement. All
payments or distributions made to Certificateholders under the Agreement
shall be made only from the Trust Property and only to the extent that the
Trustee shall have sufficient income or proceeds from the Trust Property to
make such payments in accordance with the terms of the Agreement. Each
Certificateholder of this Certificate, by its acceptance hereof, agrees that
it will look solely to the income and proceeds from the Trust Property to the
extent available for distribution to such Certificateholder as provided in
the Agreement. This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds, and duties evidenced
hereby. A copy of the Agreement may be examined during normal business hours
at the principal office of the Trustee, and at such other places, if any,
designated by the Trustee, by any Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any
time by the Company and the Trustee with the consent of the
Certificateholders holding Certificates evidencing Fractional Undivided
Interests aggregating not less than a majority in interest in the Trust. Any
such consent by the Certificateholder of this Certificate shall be conclusive
and binding on such Certificateholder and upon all future Certificateholders
of this Certificate and of any Certificate issued upon the transfer hereof or
in exchange hereof or in lieu hereof whether or not notation of such consent
is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the
Certificateholders of any of the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Register upon surrender of this Certificate for registration of transfer at
the offices or agencies maintained by the Trustee in its capacity as
Registrar, or by any successor Registrar, duly endorsed or accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Registrar, duly executed by the Certificateholder hereof or such
Certificateholder's attorney duly authorized in writing, and thereupon one or
more new Certificates of authorized denominations evidencing the same
aggregate Fractional Undivided Interest in the Trust will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $1,000 Fractional Undivided Interest and
integral multiples thereof except that one Certificate may be issued in a
different denomination. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
Each Certificateholder and Investor, by its acceptance of this
Certificate or a beneficial interest herein, agrees to treat the Trust as a
grantor trust for all U.S. federal, state and local income tax purposes.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered
as the owner hereof for all purposes, and neither the Trustee, the Registrar,
nor any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant
to the Agreement and the disposition of all property held as part of the
Trust Property.
Any Person acquiring or accepting this Certificate or an interest herein
will, by such acquisition or acceptance, be deemed to have represented and
warranted that either: (i) the assets of an employee benefit plan subject to
Title I of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or of a plan subject to Section 4975 of the Internal Revenue Code
of 1986, as amended (the "Code"), have not been used to purchase this
Certificate or an interest herein or (ii) the purchase and holding of this
Certificate or interest herein are exempt from the prohibited transaction
restrictions of ERISA and the Code pursuant to one or more prohibited
transaction statutory or administration exemptions.
THE AGREEMENT AND THIS CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
Unless the certificate of authentication hereon has been executed by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
US AIRWAYS PASS THROUGH TRUST 1998-1A
By: STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:_________________________________
Name:
Title:
THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-
mentioned Agreement.
By: STATE STREET BANK AND TRUST COMPANY,
as Trustee
By: _______________________________
Name:
Title:
Dated: December 14, 1998
CUSIP No. 90332U AA 1
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 the registered owner
hereof, Cede & Co., has an interest herein.
US AIRWAYS PASS THROUGH TRUST 1998-1A
6.85% US Airways Pass Through Certificate, Series 1998-1A
Issuance Date: December 14, 1998
Final Expected Distribution Date: January 30, 2018
Evidencing A Fractional Undivided Interest In The US Airways
Pass Through Trust 1998-1A, The Property Of Which Includes
Certain Equipment Notes Each Secured By An Aircraft Leased
To Or Owned By US Airways, Inc.
Certificate
No. 2 $166,486,000 Fractional Undivided Interest representing
0.000272862% of the Trust per $1,000 face amount
THIS CERTIFIES THAT Cede & Co., for value received, is the registered
owner of a $166,486,000 (One Hundred Sixty-Six Thousand Four Hundred Eighty-
Six Dollars) Fractional Undivided Interest in the US Airways Pass Through
Trust 1998-1A (the "Trust") created by State Street Bank and Trust Company,
as trustee (the "Trustee"), pursuant to a Pass Through Trust Agreement, dated
as of December 4, 1998 (the "Basic Agreement"), between the Trustee and US
Airways, Inc., a Delaware corporation (the "Company"), as supplemented by
Trust Supplement No. 1998-1A thereto, dated as of December 14, 1998 (the
"Trust Supplement" and, together with the Basic Agreement, the "Agreement"),
between the Trustee and 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 "6.85% US Airways Pass Through Certificates,
Series 1998-1A" (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 the Intercreditor Agreement. The property of the Trust
includes certain Equipment Notes and all rights of the Trust to receive
payments under the Intercreditor Agreement and any Liquidity Facility (the
"Trust Property"). Each issue of the Equipment Notes is secured by, among
other things, a security interest in an 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 the
Intercreditor Agreement, from funds then available to the Trustee, there will
be distributed on each January 30 and July 30 (a "Regular Distribution Date")
commencing January 30, 1999, 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 the Intercreditor Agreement, in the event that
Special Payments on the Equipment Notes are received by the Trustee, from
funds then available to the Trustee, there shall be distributed on the
applicable Special Distribution Date, to the Person in whose name this
Certificate is registered at the close of business on the 15th day preceding
the Special Distribution Date, an amount in respect of such Special Payments
on the Equipment Notes, the receipt of which has been confirmed by the
Trustee, equal to the product of the percentage interest in the Trust
evidenced by this Certificate and an amount equal to the sum of such Special
Payments so received. If a Regular Distribution Date or Special Distribution
Date is not a Business Day, distribution shall be made on the immediately
following Business Day with the same force and effect as if made on such
Regular Distribution Date or Special Distribution Date and no interest shall
accrue during the intervening period. The Trustee shall mail notice of each
Special Payment and the Special Distribution Date therefor to the
Certificateholder of this Certificate.
Distributions on this Certificate will be made by the Trustee by check
mailed to the Person entitled thereto, without presentation or surrender of
this Certificate or the making of any notation hereon, except that with
respect to Certificates registered on the Record Date in the name of a
Clearing Agency (or its nominee), such distribution shall be made by wire
transfer. Except as otherwise provided in the Agreement and notwithstanding
the above, the final distribution on this Certificate will be made after
notice mailed by the Trustee of the pendency of such distribution and only
upon presentation and surrender of this Certificate at the office or agency
of the Trustee specified in such notice.
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company or the Trustee or
any affiliate thereof. The Certificates are limited in right or payment, all
as more specifically set forth on the face hereof and in the Agreement. All
payments or distributions made to Certificateholders under the Agreement
shall be made only from the Trust Property and only to the extent that the
Trustee shall have sufficient income or proceeds from the Trust Property to
make such payments in accordance with the terms of the Agreement. Each
Certificateholder of this Certificate, by its acceptance hereof, agrees that
it will look solely to the income and proceeds from the Trust Property to the
extent available for distribution to such Certificateholder as provided in
the Agreement. This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds, and duties evidenced
hereby. A copy of the Agreement may be examined during normal business hours
at the principal office of the Trustee, and at such other places, if any,
designated by the Trustee, by any Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any
time by the Company and the Trustee with the consent of the
Certificateholders holding Certificates evidencing Fractional Undivided
Interests aggregating not less than a majority in interest in the Trust. Any
such consent by the Certificateholder of this Certificate shall be conclusive
and binding on such Certificateholder and upon all future Certificateholders
of this Certificate and of any Certificate issued upon the transfer hereof or
in exchange hereof or in lieu hereof whether or not notation of such consent
is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the
Certificateholders of any of the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Register upon surrender of this Certificate for registration of transfer at
the offices or agencies maintained by the Trustee in its capacity as
Registrar, or by any successor Registrar, duly endorsed or accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Registrar, duly executed by the Certificateholder hereof or such
Certificateholder's attorney duly authorized in writing, and thereupon one or
more new Certificates of authorized denominations evidencing the same
aggregate Fractional Undivided Interest in the Trust will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $1,000 Fractional Undivided Interest and
integral multiples thereof except that one Certificate may be issued in a
different denomination. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
Each Certificateholder and Investor, by its acceptance of this
Certificate or a beneficial interest herein, agrees to treat the Trust as a
grantor trust for all U.S. federal, state and local income tax purposes.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered
as the owner hereof for all purposes, and neither the Trustee, the Registrar,
nor any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant
to the Agreement and the disposition of all property held as part of the
Trust Property.
Any Person acquiring or accepting this Certificate or an interest herein
will, by such acquisition or acceptance, be deemed to have represented and
warranted that either: (i) the assets of an employee benefit plan subject to
Title I of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or of a plan subject to Section 4975 of the Internal Revenue Code
of 1986, as amended (the "Code"), have not been used to purchase this
Certificate or an interest herein or (ii) the purchase and holding of this
Certificate or interest herein are exempt from the prohibited transaction
restrictions of ERISA and the Code pursuant to one or more prohibited
transaction statutory or administration exemptions.
THE AGREEMENT AND THIS CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
Unless the certificate of authentication hereon has been executed by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
US AIRWAYS PASS THROUGH TRUST 1998-1A
By: STATE STREET BANK AND TRUST COMPANY,
as Trustee
By: _______________________________
Name:
Title:
THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-
mentioned Agreement.
By: STATE STREET BANK AND TRUST COMPANY,
as Trustee
By: _____________________________
Name:
Title:
Dated: December 14, 1998
EXHIBIT 4(a)(xxi) CUSIP No. 90332U AB 9
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 the registered owner hereof, Cede & Co., has an
interest herein.
US AIRWAYS PASS THROUGH TRUST 1998-1B
7.35% US Airways Pass Through Certificate, Series 1998-1B
Issuance Date: December 14, 1998
Final Expected Distribution Date: January 30, 2018
Evidencing A Fractional Undivided
Interest In The US Airways Pass Through
Trust 1998-1B, The Property Of Which
Includes Certain Equipment Notes Each
Secured By An Aircraft Leased To Or Owned
By US Airways, Inc.
Certificate
No. 1 $81,282,000 Fractional Undivided Interest
representing 0.001230284% of the Trust per $1,000
face amount
THIS CERTIFIES THAT Cede & Co., for value received, is
the registered owner of a $81,282,000 (Eighty-One Million Two
Hundred Eighty-Two Thousand Dollars) Fractional Undivided
Interest in the US Airways Pass Through Trust 1998-1B (the
"Trust") created by State Street Bank and Trust Company, as
trustee (the "Trustee"), pursuant to a Pass Through Trust
Agreement, dated as of December 4, 1998 (the "Basic Agreement"),
between the Trustee and US Airways, Inc., a Delaware corporation
(the "Company"), as supplemented by Trust Supplement No. 1998-1B
thereto, dated as of December 14, 1998 (the "Trust Supplement"
and, together with the Basic Agreement, the "Agreement"), between
the Trustee and 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 "7.35% US Airways Pass Through Certificates, Series 1998-1B"
(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 the Intercreditor
Agreement. The property of the Trust includes certain Equipment
Notes and all rights of the Trust to receive payments under the
Intercreditor Agreement and any Liquidity Facility (the "Trust
Property"). Each issue of the Equipment Notes is secured by,
among other things, a security interest in an 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 the Intercreditor Agreement, from funds then
available to the Trustee, there will be distributed on each
January 30 and July 30 (a "Regular Distribution Date") commencing
January 30, 1999, 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 the Intercreditor Agreement, in the
event that Special Payments on the Equipment Notes are received
by the Trustee, from funds then available to the Trustee, there
shall be distributed on the applicable Special Distribution Date,
to the Person in whose name this Certificate is registered at the
close of business on the 15th day preceding the Special
Distribution Date, an amount in respect of such Special Payments
on the Equipment Notes, the receipt of which has been confirmed
by the Trustee, equal to the product of the percentage interest
in the Trust evidenced by this Certificate and an amount equal to
the sum of such Special Payments so received. If a Regular
Distribution Date or Special Distribution Date is not a Business
Day, distribution shall be made on the immediately following
Business Day with the same force and effect as if made on such
Regular Distribution Date or Special Distribution Date and no
interest shall accrue during the intervening period. The Trustee
shall mail notice of each Special Payment and the Special
Distribution Date therefor to the Certificateholder of this
Certificate.
Distributions on this Certificate will be made by the
Trustee by check mailed to the Person entitled thereto, without
presentation or surrender of this Certificate or the making of
any notation hereon, except that with respect to Certificates
registered on the Record Date in the name of a Clearing Agency
(or its nominee), such distribution shall be made by wire
transfer. Except as otherwise provided in the Agreement and
notwithstanding the above, the final distribution on this
Certificate will be made after notice mailed by the Trustee of
the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency of the
Trustee specified in such notice.
The Certificates do not represent a direct
obligation of, or an obligation guaranteed by, or an interest in,
the Company or the Trustee or any affiliate thereof. The
Certificates are limited in right or payment, all as more
specifically set forth on the face hereof and in the Agreement.
All payments or distributions made to Certificateholders under
the Agreement shall be made only from the Trust Property and only
to the extent that the Trustee shall have sufficient income or
proceeds from the Trust Property to make such payments in
accordance with the terms of the Agreement. Each
Certificateholder of this Certificate, by its acceptance hereof,
agrees that it will look solely to the income and proceeds from
the Trust Property to the extent available for distribution to
such Certificateholder as provided in the Agreement. This
Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect
to the interests, rights, benefits, obligations, proceeds, and
duties evidenced hereby. A copy of the Agreement may be examined
during normal business hours at the principal office of the
Trustee, and at such other places, if any, designated by the
Trustee, by any Certificateholder upon request.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the
rights and obligations of the Company and the rights of the
Certificateholders under the Agreement at any time by the Company
and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests
aggregating not less than a majority in interest in the Trust.
Any such consent by the Certificateholder of this Certificate
shall be conclusive and binding on such Certificateholder and
upon all future Certificateholders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange hereof
or in lieu hereof whether or not notation of such consent is made
upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of
the Certificateholders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations set forth therein, the transfer of this Certificate
is registrable in the Register upon surrender of this Certificate
for registration of transfer at the offices or agencies
maintained by the Trustee in its capacity as Registrar, or by any
successor Registrar, duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Trustee and
the Registrar, duly executed by the Certificateholder hereof or
such Certificateholder's attorney duly authorized in writing, and
thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided
Interest in the Trust will be issued to the designated transferee
or transferees.
The Certificates are issuable only as registered
Certificates without coupons in minimum denominations of $1,000
Fractional Undivided Interest and integral multiples thereof
except that one Certificate may be issued in a different
denomination. As provided in the Agreement and subject to
certain limitations therein set forth, the Certificates are
exchangeable for new Certificates of authorized denominations
evidencing the same aggregate Fractional Undivided Interest in
the Trust, as requested by the Certificateholder surrendering the
same.
No service charge will be made for any such registration
of transfer or exchange, but the Trustee shall require payment of
a sum sufficient to cover any tax or governmental charge payable
in connection therewith.
Each Certificateholder and Investor, by its acceptance
of this Certificate or a beneficial interest herein, agrees to
treat the Trust as a grantor trust for all U.S. federal, state
and local income tax purposes.
The Trustee, the Registrar, and any agent of the Trustee
or the Registrar may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes,
and neither the Trustee, the Registrar, nor any such agent shall
be affected by any notice to the contrary.
The obligations and responsibilities created by the
Agreement and the Trust created thereby shall terminate upon the
distribution to Certificateholders of all amounts required to be
distributed to them pursuant to the Agreement and the disposition
of all property held as part of the Trust Property.
Any Person acquiring or accepting this Certificate or
an interest herein will, by such acquisition or acceptance, be
deemed to have represented and warranted that either: (i) the
assets of an employee benefit plan subject to Title I of the
Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or of a plan subject to Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code"), have not been used
to purchase this Certificate or an interest herein or (ii) the
purchase and holding of this Certificate or interest herein are
exempt from the prohibited transaction restrictions of ERISA and
the Code pursuant to one or more prohibited transaction statutory
or administration exemptions.
THE AGREEMENT AND THIS CERTIFICATE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be
valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this
Certificate to be duly executed.
US AIRWAYS PASS THROUGH TRUST 1998-1B
By: STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
--------------------------
Name:
Title:
THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Agreement.
By: STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
------------------------
Name:
Title:
Dated: December 14, 1998
