Filed with the Securities and Exchange Commission on February 26, 1999
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
US AIRWAYS, INC.
Delaware 4512 53 - 0218143
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Classification Identification Number)
incorporation or Code Number)
organization)
2345 Crystal Drive
Arlington, Virginia 22227
(703) 872-7000
(Address, including zip code, and telephone
number, including area code, of
Registrant's principal executive
offices)
------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Thomas A. Mutryn Copy to:
Senior Vice President - Finance and Chief Financial Officer William R. Kunkel
US Airways, Inc. Skadden, Arps, Slate, Meagher & Flom (Illinois)
2345 Crystal Drive 333 W. Wacker Dr.
Arlington, Virginia 22227 Chicago, Illinois 60606
(703) 872-7000 (312) 407-0700
(Name, address, including zip code, and
telephone number, including area code,
of agent for service)
------------------------
</TABLE>
Approximate date of commencement of proposed sale to public: As
soon as practicable after this Registration Statement becomes effective.
If the securities being registered on this Form are being offered
in connection with the formation of a holding company and there is
compliance with General Instruction G, check the following box. |_|
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. |_|
If this form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=============================================================================================================================
Proposed Maximum Proposed Maximum
Title of Each Class Amount to be Offering Price Aggregate Amount of
of Securities to be Registered Registered Per Unit (1) Offering Price (1) Registration Fee
<S> <C> <C> <C> <C> <C>
Class C Pass Through Certificates, Series $141,366,000 100% $141,366,000 $39,300 (2)
1998-1
=============================================================================================================================
</TABLE>
(1) Estimated pursuant to Rule 457 solely for the purpose of calculating
the registration fee.
(2) Pursuant to Rule 457(f)(2), the registration fee has been calculated
using the book value of the securities being registered.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH
DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT WILL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT
THIS REGISTRATION STATEMENT WILL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE
WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE
REGISTRATION STATEMENT WILL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
US AIRWAYS, INC.
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
Form S-4 Item Location in Prospectus
A. INFORMATION ABOUT THE TRANSACTION
<S> <C> <C>
Item 1: Forepart of Registration Statement and Outside
Front Cover Page of Prospectus....................... Outside Front Cover Page
Item 2: Inside Front and Outside Back Cover Pages of
Prospectus........................................... Inside Front Cover Page; Outside Back
Cover Page
Item 3: Risk Factors, Ratio of Earnings to Fixed Charges,
and Other Information................................ Inside Front Cover Page; Prospectus
Summary; Risk Factors; The Company;
Ratio of Earnings to Fixed Charges
Item 4: Terms of the Transaction............................ Prospectus Summary; The Exchange Offer;
Description of the Certificates; Certain
United States Federal Income Tax
Consequences; Plan of Distribution
Item 5: Pro Forma Financial Information...................... Not Applicable
Item 6: Material Contacts With the Company Being
Acquired............................................. Not Applicable
Item 7: Additional Information Required For Reoffering
by Persons and Parties Deemed to be
Underwriters......................................... Not Applicable
Item 8: Interests of Named Experts and Counsel............... Not Applicable
Item 9: Disclosure of Commission Position on
Indemnification for Securities Act Liabilities....... Not Applicable
B. INFORMATION ABOUT THE REGISTRANT
Item 10: Information With Respect to S-3 Registrants.......... Available Information; Incorporation of
Certain Documents by Reference
Item 11: Incorporation of Certain Information by
Reference............................................ Available Information; Incorporation of
Certain Documents by Reference
Item 12: Information With Respect to S-2 or S-3
Registrants.......................................... Not Applicable
Item 13: Incorporation of Certain Information by
Reference............................................ Not Applicable
Item 14: Information With Respect to Registrants Other
Than S-3 or S-2 Registrants.......................... Not Applicable
C. INFORMATION ABOUT THE COMPANY BEING
ACQUIRED
Item 15: Information With Respect to S-3 Companies............ Not Applicable
Item 16: Information With Respect to S-2 or S-3
Companies............................................ Not Applicable
Item 17: Information With Respect to Companies Other
Than S-3 or S-2 Companies............................ Not Applicable
D. VOTING AND MANAGEMENT INFORMATION
Item 18: Information if Proxies, Consents or Authorizations
Are to be Solicited.................................. Not Applicable
Item 19: Information if Proxies, Consents or Authorizations
Are Not to be Solicited or in an Exchange Offer...... Not Applicable
</TABLE>
[FLAG]
The Information in this Prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This Prospectus is not
an offer to sell these securities and it is not soliciting an offer to buy
these securities in any state where the offer or sale is not permitted.
Subject to Completion, dated February 26, 1999
Prospectus
LOGO
US AIRWAYS, INC.
Exchange Offer for
$141,366,000
CLASS C PASS THROUGH CERTIFICATES,
SERIES 1998-1
Terms of the Exchange Offer
o Expires 5:00 p.m. New York City time,
, 1999, unless extended.
o US Airways will not receive any proceeds from the
Exchange Offer.
o All Old Class C Certificates that are validly tendered and not
validly withdrawn will be exchanged.
o The exchange of the Old Class C Certificates (with attached Old
Escrow Receipts) for the New Class C Certificates (with attached
New Escrow Receipts) will not be a taxable event for U.S.
federal income tax purposes.
o Tenders of the Old Class C Certificates may be
withdrawn any time prior to the expiration of
the Exchange Offer.
o Not subject to any condition, other than that the Exchange Offer
not violate applicable law or any applicable interpretation of the
Staff of the Securities and Exchange Commission.
o The terms of the New Class C Certificates and the Old Class C
Certificates are substantially identical, except that the New
Class C Certificates will not contain terms with respect to
transfer restrictions or liquidated damages and the New Class C
Certificates will be available only in book-entry form.
o There is no existing market for the New Class C Certificates, and
US Airways does not intend to apply for their listing on any
securities exchange.
INVESTING IN THE CERTIFICATES INVOLVES RISKS.
SEE "RISK FACTORS" BEGINNING ON PAGE 19.
------------------------
PASS THROUGH PRINCIPAL FINAL EXPECTED
CERTIFICATES AMOUNT INTEREST RATE DISTRIBUTION DATE
1998-1C $141,366,000 6.82% July 30, 2014
------------------------
Each broker-dealer that receives New Class C Certificates for its own
account pursuant to the Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange
Certificates. The Letter of Transmittal states that by so acknowledging and
by delivering a prospectus, a broker-dealer will not be deemed to admit
that it is an "underwriter" within the meaning of the Securities Act of
1933. This Prospectus, as it may be amended or supplemented from time to
time, may be used by a broker-dealer in connection with resales of New
Class C Certificates received in exchange for Old Class C Certificates
where such Old Class C Certificates were acquired by such broker- dealer as
a result of market-making activities or other trading activities. US
Airways has agreed that, for a period of one hundred eighty (180) days
after _____, 1999, it will make this Prospectus available to any
broker-dealer for use in connection with any such resale. See "Plan of
Distribution."
------------------------
The Securities and Exchange Commission and state securities regulators have
not approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
_______________, 1999
PRESENTATION OF INFORMATION
We have given certain capitalized terms specific meanings for purposes
of this Prospectus. The "Index of Terms" attached as Appendix I to this
Prospectus lists the page in this Prospectus on which we have defined each
such term.
At varying places in this Prospectus, we refer you to other sections
of the Prospectus for additional information by indicating the caption
heading of such other sections. The page on which each principal caption
included in this Prospectus can be found is listed in the Table of Contents
below.
TABLE OF CONTENTS
PROSPECTUS
Page
Prospectus Summary............................ 5
The Exchange Offer.......................... 5
Summary of Terms of Certificates............ 8
Cash Flow Structure......................... 9
Equipment Notes and the Aircraft............10
Loan to Aircraft Value Ratios...............11
The Certificates............................12
Risk Factors..................................19
Risk Factors Relating to US Airways.........19
Risk Factors Relating to the Airline
Industry..................................22
Risk Factors Relating to the Certificates ..24
Risk Factors Relating to the Exchange Offer.26
The Company...................................27
Domestic Service............................28
Expanding International Service.............29
Code Sharing Relationships..................30
The US Airways and American Airlines
Marketing Relationship...................30
Labor Agreements............................30
Fleet Rationalization and the Airbus
Aircraft..................................31
US Airways' Market Position.................31
The SABRE Group Agreement...................32
On-Line Reservation System..................32
Change in Culture -- A New Outlook..........32
Use of Proceeds...............................33
Ratio of Earnings to Fixed Charges............33
The Exchange Offer............................33
General.....................................33
Expiration Date; Extensions; Amendments;
Termination...............................36
Interest on the New Class C Certificates....37
Procedures for Tendering....................37
Acceptance of Old Class C Certificates for
Exchange; Delivery of New Class C
Certificates..............................39
Book-Entry Transfer.........................39
Guaranteed Delivery Procedures..............39
Withdrawal of Tenders.......................40
Conditions..................................40
Exchange Agent..............................42
Fees and Expenses...........................42
Miscellaneous...............................43
Description of the Certificates...............43
General.....................................43
Payments and Distributions..................45
Pool Factors................................47
Reports to Certificateholders...............49
Indenture Defaults and Certain Rights
upon an Indenture Default.................50
Purchase Rights of Certificateholders.......52
PTC Event of Default........................52
Merger, Consolidation and Transfer
of Assets.................................52
Modifications of the Pass Through Trust
Agreements and Certain Other Agreements..53
Obligation to Purchase Equipment Notes......56
Termination of the Trusts...................59
The Trustees................................59
Book-Entry; Delivery and Form...............59
Description of the Deposit Agreements.........62
General.....................................62
Unused Deposits.............................63
Distribution upon Occurrence of a
Triggering Event..........................64
Distribution upon Occurrence of a
Termination Event.........................64
Depositaries................................64
Description of the Escrow Agreements..........65
Description of the Liquidity Facilities.......66
General.....................................66
Drawings....................................66
Reimbursement of Drawings...................69
Liquidity Events of Default.................70
Liquidity Provider..........................71
Description of the Intercreditor Agreement....71
Intercreditor Rights........................71
Priority of Distributions...................73
The Subordination Agent.....................76
Description of the Aircraft and the
Appraisals..................................77
The Aircraft................................77
The Appraisals..............................77
Deliveries of Aircraft......................78
Substitute Aircraft.........................78
Description of the Equipment Notes............79
General.....................................79
Subordination...............................79
Principal and Interest Payments.............80
Redemption..................................80
Security....................................82
Loan to Value Ratios of Equipment Notes.....82
Limitation of Liability.....................83
Indenture Defaults, Notice and Waiver.......84
Remedies....................................85
Modification of Indentures and Leases.......87
Indemnification.............................88
The Leases and Certain Provisions of
Owned Aircraft Indentures.................88
Certain United States Federal Income Tax
Consequences................................95
ERISA Considerations..........................95
General.....................................95
Plan Assets Issues..........................96
Prohibited Transaction Exemptions...........96
Special Considerations Applicable to
Insurance Company General Accounts....... 97
Plan of Distribution......................... 97
Legal Matters................................ 98
Experts...................................... 98
Other Information............................ 99
Effects of Year 2000 .................... 99
Available Information........................100
Reports to Certificateholders................101
Incorporation of Certain Documents by
Reference..................................101
Index of Terms...............................I-1
Appraisal Letters...........................II-1
We have not authorized anyone to provide you with information
concerning this offering other than the information contained in this
Prospectus. We are offering to exchange Certificates only in jurisdictions
where such offers are permitted. The information contained in this
Prospectus is accurate only as of the date of this Prospectus, regardless
of the time of delivery of this Prospectus or any exchange of Certificates.
[THIS PAGE INTENTIONALLY LEFT BLANK]
PROSPECTUS SUMMARY
This summary highlights selected information from this Prospectus and
may not contain all of the information that is important to you. References
in this Prospectus to "we," "us," "our," the "Company" or "US Airways"
refer to US Airways, Inc. and its subsidiary. For more complete information
about the Certificates and US Airways, you should read this entire
Prospectus, as well as the materials filed with the Securities and Exchange
Commission that are considered to be part of this Prospectus. See
"Incorporation of Certain Documents by Reference" in the Prospectus.
The Exchange Offer
The Certificates On December 14, 1998, we privately
placed an aggregate of $141,366,000 of
Old Class C Certificates. On the same
date, we publicly sold an aggregate of
$447,768,000 of Class A and Class B
Certificates, which were registered
under the Securities Act. We are using
the proceeds from the sale of the
Certificates to purchase Equipment
Notes issued to finance the
acquisition, from time to time, of 23
new Airbus aircraft by us and our
affiliates. We already have used some
of the proceeds to purchase Equipment
Notes relating to nine of the Aircraft.
The remaining proceeds are being held
in escrow and were deposited by the
Escrow Agent with the applicable
Depositary. Funds are withdrawn from
escrow to acquire Equipment Notes, from
time to time, to finance Aircraft when
they are delivered to us.
When we refer to the "Old Class C
Certificates" in this Prospectus, we
mean the Class C Pass Through
Certificates, Series 1998-1 privately
placed with the Initial Purchaser on
December 14, 1998 and which were not
registered with the Securities
and Exchange Commission.
When we refer to the "New Class C
Certificates" in this Prospectus, we
mean the Class C Certificates
registered with the Securities and
Exchange Commission and offered hereby
in exchange for the Old Class C
Certificates.
When we refer to the "Class C
Certificates" in this Prospectus, the
related discussion applies to both the
Old Class C Certificates and the New
Class C Certificates.
When we refer to the "Certificates" in
this Prospectus, the related discussion
applies to all of the Class A
Certificates, the Class B Certificates,
the Old Class C Certificates and the
New Class C Certificates.
Registration Agreement On December 14, 1998, we entered into a
Registration Agreement with the Initial
Purchaser and Trustee of the Class C
Trust providing, among other things,
for the Exchange Offer. On January 20,
1999, the parties entered into
Amendment No. 1 to the Registration
Agreement providing for an extension of
time by 30 days to file the
Registration Statement with the
Commission.
The Exchange Offer We are offering New Class C
Certificates in exchange for an equal
principal amount of Old Class C
Certificates. The New Class C
Certificates will be issued to satisfy
our obligations under the Registration
Agreement. The New Class C Certificates
will be entitled to the benefits of and
will be governed by the same Pass
Through Trust Agreement that governs
the Old Class C Certificates. The form
and terms of the New Class C
Certificates are the same in all
material respects as the form and terms
of the Old Class C Certificates, except
that we registered the New Class C
Certificates under the Securities Act
so their transfer is not restricted
like the Old Class C Certificates and
the New Class C Certificates are not
entitled to liquidated damages under
the Registration Agreement. As of the
date of this Prospectus, $141,366,000
aggregate principal amount of the Old
Class C Certificates are outstanding.
You may tender Old Class C Certificates
only in integral multiples of $1,000.
See "The Exchange Offer--General."
The Class A Certificates and the Class
B Certificates are not being exchanged
in the Exchange Offer. We anticipate
that all $447,768,000 of the Class A
and Class B Certificates outstanding on
the date of this Prospectus will be
outstanding following completion of the
Exchange Offer.
Resale of New Class C
Certificates We believe that you can offer for
resale, resell and otherwise transfer
the New Class C Certificates without
complying with the registration and
prospectus delivery requirements of the
Securities Act if:
o you acquire the New Class C
Certificates in the ordinary course
of your business;
o you are not participating, do not
intend to participate, and have no
arrangement or understanding with any
person to participate, in the
distribution of the New Class C
Certificates; and
o you are not an "affiliate" of ours,
as defined in Rule 405 of the
Securities Act.
If any of these conditions is not
satisfied and you transfer any New
Class C Certificate without delivering
a proper prospectus or without
qualifying for a registration
exemption, you may incur liability
under the Securities Act. We do not
assume or indemnify you against such
liability.
Consequences of Failure to
Exchange Old Class C
Certificates Once the Exchange Offer has been
completed, if you do not exchange your
Old Class C Certificates for New Class C
Certificates in the Exchange Offer, you
will no longer be entitled to
registration rights and will not be able
to offer or sell your Old Class C
Certificates, unless (i) such Old Class C
Certificates are subsequently registered
under the Securities Act (which, subject
to certain exceptions set forth in the
Registration Agreement, we will have no
obligation to do) or (ii) your
transaction is exempt from or otherwise
not subject to, the Securities Act and
applicable state securities laws. See
"Risk Factors--Risk Factors Relating to
the Certificates and the
Offering--Consequences of Failure to
Exchange" and "The Exchange Offer."
Expiration Date The Exchange Offer expires at 5:00 p.m.,
New York City time, _________, 1999,
unless we extend the expiration date.
Interest on the New Class C The New Class C Certificates will accrue
Certificates interest at the rate of 6.82% per annum,
from the most recent date to which
interest has been paid on the Old Class C
Certificates or, if no interest has been
paid, from the Issuance Date.
Conditions to the Exchange Offer The Exchange Offer is not conditioned
upon any minimum principal amount of Old
Class C Certificates being tendered for
exchange. However, the Exchange Offer is
subject to certain customary conditions,
which may be waived by us. See "The
Exchange Offer--Conditions."
Procedures for Tendering Old
Class C Certificates If you wish to accept the Exchange Offer,
you must transmit a properly completed
and signed Letter of Transmittal, or a
facsimile thereof (or, in the case of a
book- entry transfer, an Agent's Message
in lieu of such Letter of Transmittal),
together with the Old Class C
Certificates to be exchanged and any
other required documentation to the
Exchange Agent at the address set forth
in this Prospectus or effect a tender of
Old Class C Certificates pursuant to the
procedures for book- entry transfer as
provided for in this Prospectus. See "The
Exchange Offer --Procedures for
Tendering" and "--Book-Entry Transfer."
Guaranteed Delivery Procedures If you wish to tender Old Class C
Certificates and your Old Class C
Certificates are not immediately
available or you cannot deliver your Old
Class C Certificates and a properly
completed Letter of Transmittal or any
other documents required by the Letter of
Transmittal to the Exchange Agent prior
to the Expiration Date, you may tender
your Old Class C Certificates according
to the guaranteed delivery procedures set
forth in "The Exchange Offer--Guaranteed
Delivery Procedures."
Withdrawal Rights You may withdraw a tender of Old Class C
Certificates at any time prior to 5:00
p.m., New York City time, on the
Expiration Date. To withdraw a tender of
Old Class C Certificates, the Exchange
Agent must receive a written or facsimile
transmission notice of withdrawal at its
address set forth under "The Exchange
Offer--Exchange Agent" prior to 5:00
p.m., New York City time, on the
Expiration Date.
Acceptance of Old Class C
Certificates and Delivery of
New Class C Certificates Subject to certain conditions, we will
accept for exchange any and all Old Class
C Certificates which are properly
tendered in the Exchange Offer prior to
5:00 p.m., New York City time, on the
Expiration Date. We will deliver the New
Class C Certificates promptly following
the Expiration Date. See "The Exchange
Offer."
Certain United States Federal
Income Tax Consequences The exchange of the Old Class C
Certificates (with attached Old Escrow
Receipts) for the New Class C
Certificates (with attached New Escrow
Receipts) will not be a taxable event for
U.S. federal income tax purposes. See
"Certain United States Federal Income Tax
Consequences."
Exchange Agent State Street Bank and Trust Company is
serving as Exchange Agent in the Exchange
Offer.
Fees and Expenses We will pay all expenses of completing
the Exchange Offer and compliance with
the Registration Agreement, except that
the Initial Purchaser will bear any
additional expenses caused by a request
by the Initial Purchaser to delay
effectiveness of the Registration
Statement and keeping the Registration
Statement effective with the Commission
for more than 180 days after the
expiration of the Exchange Offer. See
"The Exchange Offer--Fees and Expenses."
Use of Proceeds We will not receive any cash proceeds
from the exchange of the New Class C
Certificates for the Old Class C
Certificates.
Summary of Terms of Certificates
<TABLE>
<CAPTION>
Class A Class B Class C
Certificates Certificates Certificates
------------ ------------ ------------
<S> <C> <C> <C>
Aggregate Face Amount................................ $366,486,000 $81,282,000 $141,366,000
Ratings:
Moody's......................................... A2 Baa1 Ba1
Standard & Poor's............................... AA- A BBB-
Initial Loan to Aircraft Value (cumulative) (1)...... 39.6% 48.3% 63.9%
Expected Principal Distribution Windows
(in years)........................................ 0.6 - 19.1 1.1 - 19.1 7.1 - 15.6
Initial Average Life (in years from issuance date)... 12.9 9.6 12.5
Regular Distribution Dates........................... January 30 January 30 January 30
and July 30 and July 30 and July 30
Final Expected Regular Distribution Date............. January 30, 2018 January 30, 2018 July 30, 2014
Final Maturity Date.................................. July 30, 2019 July 30, 2019 January 30, 2016
Minimum Denomination................................. $1,000 $1,000 $1,000
Section 1110 Protection.............................. Yes Yes Yes
Liquidity Facility Coverage.......................... 3 semiannual 3 semiannual 3 semiannual
interest interest interest
payments payments payments
</TABLE>
- ------------
(1) These percentages are calculated as of January 30, 2000, the first
Regular Distribution Date after all Aircraft are scheduled to have
been delivered. In making such calculations, we have assumed that all
Aircraft are delivered prior to such date, that the maximum principal
amount of the Equipment Notes is issued and that the aggregate
appraised Aircraft base value is $906,005,467 as of such date. The
appraised base value is only an estimate and reflects certain
assumptions, which assumptions may not reflect current market
conditions. See "Description of the Aircraft and the Appraisals--The
Appraisals." The Mandatory Economic Terms require that the initial
loan to Aircraft value, based on the foregoing appraisals, for each
Aircraft as of its delivery date be not in excess of 40.5% in the case
of the Series A Equipment Notes, 51.0% in the case of Series B
Equipment Notes and 67.0% in the case of the Series C Equipment Notes.
Cash Flow Structure
Set forth below is a diagram illustrating the cash flow structure
relating to the Certificates.
Diagram omitted, which shows that US Airways will pay to the Loan
Trustee for Leased Aircraft and Owned Aircraft (i) the Lease Rental
Payments, which are assigned by the Loan Trustee, on Leased Aircraft and
(ii) the Mortgage Payments on Owned Aircraft. From such Lease Rental
Payments and Mortgage Payments, the Loan Trustee will make Equipment Note
Payments on the Series A Equipment Notes, the Series B Equipment Notes and
the Series C Equipment Notes with respect to all Aircraft to the
Subordination Agent. Excess Rental Payments will be paid by the Loan
Trustee to the Lessors for Leased Aircraft. From such Equipment Note
Payments, the Subordination Agent will pay Principal, Premium, if any, and
Interest Distributions to the Pass Through Trustee for the Class A Trust,
the Pass Through Trustee for the Class B Trust and the Pass Through Trustee
for the Class C Trust, who will pay such principal, premium, if any, and
interest distributions to the Holders of Class A Certificates, the Holders
of Class B Certificates and Holders of Class C Certificates, respectively.
The Subordination Agent may also receive Advances, if any, and pay
Reimbursements, if any, to the Liquidity Provider. The applicable
Depositary will make Interest Payments on the Deposits to the Paying Agent
on behalf of the Escrow Agent. From such Interest Payments, the Paying
Agent on behalf of the Escrow Agent will make payments to the Holders of
Class A Certificates, the Holders of Class B Certificates and the Holders
of Class C Certificates.
- -------------
(1) Each Aircraft leased to us will be subject to a separate Lease and a
related Indenture; each Owned Aircraft will be subject to a separate
Indenture.
(2) A portion of the proceeds of the public offering of the Class A and
Class B Certificates and a portion of the proceeds of the private
placement of the Old Class C Certificates have been used by the Trusts
to purchase Equipment Notes relating to nine of the Aircraft. The
remaining proceeds from the sale of the Certificates are held in
escrow and deposited with the Depositaries. The Depositaries are
holding such funds as interest-bearing Deposits. Each Trust will
withdraw funds from the Deposits relating to such Trust to purchase
the corresponding series of Equipment Notes from time to time as each
Aircraft is financed. The scheduled payments of interest on the
Equipment Notes and on the Deposits relating to a Trust, taken
together, will be sufficient to pay accrued interest on the
outstanding Certificates of such Trust. The Liquidity Facilities will
not cover interest on the Deposits. If any funds remain as Deposits
with respect to any Trust at the Delivery Period Termination Date,
such funds will be withdrawn by the Escrow Agent and distributed to
the holders of the Certificates issued by such Trust, together with
accrued and unpaid interest thereon and a Deposit Make-Whole Premium
payable by us, provided that no premium will be paid with respect to
unused Deposits attributable to the failure of an Aircraft to be
delivered prior to the Delivery Period Termination Date due to any
reason not occasioned by our fault or negligence.
Equipment Notes and the Aircraft
Set forth below is certain information about the Equipment Notes
expected to be held in the Trusts and the Aircraft
expected to secure such Equipment Notes:
<TABLE>
<CAPTION>
Maximum
Principal Principal Principal
Manu- Amount of Amount of Amount of
Expected facturer's Aircraft Series A Series B Series C Appraised
Registration Serial Delivery Equipment Equipment Equipment Base
Aircraft Type Number Number Month (1) Notes Notes Notes (2) Value (3)
- --------------- ------------- ---------- --------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Airbus A319. N700UW 0885 October 15, 1998 $15,053,003 $2,735,481 $5,755,411 $37,633,333
Airbus A319. N701UW 0890 October 20, 1998 15,053,000 3,617,119 5,758,425 37,633,333
Airbus A319. N702UW 0896 November 2, 1998 15,062,667 3,647,600 5,779,505 37,656,667
Airbus A319. N703UW 0904 November 10, 1998 15,062,667 3,643,831 5,783,274 37,656,667
Airbus A319. N704US 0922 December 14, 1998 15,073,333 3,523,910 5,793,467 37,683,333
Airbus A319. N705UW 0929 December 17, 1998 15,073,333 3,523,910 5,793,467 37,683,333
Airbus A320. N101UW 0936 January 29, 1999 17,594,667 4,706,573 7,063,070 43,986,667
Airbus A319. N706US 0946 January 22, 1999 15,253,333 3,414,504 5,793,467 38,133,333
Airbus A319. N707UW 0949 January 29, 1999 15,253,333 3,249,879 5,793,467 38,133,333
Airbus A319. N708UW 0972 March 1999 15,264,000 3,387,021 5,788,248 38,160,000
Airbus A319. N709UW 0997 March 1999 15,273,333 3,406,805 5,797,284 38,183,333
Airbus A320. N102UW 0844 May 1999 17,777,333 3,100,808 7,110,663 44,443,333
Airbus A320. N103US 0861 May 1999 17,777,333 4,179,107 7,110,663 44,443,333
Airbus A319. N710UW 1019 May 1999 15,412,000 3,353,182 5,823,677 38,530,000
Airbus A320. N104UW 0863 June 1999 17,789,333 4,069,042 7,125,015 44,473,333
Airbus A320. N105UW 0868 June 1999 17,789,333 4,069,042 7,125,015 44,473,333
Airbus A319. N711UW 1033 June 1999 15,421,333 3,369,900 5,831,762 38,553,333
Airbus A319. N712US 1038 June 1999 15,421,333 3,369,900 5,831,762 38,553,333
Airbus A320. N106US 1044 July 1999 17,937,333 3,846,114 7,134,730 44,843,333
Airbus A319. N713UW 1040 July 1999 15,536,000 3,292,757 5,843,407 38,840,000
Airbus A319. N714US 1046 July 1999 15,536,000 3,292,757 5,843,407 38,840,000
Airbus A319. N715UW 1051 July 1999 15,536,000 3,241,379 5,843,407 38,840,000
Airbus A319. N716UW 1055 July 1999 15,536,000 3,241,379 5,843,407 38,840,000
</TABLE>
- -------------
(1) The delivery dates for the first nine Aircraft are set forth in this
table. The delivery date for any other Aircraft may be delayed or
accelerated. The Delivery Period Termination Date will be no later
than October 31, 1999. See "Description of the Aircraft and the
Appraisals--Deliveries of Aircraft." We have the option to substitute
other aircraft if the delivery of any Aircraft is expected to be
delayed for more than 30 days after the month scheduled for such
delivery or beyond the Delivery Period Termination Date. See
"Description of the Aircraft and the Appraisals--Substitute Aircraft."
(2) The actual principal amount of the Series C Equipment Notes issued for
any Aircraft may be less than the amounts set forth in this table
depending on the circumstances of the financing of such Aircraft. The
aggregate principal amount of all the Equipment Notes of each Series
will not exceed the aggregate face amount of the Certificates of the
corresponding Class.
(3) The appraised base value of each Aircraft set forth above is the
lesser of the mean and median base values of such Aircraft as
appraised by three independent appraisal and consulting firms, and, in
the case of future deliveries, projected as of the scheduled delivery
month of each Aircraft. Such appraisals are based upon varying
assumptions (which assumptions may not reflect current market
conditions) and methodologies made in connection with the initial sale
of the Certificates in December of 1998. An appraisal is only an
estimate of value and should not be relied upon as a measure of
realizable value. See "Risk Factors--Risk Factors Relating to the
Certificates and the Exchange Offer--Appraisals and Realizable Value
of Aircraft."
Loan to Aircraft Value Ratios
The following table sets forth loan to Aircraft value ratios ("LTVs")
for each Class of Certificates as of January 30, 2000 (the first Regular
Distribution Date that occurs after all Aircraft are scheduled to have been
delivered) and each July Regular Distribution Date thereafter assuming that
Equipment Notes of each series in the maximum principal amount for all of
the Aircraft are acquired by the Trusts prior to the Delivery Period
Termination Date. The LTVs for any Class of Certificates as of dates prior
to January 30, 2000 are not meaningful, since the property of the Trusts
will not include during such period all of the Equipment Notes expected to
be acquired by the Trusts and the related Aircraft will not be included in
the calculation. The table should not be considered a forecast or
prediction of expected or likely LTVs but simply a mathematical calculation
based on one set of assumptions. See "Risk Factors--Risk Factors Relating
to the Certificates and the Exchange Offer--Appraisals and Realizable Value
of Aircraft."
<TABLE>
<CAPTION>
Assumed Class A Class B Class C
Aggregate Certificates Certificates Certificates Class A Class B Class C
Aircraft Pool Pool Pool Certificates Certificates Certificates
Date Value(1) Balance(2) Balance(2) Balance(2) LTV(3) LTV(3) LTV(3)
---- ----------- ------------ ------------ ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
January 30, 2000. $ 906,005,467 $ 358,949,213 $ 78,388,855 $ 141,366,000 39.6% 48.3% 63.9%
July 30, 2000.... 878,518,967 355,800,180 78,286,374 141,366,000 40.5 49.4 65.5
July 30, 2001.... 851,032,467 344,668,148 74,637,893 141,366,000 40.5 49.3 65.9
July 30, 2002.... 823,545,967 333,536,115 69,891,574 141,366,000 40.5 49.0 66.2
July 30, 2003.... 796,059,467 322,404,083 63,697,711 141,366,000 40.5 48.5 66.3
July 30, 2004.... 768,572,967 311,119,854 56,358,337 141,366,000 40.5 47.8 66.2
July 30, 2005.... 741,086,467 299,424,046 47,863,796 141,366,000 40.4 46.9 65.9
July 30, 2006.... 713,599,967 284,800,838 41,523,788 140,435,893 39.9 45.7 65.4
July 30, 2007.... 686,113,467 269,507,075 37,335,503 136,477,828 39.3 44.7 64.6
July 30, 2008.... 658,626,967 255,868,673 34,166,914 130,782,717 38.8 44.0 63.9
July 30, 2009.... 631,140,467 249,816,689 31,728,454 120,443,849 39.6 44.6 63.7
July 30, 2010.... 603,653,967 243,091,889 29,289,994 99,155,827 40.3 45.1 61.5
July 30, 2011.... 576,167,467 233,347,823 26,851,534 75,384,499 40.5 45.2 58.2
July 30, 2012.... 548,680,967 222,215,790 24,413,074 48,885,700 40.5 44.9 53.9
July 30, 2013.... 521,194,467 210,920,930 19,814,328 3,406,990 40.5 44.3 44.9
July 30, 2014.... 490,304,233 148,586,631 14,097,042 0 30.3 33.2 NA
July 30, 2015.... 453,655,567 121,490,540 12,068,520 0 26.8 29.4 NA
July 30, 2016.... 417,006,900 84,523,352 12,068,520 0 20.3 23.2 NA
July 30, 2017.... 334,185,000 24,280,592 11,376,265 0 7.3 10.7 NA
</TABLE>
(1) We have assumed the initial appraised value of each Aircraft, determined
as described under "--Equipment Notes and the Aircraft," declines by 3%
per year for the first fifteen years after the year of delivery of such
Aircraft and by 4% per year for the next five years. Other depreciation
assumptions would result in important differences in the LTVs.
(2) In calculating the outstanding balances, we have assumed that the
Trusts will acquire the maximum principal amount of Equipment Notes
for all Aircraft.
(3) The LTVs for each Class of Certificates were obtained for each Regular
Distribution Date by dividing (i) the expected outstanding balance of
such Class together with the expected outstanding balance of all other
Classes equal or senior in right of payment to such Class after giving
effect to the distributions expected to be made on such date, by (ii)
the assumed value of all of the Aircraft on such date based on the
assumptions described above. The outstanding balances and LTVs may
change if, among other things, the aggregate principal amount of the
Equipment Notes acquired by the Trusts is less than the maximum
permitted under the terms of the offering or the amortization of the
Equipment Notes differs from the assumed amortization schedule
calculated for purposes of this Prospectus.
The above table was compiled on an aggregate basis. However, the
Equipment Notes for an Aircraft will not have a security interest in any
other Aircraft. This means that any excess proceeds realized from the sale
of an Aircraft or other exercise of remedies will not be available to cover
any shortfalls on the Equipment Notes relating to any other Aircraft. See
"Description of the Equipment Notes--Loan to Value Ratios of Equipment
Notes" for examples of LTVs for the Equipment Notes issued in respect of
individual Aircraft, which may be more relevant in a default situation than
the aggregate values shown above.
The Certificates
The Certificates Each Class of Certificates
represents a fractional undivided
interest in a related Trust. The
Certificates represent interests in
the Trusts only and do not represent
interests in or obligations of US
Airways or any of our affiliates.
Use of Proceeds We are using the proceeds from the
sale of the Class A Certificates,
the Class B Certificates and the Old
Class C Certificates to purchase
Equipment Notes issued to finance
the acquisition of 23 new Airbus
aircraft to be operated by US
Airways and our affiliates. A
portion of the proceeds from such
sale already has been used by the
Trusts to purchase Equipment Notes
relating to nine of the 23 new
Airbus aircraft. The remaining
proceeds from such sale are held in
escrow and were deposited with the
applicable Depositary. Each such
Trust will withdraw funds from the
escrow relating to such Trust to
acquire Equipment Notes. We will not
receive any cash proceeds from the
exchange of the New Class C
Certificates for the Old Class C
Certificates.
Subordination Agent, Trustee,
Paying Agent and Loan Trustee State Street Bank and Trust Company.
Escrow Agent First Security Bank, National
Association.
Depositaries Credit Suisse First Boston, New York
branch, for the Class A and Class B
Certificates; Citibank, N.A., for
the Class C Certificates.
Liquidity Provider ABN AMRO Bank N.V., acting through
its Chicago branch.
Trust Property The property of each Trust includes:
o Equipment Notes acquired by
such Trust.
o All monies receivable under
the Liquidity Facility for
such Trust.
o Funds from time to time
deposited with the Trustee in
accounts relating to such
Trust.
o Rights of the Trust to acquire
Equipment Notes under the Note
Purchase Agreement.
o Rights of the Trust under the
related Escrow and Paying Agent
Agreement.
o Rights of the Trust under the
Intercreditor Agreement.
Regular Distribution Dates January 30 and July 30, commencing
on January 30, 1999.
Record Dates The fifteenth day preceding the
related Distribution Date.
Distributions The Trustee and the Paying Agent, as
the case may be, will distribute all
payments of principal, premium (if
any) and interest received on the
Equipment Notes held in each Trust
and all payments of interest and
Deposit Make-Whole Premium (if any)
on the Deposits relating to each
Trust to the holders of the
Certificates of such Trust, subject,
in the case of payments on the
Equipment Notes, to the
subordination provisions applicable
to the Certificates.
Subject to the subordination
provisions applicable to the
Certificates, scheduled payments of
principal and interest made on the
Equipment Notes will be distributed
on the applicable Regular
Distribution Dates.
Subject to the subordination
provisions applicable to the
Certificates, payments of principal,
premium (if any) and interest made
on the Equipment Notes resulting
from any early redemption or
purchase of such Equipment Notes
will be distributed on a Special
Distribution Date after not less
than 15 days' notice to
Certificateholders.
Subordination After distributions are made to
reimburse the Liquidity Provider (if
necessary), distributions on the
Certificates will be made in the
following order:
o First, to the holders of the
Class A Certificates.
o Second, to the holders of the
Class B Certificates.
o Third, to the holders of the
Class C Certificates.
If we are in bankruptcy or certain
other specified events have occurred
but we are continuing to meet
certain of our obligations, the
subordination provisions applicable
to the Certificates permit
distributions to be made to junior
Certificates prior to making
distributions in full on the senior
Certificates.
Control of Loan Trustee The holders of at least a majority
of the outstanding principal amount
of Equipment Notes issued under each
Indenture will be entitled to direct
the Loan Trustee under such
Indenture in taking action as long
as no Indenture Default is
continuing under the respective
Indenture. If an Indenture Default
is continuing, subject to certain
conditions, the "Controlling Party"
will direct the Loan Trustees
(including in exercising remedies,
such as accelerating such Equipment
Notes or foreclosing the lien on the
Aircraft securing such Equipment
Notes).
The Controlling Party will be:
o The Class A Trustee.
o Upon payment of final
distributions to the holders of
Class A Certificates, the Class
B Trustee.
o Upon payment of final
distributions to the holders of
Class B Certificates, the Class
C Trustee.
o Under certain circumstances, the
Liquidity Provider.
In exercising remedies during the
nine months after the earlier of (a)
the acceleration of the Equipment
Notes issued pursuant to any
Indenture or (b) the bankruptcy of
US Airways, the Controlling Party
may not sell such Equipment Notes or
the Aircraft subject to the lien of
such Indenture for less than certain
specified minimums or modify lease
rental payments for such Aircraft
below a specified threshold.
Right to Buy Other Classes of
Certificates If we are in bankruptcy or certain
other specified events have
occurred, the Certificateholders may
have the right to buy the more
senior Classes of Certificates on
the following basis:
o The Class B Certificateholders
will have the right to purchase
all of the Class A
Certificates.
o The Class C Certificateholders
will have the right to purchase
all of the Class A and Class B
Certificates.
The purchase price will be the
outstanding balance of the
applicable Class of Certificates
plus accrued and unpaid interest,
plus any other amounts then due to
the Certificateholders of such
Class.
Liquidity Facilities Under the Liquidity Facility for
each Trust, the Liquidity Provider
will, if necessary, make advances in
an aggregate amount sufficient to
pay interest on the applicable
Certificates on up to three
successive semiannual Regular
Distribution Dates at the applicable
interest rate for such Certificates.
The Liquidity Facilities cannot be
used to pay any other amount in
respect of the Certificates and will
not cover interest payable on
amounts held in escrow as Deposits
with the Depositaries or liquidated
damages paid pursuant to the
Registration Agreement.
Notwithstanding the subordination
provisions applicable to the
Certificates, the holders of the
Certificates to be issued by each
Trust will be entitled to receive
and retain the proceeds of drawings
under the Liquidity Facility for
such Trust.
Upon each drawing under any
Liquidity Facility to pay interest
on the Certificates, the
Subordination Agent will, to the
extent of available funds, reimburse
the Liquidity Provider for the
amount of such drawing. Such
reimbursement obligation and all
interest, fees and other amounts
owing to the Liquidity Provider will
rank senior to the Certificates in
right of payment.
Escrowed Funds Funds paid to the Escrow Agent by
the Certificateholders were
deposited with the applicable
Depositary and are held as Deposits
pursuant to separate Deposit
Agreements for each Trust. Funds may
be withdrawn by the Escrow Agent at
the direction of the applicable
Trustee from time to time to
purchase Equipment Notes prior to
the Delivery Period Termination
Date. On each Regular Distribution
Date, the applicable Depositary will
pay to the Paying Agent interest
accrued on the Deposits relating to
each Trust at a rate per annum equal
to the interest rate applicable to
the Certificates issued by such
Trust. The Paying Agent, on behalf
of the Escrow Agent, will pay such
interest to the applicable
Certificateholders. The Deposits
relating to a Trust and interest
paid thereon will not be subject to
the subordination provisions
applicable to the Certificates. The
Deposits cannot be used to pay any
other amount in respect of the
Certificates.
Unused Escrowed Funds Less than all of the Deposits held
in escrow may be used to purchase
Equipment Notes by the Delivery
Period Termination Date. This may
occur because of delays in the
delivery of Aircraft or other
reasons. If any funds remain as
Deposits with respect to any Trust
after the Delivery Period
Termination Date, they will be
withdrawn by the Escrow Agent for
such Trust and distributed, with
accrued and unpaid interest, to the
holders of Escrow Receipts relating
to the respective Trust after at
least 15 days' prior written notice.
In addition, such distribution will
include a premium payable by us
equal to the Deposit Make-Whole
Premium with respect to such Trust's
remaining Deposits, provided that no
premium will be paid with respect to
unused Deposits attributable to the
failure of an Aircraft to be
delivered prior to the Delivery
Period Termination Date due to any
reason not occasioned by our fault
or negligence. See "Description of
the Deposit Agreements --Unused
Deposits."
Obligation to Purchase Equipment
Notes The Class A, Class B and Class C
Trustees will be obligated to
purchase the Series A, Series B and
Series C Equipment Notes issued with
respect to each Aircraft pursuant to
the Note Purchase Agreement. We may
enter into a leveraged lease
financing or a secured debt
financing with respect to each
Aircraft pursuant to forms of
financing agreements attached to the
Note Purchase Agreement. In the case
of a Leased Aircraft, the terms of
the financing agreements entered
into may differ from the forms of
such agreements described in this
Prospectus because a third party,
the Owner Participant, which will
provide a portion of the financing
of each Aircraft, may request
changes. However, under the Note
Purchase Agreement, the terms of
such financing agreements must (a)
contain the Mandatory Document Terms
set forth in the Note Purchase
Agreement with such modification as
is expressly permitted by the terms
of the Note Purchase Agreement and
(b) not vary the Mandatory Economic
Terms set forth in the Note Purchase
Agreement. In addition, we must (a)
certify to the Trustees that any
such modifications do not materially
and adversely affect the
Certificateholders and (b) obtain
written confirmation from each
Rating Agency that the use of
versions of such agreements modified
in any material respect will not
result in a withdrawal, suspension
or downgrading of the rating of any
Class of Certificates. The Trustees
will not be obligated to purchase
Equipment Notes if, at the time of
issuance, we are in bankruptcy or
certain other specified events have
occurred. See "Description of the
Certificates--Obligation to Purchase
Equipment Notes."
Equipment Notes
(a) Issuer Leased Aircraft. For Aircraft leased
by us, the related Equipment Notes
will be issued by First Security
Bank, National Association, acting
as Owner Trustee. The Owner Trustee
will not be individually liable for
such Equipment Notes. However, our
scheduled rental obligations under
the related Lease will be in amounts
sufficient to pay scheduled payments
on such Equipment Notes.
Owned Aircraft. If we purchase an
Aircraft, the related Equipment
Notes will be issued by us.
(b) Interest The Equipment Notes held in the
Class C Trust will accrue interest
at the rate of 6.82% per annum. The
Equipment Notes held in the Class A
Trust and the Class B Trust will
accrue interest at 6.85% per annum
and 7.35% per annum, respectively.
Interest on all Equipment Notes will
be payable on January 30 and July 30
of each year, commencing on January
30, 1999. Interest is calculated on
the basis of a 360-day year
consisting of twelve 30-day months.
(c) Principal Principal payments on the Series A,
Series B and Series C Equipment
Notes are scheduled to begin on July
30, 1999, January 30, 2000 and
January 30, 2006, respectively.
(d) Redemption and Purchase Aircraft Event of Loss. If an Event
of Loss occurs with respect to an
Aircraft, all of the Equipment Notes
issued with respect to such Aircraft
will be redeemed, unless such
Aircraft is replaced by us under the
related financing agreements. The
redemption price in such case will
be the unpaid principal amount of
such Equipment Notes, together with
accrued interest, but without any
premium.
Optional Redemption. The issuer of
the Equipment Notes with respect to
an Aircraft may elect to redeem them
prior to maturity. The redemption
price in such case will be the
unpaid principal amount of such
Equipment Notes, together with
accrued interest plus a Make-Whole
Premium. See "Description of the
Equipment Notes--Redemption."
Purchase by Owner. In the case of a
Leased Aircraft, if a Lease Event of
Default is continuing, the
applicable Owner Trustee or Owner
Participant may elect to purchase
all of the Equipment Notes with
respect to such Aircraft, subject to
the terms of the applicable Leased
Aircraft Indenture. The purchase
price in such case will be the
unpaid principal amount of such
Equipment Notes, together with
accrued interest, but without any
premium (provided, that a Make-Whole
Premium will be payable under
certain circumstances specified in
the Leased Aircraft Indenture). In
the case of an Owned Aircraft, we
will have no comparable right to
purchase the Equipment Notes under
such circumstances.
(e) Security The Equipment Notes issued with
respect to each Aircraft will be
secured by a security interest in
such Aircraft and, in the case of
each Leased Aircraft, in the related
Owner Trustee's rights under the
Lease with respect to such Aircraft
(with certain exceptions).
The Equipment Notes are not
cross-collateralized. This means
that the Equipment Notes issued in
respect of an Aircraft will not be
secured by any other Aircraft or
Leases and that any excess proceeds
from the sale of an Aircraft or
other exercise of remedies with
respect to such Aircraft will not be
available to cover any shortfall
with respect to any other Aircraft.
By virtue of the Intercreditor
Agreement, the Equipment Notes are
cross-subordinated. This means that
payments received on a junior class
of Equipment Notes issued in respect
of one Aircraft may be applied in
accordance with the priority of
payment provisions set forth in the
Intercreditor Agreement to make
payments in respect of a more senior
class of Certificates.
There are no cross-default
provisions in the Indentures or in
the Leases. This means that if the
Equipment Notes issued with respect
to one or more Aircraft are in
default and the Equipment Notes
issued with respect to the remaining
Aircraft are not in default, no
remedies will be exercisable with
respect to the remaining Aircraft.
(f) Section 1110 Protection Our outside counsel has provided its
opinion to the Trustees that the
Trustee (as assignee of the lessor's
rights with respect to Leased
Aircraft) will be entitled to the
benefits of Section 1110 of the U.S.
Bankruptcy Code with respect to the
applicable Aircraft. See
"Description of the Equipment
Notes--Remedies."
Certain United States Federal
Income Tax Consequences The exchange of the Old Class C
Certificates (with attached Old
Escrow Receipts) for the New Class C
Certificates (with attached New
Escrow Receipts) will not be a
taxable event for U.S. federal
income tax purposes.
ERISA Considerations In general, employee benefit plans
subject to Title I of ERISA or
Section 4975 of the Code (or
entities which may be deemed to hold
the assets of any such plan) will be
eligible to acquire and hold the New
Class C Certificates, subject to
certain conditions and the
circumstances applicable to such
plans. Each person who acquires a
New Class C Certificate will be
deemed to have represented and
warranted that either: (a) no
employee benefit plan assets have
been used to acquire and hold such
New Class C Certificate or (b) the
acquisition and holding of such New
Class C Certificate are exempt from
the prohibited transaction
restrictions of ERISA and Section
4975 of the Code pursuant to one or
more prohibited transaction
statutory or administrative
exemptions. See "ERISA
Considerations."
Rating of the Certificates The Class A, Class B and Class C
Certificates are rated by Moody's
and Standard & Poor's as set forth
below.
Standard
Certificates Moody's & Poor's
Class A A2 AA-
Class B Baa1 A
Class C Ba1 BBB-
A rating is not a recommendation to
purchase, hold or sell Certificates,
since such rating does not address
market price or suitability for a
particular investor. There can be no
assurance that such ratings will not
be lowered or withdrawn by a Rating
Agency.
Standard
Moody's & Poor's
Rating of each Depositary Short Term......... P-1 A-1+
Threshold Rating for the Liquidity
Provider Short Term Standard
Moody's & Poor's
Class A.......... P-1 A-1+
Class B.......... P-1 A-1
Class C.......... P-1 A-1
Liquidity Provider Rating The Liquidity Provider meets the
threshold ratings requirement for
each Class of Certificates.
RISK FACTORS
You should carefully read the following risk factors before tendering
your Old Class C Certificates in the Exchange Offer. The risk factors set
forth below (other than "Consequences of Failure to Exchange") are
generally applicable to the Old Class C Certificates as well as the New
Class C Certificates.
Risk Factors Relating to US Airways
Leverage and Liquidity
US Airways, Inc. ("US Airways") has a higher proportion of debt
compared to its equity capital than most of its principal competitors. A
majority of US Airways' property and equipment is subject to liens securing
indebtedness. US Airways requires substantial cash resources in order to
meet scheduled debt and lease payments and to finance day-to-day
operations. Accordingly, US Airways may be less able than some of its
competitors to withstand a prolonged recession in the airline industry or
respond as flexibly to changing economic and competitive conditions.
As of December 31, 1998, US Airways had:
o $[ ] billion of cash, cash equivalents and short-term investments;
o a ratio of current assets to current liabilities of [ ];
o $[ ] billion of long-term debt and capital lease obligations; and
o a ratio of debt to equity of [ ].
The ability of US Airways to fulfill its short-term and long-term cash
needs and to service its debt obligations depends upon a variety of
factors, including:
o the rates US Airways pays to acquire resources vital to its
operations, such as labor and aviation fuel;
o the prices US Airways can obtain for its services;
o the absence of adverse general economic changes;
o the ability of US Airways to compete effectively in the market;
o continued unit operating cost reductions; and
o the ability of US Airways to attract new capital.
There can be no assurances that any of these factors will produce an
outcome favorable to US Airways. Continued unit cost reductions
(particularly in personnel costs) are especially critical to enable US
Airways to become more competitive with airlines with lower unit operating
costs and those with greater financial strength.
US Airways Group, Inc. ("US Airways Group"), US Airways' parent
corporation, has agreements to acquire up to 430 new Airbus aircraft,
accompanying jet engines and ancillary assets. As of December 31, 1998, US
Airways Group had 122 Airbus A320 Family single-aisle aircraft on firm
order, 112 Airbus A320 Family aircraft subject to reconfirmation prior to
delivery and options for 160 additional Airbus A320 Family aircraft. In
addition, US Airways Group had seven Airbus A330-300 widebody aircraft on
firm order, seven aircraft subject to reconfirmation and options for 16
additional Airbus A330 Family aircraft. Of the first 122 A320 Family
aircraft, 43 of the aircraft scheduled for delivery between 2000 to 2002
are subject to cancellation with 18 months notice and payment of a
cancellation fee. The new single-aisle aircraft are expected to replace, at
a minimum, US Airways' McDonnell Douglas DC-9-30 and MD-80 and Boeing
737-200 aircraft. The Airbus A330-300 aircraft are expected to be deployed
by US Airways in transatlantic markets. As of December 31, 1998, the
minimum determinable payments associated with US Airways Group's
acquisition agreements for Airbus aircraft (including progress payments,
payments at delivery, buyer-furnished equipment, spares, capitalized
interest, penalty payments, cancellation fees and/or nonrefundable
deposits) were estimated to be $[ ] billion in 1999, $[ ] billion in 2000
and $[ ] million in 2001. US Airways Group may from time to time assign its
rights and obligations with respect to the purchase of the new Airbus
aircraft to US Airways.
With respect to aircraft for which the purchase rights have been
assigned to US Airways, US Airways anticipates financing such aircraft with
a combination of enhanced pass through trust certificates, other debt,
leveraged leases and cash. Because US Airways is currently funding US
Airways Group's purchase deposits for Airbus aircraft and since it is
expected that US Airways Group will continue to assign its purchase rights
to US Airways, this represents a significant financial obligation of US
Airways. As of December 31, 1998, US Airways had commitments or letters of
intent which it believes will provide financing for at least 25% of the
anticipated purchase price of all of its 129 firm-order Airbus aircraft.
These commitments include a financing commitment between US Airways and an
affiliate of Airbus (the "Airbus Financing Commitment"). Subject to certain
conditions described below, such affiliate fulfilled its commitment with
respect to the Aircraft being financed with the proceeds of the Old Class C
Certificates through the purchase by Airbus Industrie Financial Services
("AIFS") of the Old Class C Certificates. However, further financing or
internally-generated funds is needed to satisfy the Company's capital
commitments for the balance of the aircraft purchase price and for other
aircraft-related expenditures. Other capital expenditures, such as for
training simulators, rotables and other aircraft components, also are
expected to increase in conjunction with the acquisition of the new
aircraft and jet engines. There can be no assurance that sufficient
financing will be available for all aircraft and other capital expenditures
not covered by commercial financing.
US Airways currently is unable to predict the full impact that the
purchase of the new aircraft will have on its future operating cash flows.
US Airways expects decreases in certain expenses as US Airways replaces
several older, diverse aircraft types with newer, more efficient aircraft.
US Airways may, however, experience increases in certain expenses resulting
from US Airways' growth plans, including higher ownership costs and costs
associated with integrating new aircraft types into its operating fleet. An
economic downturn, additional government regulation, intensified
competition from lower-cost competitors or increases in the cost of
aviation fuel could have a material adverse effect on US Airways' results
of operations, financial condition and future prospects.
Financial History
US Airways recorded net income of $559 million for 1998, $1.05 billion
for 1997, $183.2 million for 1996 and $33.0 million for 1995. However, it
recorded net losses in excess of $3.23 billion on revenues of approximately
$35.9 billion from 1989 through 1994. Historically, the United States
airline industry's results have correlated with the performance of the
economy, as is evidenced by the Company's financial performance since 1989.
US Airways cannot predict whether the favorable economic conditions of the
last several years will continue.
Transactions with US Airways Group, Inc.
Historically, US Airways has funded certain activities and financing
transactions of US Airways Group. As of December 31, 1998, US Airways Group
owed US Airways $[ ] billion, of which $[ ] billion was not expected to be
collected prior to December 31, 1999. This reflects an increase from
December 31, 1997 when US Airways Group owed US Airways $419 million. The
increase is due primarily to US Airways' funding of US Airways Group's
common stock purchase programs and an increase in US Airways Group's
obligations for purchase deposits for new flight equipment, including the
new Airbus aircraft. In 1998, US Airways Group purchased 17.9 million
shares of its common stock for approximately $1.1 billion.
High Personnel Costs
US Airways' personnel costs are the largest single component of its
operating costs (approximately 38% for 1998). US Airways' unit operating
costs, and particularly its personnel costs, generally are higher than
those of its competitors. US Airways believes that it must reduce its
operating cost structure substantially to achieve sustained improved
financial performance.
The current status of US Airways' principal labor union agreements is
as follows:
o Pilots. US Airways' pilots ratified a new five year labor
agreement in October 1997. The new agreement became effective on
January 1, 1998 and becomes amendable on January 1, 2003. The
labor agreement includes various provisions which US Airways
believes will help address its high cost structure, including work
rule changes and linking the compensation of US Airways' pilots to
the compensation of pilots at several other major domestic air
carriers. The new contract also includes provisions which allowed
US Airways to launch its MetroJet service, its competitive
response to low-cost, low-fare competition, and introduce regional
jet aircraft on certain routes operated by US Airways Express.
o Flight Attendants. US Airways' labor agreement with its flight
attendants became amendable in January 1997. US Airways currently
is in negotiations over the labor agreements with the Association
of Flight Attendants covering US Airways' flight attendants.
o Passenger Service. US Airways' passenger service employees voted
for representation by the Communications Workers of America (the
"CWA") on September 27, 1997. The election was a re-run election
mandated by the National Mediation Board ("NMB"). US Airways has
filed an action challenging the NMB order in federal court. US
Airways is still in negotiations over an initial contract with the
CWA.
o Mechanics. US Airways' mechanics and related employees,
represented by the International Association of Machinists and
Aerospace Workers ("IAMAW"), filed on September 29, 1998 with the
NMB for mediation of its contract negotiations with US Airways.
Negotiations resumed in November 1998 under the auspices of an
NMB-appointed mediator.
o Fleet Service. US Airways' fleet service employees, represented by
IAMAW, filed on June 23, 1998 with the NMB for mediation of its
negotiations with US Airways for its initial contract. A tentative
agreement was reached by representatives of the IAMAW and US
Airways on August 17, 1998. The members of the IAMAW rejected the
tentative agreement, and negotiations reconvened on October 6,
1998.
US Airways cannot predict the outcome of its current negotiations with
its unionized employees at this time. With respect to its current
negotiations, US Airways may not be able to obtain meaningful wage and
benefit concessions and productivity improvements from its unionized
employees, which would impede US Airways' drive to meaningfully
lower costs.
Geographical Concentration
A substantial portion of US Airways' flights are to or from cities in
the Eastern United States. As of December 1998, approximately 84% of US
Airways' departures originated from, and approximately 56% of its capacity
(available seat miles) was deployed within the United States east of the
Mississippi River. Accordingly, severe weather, downturns in the economy
and air traffic control problems in the Eastern United States can adversely
affect US Airways' results of operations and financial condition more than
they affect airlines that do not have flights concentrated in the Eastern
United States.
Year 2000 Matters
For a discussion of US Airways' preparations for Year 2000 issues
related to its information technology and non-information technology
systems, see the section of the Prospectus captioned "Other
Information--Effects of Year 2000."
Risk Factors Relating to the Airline Industry
General Industry Conditions
The airline industry is highly competitive and susceptible to price
discounting and similar promotions. Airlines, including US Airways,
typically use discount fares and other promotions to stimulate traffic
during normally slack travel periods to generate cash flow and to increase
relative market share in certain markets.
US Airways believes that, for the foreseeable future, demand for more
profitable "business fares" will remain essentially flat and demand for
lower-profit "leisure fares," which are affected by the general economy,
will remain highly price sensitive. These conditions make it difficult for
airlines, including US Airways, to implement regular price increases.
Therefore, US Airways believes it must reduce its cost structure
substantially in order to ensure its long-term financial stability.
Current Competitive Position
Most of US Airways' operations are in competitive markets. US Airways
competes with at least one major airline on most of its routes between
major cities. US Airways also competes with all forms of ground
transportation.
Vigorous price competition exists in the airline industry. Competitors
frequently offer sharply reduced discount fares and other promotions to
increase the number of passengers during normally slack travel periods, to
generate cash flow and to increase market share in selected markets. US
Airways often elects to match discount or promotional fares in certain
markets in order to compete in those discounted markets.
Significant Impact of Low-Cost, Low-Fare Competition
US Airways' foremost competitive threat is the growth of low-cost,
low-fare competition in its primary operating region, the Eastern United
States. US Airways' primary low-cost, low-fare competition is Southwest
Airlines Co. ("Southwest Airlines") and Delta Express. Southwest Airlines
has exhibited steady growth within the Eastern United States since
launching service at Baltimore-Washington International Airport in 1993. In
October 1996, Delta Air Lines, a major air carrier which was itself
experiencing pressure from low-cost, low-fare competition, launched Delta
Express, its low-cost product.
Direct competition with low-cost, low-fare competitors has typically
resulted in the dilution of yield realized by US Airways. US Airways
Northeast-Florida service has been particularly affected by low-cost,
low-fare competition. US Airways has the highest unit operating cost
(operating cost per available seat mile or cost per available seat mile) of
all major domestic air carriers. US Airways' cost per available seat mile
was 12.34 cents for 1998. In contrast, Southwest Airlines reported unit
operating costs for 1998 of 7.32 cents. Although Delta Air Lines reported
an overall unit operating cost of 8.86 cents for calendar year 1998, its
Delta Express product is purported to have a unit operating cost of
approximately 7.50 cents.
US Airways launched MetroJet, its competitive response to low-cost,
low-fare competition, on June 1, 1998. US Airways believes that MetroJet is
helping US Airways to compete effectively against low-cost, low-fare
competitors in the markets in which MetroJet operates. US Airways also
believes that MetroJet improves the attractiveness of its product offering,
particularly with respect to predominately leisure markets such as service
between the Northeast United States and Florida.
Aviation Fuel
Aviation fuel costs represent a significant portion of US Airways'
operating costs; approximately 8% of US Airways' operating costs for 1998.
Significant increases in aviation fuel costs could materially and adversely
effect US Airways' results of operations. Fuel prices continue to be
susceptible to, among other factors, political events and market factors
that US Airways cannot control. If a fuel supply shortage resulting from a
disruption of oil imports or otherwise occurs, higher fuel prices or
curtailment of scheduled service could result.
Regulatory Matters
US Airways is subject to a wide range of government regulation.
Changes in government regulation can have a material impact on US Airways'
results of operations and financial condition. In recent years, for
example, the Federal Aviation Administration ("FAA") has issued or proposed
mandates relating to, among other things, flight data recorders that
measure more parameters than most original equipment flight data recorders,
cargo hold fire detection/suppression systems, ground proximity warning
systems, the retirement of older aircraft, collision avoidance systems,
airborne windshear avoidance systems, noise abatement and increased
inspections and maintenance procedures to be conducted on certain aircraft.
US Airways expects to continue to incur expenditures relating to
compliance with noise and aging aircraft modifications and fire safety. In
addition, several airports have increased substantially the rates charged
to airlines. The ability of airlines to contest these increases is
restricted by federal legislation, United States Department of
Transportation ("DOT") regulations and judicial decisions.
The FAA has designated John F. Kennedy International Airport
("Kennedy"), Chicago O'Hare International Airport ("O'Hare"), LaGuardia
Airport ("LaGuardia") and Washington's Ronald Reagan Washington National
Airport ("Reagan National") as "high-density traffic airports" and limited
the number of departure and arrival slots available to air carriers at
those airports. Currently, slots at the high-density traffic airports may
be voluntarily sold or transferred between air carriers. The DOT has in the
past reallocated slots to other air carriers and reserves the right to add
or withdraw slots. The DOT awarded slots to several low-cost, low-fare air
carriers during October 1997, however, these slots were "created" and not
confiscated from incumbent air carriers. Various amendments to the slot
system, proposed from time-to-time by the FAA, members of Congress and
others, could, if adopted, significantly affect operations at the
high-density traffic airports or expand slot controls to other airports.
Certain proposals could restrict the number of flights, limit the ownership
transferability of slots, increase the risk of slot withdrawal, or
otherwise decrease the value of slots. A bill recently introduced in
Congress would eliminate the high-density rule at Kennedy, O'Hare and
LaGuardia in five years. Passage of such legislation could have a
significant impact on US Airways' results of operations and financial
condition. US Airways holds a substantial number of slots at both LaGuardia
and Reagan National. These slots are valuable assets and important to the
US Airways' overall business strategy. US Airways cannot predict whether
any of the current proposals before Congress will be adopted or, if
adopted, precisely how their implementation would impact US Airways'
current operations at LaGuardia.
Legislation has recently been enacted that would provide for increased
review of certain airline joint ventures by the DOT. In April 1998, the DOT
issued proposed rules designed to regulate perceived anti-competitive
behavior directed at new entrants in the airline industry. Legislation has
recently been enacted requiring, among other things, the National Research
Council of the National Academy of Sciences to complete a comprehensive
study pertaining to competitive issues in the airline industry prior to the
DOT's implementation of any such rules. US Airways cannot predict whether
or when any such proposed rules will be adopted. Also in early 1999,
legislation was introduced in Congress that would impose, in some cases,
significant obligations on airlines by providing significant rights to
passengers. US Airways cannot predict whether, or in what form, this
legislation might be enacted.
US Airways cannot predict what laws and regulations will be adopted,
what changes to aviation treaties and agreements between the United States
and foreign governments may be effected or how any of the foregoing might
affect US Airways. Future laws or regulations may adversely affect US
Airways.
Risks Factors Relating to the Certificates
Appraisals and Realizable Value of Aircraft
Three independent appraisal and consulting firms prepared base value
appraisals of the Aircraft in connection with the initial sale of the
Certificates in December of 1998. Letters summarizing such appraisals are
annexed to this Prospectus as Appendix II. Such appraisals, which are based
on the base value of the Aircraft, rely on certain varying assumptions and
methodologies and may not reflect current market conditions that could
affect the fair market value of the Aircraft. The appraisals were prepared
without physical inspection of the Aircraft. Appraisals that are based on
other assumptions and methodologies may result in valuations that are
materially different from those contained in such appraisals. See
"Description of the Aircraft and the Appraisals--The Appraisals."
An appraisal is only an estimate of value. It does not indicate the
price at which an Aircraft may be purchased from the Aircraft manufacturer.
An appraisal should not be relied upon as a measure of realizable value.
The proceeds realized upon a sale of any Aircraft may be less than its
appraised value. In particular, the appraisals of the Aircraft are
estimates of values as of the Aircraft's projected delivery dates at the
time the appraisals were made. The value of an Aircraft, if remedies are
exercised under the applicable Indenture, will depend on market and
economic conditions, the supply of similar aircraft, the availability of
buyers, the condition of the Aircraft and other factors. Accordingly,
proceeds realized upon any such exercise of remedies may not be sufficient
to satisfy the total payments due on the Certificates.
Control Over Collateral; Sale of Collateral
If an Indenture Default is continuing, subject to certain conditions,
the bank, trust company or other institution as trustee under such
Indenture (the "Loan Trustee") will be directed by the Controlling Party in
exercising remedies under such Indenture, including accelerating the
applicable Equipment Notes or foreclosing the lien on the Aircraft securing
such Equipment Notes. See "Description of the Certificates--Indenture
Defaults and Certain Rights Upon an Indenture Default."
The Controlling Party will be:
o the Trustee of the Class A Trust, ("Class A Trustee");
o upon payment of final distributions to the holders of Class A
Certificates, the Trustee of the Class B Trust ("Class B
Trustee");
o upon payment of final distributions to the holders of Class B
Certificates, the Trustee of the Class C Certificates ("Class C
Trustee"); and
o under certain circumstances, the Liquidity Provider.
During the continuation of any Indenture Default, the Controlling
Party may accelerate and sell the Equipment Notes issued under such
Indenture, subject to certain limitations. See "Description of the
Intercreditor Agreement--Intercreditor Rights--Sale of Equipment Notes or
Aircraft." The market for Equipment Notes during any Indenture Default may
be very limited, and there can be no assurance as to the price at which
they could be sold. If the Controlling Party sells any Equipment Notes for
less than their outstanding principal amount, certain Certificateholders
will receive a smaller amount of principal distributions than anticipated
and will not have any claim for the shortfall against US Airways, any Owner
Trustee, any Owner Participant or any Trustee.
Ratings of the Certificates
The Class A, Class B and Class C Certificates have received the
following ratings from Moody's Investors Service, Inc. ("Moody's") and
Standard & Poor's Ratings Services, a division of McGraw-Hill Companies,
Inc. ("Standard & Poor's" and, together with Moody's, the "Rating
Agencies").
Moody's Standard &
Poor's
Class A Certificates...................... A2 AA-
Class B Certificates...................... Baa1 A
Class C Certificates...................... Ba1 BBB-
A rating is not a recommendation to purchase, hold or sell
Certificates, since such rating does not address market price or
suitability for a particular investor. A rating may not remain for any
given period of time and may be lowered or withdrawn entirely by a Rating
Agency if in its judgment circumstances in the future (including the
downgrading of US Airways, either Depositary or the Liquidity Provider) so
warrant.
The rating of the Certificates is based primarily on the default risk
of the Equipment Notes and the applicable Depositary, the availability of
the Liquidity Facility for the benefit of holders of the Certificates, the
collateral value provided by the Aircraft relating to the Equipment Notes
and the subordination provisions applicable to the Certificates. Standard &
Poor's has indicated that its rating applies to a unit consisting of
Certificates representing the Trust Property and Escrow Receipts initially
representing undivided interests in certain rights to the Deposits. Amounts
deposited under the Escrow Agreements are not property of US Airways and
are not entitled to the benefits of Section 1110 of the U.S. Bankruptcy
Code. Neither the Certificates nor the Escrow Receipts may be separately
assigned or transferred.
Agreements May Change
US Airways currently is in negotiations with several companies to act
as Owner Participant with respect to several of the Aircraft. Such Owner
Participants and other Owner Participants that have not yet been identified
may request changes to the forms of the Participation Agreement, Lease and
Leased Aircraft Indenture attached to the Note Purchase Agreement. As a
result, the actual Participation Agreements, Leases and Leased Aircraft
Indentures entered into by US Airways may differ from the descriptions of
such agreements in this Prospectus. The degree to which such agreements may
change is limited because (i) such agreements are required to contain the
Mandatory Document Terms (as such Mandatory Document Terms are permitted to
vary under the Note Purchase Agreement), and the Mandatory Economic Terms,
(ii) US Airways is obligated to certify that changes to the form agreements
do not materially and adversely affect the Certificateholders and (iii) US
Airways is obligated to obtain written confirmation from the rating
agencies that use of versions of such agreements modified in any material
respect will not result in a withdrawal, downgrade or suspension of the
rating of any Class of Certificates.
Note Purchase Agreement; Series C Equipment Notes
The Note Purchase Agreement contains certain conditions to the Class C
Trustee's obligation to enter into the Participation Agreement to purchase
the Series C Equipment Notes to be issued in any particular financing
transaction that do not apply to the Class A and Class B Trustees'
obligations to purchase Series A and Series B Equipment Notes. These
conditions are part of the Airbus Financing Commitment and remain in effect
only for so long as AIFS owns any Class C Certificates. US Airways has no
reason to believe that these conditions will not be satisfied at all times
during the Delivery Period. If, however, at the time of the closing of a
financing with respect to any Aircraft, such conditions are not satisfied
and AIFS owns any Class C Certificates, US Airways will still be obligated
to finance such Aircraft but will not issue any Series C Equipment Notes
with respect to such Aircraft. US Airways believes that, as of the date of
this Prospectus, AIFS owned no Class C Certificates.
Any Series C Equipment Notes not purchased by the Class C Trustee will
reduce the aggregate amount of equipment note payments made to the
Subordination Agent under the Intercreditor Agreement. Accordingly, less
money will be available to support the payment obligations on the Class A
and Class B Certificates, which rank senior in right of distributions to
the Class C Certificates.
Unused Escrowed Funds
Under certain circumstances, less than all of the funds held in escrow
as Deposits may be used to purchase Equipment Notes by the Delivery Period
Termination Date. See "Description of the Deposit Agreements--Unused
Deposits." If any funds remain as Deposits with respect to any Trust after
the Delivery Period Termination Date, they will be withdrawn by the Escrow
Agent for such Trust and distributed, with accrued and unpaid interest, to
the Certificateholders of such Trust. In addition, such distribution will
include a premium payable by US Airways equal to the Deposit Make-Whole
Premium with respect to such remaining Deposits. However, (i) no premium
will be paid with respect to unused deposits attributable 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 and
(ii) with respect to Deposits pertaining to the Class C Trust, the amount
of a premium will be limited under certain circumstances. See "Description
of the Deposit Agreements--Unused Deposits."
Risk Factors Relating to the Exchange Offer
Consequences of Failure to Exchange
Holders of Old Class C Certificates who do not exchange their Old
Class C Certificates for New Class C Certificates pursuant to the Exchange
Offer will continue to be subject to the restrictions on transfer of such
Old Class C Certificates as set forth in the legend thereon. In general,
the Old Class C Certificates may not be offered or sold, unless registered
under the Securities Act, except pursuant to an exemption from, or in a
transaction not subject to, the Securities Act and applicable state
securities laws. US Airways does not currently anticipate that it will
register the Old Class C Certificates under the Securities Act, unless
required to under the Registration Agreement. To the extent that Old Class
C Certificates are tendered and accepted in the Exchange Offer, the trading
market for untendered and tendered but unaccepted Old Class C Certificates
could be adversely affected.
Absence of an Established Market for the Certificates
Prior to the Exchange Offer, there was no public market for the Old
Class C Certificates. There can be no assurance as to the liquidity of the
public market for the New Class C Certificates or that any active public
market for the New Class C Certificates will develop. Neither US Airways
nor the Class C Trust intends to apply for listing of the New Class C
Certificates on any securities exchange or for quotation of the New Class C
Certificates on The Nasdaq Stock Market's National Market or otherwise. The
Initial Purchaser has advised us that it does not intend to make a market
in the Class C Certificates. If an active public market does not develop,
the market price and liquidity of the Class C Certificates may be adversely
affected.
Procedures for Tender of Old Class C Certificates
The New Class C Certificates will be issued in exchange for the Old
Class C Certificates only after timely receipt by the Exchange Agent of the
Old Class C Certificates, a properly completed and executed Letter of
Transmittal and all other required documentation. Holders of Old Class C
Certificates who wish to tender their Old Class C Certificates in exchange
for New Class C Certificates should allow sufficient time to ensure timely
delivery. None of the Exchange Agent, the Trustee or the Company is under
any duty to give holders of Old Class C Certificates notification of
defects or irregularities with respect to tenders of Old Class C
Certificates for exchange. Old Class C Certificates that are not tendered
or are tendered but not accepted will, following the Exchange Offer,
continue to be subject to the existing transfer restrictions. In addition,
holders of Old Class C Certificates who tender Old Class C Certificates in
the Exchange Offer to participate in a distribution of the New Class C
Certificates will be required to comply with the registration and
prospectus delivery requirements of the Securities Act in connection with
any resale transaction.
THE COMPANY
US Airways is a certificated air carrier engaged primarily in the
business of transporting passengers, property and mail. It is the principal
operating subsidiary of US Airways Group. US Airways accounted for
approximately 90% of US Airways Group's consolidated operating revenues for
1998.
US Airways carried approximately 58 million passengers in 1998 and is
currently the sixth largest domestic air carrier (as ranked by total
revenue passenger miles). The US Airways system includes its mainline
domestic and international service and its new MetroJet service, together
with its code share partners US Airways Express and US Airways Shuttle. See
"--Code Sharing Relationships." The combined US Airways system served 202
destinations worldwide as of December 1998. As of December 31, 1998, US
Airways had more than 38,000 full-time equivalent employees.
US Airways has established a new foundation on which it is moving
forward with achieving its long-term strategic objective of establishing
itself as a competitive global airline:
o a new labor contract between US Airways and its pilots;
o an agreement between US Airways Group and Airbus to purchase up to
400 new aircraft from the Airbus A320 Family of single-aisle
aircraft (these aircraft are expected to replace, at a minimum, US
Airways' B737- 200, DC-9 and MD-80 aircraft) and up to 30 new
Airbus A330 Family widebody aircraft (these aircraft are expected
to be used primarily by US Airways in the transatlantic market);
o an expanded and substantially improved line of products including
new international service and international business class, and
expanded regional jet service on certain routes operated by US
Airways Express;
o the MetroJet service--US Airways' competitive response to
low-cost, low-fare competition; and
o a contract with The SABRE Group that US Airways believes will
provide long-term cost savings and enhancements to US Airways'
information services requirements.
On April 15, 1998, Standard & Poor's raised its senior unsecured
credit ratings of US Airways to B and removed US Airways from CreditWatch,
where it was placed on October 1, 1997. Standard & Poor's cited "sharply
improved operating performance" among other factors for its decision to
raise the credit ratings. On April 23, 1998, Moody's also raised its senior
unsecured credit ratings of US Airways to B1. Credit ratings issued by
agencies such as Standard & Poor's and Moody's affect a company's ability
to issue debt or equity securities and the effective rate at which such
financings are undertaken.
Domestic Service
US Airways' major connecting hubs are located at airports in
Charlotte, Philadelphia and Pittsburgh. US Airways also has substantial
operations at the Baltimore-Washington International Airport, Boston's
Logan International Airport, New York's LaGuardia Airport and Washington's
Ronald Reagan Washington National Airport. As of January 1999, measured by
departures, US Airways was the largest airline at each of these airports
and is the largest air carrier in many other smaller eastern cities such as
Albany, Buffalo, Hartford, Providence, Richmond, Rochester and Syracuse. US
Airways also is the leading airline from the Northeast United States to
Florida. As of January 1999, approximately 84% of US Airways' departures
and approximately 56% of its capacity (available seat miles) were deployed
within the United States east of the Mississippi River.
Four Northeast United States corridor cities are the core of US
Airways' network: Boston, New York, Philadelphia and Washington. These
metropolitan areas represent approximately 14% of the United States'
population as of August 1998, and approximately one-third of US Airways'
jet service in terms of departures. With the exception of Newark Airport
and Washington Dulles Airport, US Airways is the number one carrier in
terms of number of departures at these metro regions' airports as of
January 1999. US Airways believes that its intra-East Coast core provides a
platform for growth by allowing US Airways to leverage its intra-East Coast
short-haul presence into long-haul operations.
MetroJet
In response to the entrance and growth of "low-cost, low-fare"
competition, including competition from Southwest Airlines and Delta
Express, US Airways launched its "MetroJet" product on June 1, 1998.
Through the use of a cross-functional employee task force, the MetroJet
product was developed to serve the following mission: "To Serve the Low-
Fare Demands of the Marketplace Effectively While Competing at a Profitable
Level Against Low-Cost Carriers."
The MetroJet service is designed to be competitive with Southwest
Airlines in terms of labor costs, asset utilization and the on-board
product offered. Southwest Airlines still maintains advantages relating to
the cost of employee benefits and productivity and to the cost of
distribution, but US Airways believes that these advantages have been
significantly reduced. US Airways believes MetroJet will maintain a revenue
premium advantage over Southwest Airlines by virtue of the following
factors:
o strong East Coast presence;
o broad-based Dividend Miles program;
o seat assignments at the airport;
o existing customer base;
o vast travel agency network;
o reciprocal club room access for members of US Airways Clubs and
American Airlines' Admirals Club; and
o marketing agreement with American Airlines to share frequent flyer
miles.
Due to these factors, US Airways also anticipates carrying a few more
passengers per departure than its low-cost competitors, as well as a
broader yield mix of passengers. See "--The US Airways and American
Airlines Marketing Relationship."
US Airways believes it will realize cost savings from MetroJet
principally due to the fact that the MetroJet service is largely a
conversion of US Airways' mainline service. US Airways also realizes cost
savings due to the increased utilization of its fleet. MetroJet currently
operates 28 Boeing B737-200 aircraft and currently serves 19 cities. US
Airways anticipates that MetroJet will operate 54 aircraft by the end of
1999. US Airways' new pilot labor agreement allows for additional expansion
beyond this first phase; MetroJet can comprise up to 25% of the US Airways
system (as measured by revenue block hours).
Expanding International Service
As part of its strategy to become a competitive global airline, US
Airways has expanded and intends to continue to expand its international
service. In the last two-and-one-half years, US Airways has increased its
weekly flights to Europe from 21 to 70. In July 1998, US Airways announced
its order for up to 30 Airbus A330-300 widebody aircraft and the plans for
a new international terminal at Philadelphia International Airport, US
Airways' primary international gateway.
This commitment to expand international service also is exemplified by
the introduction of "Envoy Class" in December 1997. In 1998, US Airways
added new service from Philadelphia to London's Gatwick Airport (now two
flights daily) and from Philadelphia to Amsterdam. In October 1998, US
Airways temporarily suspended its second Philadelphia-Paris flight in order
to initiate daily service to Paris from Pittsburgh. However, in November
1998, US Airways received authority from the U.S. government to operate a
third daily flight to Paris beginning in March 1999 and will resume the
second Philadelphia-Paris flight this Summer. US Airways has filed with the
DOT for authority to serve London's Heathrow Airport from Charlotte,
Philadelphia, Pittsburgh and Boston. US Airways anticipates moving its
operations at Gatwick Airport to Heathrow Airport at the earliest possible
time. The availability of operating rights at Heathrow Airport currently is
constrained by the bilateral aviation treaty between the United States and
the United Kingdom. Also in 1998, US Airways applied to DOT for authority
to operate Philadelphia-Milan service using seven weekly frequencies made
available pursuant to an agreement between the United States and Italy. US
Airways participated vigorously in DOT's Italy proceeding. However, in
February 1999 DOT selected Delta Air Lines over US Airways for the new
Italy route. US Airways' transatlantic 1998 was 15% greater than for 1997,
which in 1997 was approximately 35% greater than for 1996 and has more than
doubled from 1995 levels. US Airways continues to explore additional
international opportunities.
On April 22, 1998, US Airways announced that it had postponed its
service to London's Gatwick Airport from Charlotte, citing "unlawful"
behavior by the United Kingdom in refusing to grant commercially viable
landing rights for the flight, which was scheduled to begin on May 7, 1998.
While not commercially viable for once-daily service from Charlotte, US
Airways has been able to use landing rights during the 1998-1999 winter
season it intended for use to Charlotte to add the second
Philadelphia--London flight. US Airways so far has been unable to secure
commercially viable slots to operate the Charlotte service during the
Summer 1999 season. However, US Airways continues to pursue this matter
vigorously and intends to establish Charlotte--London service as soon as it
is granted commercially viable landing rights for the flight.
Code Sharing Relationships
US Airways Express
US Airways has code-sharing arrangements with nine air carriers which
operate under the trade name "US Airways Express," including US Airways
Group's wholly-owned subsidiaries Allegheny Airlines, Inc., Piedmont
Airlines, Inc. and PSA Airlines, Inc. Typically, under a code-share
arrangement, one air carrier places its designator code and sells tickets
on flights of another carrier. Through service agreements, US Airways
provides reservations and, at certain stations, ground support services, in
return for service fees. The US Airways Express network feeds traffic into
US Airways' route system at several points, primarily at US Airways' hubs.
As of December 31, 1998, US Airways Express served 169 airports in the
continental United States, Canada and the Bahamas, including 69 airports
also served by US Airways. During 1998, US Airways Express air carriers
carried approximately 12 million passengers, approximately 59% of whom
connected to US Airways' flights.
US Airways Shuttle
US Airways also code shares with US Airways Group's wholly-owned
subsidiary, Shuttle, Inc., which operates under the trade name "US Airways
Shuttle." US Airways Shuttle owns 12 Boeing B727-200 aircraft and currently
provides high frequency service between LaGuardia and Boston's Logan
International Airport and between LaGuardia and Reagan National.
Other Relationships
US Airways also has code-share arrangements with Deutsche BA for
certain intra-Germany flights.
The US Airways and American Airlines Marketing Relationship
On April 23, 1998, US Airways and American Airlines, Inc. ("American
Airlines") announced a marketing relationship that gives customers of both
companies important new benefits, including combined access to both
frequent traveler programs: US Airways' Dividend Miles and American
Airlines' AAdvantage. Under the program, effective August 1, 1998, members
who belong to Dividend Miles and AAdvantage are able to claim awards for
travel on both airlines. In addition, US Airways Club and American
Airlines' Admirals Club members now enjoy reciprocal access to each
airlines' airport clubs. During August 1998, the second phase of the
marketing relationship was launched: enabling Dividend Miles and AAdvantage
members who belong to both programs to combine miles when claiming a travel
award on either airline. The third phase of the relationship, allowing
AAdvantage members to earn AAdvantage miles as well as Dividend Miles on
certain US Airways Shuttle flights (through September 30, 1999), was
unveiled in early October 1998.
Labor Agreements
A new five-year labor contract between US Airways and its pilots
became effective January 1, 1998. This contract provides the Company's
pilots with job security, guaranteed capacity growth and the opportunity to
share in the success of the airline through stock options. The labor
agreement includes various provisions which US Airways believes will help
address its high cost structure, including work rule changes and linking
the compensation of US Airways' pilots to the compensation of pilots at
several other major domestic air carriers. The new contract also includes
provisions which allowed US Airways to launch MetroJet and introduce jet
aircraft on certain routes operated by US Airways Express. US Airways
currently is negotiating agreements with its flight attendants, machinists
and customer service employees. See "Risk Factors Relating to US
Airways--High Personnel Costs."
Fleet Rationalization and the Airbus Aircraft
US Airways is committed to rationalizing its fleet through US Airways
Group's order for up to 400 new aircraft from the Airbus A320 Family of
single-aisle aircraft and US Airways Group's order for up to 30 new Airbus
A330-300 widebody aircraft. Prior to taking delivery of any new Airbus
aircraft, US Airways' operating fleet was comprised of eight different
aircraft models--six within the 95-150 seat range--a diversity which
reflects the different airlines that have merged with or been acquired by
US Airways over the years. As of December 31, 1998, US Airways operated 324
aircraft, excluding Airbus A320 Family aircraft, in the 95-150 seat
category, including 50 DC-9s, 64 737-200s, 31 MD- 80s and 40 Fokker-100s.
The complexity and mechanical differences of US Airways' fleet creates
inefficiencies with respect to aircraft maintenance, flight scheduling,
flight crew and maintenance training and inventory management (spare
parts).
US Airways believes the addition of the Airbus A320 Family of aircraft
to US Airways' fleet will allow the airline to enjoy economies of
consolidation in terms of training costs, ground support equipment and
spare aircraft parts. The Airbus aircraft are expected to serve the dual
purposes of retiring older fleet types while growing the fleet overall, and
are expected to permit US Airways the flexibility to further increase
capacity through the exercise of options for additional aircraft. The
addition of the Airbus single-aisle aircraft also provides more seats with
lower direct operating costs per plane mile. As US Airways modernizes its
fleet over the next several years, the airline believes it will realize a
reduction in maintenance and fuel costs associated with retiring aircraft.
A newer fleet is generally expected to have greater dispatch reliability,
which is expected to enhance further US Airways' revenues. However, certain
ownership costs such as interest expense, depreciation and aircraft rent
expense are likely to increase in conjunction with the higher ownership
and/or rental costs associated with the new aircraft.
US Airways also believes that upgrading its fleet to include the
Airbus A320 Family of aircraft will provide the airline with added
flexibility in assigning aircraft to routes based on customer volume and
demand. As the full-passenger ranges of the Airbus A320 Family of aircraft
range from 2,500 to 2,900 nautical miles, these aircraft can be dispatched
non-stop from any of US Airways' four domestic hub cities to most major
cities on the West Coast. Additionally, the aircraft delivered initially
will be overwater equipped and have the range for Caribbean flying.
US Airways Group's recent order for up to 30 Airbus A330-300 aircraft
is designed to take advantage of fleet commonality in order to increase US
Airways' savings. These aircraft are expected to be deployed by US Airways
in transatlantic markets. The savings in training costs, ground support
equipment and spare parts will be compounded because the Airbus A330-300
aircraft are consistent in cockpit design with the Airbus A320 aircraft.
The decision to select the Airbus A330-300 was based, in part, on the
desire to obtain properly-sized planes in order to upgrade existing routes
as well as to introduce service in new markets. US Airways anticipates
that, by combining the Airbus A330-300 deliveries with the Airbus A320
Family deliveries, it will have one of the most modern commercial air
carrier fleets within a few years time. US Airways also believes that the
Airbus A330-300 offers exceptional passenger appeal together with comfort
and efficiency in international service.
US Airways' Market Position
Historically, demand for air transportation tends to mirror general
economic conditions. Since early 1995, general domestic economic conditions
have been relatively favorable as has been the level of demand for air
transportation. In addition, over the same time period, US Airways and its
affiliated carriers have experienced favorable pricing and
capacity trends in the markets in which they operate.
Most of the markets in which US Airways and its affiliated carriers
operate are highly competitive, especially with respect to leisure traffic.
Crucial to US Airways' ability to compete effectively is the airline's
ongoing efforts to reduce its traditionally high cost structure. The Airbus
single-aisle aircraft are expected to bring substantial operational cost
savings to US Airways over time. In addition, US Airways' new labor
agreement with its pilots has opened the way for the airline to develop its
own cost-effective response to the low-cost, low-fare competition by
launching its MetroJet service.
The SABRE Group Agreement
US Airways entered into an extensive contract with The SABRE Group
under which The SABRE Group has assumed responsibility, as of January 1,
1998, for substantially all of US Airways' information technology
requirements. The agreement with The SABRE Group is expected to result in
substantial information system enhancements and efficiencies, particularly
in the areas of reservations, passenger check-in, yield management and
aircraft and crew scheduling. The SABRE Group also has assumed
responsibility for the majority of US Airways' Year 2000 compliance
efforts. These conversion efforts are expected to be substantially
completed as of August 1, 1999. For additional information regarding The
SABRE Group agreement and US Airways' Year 2000 compliance efforts, see the
section of the Prospectus captioned "Other Information--Effects of Year
2000."
On-Line Reservation System
In October 1998, US Airways launched an on-line internet reservation
system called "Personal Travelworks." The new system offers customers the
ability to make their own travel arrangements for flights on US Airways,
MetroJet, US Airways Shuttle and US Airways Express. Visitors to
www.usairways.com, and the new MetroJet internet site, www.flymetrojet.com,
can make travel reservations, purchase tickets and obtain flight schedules,
ticket prices and other travel information on-line.
Change in Culture--A New Outlook
US Airways is engaged in a process to change how the airline is
perceived both internally and externally. Hundreds of front-line employees,
who have extensive first-hand knowledge and experience to offer, have been
involved in cross-functional task forces to address some of the most
important service issues facing US Airways. US Airways has instituted a
company-wide policy to "make exceptional service a way of life at US
Airways" and has identified teamwork and training as the centerpieces of
its efforts. US Airways has offered a day-long session called "Creating
Impressions of Excellence" to the majority of its employees throughout the
airline.
US Airways' efforts to change external perceptions of the airline have
produced measurable benefits. US Airways has been working to improve its
performance with respect to several areas traditionally identified in the
industry as barometers of customer satisfaction, such as on-time arrivals
and lost baggage problems. As a result of these strategic initiatives, US
Airways was ranked as the top airline in terms of best overall service in
1997 as measured by the DOT composite statistics of five selected major
United States airlines. This high level has continued into 1998 as
illustrated by the table below:
1998
---------------------------------------------------
On- Involuntary
1998 Time Consumer Lost Denied
Airline Ranking* Arrival Complaints Baggage Boardings**
- ------- ------- ------- --------- ------- -----------
US Airways............. 1 3 2 1 1
American............... 2 1 3 3 3
Delta.................. 3 2 1 2 5
Northwest.............. 4 5 5 4 2
United................. 5 4 4 5 4
- ----------
* Composite average of DOT rankings of on-time arrivals, lost baggage,
consumer complaints and involuntarily denied boardings.
** Involuntary denied boardings twelve months ended September 1998.
USE OF PROCEEDS
There will be no cash proceeds payable to US Airways from the issuance
of the New Class C Certificates pursuant to the Exchange Offer. US Airways
is using the proceeds from the sale of the Class A Certificates, the Class
B Certificates and the Old Class C Certificates to purchase the Series A,
Series B and Series C Equipment Notes, respectively, issued by (a) the
related Owner Trustees in connection with the refinancing of the
indebtedness originally incurred by such Owner Trustees to finance the
purchase of each of the Leased Aircraft and (b) US Airways in connection
with the debt financings secured by the Owned Aircraft.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for the years ended December
31, 1998, 1997, 1996 and 1995 was 2.7, 2.2, 1.3 and 1.1, respectively. For
the year ended December 31, 1994, earnings were not sufficient to cover
fixed charges. Additional earnings of $721 million would have been required
to achieve a ratio of earnings to fixed charges of 1.0. For purposes of
calculating this ratio, earnings consist of pre-tax income, fixed charges,
capitalized interest and amortization of previously capitalized interest.
Fixed charges consist of interest expense, amortization of debt issue
expense and the portion of rental expense representative or interest
expense.
THE EXCHANGE OFFER
The summary herein of certain provisions of the Registration Agreement
dated as of December 14, 1998 (the "Registration Agreement") among US
Airways, the Initial Purchaser and the Trustee does not purport to be
complete and reference is made to the provisions of the Registration
Agreement, which has been filed as an exhibit to the Registration
Statement. In addition, on January 20, 1999, the parties entered into
Amendment No. 1 to the Registration Agreement ("Amendment No. 1 to the
Registration Agreement") providing for an extension of time by 30 days to
file the Registration Statement with the Commission. The Registration
Agreement and Amendment No. 1 to the Registration Agreement are
collectively referred to herein as the "Registration Agreement."
General
On December 14, 1998, US Airways, through its Class C Trust, privately
placed an aggregate of $141,366,000 of Class C Pass Through Certificates,
Series 1998-1 (the "Old Class C Certificates"). In connection with the
issuance of the Old Class C Certificates, pursuant to a Purchase Agreement,
dated as of December 14, 1998 (the "Purchase Agreement"), between US
Airways and Airbus Industries Financial Services (the "Initial Purchaser"),
a wholly-owned subsidiary of Airbus Industries, G.I.E. ("Airbus"), the
Initial Purchaser and its respective assignees became entitled to the
benefits of the Registration Agreement.
Under the Registration Agreement, US Airways is obligated (i) to file
the Registration Statement of which this Prospectus is a part for a
registered exchange offer (the "Exchange Offer") with respect to an issue
of Class C Pass Through Certificates, Series 1998-1 (the "New Class C
Certificates") identical in all material respects to the Old Class C
Certificates within 75 days after December 14, 1998 (the "Issuance Date"),
(ii) to cause the Registration Statement to become effective under the
Securities Act within 150 days after the Issuance Date, (iii) to consummate
the Exchange Offer within 180 calendar days after the Issuance Date and
(iv) to keep the Registration Statement effective under the Securities Act
until the close of business on the 180th day following the expiration of
the Exchange Offer. The Initial Purchaser may cause the Issuer to delay
effectiveness of the Registration Statement to any date not later than 210
days from the Issuance Date (the "Delay Period"). The 150 day and 180 day
periods described above will be extended by the Delay Period. US Airways
will keep the Exchange Offer open for a period of not less than 30 calendar
days. The Exchange Offer, if commenced and consummated within the time
periods described in this paragraph, will satisfy those requirements under
the Registration Agreement.
Upon the terms and subject to the conditions set forth in this
Prospectus and in the Letter of Transmittal (which together constitute the
Exchange Offer), all Old Class C Certificates validly tendered and not
withdrawn prior to 5:00 p.m., New York City time, on the Expiration Date
will be accepted for exchange. New Class C Certificates of the same class
will be issued in exchange for an equal face amount of outstanding Old
Class C Certificates accepted in the Exchange Offer. Old Class C
Certificates may be tendered only in integral multiples of $1,000. This
Prospectus, together with the letter of transmittal accompanying this
Prospectus (the "Letter of Transmittal"), is being sent to all registered
holders of the Old Class C Certificates as of __________, 1999. The
Exchange Offer is not conditioned upon any minimum principal amount of Old
Class C Certificates being tendered for exchange. However, the obligation
to accept Old Class C Certificates for exchange pursuant to the Exchange
Offer is subject to certain conditions as set forth under "--Conditions."
Old Class C Certificates will be deemed to have been accepted as
validly tendered when, as and if the Trustee has given oral or written
notice thereof to the Exchange Agent. The Exchange Agent will act as agent
for the tendering holders of Old Class C Certificates for the purposes of
receiving the New Class C Certificates and delivering New Class
C Certificates to such holders.
The New Class C Certificates are being offered hereby in order to
satisfy certain obligations of US Airways contained in the Registration
Agreement. US Airways is making the Exchange Offer in reliance on the
position of the staff of the Commission as set forth in certain
interpretive letters addressed to third parties in other transactions.
However, US Airways has not sought its own interpretive letter and there
can be no assurance that the staff of the Commission would make a similar
determination with respect to the Exchange Offer as it has in such
interpretive letters to third parties. Based on these interpretations by
the staff of the Commission, US Airways believes that New Class C
Certificates issued pursuant to the Exchange Offer to a holder in exchange
for Old Class C Certificates may be offered for resale, resold and
otherwise transferred by a holder (other than (i) a broker-dealer who
purchased Old Class C Certificates directly from US Airways for resale
pursuant to Rule 144A or any other available exemption under the Securities
Act, (ii) an "affiliate" of US Airways within the meaning of Rule 405 under
the Securities Act, or (iii) a broker-dealer who acquired the Old Class C
Certificates as a result of market-making or other trading activities)
without further compliance with the registration and prospectus delivery
provisions of the Securities Act; provided, that such holder is acquiring
the New Class C Certificates in the ordinary course of business and is not
participating, and has no arrangement or understanding with any person to
participate, in a distribution (within the meaning of the Securities Act)
of the New Class C Certificates. Any holder of Old Class C Certificates who
is not able to rely on the interpretations of the staff of the Commission
set forth in the above-mentioned interpretive letters must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any sale or other transfer of such Old Class C Certificates
unless such sale is made pursuant to an exemption from such requirements.
Each broker-dealer that receives New Class C Certificates for its own
account pursuant to the Exchange Offer (a "Participating Broker-Dealer"),
where such Old Class C Certificates were acquired by such broker-dealer as
a result of market-making activities or other trading activities, must
acknowledge that it will deliver a prospectus meeting the requirements of
the Securities Act in connection with any resale of such New Class C
Certificates. The Letter of Transmittal states that by so acknowledging and
by delivering a prospectus, a broker-dealer will not be deemed to admit
that it is an "underwriter" within the meaning of the Securities Act. This
Prospectus, as it may be amended or supplemented from time to time, may be
used by a Participating Broker-Dealer in connection with resales of New
Class C Certificates received in exchange for Old Class C Certificates
where such Old Class C Certificates were acquired by such Participating
Broker-Dealer for its own account as a result of market making or other
trading activities. Subject to certain provisions set forth in the
Registration Agreement, US Airways has agreed that this Prospectus may be
used by a Participating Broker-Dealer in connection with resales of such
New Class C Certificates. See "Plan of Distribution."
Each holder of the Old Class C Certificates who wishes to exchange
such Old Class C Certificates for New Class C Certificates in the Exchange
Offer will be required to make certain representations, including that (i)
any New Class C Certificates to be received by it are being acquired in the
ordinary course of its business, (ii) it has no arrangement or
understanding with any person to participate in the distribution (within
the meaning of the Securities Act) of the Old Class C Certificates or of
the New Class C Certificates, (iii) it is not an affiliate of US Airways or
if it is an affiliate of US Airways, such holder acknowledges that it must
comply with the registration and prospectus delivery requirements of the
Securities Act to the extent applicable, (iv) if such holder is not a
broker-dealer, that it is not engaged in, and does not intend to engage in,
a distribution of the New Class C Certificates and (v) if such holder is a
broker-dealer, that it will receive New Class C Certificates for its own
account in exchange for the Old Class C Certificates that were acquired as
a result of market-making activities or other trading activities and that
it will be required to acknowledge that it will deliver a prospectus in
connection with any resale of such New Class C Certificates.
If the Exchange Offer does not occur in the time period prescribed by
the Registration Agreement because (i) US Airways determines that
registration of the Exchange Offer is not available because of any change
in applicable law or interpretations thereof by the staff of the
Commission, (ii) the Exchange Offer is not consummated by the 180th day
after the Issuance Date (as extended by any Delay Period), (iii) the
Initial Purchaser determines that any Holder (as defined in the
Registration Agreement) is not eligible to participate in the Exchange
Offer, (iv) the Initial Purchaser requests with respect to Old Class C
Certificates not eligible to be exchanged for New Class C Certificates or
(v) the Initial Purchaser determines that any holder of Old Class C
Certificates will not receive freely transferable New Class C Certificates,
(a) as promptly as practicable (but in any event within 45 days of being so
required or requested), file with the Commission a shelf registration
statement on an appropriate form, under the Securities Act (the "Shelf
Registration Statement") covering resales of such Old Class C Certificates,
(b) use all reasonable best efforts to cause the Shelf Registration
Statement to be declared effective under the Securities Act within 120 days
after so required or requested pursuant to the Registration Agreement and
(c) use all reasonable best efforts to keep continuously effective the
Shelf Registration Statement for a period of two years from the Issuance
Date (or for such shorter period as ends when all of the Old Class C
Certificates covered by the Shelf Registration Statement have been sold
pursuant thereto). US Airways will, in the event of the filing of a Shelf
Registration Statement, provide to each holder of such Certificates copies
of the prospectus which is a part of the Shelf Registration Statement,
notify each such holder when the Shelf Registration Statement for the Old
Class C Certificates has become effective and take certain other actions as
are required pursuant to the Registration Agreement. A holder of the Old
Class C Certificates who sells such Old Class C Certificates pursuant to
the Shelf Registration Statement generally will be required to be named as
a selling security holder in the related prospectus and to deliver the
prospectus to purchasers, will be subject to certain of the civil liability
provisions under the Securities Act in connection with such sales and will
be bound by the provisions of the Registration Agreement that are
applicable to such a holder (including certain indemnification
obligations).
If (i) any Registration Statement required by the Registration
Agreement is not filed with the Commission on or prior to the applicable
filing deadline specified in the Registration Agreement, (ii) any
Registration Statement required by the Registration Agreement is not
declared effective by the Commission on or prior to the applicable
effectiveness deadline specified in the Registration Agreement, (iii) the
Exchange Offer has not been consummated on or prior to the consummation
deadline specified in the Registration Agreement or (iv) any Registration
Statement required by the Registration Agreement is filed and declared
effective but shall thereafter cease to be effective or fail to be usable
for its intended purpose without being succeeded within two (2) days by a
post-effective amendment to such Registration Statement that cures such
failure and that is itself declared effective within five (5) days of
filing such post-effective amendment to such Registration Statement (each
such event in clauses (i) through (iv), a "Registration Default"), then US
Airways agrees to pay to the Class C Trust for distribution to each Holder
effected thereby liquidated damages in an amount equal to the following:
during the first ninety (90)-day period immediately following the
occurrence of such Registration Default, .0025 (the "Multiplier") times the
aggregate principal amount of such Holder's Old Class C Certificates times
the number of days such Registration Default exists divided by 360 (less
any amount thereof that has been paid as provided in the next paragraph).
The amount of the Multiplier shall increase by .0025 during each subsequent
ninety (90)-day period up to a maximum Multiplier of .01. Once US Airways
cures a default described in clause (i), (ii), (iii) or (iv) of the
preceding sentence, the liquidated damages payable with respect to the Old
Class C Certificates as a result of such clause (i), (ii), (iii) or (iv),
as applicable, will cease, until such time, if any, that another
Registration Default occurs.
US Airways will pay any such liquidated damages to the Class C Trust
for distribution to each Holder affected thereby as Class C Special
Indemnity Payments under the Participation Agreement and as Class C Special
Deposit Payments under the Note Purchase Agreement. (Participation
Agreement, 6(d); Note Purchase Agreement, 5(a)) Liquidated damages paid by
US Airways to the Class C Trust are not subject to the Intercreditor
Agreement and, accordingly, are not subordinated to the payment of
principal and interest on the Class A and Class B Certificates. Liquidated
damages payable by US Airways, if any, are not covered by the Liquidity
Facility for the Class C Certificates.
US Airways' obligation to pay liquidated damages may be postponed for
up to 30 days if the reason US Airways failed to meet a deadline described
above is because (i) such action was required by law, (ii) US Airways
cannot obtain, after using its reasonable best efforts, financial
information necessary for the Registration Statement or (iii) such action
is taken by US Airways in good faith and for valid business reasons (not
including the avoidance of US Airways' obligations under the Registration
Agreement).
All accrued liquidated damages will be paid to holders entitled
thereto in the manner provided for the payment of interest in the Class C
Pass Through Trust Agreement, on each Regular Distribution Date, as more
fully set forth in the Class C Pass Through Trust Agreement and the Old
Class C Certificates.
Upon consummation of the Exchange Offer, subject to certain exceptions
described above, holders of Old Class C Certificates who do not exchange
their Old Class C Certificates for New Class C Certificates in the Exchange
Offer will no longer be entitled to registration rights and will not be
able to offer or sell their Old Class C Certificates, unless such Old Class
C Certificates are subsequently registered under the Securities Act (which,
subject to certain limited exceptions, US Airways will have no obligation
to do), except pursuant to an exemption from, or in a transaction not
subject to, the Securities Act and applicable state securities laws. See
"Risk Factors--Risk Factors Relating to the Certificates and the Exchange
Offer--Consequences of Failure to Exchange."
Expiration Date; Extensions; Amendments; Termination
The term "Expiration Date" means ___________________, 1999 (30
calendar days following the commencement of the Exchange Offer), unless US
Airways, in its sole discretion, extends the Exchange Offer, in which case
the term "Expiration Date" means the latest date to which the Exchange
Offer is extended. Notwithstanding any extension of the Exchange Offer, if
the Exchange Offer is not consummated by June 14, 1999, US Airways is
obligated under the Registration Agreement to pay liquidated damages to the
Class C Trust for distribution to the holders of the Class C Certificates.
See "--General."
In order to extend the Expiration Date, US Airways will notify the
Exchange Agent of any extension by oral or written notice and will mail to
the record holders of Old Class C Certificates an announcement thereof,
each prior to 9:00 a.m., New York City time, on the next business day after
the previously scheduled Expiration Date. Such announcement may state that
US Airways is extending the Exchange Offer for a specified period of time.
US Airways reserves the right (i) to delay acceptance of any Old Class
C Certificates, to extend the Exchange Offer or to terminate the Exchange
Offer and not permit acceptance of Old Class C Certificates not previously
accepted if any of the conditions set forth under "--Conditions" have
occurred and not have been waived by US Airways, by giving oral or written
notice of such delay, extension or termination to the Exchange Agent, or
(ii) to amend the terms of the Exchange Offer in any manner deemed by it to
be advantageous to the holders of the Old Class C Certificates. Any such
delay in acceptance, extension, termination or amendment will be followed
as promptly as practicable by oral or written notice thereof to the
Exchange Agent. If the Exchange Offer is amended in a manner determined by
US Airways to constitute a material change, US Airways will promptly
disclose such amendment in a manner reasonably calculated to inform the
holders of the Old Class C Certificates of such amendment.
Without limiting the manner in which US Airways may choose to make
public announcement of any delay, extension, amendment or termination of
the Exchange Offer, US Airways has no obligation to publish, advertise or
otherwise communicate any such public announcement, other than by making a
timely release to an appropriate news agency.
Interest on the New Class C Certificates
The New Class C Certificates will accrue interest at the rate of 6.82%
per annum, from the most recent date to which interest has been paid on the
Old Class C Certificates or, if no interest has been paid, from the
Issuance Date. Interest on the New Class C Certificates is payable on
January 30 and July 30 of each year, commencing on January 30, 1999.
Procedures for Tendering
To tender in the Exchange Offer, a holder must transmit a properly
completed and duly executed Letter of Transmittal, or a facsimile thereof,
together with any other documents required by such Letter of Transmittal,
or (in the case of a book-entry transfer) an Agent's Message in lieu of
such Letter of Transmittal, to the Exchange Agent at the address set forth
below under "--Exchange Agent" prior to 5:00 p.m., New York City time, on
the Expiration Date. In addition, either (i) certificates for such Old
Class C Certificates must be received by the Exchange Agent along with the
Letter of Transmittal, (ii) a timely confirmation of a book-entry transfer
(a "Book-Entry Confirmation") of such Old Class C Certificates, if such
procedure is available, into the Exchange Agent's account at The Depository
Trust Company (the "Book-Entry Transfer Facility") pursuant to the
procedure for book-entry transfer described below, must be received by the
Exchange Agent prior to the Expiration Date with the Letter of Transmittal
or Agent's Message in lieu of such Letter of Transmittal or (iii) the
holder must comply with the guaranteed delivery procedures described below.
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility to and received by the Exchange Agent and forming a part
of a Book-Entry Confirmation, which states that the Book-Entry Transfer
Facility has received an express acknowledgment from the tendering
participant, which acknowledgment states that such participant has received
and agrees to be bound by, and makes the representations and warranties
contained in, the Letter of Transmittal and that US Airways may enforce
such Letter of Transmittal against such participant. THE METHOD OF DELIVERY
OF OLD CLASS C CERTIFICATES, LETTERS OF TRANSMITTAL AND ALL OTHER REQUIRED
DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDERS. IF SUCH DELIVERY IS
BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL, PROPERLY INSURED, WITH
RETURN RECEIPT REQUESTED BE USED. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ASSURE TIMELY DELIVERY. NO LETTERS OF TRANSMITTAL OR OLD CLASS C
CERTIFICATES SHOULD BE SENT TO US AIRWAYS. Delivery of all documents must
be made to the Exchange Agent at its address set forth below. Holders may
also request their respective brokers, dealers, commercial banks, trust
companies or nominees to effect such tender for such holders.
The tender by a holder of Old Class C Certificates will constitute an
agreement between such holder and US Airways in accordance with the terms
and subject to the conditions set forth herein and in the Letter of
Transmittal.
Only a holder of Old Class C Certificates may tender such Old Class C
Certificates in the Exchange Offer. The term "holder" with respect to the
Exchange Offer means any person in whose name Old Class C Certificates are
registered on the books of US Airways or any other person who has obtained
a properly completed bond power from
the registered holder.
Any beneficial owner whose Old Class C Certificates are registered in
the name of a broker, dealer, commercial bank, trust company or other
nominee and who wishes to tender should contact such registered holder
promptly and instruct such registered holder to tender on his behalf. If
such beneficial holder wishes to tender on its own behalf, such beneficial
holder must, prior to completing and executing the Letter of Transmittal
and delivering its Old Class C Certificates, either make appropriate
arrangements to register ownership of the Old Class C Certificates in such
owner's name or obtain a properly completed bond power from the registered
holder. The transfer of registered ownership may take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal, as
the case may be, must be guaranteed by any member firm of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or an "eligible guarantor" institution
within the meaning of Rule 17Ad-15 under the Exchange Act (each, an
"Eligible Institution") unless the Old Class C Certificates tendered
pursuant thereto are tendered (i) by a registered holder who has not
completed the box entitled "Special Issuance Instructions" or "Special
Delivery Instructions" on the Letter of Transmittal or (ii) for the account
of an Eligible Institution.
If the Letter of Transmittal is signed by a person other than the
registered holder of any Old Class C Certificates listed therein, such Old
Class C Certificates must be endorsed or accompanied by bond powers and a
proxy which authorizes such person to tender the Old Class C Certificates
on behalf of the registered holder, in each case as the name of the
registered holder or holders appears on the Old Class C Certificates.
If the Letter of Transmittal or any Old Class C Certificates or bond
powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary
or representative capacity, such persons should so indicate when signing,
and unless waived by US Airways, evidence satisfactory to US Airways of
their authority to so act must be submitted with the Letter of Transmittal.
All questions as to the validity, form, eligibility (including time of
receipt) and withdrawal of the tendered Old Class C Certificates will be
determined by US Airways in its sole discretion, which determination will
be final and binding. US Airways reserves the absolute right to reject any
and all Old Class C Certificates not properly tendered or any Old Class C
Certificates the acceptance of which would, in the opinion of counsel for
US Airways, be unlawful. US Airways also reserves the absolute right to
waive any irregularities or conditions of tender as to particular Old Class
C Certificates. US Airways' interpretation of the terms and conditions of
the Exchange Offer (including the instructions in the Letter of
Transmittal) will be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of Old Class C
Certificates must be cured within such time as US Airways shall determine.
Neither US Airways, the Exchange Agent nor any other person will be under
any duty to give notification of defects or irregularities with respect to
tenders of Old Class C Certificates, nor will any of them incur any
liability for failure to give such notification. Tenders of Old Class C
Certificates will not be deemed to have been made until such irregularities
have been cured or waived. Any Old Class C Certificates received by the
Exchange Agent that are not properly tendered and as to which the defects
or irregularities have not been cured or waived will be returned without
cost to such holder by the Exchange Agent to the tendering holders of Old
Class C Certificates, unless otherwise provided in the Letter of
Transmittal, as soon as practicable following the Expiration Date.
In addition, US Airways reserves the right in its sole discretion,
subject to the provisions of the Pass Through Trust Agreements, to (i)
purchase or make offers for any Old Class C Certificates that remain
outstanding subsequent to the Expiration Date or, as set forth under
"--Conditions," to terminate the Exchange Offer in accordance with the
terms of the Registration Agreement and (ii) to the extent permitted by
applicable law, purchase Old Class C Certificates in the open market, in
privately negotiated transactions or otherwise. The terms of any such
purchases or offers could differ from the terms of the Exchange Offer.
Acceptance of Old Class C Certificates for Exchange; Delivery of New Class C
Certificates
Upon satisfaction or waiver of all of the conditions to the Exchange
Offer, all Old Class C Certificates properly tendered will be accepted,
promptly after the Expiration Date, and the New Class C Certificates will
be issued promptly after acceptance of the Old Class C Certificates. See
"--Conditions" below. For purposes of the Exchange Offer, Old Class C
Certificates will be deemed to have been accepted for exchange when, as and
if US Airways has given oral or written notice thereof to the Exchange
Agent. For each Old Class C Certificate accepted for exchange, the holder
of such Old Class C Certificate will receive a New Class C Certificate
having a denomination equal to that of the surrendered Old Class C
Certificate.
In all cases, issuance of New Class C Certificates for Old Class C
Certificates that are accepted for exchange pursuant to the Exchange Offer
will be made only after timely receipt by the Exchange Agent of (i)
certificates for such Old Class C Certificates or a timely Book-Entry
Confirmation of such Old Class C Certificates into the Exchange Agent's
account at the Book-Entry Transfer Facility, (ii) a properly completed and
duly executed Letter of Transmittal or an Agent's Message in lieu thereof
and (iii) all other required documents. If any tendered Old Class C
Certificates are not accepted for any reason set forth in the terms and
conditions of the Exchange Offer, such unaccepted or nonexchanged Old Class
C Certificates will be returned without expense to the tendering holder
thereof (or, in the case of Old Class C Certificates tendered by book-entry
transfer procedures described below, such nonexchanged Old Class C
Certificates will be credited to an account maintained with such Book-Entry
Transfer Facility) as promptly as practicable after the expiration or
termination of the Exchange Offer.
Book-Entry Transfer
The Exchange Agent will make a request to establish an account with
respect to the Old Class C Certificates at the Book-Entry Transfer Facility
for purposes of the Exchange Offer within two business days after the date
of this Prospectus. Any financial institution that is a participant in the
Book-Entry Transfer Facility's systems may make book-entry delivery of Old
Class C Certificates by causing the Book-Entry Transfer Facility to
transfer such Old Class C Certificates into the Exchange Agent's account at
the Book-Entry Transfer Facility in accordance with such Book-Entry
Transfer Facility's procedures for transfer. However, although delivery of
Old Class C Certificates may be effected through book-entry transfer at the
Book-Entry Transfer Facility, the Letter of Transmittal or facsimile
thereof with any required signature guarantees or an Agent's Message in
lieu thereof, together with any other required documents, must, in any
case, be transmitted to and received by the Exchange Agent at one of the
addresses set forth below under "--Exchange Agent" on or prior to the
Expiration Date or the guaranteed delivery procedures described below must
be complied with.
Guaranteed Delivery Procedures
If a registered holder of the Old Class C Certificates desires to
tender such Old Class C Certificates, and the Old Class C Certificates are
not immediately available, or time will not permit such holder's Old Class
C Certificates or other required documents to reach the Exchange Agent
before the Expiration Date, or the procedures for book-entry transfer
cannot be completed on a timely basis, a tender may be effected if (i) the
tender is made through an Eligible Institution, (ii) prior to the
Expiration Date, the Exchange Agent receives from such Eligible Institution
a properly completed and duly executed notice of guaranteed delivery,
substantially in the form provided by US Airways (a "Notice of Guaranteed
Delivery") (by facsimile transmission, mail or hand delivery), setting
forth the name and address of the holder of Old Class C Certificates and
the amount of Old Class C Certificates tendered, stating that the tender is
being made thereby and guaranteeing that within three New York Stock
Exchange ("NYSE") trading days after the date of execution of the Notice of
Guaranteed Delivery, the certificates for all physically tendered Old Class
C Certificates, in proper form for transfer, or a Book-Entry Confirmation,
as the case may be, together with a properly completed and duly executed
Letter of Transmittal (or a facsimile thereof or an Agent's Message in lieu
thereof), with any required signature guarantees and any other documents
required by the Letter of Transmittal will be deposited by the Eligible
Institution with the Exchange Agent and (iii) the certificates for all
physically tendered Old Class C Certificates, in proper form for transfer,
or a Book-Entry Confirmation, as the case may be, together with a properly
completed and duly executed Letter of Transmittal (or a facsimile thereof
or an Agent's Message in lieu thereof), with any required signature
guarantees and all other documents required by the Letter of Transmittal
are received by the Exchange Agent within three NYSE trading days after the
date of execution of the Notice of Guaranteed Delivery.
Withdrawal of Tenders
Tenders of Old Class C Certificates may be withdrawn at any time prior
to 5:00 p.m., New York City time, on the Expiration Date.
For a withdrawal to be effective, a written notice of withdrawal must
be received by the Exchange Agent prior to 5:00 p.m., New York City time,
on the Expiration Date at the address set forth below under "--Exchange
Agent." Any such notice of withdrawal must specify the name of the person
having tendered the Old Class C Certificates to be withdrawn, identify the
Old Class C Certificates to be withdrawn (including the principal amount of
such Old Class C Certificates) and (where certificates for Old Class C
Certificates have been transmitted) specify the name in which such Old
Class C Certificates are registered, if different from that of the
withdrawing holder. If certificates for Old Class C Certificates have been
delivered or otherwise identified to the Exchange Agent, then, prior to the
release of such certificates, the withdrawing holder must also submit the
serial numbers of the particular certificates to be withdrawn and a signed
notice of withdrawal with signatures guaranteed by an Eligible Institution
unless such holder is an Eligible Institution. If Old Class C Certificates
have been tendered pursuant to the procedure for book-entry transfer
described above, any notice of withdrawal must specify the name and number
of the account at the Book-Entry Transfer Facility to be credited with the
withdrawn Old Class C Certificates and otherwise comply with the procedures
of such facility. All questions as to the validity, form and eligibility
(including time of receipt) of such notices will be determined by US
Airways, whose determination will be final and binding on all parties. Any
Old Class C Certificates so withdrawn will be deemed not to have been
validly tendered for exchange for purposes of the Exchange Offer. Any Old
Class C Certificates which have been tendered for exchange but which are
not exchanged for any reason will be returned to the holder thereof without
cost to such holder (or, in the case of Old Class C Certificates tendered
by book-entry transfer into the Exchange Agent's account at the Book-Entry
Transfer Facility pursuant to the book-entry transfer procedures described
above, such Old Class C Certificates will be credited to an account
maintained with such Book-Entry Transfer Facility for the Old Class C
Certificates) as soon as practicable after withdrawal, rejection of tender
or termination of the Exchange Offer. Properly withdrawn Old Class C
Certificates may be retendered by following one of the procedures described
under "--Procedures for Tendering" and "--Book-Entry Transfer" above at any
time on or prior to the Expiration Date.
Conditions
Notwithstanding any other provisions of the Exchange Offer, or any
extension of the Exchange Offer, US Airways will not be required to accept
for exchange, or to exchange, any Old Class C Certificates for any New
Class C Certificates, and, as described below, may terminate the Exchange
Offer (whether or not any Old Class C Certificates have theretofore been
accepted for exchange) or may waive any conditions to or amend the Exchange
Offer, if any of the following conditions have occurred or exists or have
not been satisfied:
(i) the due tendering of Old Class C Certificates in accordance with
the Exchange Offer;
(ii) the Exchange Offer, or the making of any exchange by a holder,
violates any applicable law, statute, rule, regulation or any
applicable interpretation of the staff of the Commission;
(iii) any law, statute, rule, regulation or interpretation by the
staff of the Commission is proposed, adopted or enacted that, in
the reasonable judgment of US Airways, might materially impair
the ability of US Airways to proceed with the Exchange Offer or
materially impair the contemplated benefits of the Exchange
Offer to US Airways; or
(iv) each holder of Old Class C Certificates exchanged in the
Exchange Offer shall have made certain customary
representations, including representations that, among other
things, (a) the holder will acquire New Class C Certificates in
the ordinary course of business, (b) that the holder has no
arrangement or understanding with any person to participate, in
the distribution of the New Class C Certificates, (c) the holder
is not an "affiliate" of US Airways as defined in Rule 405 of
the Securities Act or, if it is an affiliate, the holder
acknowledges it must comply with the prospectus delivery
requirements of the Securities Act, (d) if such holder is not a
broker-dealer, that it is not engaged in, and does not intend to
engage in, a distribution of the New Class C Certificates and
(e) if such holder is a broker-dealer, that it will receive New
Class C Certificates for its own account in exchange for Old
Class C Certificates that were acquired as a result of
market-making activities or other trading activities and that it
will be required to deliver a prospectus in connection with any
resale of New Class C Certificates.
If US Airways determines in its sole and absolute discretion that any
of the foregoing events or conditions has occurred or exists or has not
been satisfied, US Airways may, subject to applicable law, (i) terminate
the Exchange Offer (whether or not any Old Class C Certificates have
theretofore been accepted for exchange), (ii) extend the Exchange Offer and
retain all Old Class C Certificates tendered prior to the expiration of the
Exchange Offer subject, however, to the rights of holders to withdraw such
Old Class C Certificates or (iii) waive any such condition or otherwise
amend the terms of the Exchange Offer in any respect. If such waiver or
amendment constitutes a material change to the Exchange Offer, US Airways
will promptly disclose such waiver or amendment by means of a prospectus
supplement that will be distributed to the registered holders of the Old
Class C Certificates, and US Airways will extend the Exchange Offer to the
extent required by Rule 14e-1 under the Exchange Act.
The foregoing conditions are for the sole benefit of US Airways and
may be waived by US Airways in whole or in part at any time and from time
to time in its sole discretion. The failure by US Airways at any time to
exercise any of the foregoing rights shall not be deemed a waiver of such
rights and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time. Any determination by US Airways
concerning the events described above will be final and binding upon all
parties.
In addition, US Airways will not accept for exchange any Old Class C
Certificates tendered, and no New Class C Certificates will be issued in
exchange for any such Old Class C Certificates, if at such time any stop
order shall be threatened or in effect with respect to the Registration
Statement of which this Prospectus constitutes a part or the qualification
of the Pass Through Trust Agreements under the Trust Indenture Act of 1939,
as amended (the "Trust Indenture Act").
The Exchange Offer is not conditioned upon any minimum principal
amount of the Old Class C Certificates being tendered for exchange.
Exchange Agent
State Street Bank and Trust Company has been appointed as Exchange
Agent for the Exchange Offer. Questions and requests for assistance and
requests for additional copies of this Prospectus or the Letter of
Transmittal should be directed to the Exchange Agent addressed as follows:
By Hand, Mail or Overnight Delivery:
State Street Bank and Trust Company
Corporate Trust Department
Two International Place-4th Floor
Boston, MA 02110
Attention: Susan Lavey
Facsimile Transmission:
(617) 664-5290
Confirm by Telephone:
(617) 664-5314
Fees and Expenses
The expenses of soliciting tenders pursuant to the Exchange Offer and
all other expenses to be incurred in connection with the Exchange Offer
will be paid by US Airways, including fees and expenses of the Exchange
Agent and Trustee and accounting, legal, printing and related fees and
expenses, provided that the Initial Purchaser will bear any additional
expenses caused by a request by the Initial Purchaser to delay
effectiveness of the Registration Statement and keeping the Registration
Statement effective with the Commission for more than 180 days after the
expiration of the Exchange Offer. The principal solicitation for tenders
pursuant to the Exchange Offer is being made by mail. However, additional
solicitations may be made by telegraph, telephone, telecopy, electronic
mail or in person by officers and regular employees of US Airways.
US Airways will not make any payments to brokers, dealers or other
persons soliciting acceptances of the Exchange Offer. US Airways will,
however, pay the Exchange Agent reasonable and customary fees for its
services and will reimburse the Exchange Agent for its reasonable
out-of-pocket expenses in connection therewith. US Airways may also pay
brokerage houses and other custodians, nominees and fiduciaries the
reasonable out-of-pocket expenses incurred by them in forwarding copies of
the Prospectus and related documents to the beneficial owners of the Old
Class C Certificates, and in handling or forwarding tenders for exchange.
US Airways will pay all transfer taxes, if any, applicable to the
exchange of Old Class C Certificates pursuant to the Exchange Offer. If,
however, certificates representing New Class C Certificates or Old Class C
Certificates for principal amounts not tendered or accepted for exchange
are to be delivered to, or are to be registered or issued in the name of,
any person other than the registered holder of the Old Class C Certificates
tendered, or if tendered Old Class C Certificates are registered in the
name of any person other than the person signing the Letter of Transmittal,
or if a transfer tax is imposed for any reason other than the exchange of
Old Class C Certificates pursuant to the Exchange Offer, then the amount of
any such transfer taxes (whether imposed on the registered holder or any
other persons) will be payable by the tendering holder. If satisfactory
evidence of payment of such taxes or exemption therefrom is not submitted
with the Letter of Transmittal, the amount of such transfer taxes will be
billed directly to such tendering holder.
Miscellaneous
Participation in the Exchange Offer is voluntary and holders should
carefully consider whether to accept. Holders of the Old Class C
Certificates are urged to consult their financial and tax advisors in
making their own decision on what action to take.
US Airways may in the future seek to acquire untendered Old Class C
Certificates, to the extent permitted by applicable law, in open market or
privately negotiated transactions, through subsequent exchange offers or
otherwise. US Airways has no present plans to acquire any Old Class C
Certificates that are not tendered in the Exchange Offer or to file a
registration statement to permit resales of any untendered Old Class C
Certificates.
DESCRIPTION OF THE CERTIFICATES
The following description of the particular terms of the Certificates
provides the general terms and provisions of the Certificates. The
statements under this caption are summaries and do not purport to be
complete and are qualified in their entirety by reference to all of the
provisions of the Basic Agreement, a form of which was filed with the
Commission on September 28, 1998 as an exhibit to US Airways' Registration
Statement on Form S-3, and to all of the provisions of the Certificates,
the Trust Supplements, the Deposit Agreements, the Escrow Agreements and
the Intercreditor Agreement. The documents pertaining to the Class A and
Class B Certificates were filed with the Commission as exhibits to US
Airways' Current Report on Form 8-K on December 29, 1998. The documents
pertaining to the Class C Certificates were filed on February 26, 1999 with
the Commission as exhibits to US Airways' Registration Statement on Form
S-4.
Except as otherwise indicated, the following summary relates to each
of the Trusts and the Certificates issued by each Trust. The terms and
conditions governing each of the Trusts will be substantially the same,
except as described under "Description of the Intercreditor
Agreement--Priority of Distributions" below and except that the principal
amount and scheduled principal repayments of the Equipment Notes held by
each Trust and the interest rate and maturity date of the Equipment Notes
held by each Trust will differ. The references to Sections in parentheses
in the following summary are to the relevant Sections of the Basic
Agreement unless otherwise indicated.
General
On December 14, 1998, US Airways, through its Class C Trust, privately
placed an aggregate of $141,366,000 of Old Class C Certificates. The Old C
Certificates were issued, and the New Class C Certificates will be issued,
pursuant to the Class C Pass Through Trust Agreement. The form and terms of
the New Class C Certificates are the same in all material respects as the
form and terms of the Old Class C Certificates, except that:
o US Airways registered the New Class C Certificates under the
Securities Act and their transfer is not restricted
like the Old Class C Certificates; and
o the New Class C Certificates are not entitled to liquidated
damages under the Registration Agreement.
As of the date of this Prospectus, $141,366,000 aggregate principal amount
of Old Class C Certificates is outstanding.
On December 14, 1998, US Airways publicly sold an aggregate of
$447,768,000 of Class A Pass Through Certificates, Series 1998-1 (the
"Class A Certificates") and Class B Pass Through Certificates, Series
1998-1 (the "Class B Certificates"), which were registered with the
Securities and Exchange Commission (the "Commission"). All $447,768,000 of
the Class A and Class B Certificates remains outstanding as of the date of
this Prospectus. Class A and Class B Certificates are not being exchanged
in connection with the Exchange Offer.
The Certificates represent a fractional undivided interest in one of
the three US Airways 1998-1 Pass Through Trusts (the "Class A Trust," the
"Class B Trust," and the "Class C Trust," and, collectively, the "Trusts").
The Trusts were formed pursuant to a pass through trust agreement between
US Airways and State Street Bank and Trust Company, as trustee (the
"Trustee"), dated as of December 4, 1998 (the "Basic Agreement"), and three
separate supplements thereto (each, a "Trust Supplement" and, together with
the Basic Agreement, collectively, the "Pass Through Trust Agreements").
The property of each Trust (the "Trust Property") consists of:
o Subject to the Intercreditor Agreement, Equipment Notes acquired
under the Note Purchase Agreement and issued, at US Airways'
election, either (a) on a nonrecourse basis by the trustees
(each, an "Owner Trustee") of separate owner trusts in each
separate leveraged lease transaction with respect to each Leased
Aircraft to finance a portion of the purchase price of such
Leased Aircraft by the Owner Trustee, in which case the
applicable Leased Aircraft will be leased to US Airways, or (b)
on a recourse basis by US Airways in connection with each
separate secured loan transaction with respect to each Owned
Aircraft to finance a portion of the purchase price of such Owned
Aircraft by US Airways. All Aircraft financed prior to the date
hereof were Leased Aircraft and there were no Owned Aircraft.
o The rights of such Trust to acquire Equipment Notes under the
Note Purchase Agreement.
o The rights of such Trust under the applicable Escrow Agreement to
request the Escrow Agent to withdraw from the applicable
Depositary funds sufficient to enable each such Trust to purchase
Equipment Notes on the delivery of each Aircraft during the
Delivery Period.
o The rights of such Trust under the Intercreditor Agreement
(including all monies receivable in respect of such rights).
o Monies receivable under the Liquidity Facility for such Trust.
o Funds from time to time deposited with the Trustee in accounts
relating to such Trust.
The Certificates of each Trust have been issued in fully registered
form only and are subject to the provisions described below under
"--Book-Entry; Delivery and Form." Certificates will be issued only in
minimum denominations of $1,000 or integral multiples thereof, except that
one Certificate of each Trust may be issued in a different denomination.
(Section 3.01)
The Certificates represent interests in the respective Trusts, and all
payments and distributions thereon are made only from the Trust Property of
the related Trust. (Section 3.09) The Certificates do not and will not
represent an interest in or obligation of US Airways, the Trustees, any of
the Loan Trustees or Owner Trustees in their individual capacities, any
Owner Participant or any affiliate of any thereof.
Pursuant to the Escrow Agreement applicable to each Trust, the holders
of Certificates of each such Trust (each a "Certificateholder") as holders
of the Escrow Receipts affixed to each Certificate are entitled to certain
rights with respect to payments and withdrawals that are required to be
made by the applicable Depositary under the applicable Deposit Agreement.
Accordingly, any transfer of a Certificate will have the effect of
transferring the corresponding rights with respect to such payments, and
rights with respect to payments and withdrawals to be made under the
applicable Deposit Agreement may not be separately transferred by holders
of the Certificates. Rights with respect to the Deposits, payments and
withdrawals to be made under the applicable Deposit Agreement and the
Escrow Agreement relating to a Trust, except for the right to request
withdrawals for the purchase of Equipment Notes, do not constitute Trust
Property of such Trust.
Payments and Distributions
The following description of distributions on the Certificates should
be read in conjunction with the description of the Intercreditor Agreement
which may have the consequence of altering the effect of the following
provisions in a default situation. See "Description of the Intercreditor
Agreement--Priority of Distributions." Payments of interest on the Deposits
with respect to each Trust will be made by the applicable Depositary to the
Paying Agent and will be distributed to the Receiptholders on the date
receipt of such payment is confirmed by the Paying Agent and payments of
principal, premium (if any) and interest on the Equipment Notes or with
respect to other Trust Property held in each Trust will be distributed by
the Trustee to Certificateholders of such Trust on the date receipt of such
payment is confirmed, except in the case of certain types of Special
Payments.
The Deposits held with respect to the Class A Trust, the Class B Trust
and the Class C Trust and the Equipment Notes held in each such Trust
accrue interest at the rate of 6.85% per annum for the Class A
Certificates, 7.35% per annum for the Class B Certificates and 6.82% per
annum for the Class C Certificates, payable on January 30 and July 30 of
each year, commencing on January 30, 1999 (or, in the case of Equipment
Notes issued after such date, commencing with the first such date to occur
after initial issuance thereof). The interest rate applicable to each Class
of Certificates is referred to as the "Stated Interest Rate" for such
Trust. All such interest payments will be distributed to Certificateholders
of such Trust on each such date until the final Distribution Date for such
Trust, subject in the case of payments on the Equipment Notes to the
Intercreditor Agreement. Interest is calculated on the basis of a 360-day
year consisting of twelve 30-day months.
Payments of interest applicable to the Certificates are supported by a
separate Liquidity Facility provided by the Liquidity Provider for the
benefit of the holders of such Certificates in an aggregate amount
sufficient to pay interest thereon at the Stated Interest Rate for such
Certificates on the next three successive Regular Distribution Dates
(without regard to any future payments of principal on such Certificates).
The Liquidity Facility with respect to each Trust does not cover
interest payable by the applicable Depositary on the Deposits relating to
such Trust. Furthermore, such Liquidity Facility does not provide for
drawings thereunder to pay for principal of or premium on such
Certificates, any interest on such Certificates in excess of the Stated
Interest Rates, or, notwithstanding the subordination provisions of the
Intercreditor Agreement, principal of or interest or premium on the
Certificates of any other Class. Therefore, only the holders of the
Certificates issued by a particular Trust are entitled to receive and
retain the proceeds of drawings under the Liquidity Facility for such
Trust. The Liquidity Facility with respect to the Class C Trust does not
cover amounts payable by US Airways as liquidated damages under the
Registration Agreement. See "Description of the Liquidity Facilities."
Payments of principal of the Equipment Notes are scheduled to be
received by the Trustee on January 30 and July 30 in certain years
depending upon the terms of the Equipment Notes held in such Trust.
Scheduled payments of interest on the Deposits and of interest or
principal on the Equipment Notes are herein referred to as "Scheduled
Payments," and January 30 and July 30 of each year are herein referred to
as "Regular Distribution Dates." See "Description of the Equipment
Notes--Principal and Interest Payments." The "Final Maturity Date" for the
Class A Certificates is July 30, 2019, for the Class B Certificates is July
30, 2019, and for the Class C Certificates is January 30, 2016.
The Paying Agent with respect to each Escrow Agreement will distribute
on each Regular Distribution Date to the Certificateholders of the Trust to
which such Escrow Agreement relates all Scheduled Payments received in
respect of the related Deposits, the receipt of which is confirmed by the
Paying Agent on such Regular Distribution Date. The Trustee of each Trust
will distribute, subject to the Intercreditor Agreement, on each Regular
Distribution Date to the Certificateholders of such Trust all Scheduled
Payments received in respect of Equipment Notes held on behalf of such
Trust, the receipt of which is confirmed by the Trustee on such Regular
Distribution Date. Each Certificateholder of each Trust will be entitled to
receive its proportionate share, based upon its fractional interest in such
Trust, of any distribution in respect of Scheduled Payments of interest on
the Deposits relating to such Trust and, subject to the Intercreditor
Agreement, of principal or interest on Equipment Notes held by the
Subordination Agent on behalf of such Trust. Each such distribution of
Scheduled Payments will be made by the applicable Paying Agent or Trustee
to the Certificateholders of record of the relevant Trust on the record
date applicable to such Scheduled Payment subject to certain exceptions.
(Sections 4.01 and 4.02; Escrow Agreement, Section 2.3) If a Scheduled
Payment is not received by the applicable Paying Agent or Trustee on a
Regular Distribution Date but is received within five days thereafter, it
will be distributed on the date received to such holders of record. If it
is received after such five-day period, it will be treated as a Special
Payment (as defined below) and distributed as described below.
Any payment in respect of, or any proceeds of, any Equipment Note,
Trust Indenture Estate under (and as defined in) any Leased Aircraft
Indenture or Collateral under (and as defined in) any Owned Aircraft
Indenture other than a Scheduled Payment (each, a "Special Payment") will
be distributed on, in the case of an early redemption or a purchase of any
Equipment Note, the date of such early redemption or purchase (which is a
Business Day), and otherwise on the Business Day specified for distribution
of such Special Payment pursuant to a notice delivered by each Trustee as
soon as practicable after the Trustee has received funds for such Special
Payment (each a "Special Distribution Date", each Special Distribution Date
and Regular Distribution Date, a "Distribution Date"). Any such
distribution will be subject to the Intercreditor Agreement.
Any unused Deposits to be distributed after the Delivery Period
Termination Date or the occurrence of a Triggering Event, together with
accrued and unpaid interest thereon (each, also a "Special Payment"), will
be distributed on a date 15 days after the Paying Agent has received notice
of the event requiring such distribution (also a "Special Distribution
Date"). However, if such date is within ten days before or after a Regular
Distribution Date, such Special Payment will be made on such Regular
Distribution Date. Payments made on or with respect to a Deposit are not
subject to the Intercreditor Agreement.
Each Paying Agent, in the case of the Deposits, and each Trustee, in
the case of Trust Property, will mail a notice to the Certificateholders of
the applicable Trust stating the scheduled Special Distribution Date, the
related record date, the amount of the Special Payment and the reason for
the Special Payment. In the case of a redemption or purchase of the
Equipment Notes held in the related Trust or any distribution of unused
Deposits after the Delivery Period Termination Date or the occurrence of a
Triggering Event, such notice will be mailed not less than 15 days prior to
the date such Special Payment is scheduled to be distributed, and in the
case of any other Special Payment, such notice will be mailed as soon as
practicable after the Trustee has confirmed that it has received funds for
such Special Payment. (Section 4.02(c); Trust Supplements, Section 3.01;
Escrow Agreement, Sections 2.3 and 2.6) Each distribution of a Special
Payment, other than a final distribution, on a Special Distribution Date
for any Trust will be made by the Paying Agent or the Trustee, as
applicable, to the Certificateholders of record of such Trust on the record
date applicable to such Special Payment. (Section 4.02(b); Escrow
Agreements Section 2.3) See "--Indenture Defaults and Certain Rights upon
an Indenture Default" and "Description of the Equipment Notes--Redemption."
Each Pass Through Trust Agreement requires that the Trustee establish
and maintain, for the related Trust and for the benefit of the
Certificateholders of such Trust, one or more non-interest bearing accounts
(the "Certificate Account") for the deposit of payments representing
Scheduled Payments received by such Trustee. The Class C Pass Through Trust
Agreement also requires that the Trustee deposit any Class C Special
Indemnity Payments and any Class C Special Deposit Payments received by the
Trustee in the Certificate Account. Each Pass Through Trust Agreement
requires that the Trustee establish and maintain, for the related Trust and
for the benefit of the Certificateholders of such Trust, one or more
accounts (the "Special Payments Account") for the deposit of payments
representing Special Payments received by such Trustee, which are to be
non-interest bearing except in certain circumstances where the Trustee may
invest amounts in such account in certain permitted investments. Pursuant
to the terms of each Pass Through Trust Agreement, the Trustee is required
to deposit any Scheduled Payments relating to the applicable Trust received
by it in the Certificate Account of such Trust and to deposit any Special
Payments so received by it in the Special Payments Account of such Trust.
(Section 4.01; Trust Supplements, Section 3.01) All amounts so deposited
will be distributed by the Trustee on a Regular Distribution Date or a
Special Distribution Date, as appropriate. (Section 4.02; Trust
Supplements, Section 3.01)
Each Escrow Agreement requires that the Paying Agent establish and
maintain, for the benefit of the Receiptholders, one or more accounts (the
"Paying Agent Account"), which are to be non-interest bearing. Pursuant to
the terms of the Escrow Agreement, the Paying Agent is required to deposit
interest on Deposits relating to such Trust and any unused Deposits
withdrawn by the Escrow Agent in the Paying Agent Account. All amounts so
deposited will be distributed by the Paying Agent on a Regular Distribution
Date or Special Distribution Date, as appropriate.
The final distribution for each Trust will be made only upon
presentation and surrender of the Certificates for such Trust at the office
or agency of the Trustee specified in the notice given by the Trustee of
such final distribution. The Trustee will mail such notice of the final
distribution to the Certificateholders of such Trust, specifying the date
set for such final distribution and the amount of such distribution. (Trust
Supplements, Section 7.01) See "--Termination of the Trusts" below.
Distributions in respect of Certificates issued in global form will be made
as described in "--Book-Entry; Delivery and Form" below.
If any Distribution Date is a Saturday, Sunday or other day on which
commercial banks are authorized or required to close in New York, New York,
Boston, Massachusetts, Pittsburgh, Pennsylvania or Salt Lake City, Utah
(any other day being a "Business Day"), distributions scheduled to be made
on such Regular Distribution Date or Special Distribution Date will be made
on the next succeeding Business Day with the same force and effect as if
made on such scheduled date and without additional interest.
Pool Factors
The "Pool Balance" for each Trust or for the Certificates issued by
any Trust indicates, as of any date, the original aggregate face amount of
the Certificates of such Trust less the aggregate amount of all payments
made in respect of the Certificates of such Trust 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 or expenses incurred in
connection therewith. The Pool Balance for each Trust or for the
Certificates issued by any Trust 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 held in such Trust and the
distribution thereof to be made on that date. (Trust Supplements, Section
2.01)
The "Pool Factor" for each Trust as of any Distribution Date will be
the quotient (rounded to the seventh decimal place) computed by dividing
(i) the Pool Balance of such Trust by (ii) the original aggregate face
amount of the Certificates of such Trust. The Pool Factor for each Trust or
for the Certificates issued by any Trust 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 payments
with respect to other Trust Property held in such Trust and the
distribution thereof to be made on that date. (Trust Supplements, Section
2.01) The Pool Factor for each Trust was 1.0000000 on the date of issuance
of the Certificates; thereafter, the Pool Factor for each Trust declines as
described herein to reflect reductions in the Pool Balance of such Trust.
The amount of a Certificateholder's pro rata share of the Pool Balance of a
Trust can be determined by multiplying the par value of the holder's
Certificate of such Trust by the Pool Factor for such Trust as of the
applicable Distribution Date. Notice of the Pool Factor and the Pool
Balance for each Trust will be mailed to Certificateholders of such Trust
on each Distribution Date. (Trust Supplements, Section 3.02)
The following table sets forth an illustrative aggregate principal
amortization schedule for the Equipment Notes held in each Trust (the
"Assumed Amortization Schedule") and resulting Pool Factors with respect to
such Trust. The actual aggregate principal amortization schedule applicable
to a Trust and the resulting Pool Factors with respect to such Trust may
differ from those set forth below, since the amortization schedule for the
Equipment Notes issued with respect to an Aircraft may vary from such
illustrative amortization schedule so long as it complies with the
Mandatory Economic Terms. The scheduled distribution of principal payments
for any Trust will be affected if any Equipment Notes held in such Trust
are redeemed or purchased or if a default in payment on such Equipment
Notes occurred. Accordingly, the aggregate principal amortization schedule
applicable to a Trust and the resulting Pool Factors may differ from those
set forth in the following table.
<TABLE>
<CAPTION>
Class A Trust Class B Trust Class C Trust
Equipment Class A Equipment Class B Equipment Class C
Notes Trust Notes Trust Notes Trust
Scheduled Expected Scheduled Expected Scheduled Expected
Payments of Pool Payments of Pool Payments of Pool
Date Principal Factor Principal Factor Principal Factor
- ---- --------- ------ --------- ------ --------- ------
<S> <C> <C> <C> <C> <C> <C>
January 30, 1999............ $ 0.00 1.0000000 $ 0.00 1.0000000 $ 0.00 1.000000
July 30, 1999............... 2,433,005.55 0.9933613 0.00 1.0000000 0.00 1.000000
January 30, 2000............ 5,103,781.46 0.9794350 2,893,145.27 0.9644061 0.00 1.000000
July 30, 2000............... 3,149,032.98 0.9708425 102,480.59 0.9631453 0.00 1.000000
January 30, 2001............ 9,128,060.99 0.9459355 3,546,870.19 0.9195087 0.00 1.000000
July 30, 2001............... 2,003,971.51 0.9404674 101,610.63 0.9182586 0.00 1.000000
January 30, 2002............ 9,829,788.99 0.9136457 4,644,708.50 0.8611154 0.00 1.000000
July 30, 2002............... 1,302,243.51 0.9100924 101,610.63 0.8598653 0.00 1.000000
January 30, 2003............ 10,185,787.67 0.8822993 6,193,863.27 0.7836632 0.00 1.000000
July 30, 2003............... 946,244.83 0.8797173 0.00 0.7836632 0.00 1.000000
January 30, 2004............ 10,870,342.17 0.8500563 7,339,373.87 0.6933680 0.00 1.000000
July 30, 2004............... 413,886.03 0.8489270 0.00 0.6933680 0.00 1.000000
January 30, 2005............ 11,639,293.39 0.8171678 8,494,541.27 0.5888610 0.00 1.000000
July 30, 2005............... 56,514.73 0.8170136 0.00 0.5888610 0.00 1.000000
January 30, 2006............ 14,623,208.46 0.7771125 6,340,007.87 0.5108608 930,106.80 0.9934206
January 30, 2007............ 15,293,762.28 0.7353816 4,188,284.55 0.4593330 3,958,065.23 0.9654219
January 30, 2008............ 13,638,402.14 0.6981677 3,168,589.53 0.4203503 5,695,110.61 0.9251356
January 30, 2009............ 6,051,984.14 0.6816541 2,438,460.00 0.3903503 10,338,868.68 0.8520001
January 30, 2010............ 6,261,480.67 0.6645689 2,438,460.00 0.3603503 20,287,335.49 0.7084908
July 30, 2010............... 463,320.00 0.6633047 0.00 0.3603503 1,000,685.99 0.7014121
January 30, 2011............ 9,744,066.00 0.6367169 2,438,460.00 0.3303503 23,771,328.56 0.5332576
January 30, 2012............ 9,212,170.50 0.6115804 2,438,460.00 0.3003503 25,507,683.49 0.3528204
July 30, 2012............... 1,919,862.00 0.6063418 0.00 0.3003503 991,114.93 0.3458095
January 30, 2013............ 5,962,865.08 0.5900714 2,125,415.09 0.2742017 38,998,859.05 0.0699379
July 30, 2013............... 5,331,994.62 0.5755225 2,473,331.06 0.2437726 6,479,851.23 0.0241005
January 30, 2014............ 53,641,014.05 0.4291567 4,666,657.19 0.1863595 2,926,097.76 0.0034018
July 30, 2014............... 8,693,285.15 0.4054360 1,050,628.59 0.1734337 480,892.18 0.0000000
January 30, 2015............ 26,034,323.21 0.3343983 2,028,521.50 0.1484772 0.00 0.0000000
July 30, 2015............... 1,061,768.36 0.3315012 0.00 0.1484772 0.00 0.0000000
January 30, 2016............ 31,300,318.96 0.2460946 0.00 0.1484772 0.00 0.0000000
July 30, 2016............... 5,666,868.31 0.2306319 0.00 0.1484772 0.00 0.0000000
January 30, 2017............ 60,242,760.23 0.0662524 611,608.26 0.1409526 0.00 0.0000000
July 30, 2017............... 0.00 0.0662524 80,647.56 0.1399604 0.00 0.0000000
January 30, 2018............ 24,280,592.03 0.0000000 11,376,264.58 0.0000000 0.00 0.0000000
</TABLE>
The Pool Factor and Pool Balance of each Trust will be recomputed if
there has been an early redemption, purchase, or default in the payment of
principal or interest in respect of one or more of the Equipment Notes held
in a Trust, as described in "--Indenture Defaults and Certain Rights Upon
an Indenture Default" and "Description of the Equipment Notes--Redemption,"
or a special distribution attributable to unused Deposits after the
Delivery Period Termination Date, the occurrence of a Triggering Event or,
in the case of the Class C Trust, the failure of US Airways to satisfy
certain conditions set forth in the Note Purchase Agreement, as described
in "Description of the Deposit Agreements." If the principal payments
scheduled for July 30, 1999 are changed, notice thereof will be mailed to
the Certificateholders by no later than July 15, 1999. If (i) any other
change in the scheduled repayments from the Assumed Amortization Schedule
or (ii) any such redemption, purchase, default or special distribution, the
Pool Factors and the Pool Balances of each Trust so affected will be
recomputed after giving effect thereto and notice thereof will be mailed to
the Certificateholders of such Trust promptly after the Delivery Period
Termination Date in the case of clause (i) and promptly after the
occurrence of any event described in clause (ii).
Reports to Certificateholders
On each Distribution Date, the applicable Paying Agent and Trustee
will include with each distribution by it of a Scheduled Payment or Special
Payment to Certificateholders of the related Trust a statement setting
forth the following information (per $1,000 aggregate principal amount of
Certificate for such Trust, except as to the amounts described in items (1)
and (6) below):
(1) The aggregate amount of funds distributed on such Distribution Date
under the Pass Through Trust Agreement and under the Escrow Agreement,
indicating the amount allocable to each source.
(2) The amount of such distribution under the Pass Through Trust Agreement
allocable to principal and the amount allocable to premium, if any.
(3) The amount of such distribution under the Pass Through Trust Agreement
allocable to interest.
(4) The amount of such distribution under the Escrow Agreement allocable to
interest.
(5) The amount of such distribution under the Escrow Agreement allocable to
unused Deposits, if any.
(6) The Pool Balance and the Pool Factor for such Trust. (Trust
Supplements, Section 3.02(a))
So long as the Certificates are registered in the name of The
Depository Trust Company ("DTC"), or its nominee, on the record date prior
to each Distribution Date, the applicable Trustee will request from DTC a
securities position listing setting forth the names of all DTC Participants
reflected on DTC's books as holding interests in the Certificates on such
record date. On each Distribution Date, the applicable Paying Agent and
Trustee will mail to each such DTC Participant the statement described
above and will make available additional copies as requested by such DTC
Participant for forwarding to Certificate Owners. (Trust Supplements,
Section 3.02(a))
In addition, after the end of each calendar year, the applicable
Trustee and Paying Agent will furnish to each Certificateholder of each
Trust at any time during the preceding calendar year a report containing
the sum of the amounts determined pursuant to clauses (1), (2), (3), (4)
and (5) above with respect to the Trust for such calendar year or, in the
event such person was a Certificateholder during only a portion of such
calendar year, for the applicable portion of such calendar year, and such
other items as are readily available to such Trustee and which a
Certificateholder reasonably requests as necessary for the purpose of such
Certificateholder's preparation of its U.S. federal income tax returns.
(Trust Supplements, Section 3.02(b)) Such report and such other items will
be prepared on the basis of information supplied to the applicable Trustee
by the DTC Participants and will be delivered by such Trustee to such DTC
Participants to be available for forwarding by such DTC Participants to
Certificate Owners in the manner described above. (Trust Supplements,
Section 3.02(b)) At such time, if any, as the Certificates are issued in
the form of definitive certificates, the applicable Paying Agent and
Trustee will prepare and deliver the information described above to each
Certificateholder of record of each Trust as the name and period of
ownership of such Certificateholder appears on the records of the registrar
of the Certificates.
Indenture Defaults and Certain Rights upon an Indenture Default
An event of default under an Indenture (an "Indenture Default") will,
with respect to the Leased Aircraft Indentures, include an event of default
under the related Lease (a "Lease Event of Default"). See "Description of
the Equipment Notes--Indenture Defaults, Notice and Waiver." Since the
Equipment Notes issued under an Indenture will be held in more than one
Trust, a continuing Indenture Default under such Indenture would affect the
Equipment Notes held by each such Trust. There are no cross-default
provisions in the Indentures or in the Leases. Consequently, events
resulting in an Indenture Default under any particular Indenture may or may
not result in an Indenture Default under any other Indenture, and a Lease
Event of Default under any particular Lease may or may not constitute a
Lease Event of Default under any other Lease. If an Indenture Default
occurs in fewer than all of the Indentures, notwithstanding the treatment
of Equipment Notes issued under any Indenture under which an Indenture
Default has occurred, payments of principal and interest on all of the
Equipment Notes will continue to be distributed to the holders of the
Certificates as originally scheduled, subject to the Intercreditor
Agreement. See "Description of the Intercreditor Agreement--Priority of
Distributions."
With respect to each Leased Aircraft, the applicable Owner Trustee and
Owner Participant, under the related Leased Aircraft Indenture, will have
the right under certain circumstances to cure Indenture Defaults that
result from the occurrence of a Lease Event of Default under the related
Lease. If the Owner Trustee or the Owner Participant exercises
any such cure right, the Indenture Default will be deemed to have been
cured.
In the event that the same institution acts as Trustee of multiple
Trusts, in the absence of instructions from the Certificateholders of any
such Trust, such Trustee could be faced with a potential conflict of
interest upon an Indenture Default. In such event, each Trustee has
indicated that it would resign as Trustee of one or all such Trusts, and a
successor trustee would be appointed in accordance with the terms of the
applicable Pass Through Trust Agreement. State Street Bank and Trust
Company is the initial Trustee under each Trust.
Upon the occurrence and continuation of an Indenture Default, the
Controlling Party will direct the Indenture Trustee under such Indenture in
the exercise of remedies thereunder and may accelerate and sell all (but
not less than all) of the Equipment Notes issued under such Indenture to
any person, subject to certain limitations. See "Description of the
Intercreditor Agreement--Intercreditor Rights--Sale of Equipment Notes or
Aircraft." The proceeds of such sale will be distributed pursuant to the
provisions of the Intercreditor Agreement. Any such proceeds so distributed
to any Trustee upon any such sale will be deposited in the applicable
Special Payments Account and will be distributed to the Certificateholders
of the applicable Trust on a Special Distribution Date. (Sections 4.01 and
4.02) The market for Equipment Notes at the time of the existence of an
Indenture Default may be very limited and there can be no assurance as to
the price at which they could be sold. If any such Equipment Notes are sold
for less than their outstanding principal amount, certain
Certificateholders will receive a smaller amount of principal distributions
than anticipated and will not have any claim for the shortfall against US
Airways, any Liquidity Provider, any Owner Trustee, any Owner Participant
or any Trustee.
Any amount, other than Scheduled Payments received on a Regular
Distribution Date or within five days thereafter, distributed to the
Trustee of any Trust by the Subordination Agent on account of any Equipment
Note, Trust Indenture Estate under (and as defined in) any Leased Aircraft
Indenture or Collateral under (and as defined in) any Owned Aircraft
Indenture held in such Trust following an Indenture Default will be
deposited in the Special Payments Account for such Trust and will be
distributed to the Certificateholders of such Trust on a Special
Distribution Date. (Sections 4.01 and 4.02; Trust Supplements, Section
3.01) In addition, if, following an Indenture Default under any Leased
Aircraft Indenture, the applicable Owner Participant or Owner Trustee
exercises its option to redeem or purchase the outstanding Equipment Notes
issued under such Leased Aircraft Indenture, the price paid by such Owner
Participant or Owner Trustee for the Equipment Notes issued under such
Leased Aircraft Indenture and distributed to such Trust by the
Subordination Agent will be deposited in the Special Payments Account for
such Trust and will be distributed to the Certificateholders of such Trust
on a Special Distribution Date. (Sections 4.01 and 4.02)
Any funds representing payments received with respect to any defaulted
Equipment Notes, or the proceeds from the sale of any Equipment Notes, held
by the Trustee in the Special Payments Account for such Trust will, to the
extent practicable, be invested and reinvested by such Trustee in certain
permitted investments pending the distribution of such funds on a Special
Distribution Date. (Section 4.04) Such permitted investments will be
defined as obligations of the United States or agencies or
instrumentalities thereof for the payment of which the full faith and
credit of the United States is pledged and which mature in not more than 60
days after the date of acquisition thereof or such lesser time as is
required for the distribution of any such funds on a Special Distribution
Date. (Section 1.01)
Each Pass Through Trust Agreement provides that the Trustee of the
related Trust will, within 90 days after the occurrence of any default
known to the Trustee, give to the Certificateholders of such Trust notice,
transmitted by mail, of such uncured or unwaived default with respect to
such Trust known to it, provided that, except in the case of default in a
payment of principal, premium, if any, or interest on any of the Equipment
Notes held in such Trust, the applicable Trustee will be protected in
withholding such notice if it in good faith determines that the withholding
of such notice is in the interests of such Certificateholders. (Section
7.02) The term "default" as used in this paragraph only with respect to any
Trust means the occurrence of an Indenture Default under any Indenture
pursuant to which Equipment Notes held by such Trust were issued, as
described above, except that in determining whether any such Indenture
Default has occurred, any grace period or notice in connection therewith
will be disregarded.
Each Pass Through Trust Agreement contains a provision entitling the
Trustee of the related Trust, subject to the duty of such Trustee during a
default to act with the required standard of care, to be offered reasonable
security or indemnity by the holders of the Certificates of such Trust
before proceeding to exercise any right or power under such Pass Through
Trust Agreement at the request of such Certificateholders. (Section
7.03(e))
Subject to certain qualifications set forth in each Pass Through Trust
Agreement and to the Intercreditor Agreement, the Certificateholders of
each Trust holding Certificates evidencing fractional undivided interests
aggregating not less than a majority in interest in such Trust will have
the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee with respect to such Trust or
pursuant to the terms of the Intercreditor Agreement, or exercising any
trust or power conferred on such Trustee under such Pass Through Trust
Agreement or the Intercreditor Agreement, including any right of such
Trustee as Controlling Party under the Intercreditor Agreement or as holder
of the Equipment Notes. (Section 6.04)
In certain cases, the Certificateholders of a Trust evidencing
fractional undivided interests aggregating not less than a majority in
interest of such Trust may on behalf of the holders of all the Certificates
of such Trust waive any past "event of default" under such Trust (i.e., any
Indenture Default under any Indenture pursuant to which Equipment Notes
held by such Trust were issued) and its consequences or, if the Trustee of
such Trust is the Controlling Party, may direct the Trustee to instruct the
applicable Loan Trustee to waive any past Indenture Default and its
consequences, except (i) a default in the deposit of any Scheduled Payment
or Special Payment or in the distribution thereof, (ii) a default in
payment of the principal, premium, if any, or interest with respect to any
of the Equipment Notes and (iii) a default in respect of any covenant or
provision of the Pass Through Trust Agreement that cannot be modified or
amended without the consent of each Certificateholder of such Trust
affected thereby. (Section 6.05) Each Indenture will provide that, with
certain exceptions, the holders of the majority in aggregate unpaid
principal amount of the Equipment Notes issued thereunder may on behalf of
all such holders waive any past default or Indenture Default thereunder.
Notwithstanding such provisions of the Indentures, pursuant to the
Intercreditor Agreement only the Controlling Party will be entitled to
waive any such past default or Indenture Default.
Purchase Rights of Certificateholders
Upon the occurrence and during the continuation of a Triggering Event,
with ten days' written notice to the Trustee and each Certificateholder of
the same Class:
o The Class B Certificateholders will have the right to purchase
all, but not less than all, of the Class A Certificates; and
o The Class C Certificateholders will have the right to purchase
all, but not less than all, of the Class A and B Certificates.
In each case, the purchase price will be equal to the Pool Balance of
the relevant Class or Classes of Certificates plus accrued and unpaid
interest thereon to the date of purchase, without premium, but including
any other amounts due to the Certificateholders of such Class or Classes.
Such purchase right may be exercised by any Certificateholder of the Class
or Classes entitled to such right. In each case, if prior to the end of the
ten-day period, any other Certificateholder of the same Class notifies the
purchasing Certificateholder that the other Certificateholder wants to
participate in such purchase, then such other Certificateholder may join
with the purchasing Certificateholder to purchase the Certificates pro rata
based on the interest in the Trust held by each Certificateholder. (Trust
Supplements, Section 4.01)
PTC Event of Default
A Pass Through Certificate Event of Default (a "PTC Event of Default")
under each Pass Through Trust Agreement means the failure to pay:
o The outstanding Pool Balance of the applicable Class of
Certificates within ten Business Days of the Final Maturity Date
for such Class.
o Interest due on such Class of Certificates within ten Business
Days of any Distribution Date (unless the Subordination Agent has
made Interest Drawings, or withdrawals from the Cash Collateral
Account for such Class of Certificates, with respect thereto in an
aggregate amount sufficient to pay such interest and has
distributed such amount to the Trustee entitled thereto). (Section
1.01)
Any failure to make expected principal distributions with respect to
any Class of Certificates on any Regular Distribution Date (other than the
Final Maturity Date) will not constitute a PTC Event of Default with
respect to such Certificates. A PTC Event of Default with respect to the
most senior outstanding Class of Certificates resulting from an Indenture
Default under all Indentures will constitute a "Triggering Event." See
"Description of the Intercreditor Agreement--Priority of
Distributions--After a Triggering Event" for a discussion of the
consequences of the occurrence of a Triggering Event.
Merger, Consolidation and Transfer of Assets
US Airways is prohibited from consolidating with or merging into any
other corporation or transferring substantially all of its assets as an
entirety to any other entity unless:
o The surviving successor corporation or transferee is validly
existing under the laws of the United States or any state thereof
or the District of Columbia.
o The surviving successor corporation or transferee is a "citizen of
the United States" (as defined in Title 49 of the United States
Code relating to aviation (the "Transportation Code")) holding an
air carrier operating certificate issued by the Secretary of
Transportation pursuant to Chapter 447 of Title 49, United States
Code, if, and so long as, such status is a condition of
entitlement to the benefits of Section 1110 of the U.S. Bankruptcy
Code.
o The surviving successor corporation or transferee expressly
assumes all of the obligations of US Airways contained in the
Basic Agreement and any Trust Supplement, the Note Purchase
Agreement, the Indentures, the Participation Agreements and the
Leases, and any other operative documents.
o US Airways delivers a certificate and an opinion or opinions of
counsel indicating that such transaction, in effect, complies with
such conditions.
In addition, after giving effect to such transaction, no Lease Event
of Default, in the case of a Leased Aircraft, or Indenture Default, in the
case of an Owned Aircraft, will have occurred and be continuing. (Section
5.02; Leased Aircraft Participation Agreement, Section 7(v); Owned Aircraft
Participation Agreement, Section 7(i))
The Basic Agreement, the Trust Supplements, the Note Purchase
Agreement, the Indentures, the Participation Agreements and the Leases do
not contain any covenants or provisions which afford the applicable Trustee
or Certificateholders protection in the event of a highly leveraged
transaction, including transactions effected by management or affiliates,
which may or may not result in a change in control of US Airways.
Modifications of the Pass Through Trust Agreements and Certain Other Agreements
Each Pass Through Trust Agreement contains provisions permitting, at
the request of the Company, the execution of amendments or supplements to
such Pass Through Trust Agreement or, if applicable, to the Deposit
Agreements, the Escrow Agreements, the Intercreditor Agreement, the Note
Purchase Agreement or any Liquidity Facility, without the consent of the
holders of any of the Certificates of such Trust:
o To provide for the formation of a Trust, to issue an additional
series of Certificates and to enter into Trust Supplements setting
forth the terms of any series of Certificates.
o To evidence the succession of another corporation to US Airways
and the assumption by such corporation of US Airways' obligations
under such Pass Through Trust Agreement, the Note Purchase
Agreement or any Liquidity Facility.
o To add to the covenants of US Airways for the benefit of holders
of such Certificates or to surrender any right or power conferred
upon US Airways in such Pass Through Trust Agreement, the
Intercreditor Agreement, the Note Purchase Agreement or any
Liquidity Facility.
o To correct or supplement any provision of such Pass Through Trust
Agreement, the Deposit Agreements, the Escrow Agreements, the
Intercreditor Agreement, the Note Purchase Agreement or any
Liquidity Facility which may be defective or inconsistent with any
other provision in such Pass Through Trust Agreement, the Deposit
Agreements, the Escrow Agreements, the Intercreditor Agreement,
the Note Purchase Agreement or any Liquidity Facility, as
applicable, or to cure any ambiguity or to modify any other
provision with respect to matters or questions arising under such
Pass Through Trust Agreement, the Deposit Agreements, the Escrow
Agreements, the Intercreditor Agreement, the Note Purchase
Agreement or any Liquidity Facility, provided that such action
will not materially adversely affect the interests of the holders
of such Certificates; to correct any mistake in such Pass Through
Trust Agreement, the Intercreditor Agreement, the Note Purchase
Agreement or any Liquidity Facility; or, as provided in the
Intercreditor Agreement, to give effect to or provide for a
Replacement Facility.
o To comply with any requirement of the Commission, any applicable
law, rules or regulations of any exchange or quotation system on
which the Certificates are listed, or any regulatory body.
o To modify, eliminate or add to the provisions of such Pass Through
Trust Agreement, the Deposit Agreements, the Escrow Agreements,
the Intercreditor Agreement, the Note Purchase Agreement or any
Liquidity Facility to such extent as is necessary to continue the
qualification of such Pass Through Trust Agreement (including any
supplemental agreement) under the Trust Indenture Act, or any
similar federal statute enacted after the execution of such Pass
Through Trust Agreement, and to add to such Pass Through Trust
Agreement, the Deposit Agreements, the Escrow Agreements, the
Intercreditor Agreement, the Note Purchase Agreement or any
Liquidity Facility such other provisions as may be expressly
permitted by the Trust Indenture Act.
o To evidence and provide for the acceptance of appointment under
such Pass Through Trust Agreement, the Deposit Agreements, the
Escrow Agreements, the Intercreditor Agreement, the Note Purchase
Agreement or any Liquidity Facility by a successor Trustee and to
add to or change any of the provisions of such Pass Through Trust
Agreement, the Deposit Agreements, the Escrow Agreements, the
Intercreditor Agreement, the Note Purchase Agreement or any
Liquidity Facility as is necessary to provide for or facilitate
the administration of the Trusts under the Basic Agreement by more
than one Trustee.
In each case, such modification or supplement may not adversely affect
the status of the Trust as a grantor trust under Subpart E, Part I of
Subchapter J of Chapter 1 of Subtitle A of the Internal Revenue Code of
1986, as amended (the "Code"), for U.S. federal income tax purposes.
(Section 9.01; Trust Supplements, Section 6.01)
Each Pass Through Trust Agreement also contains provisions permitting
the execution, with the consent of the holders of the Certificates of the
related Trust evidencing fractional undivided interests aggregating not
less than a majority in interest of such Trust, of amendments or
supplements adding any provisions to or changing or eliminating any of the
provisions of such Pass Through Trust Agreement, the Deposit Agreements,
the Escrow Agreements, the Intercreditor Agreement, the Note Purchase
Agreement or any Liquidity Facility to the extent applicable to such
Certificateholders or of modifying the rights and obligations of such
Certificateholders under such Pass Through Trust Agreement, the Deposit
Agreements, the Escrow Agreements, the Intercreditor Agreement, the Note
Purchase Agreement or any Liquidity Facility. No such amendment or
supplement may, without the consent of the holder of each Certificate so
affected thereby:
o Reduce in any manner the amount of, or delay the timing of, any
receipt by the Trustee (or, with respect to the Deposits, the
Receiptholders) of payments with respect to the Equipment Notes
held in such Trust or distributions in respect of any Certificate
related to such Trust (or, with respect to the Deposits, payments
to be made to Receiptholders), or change the date or place of any
payment in respect of any Certificate, or make distributions
payable in coin or currency other than that provided for in such
Certificates, or impair the right of any Certificateholder of such
Trust to institute suit for the enforcement of any such payment
when due.
o Permit the disposition of any Equipment Note held in such Trust,
except as provided in such Pass Through Trust Agreement, or
otherwise deprive such Certificateholder of the benefit of the
ownership of the applicable Equipment Notes.
o Alter the priority of distributions specified in the Intercreditor
Agreement in a manner materially adverse to such
Certificateholders.
o Reduce the percentage of the aggregate fractional undivided
interests of the Trust provided for in such Pass Through Trust
Agreement, the consent of the holders of which is required for any
such supplemental trust agreement or for any waiver provided for
in such Pass Through Trust Agreement.
o Modify any of the provisions relating to the rights of the
Certificateholders in respect of the waiver of events of default
or receipt of payment except to increase any percentage of
Certificateholders required to effect a waiver or to add to the
list of provisions that may not be altered without the consent of
each Certificateholder affected thereby. (Section 9.02; Trust
Supplements, Section 6.02)
In the event that a Trustee, as holder (or beneficial owner through
the Subordination Agent) of any Equipment Note in trust for the benefit of
the Certificateholders of the relevant Trust or as Controlling Party under
the Intercreditor Agreement, receives (directly or indirectly through the
Subordination Agent) a request for a consent to any amendment,
modification, waiver or supplement under any Indenture, any Participation
Agreement, any Lease, any Equipment Note or any other related document, the
Trustee will forthwith send a notice of such proposed amendment,
modification, waiver or supplement to each Certificateholder of the
relevant Trust registered on the register of such Trust as of the date of
such notice. The Trustee will request from the Certificateholders a
direction as to:
o Whether or not to take or refrain from taking (or direct the
Subordination Agent to take or refrain from taking) any action
which a holder of such Equipment Note or the Controlling Party has
the option to direct.
o Whether or not to give or execute (or direct the Subordination
Agent to give or execute) any waivers, consents, amendments,
modifications or supplements as a holder of such Equipment Note or
as Controlling Party.
o How to vote (or direct the Subordination Agent to vote) any
Equipment Note if a vote has been called for with respect thereto.
Provided such a request for Certificateholder direction has been made,
in directing any action or casting any vote or giving any consent as the
holder of any Equipment Note (or in directing the Subordination Agent in
any of the foregoing):
o Other than as Controlling Party, the Trustee will vote for or give
consent to any such action with respect to such Equipment Note in
the same proportion as that of (x) the aggregate face amount of
all Certificates actually voted in favor of or for giving consent
to such action by such direction of Certificateholders to (y) the
aggregate face amount of all outstanding Certificates of the
relevant Trust.
o As the Controlling Party, the Trustee will vote as directed in
such Certificateholder direction by the Certificateholders
evidencing fractional undivided interests aggregating not less
than a majority in interest in the relevant Trust.
For purposes of the immediately preceding sentence, a Certificate is
deemed "actually voted" if the Certificateholder has delivered to the
Trustee an instrument evidencing such Certificateholder's consent to such
direction prior to one Business Day before the Trustee directs such action
or casts such vote or gives such consent. Notwithstanding the foregoing,
but subject to certain rights of the Certificateholders under the relevant
Pass Through Trust Agreement and subject to the Intercreditor Agreement,
the Trustee may, in its own discretion and at its own direction, consent
and notify the relevant Loan Trustee of such consent (or direct the
Subordination Agent to consent and notify the relevant Loan Trustee of such
consent) to any amendment, modification, waiver or supplement under the
relevant Indenture, Participation Agreement or Lease, any relevant
Equipment Note or any other related document, if an Indenture Default under
any Indenture has occurred and is continuing, or if such amendment,
modification, waiver or supplement does not materially adversely affect the
interests of the Certificateholders. (Section 10.01)
Obligation to Purchase Equipment Notes
Each Trustee is obligated to purchase the Equipment Notes issued with
respect to the Aircraft during the Delivery Period, subject to the terms
and conditions of a note purchase agreement (the "Note Purchase Agreement")
and the applicable Participation Agreement. Under the Note Purchase
Agreement, US Airways agrees to finance each Aircraft in the manner
provided therein. US Airways has the option of entering into a leveraged
lease financing or a secured debt financing with respect to each Aircraft.
o If US Airways chooses to enter into a leveraged lease financing
with respect to an Aircraft (such Aircraft, a "Leased Aircraft"),
the Note Purchase Agreement provides for the relevant parties to
enter into a participation agreement (each, a "Participation
Agreement"), a Lease and an indenture (each, a "Leased Aircraft
Indenture") relating to the financing of such Leased Aircraft.
o If US Airways chooses to enter into a secured debt financing with
respect to an Aircraft (such Aircraft, an "Owned Aircraft"), the
Note Purchase Agreement provides for the relevant parties to enter
into a participation agreement (each, a "Participation Agreement")
and an indenture (each, an "Owned Aircraft Indenture," and
together with the other Owned Aircraft Indentures and the Leased
Aircraft Indentures, the "Indentures") relating to the financing
of such Owned Aircraft.
The description of such agreements in this Prospectus is based on the
agreements entered into on or shortly after the Issuance Date with respect
to four of the Leased Aircraft delivered during October, November and
December 1998 (the "Initial Delivered Aircraft") and forms of such
agreements to be utilized pursuant to the Note Purchase Agreement. In the
case of a Leased Aircraft, the terms of the agreements actually entered
into may differ from the forms of such agreements and, consequently, may
differ from the description of such agreements contained in this
Prospectus. See "Description of the Equipment Notes." However, under the
Note Purchase Agreement, the terms of such agreements are required to (a)
contain the Mandatory Document Terms (as such Mandatory Document Terms are
permitted to vary in accordance with the terms of the Note Purchase
Agreement) and (b) not vary the Mandatory Economic Terms except as
expressly provided therein. In addition, US Airways is obligated (a) to
certify to the Trustees that any such modifications do not materially and
adversely affect the Certificateholders and (b) to obtain written
confirmation from each Rating Agency that the use of versions of such
agreements modified in any material respect will not result in a
withdrawal, suspension or downgrading of the rating of any Class of
Certificates. Under the Note Purchase Agreement, it is a condition
precedent to the obligation of each Trustee to purchase the Equipment Notes
related to the financing of an Aircraft that no Triggering Event has
occurred. The Trustees have no right or obligation to purchase Equipment
Notes after the Delivery Period Termination Date. So long as AIFS is the
registered or beneficial owner of any of the Class C Certificates, the
Class C Trustee's obligation to purchase Series C Equipment Notes relating
to the financing of an Aircraft will be subject to the satisfaction of
certain additional conditions precedent. The conditions to the Class C
Trustee's obligation to purchase Series C Equipment Notes to be issued in
any financing include (i) the absence of a material payment default by US
Airways Group under its purchase agreement with an affiliate of Airbus,
(ii) the absence of a material payment default under other financing
arrangements with Airbus or its affiliates, (iii) the failure of US Airways
to hold an air carrier operating certificate required for lessors and
lenders to US Airways to be entitled to the benefits of Section 1110 of the
U.S. Bankruptcy Code, (iv) the absence of a Note Purchase Termination
Event, (v) the satisfaction of certain liquidity conditions, and (vi)
compliance with certain parameters relating to the per Aircraft amount and
aggregate amount of financing that AVSA, S.A.R.L. ("AVSA"), an affiliate of
Airbus, is obligated to provide. "Note Purchase Termination Events" include
certain bankruptcy-related events or other material events that result, or
could result, in the termination of the Aircraft purchase agreement between
US Airways Group and an affiliate of Airbus. US Airways believes that, as
of the date of this Prospectus, AIFS does not own any Class C Certificates.
US Airways expects that the foregoing conditions will be satisfied at
all times. However, no assurances can be given and if the conditions are
not satisfied with respect to any Aircraft, such Aircraft will be an Owned
Aircraft and no Series C Notes will be issued with respect thereto.
The "Mandatory Economic Terms," as defined in the Note Purchase
Agreement, require, among other things, that:
o The principal amount of the Series A and Series B Equipment Notes
issued with respect to an Aircraft equals the principal amount of
Series A and Series B Equipment Notes indicated for each such
Aircraft as set forth in "Prospectus Summary--Equipment Notes and
the Aircraft" under the columns "Principal Amount of Series A
Equipment Notes" and "Principal Amount of Series B Equipment
Notes," respectively.
o The maximum principal amount of the Series C Equipment Notes
issued with respect to an Aircraft not exceed the principal amount
of Series C Equipment Notes indicated for each Aircraft as set
forth in "Prospectus Summary--Equipment Notes and Aircraft" under
the column "Maximum Principal Amount of Series C Equipment Notes."
o The initial loan to aircraft value with respect to an Aircraft
(with the value of any Aircraft for these purposes to equal the
value (the "Assumed Appraised Value") for such Aircraft set forth
in "Prospectus Summary--Equipment Notes and the Aircraft" under
the column "Appraised Base Value"), not exceed 40.5% in the case
of the Series A Equipment Notes, 51.0% in the case of Series B
Equipment Notes and 67.0% in the case of Series C Equipment Notes.
o The loan to aircraft value for each series of Equipment Notes
issued in respect of each Aircraft (computed as of the date of
issuance thereof on the basis of the Assumed Appraised Value of
such Aircraft and the Depreciation Assumption) 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.
o The initial average life 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.
o As of the Delivery Period Termination Date the average life of the
Class A Certificates, the Class B Certificates and the Class C
Certificates not be more than 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).
o The final expected distribution date of each Class of Certificates
be as set forth in the "Prospectus Summary--Summary of Terms of
Certificates".
o The original aggregate principal amount of all of the Equipment
Notes of each Series not exceed the original aggregate face amount
of the Certificates issued by the corresponding Trust.
o 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.
o The payment dates for the Equipment Notes and basic rent under the
Leases must be January 30 and July 30.
o Basic rent and termination values under the Leases must be
sufficient to pay amounts due with respect to the related
Equipment Notes.
o The amounts payable under the all-risk aircraft hull insurance
maintained with respect to each Aircraft must be sufficient to pay
the applicable termination value, subject to certain rights of
self-insurance.
o (a) The past due rate in the Indentures and the Leases, (b) the
Make-Whole Premium payable under the Indentures, (c) the
provisions relating to the redemption and purchase of Equipment
Notes in the Indentures, (d) the minimum liability insurance
amount on Aircraft in the Leases, (e) the interest rate payable
with respect to termination value in the Leases, and (f) the
indemnification of the Loan Trustees, Subordination Agent,
Liquidity Provider, Trustees, Escrow Agents and registered holders
of the Equipment Notes (in such capacity, the "Note Holders") with
respect to certain taxes and expenses, in each case must be no
less favorable to the Loan Trustees, Subordination Agent, the
Liquidity Provider, the Trustees, the Escrow Agents and the Note
Holders than as set forth in the form of Participation Agreements,
Lease and Indentures (collectively, the "Aircraft Operative
Agreements").
The "Mandatory Document Terms" prohibit modifications in any material
adverse respect to certain specified provisions of the Aircraft Operative
Agreements annexed to the Note Purchase Agreement, as follows:
o In the case of the Indentures, the following modifications are
prohibited:
(i) modifications to the Granting Clause of the Indentures so as to
deprive the Note Holders of a first priority security interest in the
Aircraft, certain of US Airways' rights under its aircraft purchase
agreement with an affiliate of the Aircraft manufacturer and, in the
case of a Leased Aircraft, the Lease or to eliminate the obligations
intended to be secured thereby;
(ii) modifications to certain provisions relating to the issuance,
redemption, purchase, payments, and ranking of the Equipment Notes
(including the obligation to pay the Make-Whole Premium in certain
circumstances);
(iii) modifications to certain provisions regarding Indenture
Defaults, remedies relating thereto and rights of the Owner Trustee
and Owner Participant in such circumstances;
(iv) modifications to certain provisions relating to any replaced
airframe or engines with respect to an Aircraft; and
(v) modifications to the provision that New York law will govern the
Indentures.
o In the case of the Lease, the following modifications are prohibited:
(i) modifications to certain provisions regarding the unconditional
obligation of US Airways to pay basic rent and termination value to
the Leased Aircraft Trustee;
(ii) modification of the obligations of US Airways to record the
Leased Aircraft Indenture with the Federal Aviation Administration and
to maintain such Indenture as a first-priority perfected mortgage on
the related Aircraft;
(iii) modification of the obligations of US Airways to furnish certain
opinions with respect to a replacement airframe; and
(iv) modification of the obligations of US Airways to consent to the
assignment of the Lease by the Owner Trustee as collateral under the
Leased Aircraft Indenture, as well as modifications which would either
alter the provision that New York law will govern the Lease or would
deprive the Loan Trustee of rights expressly granted to it under the
Leases.
o In the case of the Participation Agreement, the following
modifications are prohibited:
(i) modifications to certain conditions to the obligations of the
Trustees to purchase the Equipment Notes issued with respect to an
Aircraft involving obtaining a certificate of airworthiness with
respect to such Aircraft, delivery of an opinion of outside counsel
with respect to the entitlement to the benefits of Section 1110 with
respect to such Aircraft and filings of certain documents with the
Federal Aviation Administration;
(ii) modifications to the provisions restricting the Note Holder's
ability to transfer such Equipment Notes;
(iii) modifications to certain provisions requiring the delivery of
legal opinions; and
(iv) modifications to the provision that New York law will govern the
Participation Agreement.
o In the case of all of the Aircraft Operative Agreements,
modifications are prohibited in any material adverse respect as
regards the interest of the Note Holders, the Subordination Agent,
the Liquidity Provider or the Loan Trustee in the definition of
"Make-Whole Premium."
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 that any such
action does not materially adversely affect the interests of the Note
Holders, the Subordination Agent, the Liquidity Provider, Loan Trustees or
the Certificateholders.
Termination of the Trusts
The obligations of US Airways and the applicable Trustee with respect
to a Trust will terminate upon the distribution to Certificateholders of
such Trust of all amounts required to be distributed to them pursuant to
the applicable Pass Through Trust Agreement and the disposition of all
property held in such Trust. The applicable Trustee will send to each
Certificateholder of such Trust notice of the termination of such Trust,
the amount of the proposed final payment and the proposed date for the
distribution of such final payment for such Trust. The final distribution
to any Certificateholder of such Trust will be made only upon surrender of
such Certificateholder's Certificates at the office or agency of the
applicable Trustee specified in such notice of termination. (Trust
Supplements, Section 7.01)
The Trustees
The Trustee for each Trust will be State Street Bank and Trust
Company.
Book-Entry; Delivery and Form
General
Upon issuance, each series of Certificates will be represented by one
or more fully registered global certificates. Each global certificate will
be deposited with, or on behalf of, DTC and registered in the name of Cede
& Co. ("Cede"), the nominee of DTC. No person acquiring an interest in such
Certificates ("Certificate Owner") will be entitled to receive a
certificate representing such person's interest in such Certificates,
except as set forth below under "--Definitive Certificates." Unless and
until Definitive Certificates are issued under the limited circumstances
described herein, all references to actions by Certificateholders will
refer to actions taken by DTC upon instructions from DTC Participants (as
defined below), and all references herein to distributions, notices,
reports and statements to Certificateholders will refer, as the case may
be, to distributions, notices, reports and statements to DTC or Cede, as
the registered holder of such Certificates, or to DTC Participants for
distribution to Certificate Owners in accordance with DTC procedures.
DTC has advised US Airways that DTC is a limited purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and "clearing agency" registered pursuant to
section 17A of the Exchange Act. DTC was created to hold securities for its
participants ("DTC Participants") and to facilitate the clearance and
settlement of securities transactions between DTC Participants through
electronic book-entry changes in the accounts of DTC Participants, thereby
eliminating the need for physical transfer of certificates. DTC
Participants include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations. DTC is
owned by a number of DTC Participants and by the New York State Exchange,
Inc., the American Stock Exchange, Inc., and the National Association of
Securities Dealers, Inc. Indirect access to the DTC system also is
available to others such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a DTC
Participant either directly or indirectly ("Indirect Participants").
Certificate Owners that are not DTC Participants or Indirect
Participants but desire to purchase, sell or otherwise transfer ownership
of, or other interests in, the Certificates may do so only through DTC
Participants and Indirect Participants. In addition, Certificate Owners
will receive all distributions of principal and interest from the Trustee
through DTC Participants or Indirect Participants, as the case may be.
Under a book-entry format, Certificate Owners may experience some delay in
their receipt of payments because such payments will be forwarded by the
Trustee to Cede, as nominee for DTC. US Airways expects DTC to forward such
payments in same-day funds to DTC Participants who are credited with
ownership of the Certificates in amounts proportionate to the principal
amount of each such DTC Participant's respective holdings of beneficial
interests in the Certificates, as shown on the records of DTC or its
nominee. US Airways also expects that DTC Participants will thereafter
forward payments to Indirect Participants or Certificate Owners, as the
case may be, in accordance with standing instructions and customary
industry practices. The forwarding of such distributions to the Certificate
Owners will be the responsibility of such DTC Participants. Unless and
until the Definitive Certificates are issued under the limited
circumstances described herein, the only "Certificateholder" will be Cede,
as nominee of DTC. Certificate Owners will not be recognized by the Trustee
as Certificateholders, as such term is used in the Basic Agreement, and
Certificate Owners will be permitted to exercise the rights of
Certificateholders only indirectly through DTC and DTC Participants.
Under the rules, regulations and procedures creating and affecting DTC
and its operations (the "Rules"), DTC is required to make book-entry
transfers of the Certificates among DTC Participants on whose behalf it
acts with respect to the Certificates and to receive and transmit
distributions of principal, premium, if any, and interest with respect to
the Certificates. DTC Participants and Indirect Participants with which
Certificate Owners have accounts with respect to the Certificates similarly
are required to make book-entry transfers and receive and transmit such
payments on behalf of their respective customers. Accordingly, although
Certificate Owners will not possess the Certificates, the Rules provide a
mechanism by which Certificate Owners will receive payments and will be
able to transfer their interests. Conveyance of notices and other
communications by DTC to DTC Participants and by DTC Participants to
Indirect Participants and to Certificate Holders will be governed by
arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time. The Rules applicable to
DTC and DTC Participants are on file with the Commission.
Because DTC can only act on behalf of DTC Participants, who in turn
act on behalf of Indirect Participants, the ability of a Certificate Owner
to pledge the Certificates to persons or entities that do not participate
in the DTC system, or to otherwise act with respect to such Certificates,
may be limited due to the lack of a physical certificate for such
Certificates.
DTC has advised US Airways that it will take any action permitted to
be taken by a Certificateholder under the Basic Agreement only at the
direction of one or more DTC Participants to whose accounts with DTC the
Certificates are credited. Additionally, DTC has advised US Airways that in
the event any action requires approval by Certificateholders of a certain
percentage of beneficial interest in each Trust, DTC will take such action
only at the direction of and on behalf of DTC Participants whose holdings
include undivided interests that satisfy any such percentage. DTC may take
conflicting actions with respect to other undivided interests to the extent
that such actions are taken on behalf of DTC Participants whose holdings
include such undivided interests.
Neither US Airways nor the Trustee will have any liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in the Certificates held by Cede, as nominee for DTC,
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests or for the performance by DTC, any DTC
Participant or any Indirect Participant of their respective obligations
under the rules and procedures governing their obligations.
The information contained in this Prospectus concerning DTC and its
book entry system has been obtained from sources US Airways believes to be
reliable, but US Airways takes no responsibility for the accuracy thereof.
Same-Day Settlement and Payment
As long as the Certificates are registered in the name of DTC or its
nominee, all payments made by US Airways to the Loan Trustee under any
Lease or any Owned Aircraft Indenture will be in immediately available
funds. Such payments, including the final distribution of principal with
respect to the Certificates of any Trust, will be passed through to DTC in
immediately available funds.
Any Certificates registered in the name of DTC or its nominee, will
trade in DTC's Same-Day Funds Settlement System until maturity, and
secondary market trading activity in the Certificates will therefore be
required by DTC to settle in immediately available funds. No assurance can
be given as to the effect, if any, of settlement in same-day funds
on trading activity in the Certificates.
Definitive Certificates
Class C Certificates will be issued in certificated form ("Definitive
Certificates") to respective Certificate Owners or their nominees, rather
than to DTC or its nominee, only if (i) US Airways advises the Class C
Trustee in writing that DTC is no longer willing or able to discharge
properly its responsibilities as depository with respect to such Class C
Certificates and US Airways is unable to locate a qualified successor, (ii)
US Airways, at its option, elects to terminate the book-entry system
through DTC or (iii) after the occurrence of certain events of default,
Certificate Owners with fractional undivided interests aggregating not less
than a majority in interest in the Class C Trust advise the Class C
Trustee, US Airways and DTC through DTC Participants in writing that the
continuation of a book-entry system through DTC (or a successor thereto) is
no longer in such Certificate Owners' best interest. Upon the occurrence of
any event described in the immediately preceding sentence, the Class C
Trustee will be required to notify all such Certificate Owners through DTC
Participants of the availability of Definitive Certificates. Upon surrender
by DTC of the certificates representing the Class C Certificates and
receipt of instructions for re-registration, the Class C Trustee will
reissue the Class C Certificates as Definitive Certificates to such
Certificate Owners.
Distributions of principal, premium, if any, and interest with respect
to the Class C Certificates will thereafter be made by the Class C Trustee
directly in accordance with the procedures set forth in the Basic Agreement
and the Class C Trust Supplement, to holders in whose names the Definitive
Certificates were registered at the close of business on the applicable
record date. Such distributions will be made by check mailed to the address
of such holder as it appears on the register maintained by the Class C
Trustee. The final payment on any Class C Certificate, however, will be
made only upon presentation and surrender of such # ? Class C Certificate
at the office or agency specified in the notice of final distribution to
such Certificateholders.
Definitive Certificates will be freely transferable and exchangeable
at the office of the Class C Trustee upon compliance with the requirements
set forth in the Basic Agreement and the Class C Trust Supplement. No
service charge will be imposed for any registration of transfer or
exchange, but payment of a sum sufficient to cover any tax or other
governmental charge will be required.
Holders of Old Class C Certificates who do not exchange such Old Class
C Certificates for New Class C Certificates shall be subject to additional
transfer restrictions with respect to such Old Class C Certificates as set
forth in the Class C Trust Supplement.
DESCRIPTION OF THE DEPOSIT AGREEMENTS
The following is a description of the particular terms of the Deposit
Agreements. The statements under this caption are summaries and do not
purport to be complete and are qualified in their entirety by reference to
all of the provisions of the Deposit Agreements. The Deposit Agreements
relating to the Class A and Class B Certificates were filed with the
Commission as exhibits to US Airways' Current Report on Form 8-K on
December 29, 1998. The Deposit Agreement relating to the Class C
Certificates was filed with the Commission on February 26, 1999 as an
exhibit to US Airways' Registration Statement on Form S-4. The provisions
of the Deposit Agreements are substantially identical except as otherwise
indicated.
General
Pursuant to the Escrow Agreements, the Escrow Agent with respect to
each Trust has entered into a separate Deposit Agreement with the
applicable Depositary. Pursuant to the deposit agreements between the
Escrow Agent and the applicable Depositary (the "Deposit Agreements"), the
Depositaries have established separate accounts in the name of the Escrow
Agent (each such account, a "Deposit Account"). On the Issuance Date, that
portion of the proceeds not paid to the Trustees to be used for the
purchase of Equipment Notes relating to Initial Delivered Aircraft was
deposited (each, a "Deposit") into the Deposit Accounts by the Underwriters
(or, in the case of the Class C Certificates, by the Initial Purchaser), in
each case, on behalf of such Escrow Agent.
On each Regular Distribution Date the applicable Depositary will pay
to the Paying Agent on behalf of the applicable Escrow Agent, for
distribution to the holders of Escrow Receipts relating to the applicable
Trust, an amount equal to interest accrued on the Deposits relating to such
Trust during the relevant interest period at a rate per annum equal to the
interest rate applicable to the Certificates issued by such Trust.
In connection with the financing of each Airbus aircraft delivered
during the Delivery Period, the Trustee for each of the Trusts will request
that the Escrow Agent relating to the applicable Trust withdraw from the
Deposits relating to the applicable Trust funds sufficient to enable the
Trustee of such Trust to purchase the Equipment Note of the series
applicable to such Trust issued with respect to such Aircraft. Accrued but
unpaid interest on all such Deposits withdrawn will be paid on the next
Regular Distribution Date. Any portion of any Deposit withdrawn which is
not used to purchase such Equipment Note will be re-deposited by each
Trustee into an account relating to the applicable Trust.
The Deposits relating to the Trusts and interest paid thereon will not
be subject to the subordination provisions of the Intercreditor Agreement
and will not be available to pay any other amount in respect of the
Certificates.
Unused Deposits
The Trustees' obligations to purchase the Equipment Notes issued with
respect to each Aircraft are subject to satisfaction of certain conditions
at the time of delivery, as set forth in the Note Purchase Agreement and
the Participation Agreements. See "Description of the
Certificates--Obligation to Purchase Equipment Notes." Since the Aircraft
are scheduled for delivery from time to time during the Delivery Period, no
assurance can be given that all such conditions will be satisfied at the
time of delivery for each Aircraft. Moreover, since the Aircraft will be
newly manufactured, their delivery as scheduled is subject to delays in the
manufacturing process and to the Aircraft manufacturer's right to postpone
deliveries under the purchase agreement between its affiliate and US
Airways. See "Description of the Aircraft and Appraisals--Deliveries of
Aircraft." Depending on the circumstances of the financing of each
Aircraft, the maximum aggregate principal amount of Equipment Notes may not
be issued. In addition, so long as AIFS holds any Class C Certificates the
conditions to the obligations of the Class C Trustee to purchase the Series
C Equipment Notes differ from those applicable to the Series A and Series B
Equipment Notes. See "Description of the Certificates--Obligation to
Purchase Equipment Notes." If for any Aircraft the conditions to the Class
A and Class B Trustees' obligation to purchase Series A and Series B
Equipment Notes are satisfied, but the conditions to the Class C Trustee's
purchase of Series C Equipment Notes are not, US Airways will be obligated
to finance such Aircraft, but such financing may not include Series C
Equipment Notes. US Airways believes that, as of the date of this
Prospectus, AIFS does not own any Class C Certificates.
If any funds remain as Deposits with respect to any Trust at the end
of the Delivery Period or, if earlier, upon the acquisition by such Trusts
of the Equipment Notes with respect to all of the Aircraft (the "Delivery
Period Termination Date") or, in the case of Deposits relating to the Class
C Certificates, upon the occurrence of a termination event under the
Aircraft Financing Letter Agreement, dated as of October 31, 1997, between
AVSA and US Airways, such funds will be withdrawn by the Escrow Agent and
distributed, with accrued and unpaid interest thereon to the holders of
Escrow Receipts relating to the respective Trust after at least 15 days'
prior written notice. Such distribution will include, in the case of
Deposits relating to the Class A and Class B Certificates, a premium
payable by US Airways equal to the Deposit Make-Whole Premium with respect
to the remaining Deposits applicable to each such Trust, provided that no
Deposit Make-Whole Premium will be payable with respect to unused Deposits
attributable 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. In the case of Deposits relating to the Class
C Certificates, such distribution will include a premium payable by US
Airways equal to the Deposit Make-Whole Premium with respect to the
remaining Deposits applicable to the Class C Trust, except that the Deposit
Make-Whole Premium will be payable only to the extent the remaining
Deposits applicable to the Class C Trust exceeds the Par Redemption Amount
and will not be payable in respect of a Non-Premium Amount.
"Deposit Make-Whole Premium" means, with respect to the distribution
of unused Deposits to holders of any Class of Certificates, as of any date
of determination, an amount 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 date of
issuance of the Certificates).
"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.
"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.
Distribution upon Occurrence of a Triggering Event
If a Triggering Event occurs prior to the Delivery Period Termination
Date, the Escrow Agent for the Trusts will withdraw any funds then held as
Deposits with respect to such Trusts and cause such funds, with accrued and
unpaid interest thereon but without any premium, to be distributed to the
holders of Escrow Receipts relating to such Trusts by the Paying Agent on
behalf of the Escrow Agent, after at least 15 days' prior written notice.
Accordingly, if a Triggering Event occurs prior to the Delivery Period
Termination Date, the Trusts will not acquire Equipment Notes issued with
respect to Aircraft delivered after the occurrence of such Triggering
Event.
Distribution upon Occurrence of a Termination Event
If an event occurs that entitles the Airbus affiliate that is a party
to the Airbus Financing Commitment to terminate its commitment to US
Airways (an "Airbus Financing Termination Event") at a time when AIFS holds
any of the Class C Certificates, the Escrow Agent for the Class C Trust
will withdraw funds then held as Deposits with respect to the Class C Trust
and cause such funds, with accrued and unpaid interest thereon but without
any premium, to be distributed to the holders of Escrow Receipts relating
to such Trust by the Paying Agent, on behalf of the Escrow Agent, after at
least 15 days' prior written notice. So long as no Triggering Event has
occurred, Aircraft delivered from and after the time an Airbus Financing
Termination Event has occurred may still be financed but no Series C
Equipment Notes will be issued in respect of such Aircraft.
Depositaries
Credit Suisse First Boston ("CSFB"), New York branch, is acting as
"Depositary" for each of the Class A and Class B Certificates. Citibank,
N.A. ("Citibank"), is acting as "Depositary" for the Class C Certificates.
Credit Suisse First Boston
Credit Suisse First Boston, part of the Credit Suisse Group, has total
consolidated assets of approximately Sfr 453 billion ($315 billion) and
total consolidated shareholders' equity of approximately Sfr 11.3 billion
($7.8 billion), in each case as of December 31, 1997. Credit Suisse First
Boston's registered head office is in Zurich, Switzerland.
CSFB has long-term senior unsecured debt ratings of A1 from Moody's
and AA from Standard & Poor's and short-term unsecured debt ratings of P-1
from Moody's and A-1+ from Standard & Poor's.
CSFB's New York branch has executive offices at Eleven Madison Avenue,
New York, New York 10010, (212) 325-9000. A copy of the Annual Report of
CSFB for the year ended December 31, 1997 may be obtained from CSFB by
delivery of a written request to its New York branch, Attention: Corporate
Affairs.
Citibank
Citibank is a wholly-owned subsidiary of Citicorp (a Delaware
corporation) and is Citicorp's principal subsidiary. (Citicorp has been a
wholly-owned subsidiary of Citigroup Inc., a Delaware holding company
formerly known as Travelers Group Inc. ("Travelers"), since October 8,
1998, when Citicorp merged with a wholly-owned subsidiary of Travelers.) As
of September 30, 1998, the total assets of Citibank and its consolidated
subsidiaries represented more than 80% of the total assets of Citicorp and
its consolidated subsidiaries.
Citibank has long-term unsecured debt ratings of Aa2 from Moody's and
AA- from Standard & Poor's and short-term unsecured debt ratings of P-1
from Moody's and A-1+ from Standard & Poor's.
The Consolidated Balance Sheets of Citibank as of December 31, 1997
and as of December 31, 1996 are set forth in the Annual Report and Form
10-K of Citicorp and its subsidiaries for the year ended December 31, 1997
and as of September 30, 1998 and December 31, 1997 are set forth in the
Financial Review and Form 10-Q for the quarter ended September 30, 1998.
Copies of such reports are available upon request, without charge, by
writing or calling Citicorp Corporate Affairs Distribution, 850 Third
Avenue, 13th Floor, New York, New York, 10043, (212) 559-0233.
DESCRIPTION OF THE ESCROW AGREEMENTS
The following is a description of the particular terms of the escrow
and paying agent agreements (the "Escrow Agreements"). The statements under
this caption are summaries only and do not purport to be complete and are
qualified in their entirety by reference to all of the provisions of the
Escrow Agreements. The Escrow Agreements relating to the Class A and Class
B Certificates were filed with the Commission as exhibits to US Airways'
Current Report on Form 8-K on December 29, 1998. The Escrow Agreement
relating to the Class C Certificates was filed with the Commission on
February 26, 1999 as an exhibit to US Airways' Registration Statement on
Form S-4. The provisions of the Escrow Agreements are substantially
identical except as otherwise indicated. Five additional Aircraft were
delivered after the Initial Delivered Aircraft and the applicable amounts
were withdrawn from escrow to finance such Aircraft.
First Security Bank, National Association, as escrow agent in respect
of the Trusts (the "Escrow Agent"), State Street Bank and Trust Company, as
paying agent on behalf of the Escrow Agent in respect of each such Trust
(the "Paying Agent"), the Trustee of each of the Trusts and the
Underwriters (in the case of the Class A and Class B Trusts) or the Initial
Purchaser (in the case of the Class C Trust) have entered into a separate
Escrow Agreement for the benefit of the Certificateholders of each such
Trust as holders of the Escrow Receipts affixed thereto (in such capacity,
a "Receiptholder"). That portion of the cash proceeds of the offering of
Certificates not paid to the Trustees for the purchase of Equipment Notes
relating to Initial Delivered Aircraft was deposited by the Underwriters or
the Initial Purchaser, as applicable, on behalf of the Escrow Agent (for
the benefit of Receiptholders) with the applicable Depositary as Deposits
relating to such Trusts.
Each Escrow Agent will permit the Trustee of the related Trust to
cause funds to be withdrawn from such Deposits on or prior to the Delivery
Period Termination Date to such Trustee to purchase the related Equipment
Notes pursuant to the Note Purchase Agreement. In addition, the Escrow
Agent will direct the applicable Depositary to pay interest on the Deposits
accrued in accordance with the Deposit Agreement to the Paying Agent for
distribution to the Receiptholders.
Each Escrow Agreement requires that the Paying Agent establish and
maintain, for the benefit of the related Receiptholders, one or more Paying
Agent Account(s), which are non-interest-bearing. The Paying Agent will
deposit interest on Deposits and any unused Deposits withdrawn by the
Escrow Agent in the related Paying Agent Account. The Paying Agent will
distribute these amounts on a Regular Distribution Date or Special
Distribution Date, as appropriate.
The Escrow Agent has issued one or more escrow receipts ("Escrow
Receipts") which will be affixed by the relevant Trustee to each
Certificate. Each Escrow Receipt evidences a fractional undivided interest
in amounts from time to time deposited into the Paying Agent Account and is
limited in recourse to amounts deposited into such account. An Escrow
Receipt may not be assigned or transferred except in connection with the
assignment or transfer of the Certificate to which it is affixed. In
connection with the Exchange Offer, each Escrow Receipt attached to an Old
Class C Certificate (an "Old Escrow Receipt") will be exchanged for an
Escrow Receipt attached to a New Class C Certificate (a "New Escrow
Receipt") that will be identical in all material respects to the Old Escrow
Receipt. Each Escrow Receipt will be registered by the Escrow Agent in the
same name and manner as the Certificate to which it is affixed.
DESCRIPTION OF THE LIQUIDITY FACILITIES
The following is a description of the particular terms of the
Liquidity Facilities. The statements under this caption are summaries and
do not purport to be complete and are qualified in their entirety by
reference to all of the provisions of the Liquidity Facilities and the
Intercreditor Agreement, each of which was filed with the Commission as an
exhibit to US Airways' Current Report on Form 8-K on December 29, 1998. The
provisions of the Liquidity Facilities are substantially identical except
as otherwise indicated.
General
The Liquidity Provider has entered into a separate revolving credit
agreement with the Subordination Agent (each, a "Liquidity Facility") with
respect to the Certificates of each Trust pursuant to which the Liquidity
Provider will make one or more advances to the Subordination Agent that
will be used solely to pay interest on such Certificates when due, subject
to certain limitations. The Liquidity Facility for each Trust is intended
to enhance the likelihood of timely receipt by the Certificateholders of
such Trust of the interest payable on the Certificates of such Trust at the
Stated Interest Rate therefor on up to three consecutive semiannual Regular
Distribution Dates. If interest payment defaults occur which exceed the
amount covered by or available under the Liquidity Facility for a Trust,
the Certificateholders of such Trust will bear their allocable share of the
deficiencies to the extent that there are no other sources of funds.
Although ABN AMRO is the initial Liquidity Provider for each Trust, ABN
AMRO may be replaced by one or more other entities with respect to the
Trusts under certain circumstances. Therefore, the liquidity providers for
the Trusts may differ.
Drawings
The aggregate amount available under the Liquidity Facilities for each
Trust at January 30, 2000, the first Regular Distribution Date after the
scheduled Delivery Period Termination Date, assuming that Equipment Notes
in the maximum principal amount with respect to all Aircraft are acquired
by the Trusts and that all interest and principal due on or prior to
January 30, 2000, is paid, is $37,656,437, $8,961,341, and $14,461,742,
respectively.
Except as otherwise provided below, the Liquidity Facility for each
Trust enables the Subordination Agent to make interest drawings ("Interest
Drawings") thereunder on any Regular Distribution Date to pay interest then
due and payable on the Certificates of such Trust at the Stated Interest
Rate for such Trust to the extent that the amount, if any, available to the
Subordination Agent on such Regular Distribution Date is not sufficient to
pay such interest. The maximum amount available to be drawn under a
Liquidity Facility with respect to any Trust on any Regular Distribution
Date to fund any shortfall of interest on Certificates of such Trust will
not exceed the then Maximum Available Commitment under such Liquidity
Facility. The "Maximum Available Commitment" at any time under each
Liquidity Facility is an amount equal to the then Required Amount of such
Liquidity Facility less the aggregate amount of each Interest Drawing
outstanding under such Liquidity Facility at such time, provided that
following a Downgrade Drawing, a Final Drawing or a Non-Extension Drawing
under a Liquidity Facility, the Maximum Available Commitment under such
Liquidity Facility will be zero.
"Required Amount" means, for any day and with respect to any Trust,
the sum of the aggregate amount of interest, calculated at the Stated
Interest Rate applicable to the Certificates issued by such Trust, that
would be payable on such 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
Regular Distribution Dates, in each case calculated based on the Pool
Balance for such Class on such day and without regard to payments of
principal on such Certificates.
The Liquidity Facility for any Class of Certificates does not provide
for drawings thereunder to pay for principal of or premium on the
Certificates of such Class or any interest on the Certificates of such
Class in excess of the Stated Interest Rate for such Class or more than
three semiannual installments of interest thereon or principal of or
interest or premium on the Certificates of any other Class. (Liquidity
Facilities, Section 2.02; Intercreditor Agreement, Section 3.6) In
addition, the Liquidity Facility with respect to each Trust does not
provide for drawings thereunder to pay any amounts payable with respect to
the Deposits relating to such Trust. The Liquidity Facility with respect to
the Class C Trust does not cover amounts payable by US Airways as
liquidated damages under the Registration Agreement.
Each payment by the Liquidity Provider will reduce by the same amount
the Maximum Available Commitment under such Liquidity Facility, subject to
reinstatement as hereinafter described. With respect to any Interest
Drawings under a Liquidity Facility, upon reimbursement of the Liquidity
Provider in full for the amount of such Interest Drawings plus interest
thereon, the Maximum Available Commitment under such Liquidity Facility
will be reinstated to an amount not to exceed the then Required Amount of
such Liquidity Facility; provided, however, that such Liquidity Facility
will not be so reinstated at any time if (i) a Liquidity Event of Default
has occurred and is continuing and (ii) less than 65% of the then aggregate
outstanding principal amount of all Equipment Notes are Performing
Equipment Notes. With respect to any other drawings under such Liquidity
Facility, amounts available to be drawn thereunder are not subject to
reinstatement. Following the reduction of the Pool Balance for the
applicable Trust, the Maximum Commitment of the Liquidity Facility for such
Trust will be automatically reduced from time to time to an amount equal to
the Required Amount for such Trust. (Liquidity Facilities, Section 2.04(a))
"Performing Equipment Note" means an Equipment Note with respect to
which no payment default has occurred and is continuing (without giving
effect to any acceleration); provided that if a bankruptcy proceeding is
commenced involving US Airways under the U.S. Bankruptcy Code, (a) any
payment default existing during the 60-day period under Section
1110(a)(1)(A) of the U.S. Bankruptcy Code (or such longer period as may
apply under Section 1110(b) of the U.S. Bankruptcy Code) (the "Section 1110
Period") will 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 Owned
Aircraft Indenture related to such Equipment Note (in the case of an Owned
Aircraft), and (b) any payment default occurring after the date of the
order of relief in such proceeding will not be taken into consideration if
such payment default is cured under Section 1110(a)(1)(B) of the U.S.
Bankruptcy Code before the later of 30 days after the date of such default
or the expiration of the Section 1110 Period. (Intercreditor Agreement,
Section 1.1)
If at any time the short-term unsecured debt rating of the Liquidity
Provider for any Trust then issued by either Rating Agency is lower than
the Threshold Rating applicable to such Trust, the Liquidity Facility
provided by such Liquidity Provider may be replaced by a Replacement
Facility. If such Liquidity Facility is not replaced with a Replacement
Facility within 10 days after notice of the downgrading and as otherwise
provided in the Intercreditor Agreement, the Subordination Agent will draw
the then Maximum Available Commitment under such Liquidity Facility (the
"Downgrade Drawing"). The Subordination Agent will deposit the proceeds of
any Downgrade Drawing in a cash collateral account (the "Cash Collateral
Account") for such Class of Certificates and will use these proceeds for
the same purposes and under the same circumstances and subject to the same
conditions as cash payments of Interest Drawings under such Liquidity
Facility would be used. (Liquidity Facilities, Section 2.02(c);
Intercreditor Agreement, Section 3.6(c))
A "Replacement Facility" for any Liquidity Facility means an
irrevocable liquidity facility (or liquidity facilities) in substantially
the form of the replaced Liquidity Facility, including reinstatement
provisions, or in such other form (which may include a letter of credit) as
will permit the Rating Agencies to confirm in writing their respective
ratings then in effect for the Certificates (before 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 that are equal to or higher than the Threshold Rating for the
relevant Class. (Intercreditor Agreement, Section 1.1) The provider of any
Replacement Facility will have the same rights (including, without
limitation, priority distribution rights and rights as "Controlling Party")
under the Intercreditor Agreement as the replaced initial Liquidity
Provider.
"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.
The Liquidity Facility for each Trust provides that the relevant
Liquidity Provider's obligations thereunder will expire on the earliest of:
o 364 days after the Issuance Date.
o The date on which the Subordination Agent delivers to such
Liquidity Provider a certification that all of the Certificates of
such Trust have been paid in full.
o The date on which the Subordination Agent delivers to such
Liquidity Provider a certification that a Replacement Facility has
been substituted for such Liquidity Facility.
o The fifth Business Day following receipt by the Subordination
Agent of a Termination Notice from such Liquidity Provider (see
"--Liquidity Events of Default").
o The date on which no amount is or may (by reason of reinstatement)
become available for drawing under such Liquidity Facility.
o The date on which the Liquidity Provider honors a Downgrade
Drawing, a Non-Extension Drawing or a Final Drawing. (Liquidity
Facilities, Sections 1.01 and 2.04(b)).
Each Liquidity Facility provides that the scheduled expiration date thereof
may be extended for additional 364-day periods by mutual agreement.
The Intercreditor Agreement provides for the replacement of any
Liquidity Facility for any Trust if it is scheduled to expire earlier than
15 days after the Final Maturity Date for the Certificates of such Trust if
such Liquidity Facility is not extended at least 25 days prior to its then
scheduled expiration date. If such Liquidity Facility is not so extended or
replaced by the 25th day prior to its then scheduled expiration date, the
Subordination Agent will draw its then Maximum Available Commitment (the
"Non-Extension Drawing"). The Subordination Agent will deposit the proceeds
of the Non-Extension Drawing in the Cash Collateral Account for the related
Class of Certificates as cash collateral to be used for the same purposes
and under the same circumstances, and subject to the same conditions, as
cash payments of Interest Drawings under such Liquidity Facility would be
used. (Liquidity Facilities, Section 2.02(b); Intercreditor Agreement,
Section 3.6(d))
Subject to certain limitations, US Airways may, at its option, arrange
for a Replacement Facility at any time to replace any Liquidity Facility
for any Trust (including without limitation any Replacement Facility
described in the following sentence). In addition, any Liquidity Provider
may, at its option, arrange for a Replacement Facility (i) to replace a
non-extended Liquidity Facility during the period no earlier than 40 days
and no later than 25 days prior to the then scheduled expiration date of
such Liquidity Facility or (ii) after the short-term unsecured debt rating
of the Liquidity Provider is downgraded below the applicable Threshold
Rating (Intercreditor Agreement, Section 3.6(c) and (e)). If any
Replacement Facility is provided at any time after a Downgrade Drawing or a
Non-Extension Drawing under any Liquidity Facility, the funds with respect
to such Liquidity Facility on deposit in the Cash Collateral Account for
such Trust will be returned to the Liquidity Provider being replaced.
(Intercreditor Agreement, Section 3.6(f))
Upon receipt by the Subordination Agent of a Termination Notice with
respect to any Liquidity Facility from the applicable Liquidity Provider,
the Subordination Agent will request a final drawing ("Final Drawing")
under such Liquidity Facility in an amount equal to the then Maximum
Available Commitment thereunder. The Subordination Agent will hold the
proceeds of such Final Drawing in the Cash Collateral Account for the
related Trust as cash collateral to be used for the same purposes and under
the same circumstances, and subject to the same conditions, as cash
payments of Interest Drawings under such Liquidity Facility would be used.
(Liquidity Facilities, Section 2.02(d); Intercreditor Agreement, Section
3.6(i))
Reimbursement of Drawings
The Subordination Agent must reimburse amounts drawn under any
Liquidity Facility by reason of an Interest Drawing, Final Drawing,
Downgrade Drawing or Non-Extension Drawing and interest thereon, but only
to the extent that the Subordination Agent has funds available therefor.
Interest Drawings and Final Drawings
Amounts drawn by reason of an Interest Drawing or Final Drawing will
be immediately due and payable, together with interest on the amount of
such drawing. From the date of each such drawing to (but excluding) the
third business day following the applicable Liquidity Provider's receipt of
the notice of such Interest Drawing, interest will accrue at the Base Rate
plus 2.00% per annum. Thereafter, interest will accrue at LIBOR for the
applicable interest period plus 2.00% per annum. In the case of the Final
Drawing, however, the Subordination Agent may (x) convert the Final Drawing
into a drawing bearing interest at the Base Rate plus 2.00% per annum on
the last day of an Interest Period for such Drawing or (y) elect to
maintain the Final Drawing as a drawing bearing interest at the Base Rate
plus 2.00% per annum.
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum is 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
applicable Liquidity Provider from three Federal funds brokers of
recognized standing selected by it, plus (b) one quarter of one percent
(0.25%) per annum.
"LIBOR" means, with respect to any interest period, (i) the rate per
annum appearing on display page 3750 (British Bankers Association--LIBOR)
of the Dow Jones Markets Service (or any successor or substitute therefor)
at approximately 11:00 A.M. (London time) two business days before the
first day of such interest period, as the rate for dollar deposits with a
maturity comparable to such interest period, or (ii) if the rate calculated
pursuant to clause (i) above is not available, the average (rounded
upwards, if necessary, to the next 1/16 of 1%) of the rates per annum at
which deposits in dollars are offered for the relevant interest period by
three banks of recognized standing selected by the applicable 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.
Downgrade Drawings and Non-Extension Drawings
The amount drawn under any Liquidity Facility by reason of a Downgrade
Drawing or a Non-Extension Drawing will be treated as follows:
o Such amount will be released on any Distribution Date to the
applicable Liquidity Provider to the extent that such amount
exceeds the Required Amount.
o Any portion of such amount withdrawn from the Cash Collateral
Account for such Certificates to pay interest on such Certificates
will be treated in the same way as Interest Drawings.
o The balance of such amount will be invested in Eligible Investments.
Any Downgrade Drawing or Non-Extension Drawing under any of the
Liquidity Facilities, other than any portion thereof applied to the payment
of interest on the Certificates, will bear interest as follows: (x) for any
Non-Extension Drawing at a rate equal to LIBOR for the applicable Interest
Period plus 0.45% per annum; and (y) for any Downgrade Drawing at a rate
equal to LIBOR for the applicable Interest Period plus (i) 0.45% per annum
for the first year after such drawing and (ii) 1.00% per annum thereafter
in the case of the Class A Liquidity Facility or 0.75% per annum thereafter
in the case of the Class B and Class C Liquidity Facilities.
Liquidity Events of Default
Events of Default under each Liquidity Facility (each, a "Liquidity
Event of Default") consist of:
o The acceleration of all the Equipment Notes (provided, that if
such acceleration occurs during the Delivery Period, the aggregate
principal amount thereof exceeds $300 million).
o Certain bankruptcy or similar events involving US Airways.
(Liquidity Facilities, Section 1.01)
If any Liquidity Event of Default under any Liquidity Facility has
occurred and is continuing and less than 65% of the aggregate outstanding
principal amount of all Equipment Notes are Performing Equipment Notes, the
applicable Liquidity Provider may, in its discretion, give a notice of
termination of such Liquidity Facility (a "Termination
Notice"). The Termination Notice will have the following consequences:
o The related Liquidity Facility will expire on the fifth Business
Day after the date on which such Termination Notice is received by
the Subordination Agent.
o The Subordination Agent will promptly request, and the applicable
Liquidity Provider will make, a Final Drawing thereunder in an
amount equal to the then Maximum Available Commitment thereunder.
o Any Drawing remaining unreimbursed as of the date of termination
will be automatically converted into a Final Drawing under such
Liquidity Facility.
o All amounts owing to the applicable Liquidity Provider
automatically will be accelerated.
Notwithstanding the foregoing, the Subordination Agent will be
obligated to pay amounts owing to the applicable Liquidity Provider only to
the extent of funds available therefor after giving effect to the payments
in accordance with the provisions set forth under "Description of the
Intercreditor Agreement--Priority of Distributions." (Liquidity Facilities,
Section 6.01) Upon the circumstances described below under "Description of
the Intercreditor Agreement--Intercreditor Rights--Controlling Party," a
Liquidity Provider may become the Controlling Party with respect to the
exercise of remedies under the Indentures. (Intercreditor Agreement,
Section 2.6(c))
Liquidity Provider
The initial liquidity provider (the "Liquidity Provider") is ABN AMRO
Bank N.V., a bank organized under the laws of the Netherlands, acting
through its Chicago branch ("ABN AMRO"). ABN AMRO Bank N.V. has short-term
debt ratings of P-1 from Moody's and A-1+ from Standard & Poor's.
DESCRIPTION OF THE INTERCREDITOR AGREEMENT
The following is a description of the particular terms of the
Intercreditor Agreement. The statements under the caption are summaries and
do not purport to be complete and are qualified in their entirety by
reference to all of the provisions of the Intercreditor Agreement, which
was filed with the Commission as an exhibit to US Airways' Current Report
on Form 8-K on December 29, 1998.
Intercreditor Rights
General
The Intercreditor Agreement is among each Trustee, the Liquidity
Provider and the Subordination Agent (the "Intercreditor Agreement"). The
Equipment Notes will be registered in the name of the Subordination Agent
or its nominee as agent and trustee for the applicable Trustee solely for
the purpose of facilitating the enforcement of the other provisions of the
Intercreditor Agreement.
Controlling Party
With respect to any Indenture at any given time, the Loan Trustee
under such Indenture will be directed in taking, or refraining from taking,
any action under such Indenture or with respect to the Equipment Notes
issued under such Indenture, by the holders of at least a majority of the
outstanding principal amount of the Equipment Notes issued under such
Indenture, so long as no Indenture Default (which, with respect to Leased
Aircraft, has not been cured by the applicable Owner Trustee or Owner
Participant) has occurred and is continuing under such Indenture. For so
long as the Subordination Agent is the registered holder of the Equipment
Notes, the Subordination Agent will act with respect to the preceding
sentence in accordance with the directions of the Trustees for whom the
Equipment Notes issued under such Indenture are held as Trust Property, to
the extent constituting, in the aggregate, directions with respect to the
required principal amount of Equipment Notes. (Intercreditor Agreement,
Section 2.6(a))
At any time an Indenture Default has occurred and is continuing under
an Indenture (which, with respect to Leased Aircraft, has not been cured by
the applicable Owner Trustee or Owner Participant), the Loan Trustee under
such Indenture will be directed in taking, or refraining from taking, any
action thereunder or with respect to the Equipment Notes issued under the
related Indenture, including acceleration of such Equipment Notes or
foreclosing the lien on the related Aircraft, by the Controlling Party,
subject to the limitations described below. (Intercreditor Agreement,
Section 2.6(a)) Notwithstanding the foregoing, no amendment, modification,
consent or waiver will, without the consent of each Liquidity Provider,
reduce the amount of rent, supplemental rent or termination 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 Owned
Aircraft Indenture. (Intercreditor Agreement, Section 9.1(b)). See
"Description of the Certificates--Indenture Defaults and Certain Rights
Upon an Indenture Default" for a description of the rights of the
Certificateholders of each Trust to direct the respective Trustees.
The "Controlling Party" will be:
o The Class A Trustee.
o Upon payment of Final Distributions to the holders of Class A
Certificates, the Class B Trustee.
o Upon payment of Final Distributions to the holders of Class B
Certificates, the Class C Trustee.
o Under certain circumstances, and notwithstanding the foregoing,
the Liquidity Providers holding a majority in interest of
unreimbursed Liquidity Obligations, as discussed in the next
paragraph. (Intercreditor Agreement, Section 2.6(b))
At any time after 18 months from the earliest to occur of (x) the date
on which the entire available amount under any Liquidity Facility has been
drawn (for any reason other than a Downgrade Drawing or a Non-Extension
Drawing) and remains unreimbursed, (y) the date on which the entire amount
of any Downgrade Drawing or Non-Extension Drawing has been withdrawn from
the relevant Cash Collateral Account to pay interest on the relevant Class
of Certificates and remains unreimbursed and (z) the date on which all
Equipment Notes have been accelerated (provided that if such acceleration
occurs prior to the Delivery Period Termination Date, the aggregate
principal amount thereof exceeds $300 million), the Liquidity Providers
holding a majority in interest of the unreimbursed Liquidity Obligations
will have the right to become the Controlling Party with respect to any
Indenture. (Intercreditor Agreement, Section 2.6(c))
For purposes of giving effect to the rights of the Controlling Party,
the Trustees (other than the Controlling Party) irrevocably agree, and the
Certificateholders (other than the Certificateholders represented by the
Controlling Party) are deemed to agree by virtue of their purchase of
Certificates, that the Subordination Agent, as record holder of the
Equipment Notes, will exercise its voting rights in respect of the
Equipment Notes as directed by the Controlling Party. (Intercreditor
Agreement, Section 2.6(b)) For a description of certain limitations on the
Controlling Party's rights to exercise remedies, see "Description of the
Equipment Notes--Remedies."
"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
payable, if any, on 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 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) will be added to the amount of such Final
Distributions (Intercreditor Agreement, Section 1.1).
Sale of Equipment Notes or Aircraft
Upon the occurrence and during the continuation of any Indenture
Default under any Indenture, the Controlling Party will be entitled to
accelerate and, subject to the provisions of the immediately following
sentence, sell all (but not less than all) of the Equipment Notes issued
under such Indenture to any person. So long as any Certificates are
outstanding, during nine months after the earlier of (x) the acceleration
of the Equipment Notes under any Indenture or (y) the bankruptcy or
insolvency of US Airways, without the consent of each Trustee, 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. In addition, with respect
to any Leased Aircraft, the amount and payment dates of rentals payable by
US Airways under the Lease for such Leased 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. (Intercreditor Agreement, Section 4.1)
"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 (x) 75% of the Appraised Current Market Value of such Aircraft and (y)
the aggregate outstanding principal amount of such Equipment Notes, plus
accrued and unpaid interest thereon. (Intercreditor Agreement, Section 1.1)
Priority of Distributions
Before a Triggering Event
So long as no Triggering Event has occurred, the payments in respect
of the Equipment Notes and certain other payments received on any
Distribution Date will be promptly distributed by the Subordination Agent
on such Distribution Date in the following order of priority:
o to the Liquidity Provider to the extent required to pay the
Liquidity Expenses;
o to the Liquidity Provider to the extent required to pay interest
accrued on the Liquidity Obligations;
o to the Liquidity Provider to the extent required to pay or
reimburse the Liquidity Provider for the Liquidity Obligations
(other than amounts payable pursuant to the two preceding clauses)
and/or, if applicable, to replenish each Cash Collateral Account
up to the Required Amount;
o to the Class A Trustee to the extent required to pay Expected
Distributions on the Class A Certificates;
o to the Class B Trustee to the extent required to pay Expected
Distributions on the Class B Certificates;
o to the Class C Trustee to the extent required to pay Expected
Distributions on the Class C Certificates; and
o to the Subordination Agent and each Trustee for the payment of
certain fees and expenses.
"Liquidity Expenses" means the Liquidity Obligations other than any
interest accrued thereon or the principal amount of any drawing under the
Liquidity Facilities.
"Liquidity Obligations" means all principal, interest, fees and other
amounts owing to the Liquidity Providers under the Liquidity Facilities or
certain other agreements.
"Expected Distributions" means, with respect to the Certificates of
any Trust on any Distribution Date (the "Current Distribution Date"), the
sum of (1) accrued and unpaid interest on such Certificates (excluding
interest, if any, payable with respect to the Deposits relating to such
Trust) and (2) 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, upon redemption, prepayment, purchase,
acceleration or otherwise) and such payments have been distributed to
the holders of such Certificates and (ii) the principal of any
Equipment Notes formerly held in such Trust that have been sold
pursuant to the Intercreditor Agreement 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). (Intercreditor
Agreement, Section 1.1)
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 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 such Expected
Distributions.
For purposes of determining the priority of distributions on account
of the redemption, purchase or prepayment of all of the Equipment Notes
issued pursuant to an Indenture, clause (1) of the definition of Expected
Distributions is deemed to read as follows: "(1) accrued, due and unpaid
interest on such Certificates (excluding interest, if any, payable with
respect to the Deposits relating to such Trust) together with (without
duplication) accrued and unpaid interest on a portion of such Certificates
equal to the outstanding principal amount of the Equipment Notes being
redeemed, purchased or prepaid (immediately prior to such Redemption,
purchase or prepayment)."
After a Triggering Event
Subject to the terms of the Intercreditor Agreement, upon the
occurrence of a Triggering Event and at all times thereafter, all funds
received by the Subordination Agent in respect of the Equipment Notes and
certain other payments will be promptly distributed by the Subordination
Agent in the following order of priority:
o to the Subordination Agent, any Trustee, any Certificateholder
and the Liquidity Provider to the extent required to pay certain
out-of-pocket costs and expenses actually incurred by the
Subordination Agent or any Trustee or to reimburse any
Certificateholder or the Liquidity Provider in respect of payments
made to the Subordination Agent or any Trustee in connection with
the protection or realization of the value of the Equipment Notes
or any Trust Indenture Estate (collectively, the "Administration
Expenses");
o to the Liquidity Provider to the extent required to pay the
Liquidity Expenses;
o to the Liquidity Provider to the extent required to pay interest
accrued on the Liquidity Obligations;
o to the Liquidity Provider to the extent required to pay the
outstanding amount of all Liquidity Obligations and/or, if
applicable, with respect to any particular Liquidity Facility,
unless (x) less than 65% of the aggregate outstanding principal
amount of all Equipment Notes are Performing Equipment Notes and a
Liquidity Event of Default has occurred and is continuing under
such Liquidity Facility or (y) a Final Drawing has occurred under
such Liquidity Facility, to replenish the Cash Collateral Account
with respect to such Liquidity Facility up to the Required Amount
for the related Class of Certificates (less the amount of any
repayments of Interest Drawings under such Liquidity Facility
while sub-clause (x) of this clause is applicable);
o to the Subordination Agent, any Trustee or any Certificateholder
to the extent required to pay certain fees, taxes, charges and
other amounts payable;
o to the Class A Trustee to the extent required to pay Adjusted
Expected Distributions on the Class A Certificates;
o to the Class B Trustee to the extent required to pay Adjusted
Expected Distributions on the Class B Certificates; and
o to the Class C Trustee to the extent required to pay Adjusted
Expected Distributions on the Class C Certificates.
"Adjusted Expected Distributions" means, with respect to the
Certificates of any Trust on any Current Distribution Date, the sum of (1)
accrued and unpaid interest on such Certificates (excluding interest, if
any, payable with respect to the Deposits relating to such Trust) and (2)
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 Intercreditor Agreement 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)
will not apply.
For purposes of calculating Expected Distributions or Adjusted
Expected Distributions with respect to the Certificates of any Trust, any
premium paid on the Equipment Notes held in 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) will be added to the amount of Expected Distributions or Adjusted
Expected Distributions.
"Aggregate LTV Collateral Amount" for any Class of Certificates for
any Distribution Date means (i) the sum of the applicable LTV Collateral
Amounts for each Aircraft, minus (ii) 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.
"LTV Collateral Amount" of any 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 relevant 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%. (Intercreditor
Agreement, Section 1.1)
"Appraised Current Market Value" of any Aircraft means the lower of
the average and the median of the most recent three LTV Appraisals of such
Aircraft. After a Triggering Event occurs and any Equipment Note becomes a
NonPerforming Equipment Note, the Subordination Agent will obtain LTV
Appraisals of the Aircraft securing such Equipment Note 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 has the right to obtain
or cause to be obtained substitute LTV Appraisals (including LTV Appraisals
based upon physical inspection of such Aircraft).
"LTV Appraisal" means a current fair market value appraisal (which may
be a "desk-top" 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.
"Non-Performing Equipment Note" means an Equipment Note that is not a
Performing Equipment Note.
Interest Drawings under the Liquidity Facility and withdrawals from
the Cash Collateral Account, in each case in respect of interest on the
Certificates of any Trust, will be distributed to the Trustee for such
Trust, notwithstanding the priority of distributions set forth in the
Intercreditor Agreement and otherwise described herein.
The Subordination Agent
State Street Bank and Trust Company is the "Subordination Agent" under
the Intercreditor Agreement. US Airways and its affiliates may from time to
time enter into banking and trustee relationships with the Subordination
Agent and its affiliates. The Subordination Agent's address is State Street
Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts 02110.
The Subordination Agent may resign at any time, in which event a
successor Subordination Agent will be appointed as provided in the
Intercreditor Agreement. The Controlling Party may remove the Subordination
Agent for cause as provided in the Intercreditor Agreement. In such
circumstances, a successor Subordination Agent will be appointed as
provided in the Intercreditor Agreement. Any resignation or removal of the
Subordination Agent and appointment of a successor Subordination Agent does
not become effective until acceptance of the appointment by the successor
Subordination Agent. (Intercreditor Agreement, Section 8.1)
DESCRIPTION OF THE AIRCRAFT AND THE APPRAISALS
The Aircraft
The Aircraft consist of 17 Airbus A319 aircraft, and six Airbus A320
aircraft (the "Aircraft"), nine of which have been delivered by the
manufacturer to US Airways and the remaining 14 of which are scheduled for
delivery from March 1999 to July 1999 (the "Delivery Period"). The Aircraft
have been designed to be in compliance with Stage 3 noise level standards,
which are the most restrictive regulatory standards currently in effect in
the United States for aircraft noise abatement.
The Airbus A319 and Airbus A320 aircraft both are capable of flying
from US Airways' major Northeast United States hubs to its West Coast
markets. The seating capacity of the A319 aircraft is approximately 120
passengers. The engine type utilized on the Airbus A319 aircraft will be
CFM International, Inc. CFM-56-5. The seating capacity of the Airbus A320
aircraft is approximately 142 passengers. The engine type utilized on the
Airbus A320 aircraft will be CFM International, Inc. CFM-56-5.
The Appraisals
The table below sets forth the appraised base values of the Aircraft,
as determined by AVITAS, Inc. ("AVITAS"), AvSolutions, Inc.
("AvSolutions"), and Morton Beyer and Agnew, Inc. ("MBA"), independent
aircraft appraisal and consulting firms (the "Appraisers").
<TABLE>
<CAPTION>
Expected Manufacturer's Scheduled
Registration Serial Delivery Appraised Base Value
Aircraft Type Number Number Month* AVITAS AvSolutions MBA
- ------------- ------------- ------------ ----------- ------ ----------- ---
<S> <C> <C> <C> <C> <C> <C>
Airbus A319.................. N700UW 0885 October 15, 1998 37,700,000 38,140,000 37,060,000
Airbus A319.................. N701UW 0890 October 20, 1998 37,700,000 38,140,000 37,060,000
Airbus A319.................. N702UW 0896 November 2, 1998 37,700,000 38,140,000 37,130,000
Airbus A319.................. N703UW 0904 November 10, 1998 37,700,000 38,140,000 37,130,000
Airbus A319.................. N704US 0922 December 14, 1998 37,700,000 38,140,000 37,210,000
Airbus A319.................. N705UW 0929 December 17, 1998 37,700,000 38,140,000 37,210,000
Airbus A320.................. N101UW 0936 January 29, 1999 44,600,000 44,390,000 42,970,000
Airbus A319.................. N706US 0946 January 22, 1999 38,700,000 38,420,000 37,280,000
Airbus A319.................. N707UW 0949 January 29, 1999 38,700,000 38,420,000 37,280,000
Airbus A319.................. N708UW 0972 March 1999 38,700,000 38,420,000 37,360,000
Airbus A319.................. N709UW 0997 March 1999 38,700,000 38,420,000 37,430,000
Airbus A320.................. N102UW 0844 May 1999 45,300,000 44,710,000 43,320,000
Airbus A320.................. N103US 0861 May 1999 45,300,000 44,710,000 43,320,000
Airbus A319.................. N710UW 1019 May 1999 39,300,000 38,700,000 37,590,000
Airbus A320.................. N104UW 0863 June 1999 45,300,000 44,710,000 43,410,000
Airbus A320.................. N105UW 0868 June 1999 45,300,000 44,710,000 43,410,000
Airbus A319.................. N711UW 1033 June 1999 39,300,000 38,700,000 37,660,000
Airbus A319.................. N712US 1038 June 1999 39,300,000 38,700,000 37,660,000
Airbus A320.................. N106US 1044 July 1999 46,000,000 45,030,000 43,500,000
Airbus A319.................. N713UW 1040 July 1999 39,800,000 38,980,000 37,740,000
Airbus A319.................. N714US 1046 July 1999 39,800,000 38,980,000 37,740,000
Airbus A319.................. N715UW 1051 July 1999 39,800,000 38,980,000 37,740,000
Airbus A319.................. N716UW 1055 July 1999 39,800,000 38,980,000 37,740,000
</TABLE>
* The actual delivery dates for the first nine aircraft are set forth.
The actual delivery date for any other Aircraft may be subject to
delay or acceleration. See "--Deliveries of Aircraft."
For purposes of the foregoing chart, AVITAS, AvSolutions and MBA were
asked to provide their respective opinion as to the appraised base value of
each Aircraft as of November 16, 1998 and projected as of the scheduled
delivery month of each such Aircraft. As part of this process, all three
Appraisers performed "desk-top" appraisals without any physical inspection
of the Aircraft. The appraisals are based on various assumptions and
methodologies, which vary among the appraisers and may not reflect current
market conditions that could affect the fair market value of the Aircraft.
The Appraisers have delivered letters summarizing their respective
appraisals, copies of which are annexed to this Prospectus as Appendix II.
For the definition of appraised base value and a discussion of the
assumptions and methodologies used in each of the appraisals, reference is
hereby made to such summaries.
An appraisal is only an estimate of value, is not indicative of the
price at which an aircraft may be purchased from the manufacturer and
should not be relied upon as a measure of realizable value; the proceeds
realized upon a sale of any Aircraft may be less than the appraised value
thereof. The value of the Aircraft upon the exercise of remedies under the
applicable Indenture will depend on market and economic conditions, the
availability of buyers, the condition of the Aircraft and other similar
factors. Accordingly, there can be no assurance that the proceeds realized
upon any such exercise with respect to the Equipment Notes and the Aircraft
pursuant to the applicable Indenture would equal the appraised value of
such Aircraft or be sufficient to satisfy in full payments due on the
Equipment Notes issued thereunder or the Certificates.
Deliveries of Aircraft
Nine Aircraft have been delivered and the remaining Aircraft are
scheduled for delivery from March 1999 through July 1999 under a purchase
agreement between US Airways Group and AVSA. See the table under "--The
Appraisals" for the scheduled month of delivery of each Aircraft. Under
such purchase agreement, delivery of an Aircraft may be delayed due to
"Excusable Delay," which is defined to include delays in delivery or
failure to deliver or perform due to causes reasonably beyond Airbus' or
any associated contractor's control or not occasioned by Airbus' or any
associated contractor's fault, misconduct or negligence. US Airways cannot
predict whether adjustments in such schedule will be required.
The Note Purchase Agreement provides that the Delivery Period will
expire on October 31, 1999.
If delivery of any Aircraft is delayed by more than 30 days after the
month scheduled for delivery or beyond October 31, 1999, US Airways has the
right to replace such Aircraft with a Substitute Aircraft, subject to
certain conditions. See "--Substitute Aircraft." If delivery of any
Aircraft is delayed beyond the Delivery Period Termination Date and US
Airways does not exercise its right to replace such Aircraft with a
Substitute Aircraft, there will be unused Deposits that will be distributed
to Certificateholders together with accrued and unpaid interest thereon
and, in certain circumstances, a Deposit Make-Whole Premium with respect to
the Class A and the Class B Certificates. See "Description of the Deposit
Agreements--Unused Deposits."
Substitute Aircraft
If the delivery date for any Aircraft is delayed (i) more than 30 days
after the month scheduled for delivery, or (ii) beyond October 31, 1999, US
Airways may identify for delivery a substitute aircraft (each, a
"Substitute Aircraft") therefor meeting the following conditions:
o a Substitute Aircraft must be the same model (either A319 or A320)
as the Aircraft for which delivery was delayed and manufactured
after October 1, 1998.
o US Airways will be obligated to obtain written confirmation from
each Rating Agency that substituting such Substitute Aircraft for
the replaced Aircraft will not result in a withdrawal, suspension
or downgrading of the ratings of any Class of Certificates.
DESCRIPTION OF THE EQUIPMENT NOTES
The following is a description of the terms of the Equipment Notes,
the Indentures, the Leases, the Participation Agreements, the trust
agreements under which the Owner Trustees act on behalf of the Owner
Participants (the "Trust Agreements") and the Note Purchase Agreement. The
summaries make use of terms defined in and are qualified in their entirety
by reference to all of the provisions of the Equipment Notes, the
Indentures, the Leases, the Participation Agreements, the Trust Agreements
and the Note Purchase Agreement. The documents relating to the Class A and
Class B Certificates were filed with the Commission as exhibits to US
Airways' Current Report on form 8-K on December 29, 1998. The documents
relating to the Class C Certificates were filed with the Commission on
February 26, 1999 as exhibits to US Airways' Registration Statement on Form
S-4. Except as otherwise indicated, the following summaries relate to the
Equipment Notes, the Indenture, the Lease, the Participation Agreement and
the Trust Agreement that may be applicable to each Aircraft.
General
The Equipment Notes will be issued in three series: the "Series A
Equipment Notes," the "Series B Equipment Notes" and the "Series C
Equipment Notes," (together the "Equipment Notes") with respect to each
Aircraft. The Equipment Notes with respect to each Leased Aircraft will be
issued under a separate Leased Aircraft Indenture between First Security
Bank, National Association, as Owner Trustee of a trust for the benefit of
the owner participant that will be the beneficial owner of such Aircraft
(the "Owner Participant"), and State Street Bank and Trust Company, as
Leased Aircraft Trustee. The Equipment Notes with respect to each Owned
Aircraft will be issued under a separate Owned Aircraft Indenture between
US Airways and State Street Bank and Trust Company, as Owned Aircraft
Trustee. US Airways currently intends for all 23 of the Aircraft to be
Leased Aircraft. The Indentures will not provide for defeasance, or
discharge upon deposit of cash or certain obligations of the United States.
The related Owner Trustee will lease each Leased Aircraft to US
Airways pursuant to a separate Lease between such Owner Trustee and US
Airways with respect to such Leased Aircraft. Under each Lease, US Airways
will be obligated to make or cause to be made rental and other payments to
the related Leased Aircraft Trustee on behalf of the related Owner Trustee,
which rental and other payments will be at least sufficient to pay in full
when due all payments required to be made on the Equipment Notes issued
with respect to such Leased Aircraft. The Equipment Notes issued with
respect to the Leased Aircraft are not, however, direct obligations of, or
guaranteed by, US Airways. US Airways' rental obligations under each Lease
and US Airways' obligations under the Equipment Notes issued with respect
to each Owned Aircraft will be general obligations of US Airways.
Subordination
Series B Equipment Notes issued in respect of an Aircraft will be
subordinated in right of payment to Series A Equipment Notes issued in
respect of such Aircraft; Series C Equipment Notes issued in respect of
such Aircraft will be subordinated in right of payment to such Series B
Equipment Notes. (Leased Aircraft Indentures, Section 2.15; Owned Aircraft
Indentures, Section 2.15) On each Equipment Note payment date, (i) payments
of interest and principal due on Series A Equipment Notes issued in respect
of an Aircraft will be made prior to payments of interest and principal due
on Series B Equipment Notes issued in respect of such Aircraft; and (ii)
payments of interest and principal due on Series B Equipment Notes issued
in respect of an Aircraft will be made prior to payments of interest and
principal due on Series C Equipment Notes issued in respect of such
Aircraft. (Leased Aircraft Indentures, Article III; Owned Aircraft
Indentures, Article III)
Principal and Interest Payments
Subject to the provisions of the Intercreditor Agreement, interest
paid on the Equipment Notes held in each Trust will be passed through to
the Certificateholders of each such Trust on the dates and at the rate per
annum set forth in "Description of the Certificates--Payments and
Distributions" until the final expected Regular Distribution Date for such
Trust. Subject to the provisions of the Intercreditor Agreement, principal
paid on the Equipment Notes held in each Trust will be passed through to
the Certificateholders of such Trust in scheduled amounts on the dates set
forth herein until the final expected Regular Distribution Date for such
Trust.
Interest will be payable on the unpaid principal amount of each
Equipment Note at the rate applicable to such Equipment Note on January 30,
and July 30, of each year, commencing on the first such date to occur after
initial issuance thereof. Such interest will be computed on the basis of a
360-day year of twelve 30-day months. Overdue amounts of principal,
Make-Whole Premium and interest on such Series of Equipment Notes will bear
interest at a rate equal to at least 1.00% per annum over the applicable
rate on such Series of Equipment Notes.
Scheduled principal payments on the Equipment Notes will be made on
January 30 and July 30 in certain years, commencing on July 30, 1999 in the
case of the Class A Certificates, January 30, 2000 in the case of the Class
B Certificates and January 30, 2006 in the case of the Class C
Certificates. See "Description of the Certificates--Pool Factors" for a
discussion of the scheduled payments of principal of the Equipment Notes
and possible revisions thereto.
The final payment made under each Equipment Note will be in an amount
sufficient to discharge in full the unpaid principal amount, Make-Whole
Premium (if any) and to the extent permitted by law, interest and any other
amounts payable but unpaid.
If any date scheduled for a payment of principal, premium (if any) or
interest with respect to the Equipment Notes is not a Business Day, such
payment will be made on the next succeeding Business Day with the same
force and effect as if made on such scheduled payment date and without any
additional interest.
In certain circumstances, US Airways may be obligated under the
Registration Agreement to pay liquidated damages to the Class C Trust for
distribution to Holders of Class C Certificates. US Airways will pay any
such liquidated damages to the Class C Trust for distribution to each
Holder affected thereby as "Class C Special Deposit Payments" under the
Participation Agreement (which will be an amount equal to the Deposits held
in respect of the Class C Trust multiplied by the Multiplier) and as "Class
C Special Indemnity Payments" under the Note Purchase Agreement (which will
be an amount equal to the aggregate amount of Series C Equipment Notes held
by the Class C Trust multiplied by the Multiplier ). (Participation
Agreement, 6(d); Note Purchase Agreement, 5(a)) Liquidated damages paid by
US Airways to the Class C Trust are not subject to the Intercreditor
Agreement and, accordingly, are not subordinated to the payment of
principal and interest on the Class A and Class B Certificates. Liquidated
damages payable by US Airways, if any, will not be covered by the Class C
Liquidity Facility.
Redemption
If an Event of Loss occurs with respect to an Aircraft and such
Aircraft is not replaced by US Airways under the related Lease (in the case
of a Leased Aircraft) or under the related Owned Aircraft Indenture (in the
case of an Owned Aircraft), the Equipment Notes issued with respect to such
Aircraft will be redeemed, in whole, in each case at a price equal to the
aggregate unpaid principal amount thereof, together with accrued interest
thereon, to the date of redemption and other amounts payable to the holders
of the Equipment Notes under the applicable Indenture and Participation
Agreement, but without premium, on a Special Distribution Date.
(Indentures, Section 2.10(a)) If US Airways exercises its right to
terminate a Lease under its voluntary termination, early buyout or
burdensome buyout options under such Lease, the Equipment Notes relating to
the applicable Leased Aircraft will be redeemed (unless US Airways elects
to assume the Equipment Notes on a full recourse basis), in whole, on a
Special Distribution Date at a price equal to the aggregate unpaid
principal amount thereof, together with accrued interest thereon to, but
not including, the date of redemption, plus a Make-Whole Premium. (Leased
Aircraft Indentures, Section 2.10(b)) See "--The Leases--Lease
Termination."
All, but not less than all, of the Equipment Notes issued with respect
to a Leased Aircraft may be redeemed prior to maturity with the consent of
US Airways, and all of the Equipment Notes issued with respect to the Owned
Aircraft may be redeemed in whole prior to maturity at any time at the
option of US Airways, in each case at a price equal to 100% of the unpaid
principal thereof, together with accrued interest thereon to, but not
including, the date of redemption, plus, a Make-Whole Premium. (Indentures,
Section 2.11) If notice of such a redemption is given in connection with a
refinancing of Equipment Notes with respect to a Leased Aircraft, such
notice may be revoked not later than three days prior to the proposed
redemption date. (Leased Aircraft Indentures, Section 2.12).
If, with respect to a Leased Aircraft, (i) one or more Lease Events of
Default have occurred and are continuing or (ii) the Equipment Notes with
respect to such Aircraft have been accelerated or the Leased Aircraft
Trustee with respect to such Equipment Notes takes action or notifies the
applicable Owner Trustee that it intends to take action to foreclose the
lien of the related Leased Aircraft Indenture or otherwise commence the
exercise of any significant remedy under such Indenture or the related
Lease or if certain events occur in a bankruptcy proceeding involving US
Airways, then in each case all, but not less than all, of the Equipment
Notes issued with respect to such Leased Aircraft may be purchased by the
related Owner Trustee or Owner Participant on the applicable purchase date
at a price equal to the aggregate unpaid principal thereof, together with
accrued and unpaid interest thereon to, but not including, the date of
purchase, but without any premium (provided that a Make-Whole Premium is
payable if such Equipment Notes are to be purchased pursuant to clause (i)
when a Lease Event of Default has occurred and has been continuing for less
than 180 days). (Leased Aircraft Indentures, Section 2.14) US Airways as
owner of the Owned Aircraft has no comparable right under the Owned
Aircraft Indentures to purchase the Equipment Notes under such
circumstances. (Leased Aircraft Indenture, Section 2.14)
"Make-Whole Premium" means, with respect to any Equipment Note, the
amount (as determined by an independent investment banker selected by
Lessee and reasonably acceptable to the relevant Loan Trustees and related
Owner Participants) 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 payment on a
semiannual basis from each payment date under the applicable Indenture
(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 to the date of determination.
For purposes of determining the Make-Whole Premium and the Deposit
Make-Whole Premium, "Treasury Yield" means, at the time of determination
with respect to any Equipment Note, 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 of such Equipment
Note and trading in the public securities markets either as determined by
interpolation between the most recent weekly average yield to maturity for
two series of United States Treasury securities trading in the public
securities markets, (A) one maturing as close as possible to, but earlier
than, the Average Life Date of such Equipment Note and (B) the other
maturing as close as possible to, but later than, the Average Life Date of
such Equipment Note, in each case as published in the most recent H.15(519)
or, if a weekly average yield to maturity for United States Treasury
securities maturing on the Average Life Date of such Equipment Note is
reported in the most recent H.15(519), such weekly average yield to
maturity as published in such H.15(519). "H.15(519)" means the weekly
statistical release designated as such, or any successor publication,
published by the Board of Governors of the Federal Reserve System. The date
of determination of a Make-Whole Premium will be the third Business Day
prior to the applicable payment or redemption date and the "most recent
H.15(519)" means the H.15(519) published prior to the close of business on
the third Business Day prior to the applicable payment or redemption date.
"Average Life Date" for any Equipment Note to be redeemed means 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.
"Remaining Weighted Average Life" of an Equipment Note, at the redemption
date of such Equipment Note, means the number of days equal to the quotient
obtained by dividing (a) the sum of the products obtained by multiplying
(i) the amount of each then remaining installment of principal of such
Equipment Note, 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. (Indentures, 1.01)
Security
The Equipment Notes issued with respect to each Aircraft will be
secured by a first priority security interest in the Aircraft, the related
Lease and all rent thereunder (with respect to Leased Aircraft), as well as
all rents, profits and other income of such Aircraft, certain rights under
the aircraft purchase agreement between US Airways and an affiliate of the
Aircraft manufacturer, all requisition proceeds with respect to such
Aircraft, all insurance proceeds with respect to the Aircraft (other than
proceeds under third party liability policies and under policies maintained
by the Owner Participant), all monies and securities deposited with the
related Loan Trustee, and all proceeds of the foregoing. (Indentures,
Granting Clause) Unless an Indenture Default with respect to an Aircraft
has occurred and is continuing, the related Loan Trustee may not exercise
the Owner Trustee's rights under the related Lease except such Owner
Trustee's right to receive rent. The assignment by the Owner Trustee to the
Loan Trustee of its rights under the related Lease excludes the rights of
the Owner Trustee and the Owner Participant relating to the indemnification
by US Airways for certain matters, certain insurance proceeds payable to
the Owner Trustee in its individual and trust capacities and to the Owner
Participant under liability insurance maintained by US Airways under the
Lease or by the Owner Trustee or such Owner Participant, and certain
reimbursement payments made by US Airways to the Owner Trustee and the
Owner Participant. (Indenture, Granting Clause)
The Equipment Notes will not be cross-collateralized and,
consequently, the Equipment Notes issued in respect of any one Aircraft
will not be secured by any of the other Aircraft, replacement aircraft (as
described in " --The Leases--Events of Loss") or the Leases related
thereto. There will not be any cross-default provisions in the Indentures
or Leases and, consequently, events resulting in an event of default under
any particular Indenture or Lease may or may not result in an event of
default occurring under any other Indenture or Lease. If the Equipment
Notes issued with respect to one or more Aircraft are in default and the
Equipment Notes issued with respect to the remaining Aircraft are not in
default, no remedies will be exercisable under the Indentures with respect
to such remaining Aircraft.
Although the Equipment Notes are not obligations of, or guaranteed by,
US Airways, the amounts unconditionally payable by US Airways for lease of
the Aircraft will be sufficient to pay in full when due all amounts
required to be paid on the Equipment Notes. See "Description of the
Equipment Notes -- General."
Loan to Value Ratios of Equipment Notes
The following tables set forth illustrative loan to Aircraft value
ratios for the Equipment Notes issued in respect of Aircraft as of the July
Regular Distribution Dates that occur after the scheduled date of original
issuance of such Equipment Notes, assuming that the Equipment Notes in the
maximum principal amount are issued in respect of each such Aircraft. The
following tables apply both to Leased Aircraft and Owned Aircraft. These
examples were utilized by US Airways in preparing the Assumed Amortization
Schedule, although the amortization schedule for the Equipment Notes issued
with respect to an Aircraft may vary from such assumed schedule so long as
it complies with the Mandatory Economic Terms. Accordingly, the schedules
set forth below may not be applicable in the case of any particular
Aircraft. See "Description of the Certificates--Pool Factors." The LTV was
obtained by dividing (i) the outstanding balance (assuming no payment
default) of such Equipment Notes determined immediately after giving effect
to the payments scheduled to be made on each such Regular Distribution Date
by (ii) the assumed value (the "Assumed Aircraft Value") of the Aircraft
securing such Equipment Notes.
The following tables are based on the assumption (the "Depreciation
Assumption") that the value of each Aircraft set forth opposite the initial
Regular Distribution Date included in each table depreciates by 3% of the
initial appraised value per year until the fifteenth year after the year of
delivery of such Aircraft and by 4% of the initial appraised value per year
for the next five years. Other rates or methods of depreciation would
result in materially different loan to Aircraft value ratios, and no
assurance can be given (i) that the depreciation rates and method assumed
for the purposes of the tables are the ones most likely to occur or (ii) as
to the actual future value of any Aircraft. Thus the tables should not be
considered a forecast or prediction of expected or likely loan to Aircraft
value ratios, but simply a mathematical calculation based on one set of
assumptions.
<TABLE>
<CAPTION>
Airbus Model A319-100 Airbus Model A320-200
------------------------------------- --------------------------------------
Equipment Loan Equipment Loan
Note Assumed to Note Assumed to
Outstanding Aircraft Value Outstanding Aircraft Value
Date Balance Value Ratio Balance Value Ratio
- ---- ------- ----- ----- ------- ----- -----
(Millions) (Millions) (Millions) (Millions)
<S> > <C> <C> <C> <C> <C> <C>
January 30, 2000..... $ 22.90 $ 36.50 62.7% $ 28.62 $ 43.99 65.1%
July 30, 2000........ 22.74 35.38 64.3 28.62 42.67 67.1
July 30, 2001........ 22.19 34.25 64.8 27.92 41.35 67.5
July 30, 2002........ 21.42 33.12 64.7 27.15 40.03 67.8
July 30, 2003........ 20.63 31.99 64.5 26.34 38.71 68.0
July 30, 2004........ 19.77 30.86 64.1 25.46 37.39 68.1
July 30, 2005........ 18.86 29.73 63.4 24.53 36.07 68.0
July 30, 2006........ 17.88 28.60 62.5 23.53 34.75 67.7
July 30, 2007........ 16.84 27.47 61.3 22.46 33.43 67.2
July 30, 2008........ 15.72 26.34 59.7 21.41 32.11 66.7
July 30, 2009........ 14.75 25.21 58.5 20.65 30.79 67.1
July 30, 2010........ 13.65 24.09 56.7 19.34 29.47 65.6
July 30, 2011........ 12.61 22.96 54.9 18.08 28.15 64.2
July 30, 2012........ 11.49 21.83 52.7 15.22 26.83 56.7
July 30, 2013........ 9.42 20.70 45.5 12.81 25.51 50.2
July 30, 2014........ 5.40 19.19 28.1 10.33 24.19 42.7
July 30, 2015........ 5.40 17.69 30.5 7.67 22.43 34.2
July 30, 2016........ 5.40 16.18 33.4 5.00 20.67 24.2
July 30, 2017........ 2.21 14.68 15.0 1.96 18.91 10.3
</TABLE>
Limitation of Liability
The Equipment Notes issued with respect to the Leased Aircraft are not
direct obligations of, or guaranteed by, US Airways, any Owner Participant
or the Leased Aircraft Trustees or the Owner Trustees in their individual
capacities. None of the Owner Trustees, the Owner Participants or the
Leased Aircraft Trustees, or any affiliates thereof, will be personally
liable to any holder of an Equipment Note or, in the case of the Owner
Trustees and the Owner Participants, to the Leased Aircraft Trustees for
any amounts payable under the Equipment Notes or, except as provided in
each Leased Aircraft Indenture, for any liability under such Leased
Aircraft Indenture. All payments of principal, of premium, if any, and
interest on the Equipment Notes issued with respect to any Leased Aircraft
(other than payments made in connection with an optional redemption or
purchase of Equipment Notes issued with respect to a Leased Aircraft by the
related Owner Trustee or the related Owner Participant) will be made only
from the assets subject to the lien of the Indenture with respect to such
Leased Aircraft or the income and proceeds received by the related Leased
Aircraft Trustee therefrom (including rent payable by US Airways under the
Lease with respect to such Leased Aircraft).
The Equipment Notes issued with respect to any Owned Aircraft will be
direct obligations of US Airways.
Except as otherwise provided in the Indentures, no Owner Trustee or
Loan Trustee, in its individual capacity, will be answerable or accountable
under the Indentures or under the Equipment Notes under any circumstances
except, among other things, for its own willful misconduct or gross
negligence. None of the Owner Participants will have any duty or
responsibility under any of the Leased Aircraft Indentures or the Equipment
Notes to the Leased Aircraft Trustees or to any holder of any Equipment
Note.
Indenture Defaults, Notice and Waiver
Indenture Defaults under each Indenture include: (a) in the case of a
Leased Aircraft Indenture, the occurrence of any Lease Event of Default
under the related Lease (other than the failure to make certain indemnity
payments and other payments to the related Owner Trustee or Owner
Participant unless a notice is given by such Owner Trustee to the Indenture
Trustee that such failure will constitute an Indenture Default), (b) the
failure by the related Owner Trustee (other than as a result of a Lease
Default or Lease Event of Default) in the case of a Leased Aircraft
Indenture, or US Airways, in the case of an Owned Aircraft Indenture, to
pay any interest or principal or premium, if any, when due, under such
Indenture or under any Equipment Note issued thereunder that continues for
more than 10 Business Days, in the case of principal, interest or
Make-Whole Premium, and, in all other cases, 10 Business Days after the
relevant Owner Trustee or Owner Participant receives written demand from
the related Loan Trustee or holder of an Equipment Note, (c) the failure by
the related Owner Participant or the related Owner Trustee (in its
individual capacity), in the case of a Leased Aircraft Indenture, or US
Airways, in the case of an Owned Aircraft Indenture, to discharge certain
liens that continue after notice and specified cure periods, (d) any
representation or warranty made by the related Owner Trustee or Owner
Participant in such Indenture, the related Participation Agreement, or
certain related documents furnished to the Loan Trustee or any holder of an
Equipment Note pursuant thereto being false or incorrect when made in any
material respect that continues to be material and adverse to the interests
of the Loan Trustee or Note Holders and remains unremedied after notice and
specified cure periods, (e) failure by the related Owner Trustee or Owner
Participant (in the case if Leased Aircraft) or US Airways (in the case of
Owned Aircraft) to perform or observe any covenant or obligation for the
benefit of the Loan Trustee or holders of Equipment Notes under such
Indenture or certain related documents that continues after notice and
specified cure periods, (f) the registration of the related Aircraft
ceasing to be effective as a result of the Owner Participant (in the case
of a Leased Aircraft) or US Airways (in the case of an Owned Aircraft) not
being a citizen of the United States, as defined in the Transportation Code
(subject to a cure period), or (g) the occurrence of certain events of
bankruptcy, reorganization or insolvency of the related Owner Trustee or
Owner Participant (in the case of a Leased Aircraft) or US Airways (in the
case of the Owned Aircraft). (Indentures, Section 4.02) There will not be
any cross-default provisions in the Indentures or in the Leases.
Consequently, events resulting in an Indenture Default under any particular
Indenture may or may not result in an Indenture Default occurring under any
other Indenture, and a Lease Event of Default under any particular Lease
may or may not constitute a Lease Event of Default under any other Lease.
If US Airways fails to make any semiannual basic rental payment due
under any Lease, within a specified period after such failure the
applicable Owner Trustee may furnish to the Leased Aircraft Trustee the
amount due on the Equipment Notes issued with respect to the related Leased
Aircraft, together with any interest thereon on account of the delayed
payment thereof, in which event the Leased Aircraft Trustee and the holders
of outstanding Equipment Notes issued under such Indenture may not exercise
any remedies otherwise available under such Indenture or such Lease as the
result of such failure to make such rental payment, unless such Owner
Trustee has previously cured each of the three immediately preceding
semiannual basic rental payment defaults or the Owner Trustee has cured an
aggregate of six previous semiannual basic rental payment defaults. The
applicable Owner Trustee also may cure any other default by US Airways in
the performance of its obligations under any Lease that can be cured by the
payment of money. (Leased Aircraft Indenture, Section 4.03)
The holders of a majority in aggregate unpaid principal amount of the
Equipment Notes outstanding on such date issued with respect to any
Aircraft, by notice to the Loan Trustee, may on behalf of all the holders
waive, together under certain circumstances with the applicable Owner
Trustee and applicable Owner Participant, any existing default and its
consequences under the Indenture with respect to such Aircraft, except a
default in the payment of the principal of, or premium or interest on any
such Equipment Notes or a default in respect of any covenant or provision
of such Indenture that cannot be modified or amended without the consent of
each holder of Equipment Notes. (Indentures, Section 4.08)
Remedies
Each Indenture provides that if an Indenture Default occurs and is
continuing, the related Loan Trustee may, and upon receipt of written
demand from the holders of a majority in principal amount of the Equipment
Notes outstanding under such Indenture will, subject to the applicable
Owner Participant's or Owner Trustee's right to cure in the case of Leased
Aircraft Indentures, as discussed above, declare the principal of all such
Equipment Notes issued thereunder immediately due and payable, together
with all accrued but unpaid interest thereon (without the Make-Whole
Premium). The holders of a majority in principal amount of Equipment Notes
outstanding under such Indenture may rescind any such declaration at any
time before the judgment or decree for the payment of the money so due is
entered if (i) there has been paid to the related Loan Trustee an amount
sufficient to pay all principal and interest on any such Equipment Notes,
to the extent such amounts have become due otherwise than by such
declaration of acceleration and (ii) all other Indenture Defaults and
events which with the giving of notice or lapse of time or both would
become Indenture Defaults under such Indenture have been cured or waived.
(Indentures, Section 4.04(b))
Each Indenture provides that if an Indenture Default under such
Indenture has occurred and is continuing, the related Loan Trustee may
exercise certain rights or remedies available to it under such Indenture or
under applicable law, including (if, in the case of a Leased Aircraft, the
corresponding Lease has been declared in default) one or more of the
remedies under such Indenture or such Lease with respect to the Aircraft
subject to such Lease. If a Lease Event of Default has occurred and is
continuing under the corresponding Lease in the case of Leased Aircraft
Indentures, the related Loan Trustee's right to exercise remedies under
such Indenture is subject, with certain exceptions, to its having
proceeded to exercise one or more of the remedies under the Lease to
terminate the Lease (in the event that it is not commercially reasonable to
take possession of the Aircraft) or take possession of and/or sell the
Aircraft; provided that the requirement to exercise such remedies under
such Lease does not apply in circumstances where such exercise has been
involuntarily stayed or prohibited by applicable law or court order for a
continuous period in excess of 60 days subsequent to an entry for an order
for relief or such other period as may be specified in Section
1110(a)(1)(A) of the U.S. Bankruptcy Code (the "Section 1110 Period") (plus
an additional period if any resulting from (i) US Airways or its trustee in
such proceeding assuming, or agreeing to perform its obligations under,
such Lease with the approval of the applicable court, (ii) such Loan
Trustee's consent to an extension of such 60-day period, (iii) Lessee's
assumption of the Lease during the Section 1110 Period with the approval of
the applicable court, or (iv) such Loan Trustee's failure to give any
requisite notice). See "--The Leases--Events of Default under the Leases."
Such remedies may be exercised by the related Loan Trustee to the exclusion
of the related Owner Trustee, subject to certain conditions specified in
such Indenture, and US Airways, subject to the terms of such Lease. Any
Aircraft sold in the exercise of such remedies will be free and clear of
any rights of those parties, including, if a Lease Event of Default has
occurred and is continuing, the rights of US Airways under the Lease with
respect to such Aircraft. No exercise of any remedies by the related Loan
Trustee may affect the rights of US Airways under any Lease unless a Lease
Event of Default has occurred and is continuing. The Owned Aircraft
Indenture will not contain such limitations on the Loan Trustee's ability
to exercise remedies upon an Indenture Event of Default under an Owned
Aircraft Indenture. (Indentures, Section 4.04; Leases, Section 15)
If a bankruptcy proceeding involving US Airways under the U.S.
Bankruptcy Code occurs, all of the rights of the Owner Trustee as lessor
under a particular Lease will be exercised by the Owner Trustee in
accordance with the terms thereof unless (i) during the Section 1110 Period
the trustee in such proceeding or US Airways does not assume or agree to
perform its obligations under such Lease, (ii) at any time after assuming
or agreeing to perform such obligations, such trustee or US Airways ceases
to perform such obligations or (iii) the related Loan Trustee takes action,
or notifies the Owner Trustee that such Loan Trustee intends to take
action, to foreclose the lien of the related Leased Aircraft Indenture or
otherwise commence the exercise of any significant remedy in accordance
with the Leased Aircraft Indenture. The Owner Trustee's exercise of such
rights shall be subject to certain limitations and, in no event, reduce the
amount or change the time of any payment in respect of the Equipment Notes
or adversely affect the validity or enforceability of the lien under the
Leased Aircraft Indenture by depriving the holder of the Equipment Notes of
the benefits thereof.
If the Equipment Notes issued in respect of one Aircraft are in
default, the Equipment Notes issued in respect of the other Aircraft may
not be in default, and, if not, no remedies will be exercisable under the
applicable Indentures with respect to such other Aircraft.
Section 1110 of the U.S. Bankruptcy Code provides that the right of
lessors, conditional vendors and holders of security interests with respect
to "equipment" (as defined in Section 1110 of the U.S. Bankruptcy Code) to
take possession of such equipment in compliance with the provisions of a
lease, conditional sale contract or security agreement, as the case may be,
is not affected after 60 days after the filing of petition under Chapter 11
of the U.S. Bankruptcy Code by (a) the automatic stay provision of the U.S.
Bankruptcy Code, which provision enjoins repossessions by creditors for the
duration of the reorganization period, (b) the provision of the U.S.
Bankruptcy Code allowing the trustee in reorganization to use property of
the debtor during the reorganization period, (c) Section 1129 of the U.S.
Bankruptcy Code (which governs the confirmation of plans of reorganization
in Chapter 11 cases) and (d) any power of the bankruptcy court to enjoin a
repossession. Section 1110 of the U.S. Bankruptcy Code provides that the
right to take possession of an aircraft may not be exercised for 60 days
following the date of commencement of the reorganization proceedings and
may not be exercised at all after such 60-day period (or such longer period
consented to by the lessor, conditional vendor or holder of a security
interest), if the trustee in reorganization agrees to perform the debtor's
obligations that become due on or after such date and cures all existing
defaults (other than defaults that are a breach of a provision relating to
the financial condition, bankruptcy, insolvency or reorganization of the
debtor). "Equipment" is defined in Section 1110 of the U.S. Bankruptcy
Code, in part, as "an aircraft, aircraft engine, propeller, appliance, or
spare part (as defined in section 40102 of title 49) that is subject to a
security interest granted by, leased to, or conditionally sold to a debtor
that is a citizen of the U.S. (as defined in section 40102 of title 49)
holding an air carrier operating certificate issued by the Secretary of
Transportation pursuant to chapter 447 of title 49 for aircraft capable of
carrying 10 or more individuals or 6,000 pounds or more of cargo."
Skadden, Arps, Slate, Meagher & Flom (Illinois), special counsel to US
Airways, has advised the Loan Trustees that, if US Airways were to become a
debtor under Chapter 11 of the U.S. Bankruptcy Code, (x) if such Aircraft
is a Leased Aircraft, the Owner Trustee, as lessor under each of the
Leases, and the Loan Trustee, as assignee of such Owner Trustee's rights
under each of the Leases pursuant to each of the related Indentures, would
be entitled to the benefits of Section 1110 of the U.S. Bankruptcy Code
with respect to the airframe and engines comprising the related Aircraft,
or (y) if such Aircraft is an Owned Aircraft, the Loan Trustee would be
entitled to the benefits of Section 1110 of the U.S. Bankruptcy Code with
respect to the airframe and engines comprising the related Aircraft, but in
each case may not be entitled to such benefits with respect to any
replacement of an Aircraft after an Event of Loss in the future. The
replacement of any Aircraft is conditioned upon the contemporaneous
delivery of an opinion of counsel to the effect that the related Loan
Trustee's entitlement to benefits of Section 1110 of the U.S. Bankruptcy
Code would not be diminished as a result of such replacement. This opinion
is subject to certain qualifications and assumptions, including the
assumptions that US Airways is and will continue to be a citizen of the
U.S. holding an air carrier operating certificate issued by the Secretary
of Transportation pursuant to chapter 447 of title 49 of the U.S. Code for
aircraft capable of carrying 10 or more individuals or 6,000 pounds or more
of cargo. See " --The Leases--Events of Loss." The opinion of Skadden,
Arps, Slate, Meagher & Flom (Illinois) does not address the availability of
Section 1110 with respect to the bankruptcy proceedings of any possible
sublessee of an Aircraft, or to any possible lessee of an Owned Aircraft if
it is leased by US Airways. For a description of certain limitations on the
Loan Trustee's exercise of rights contained in the Indenture, see
"--Indenture Defaults, Notice and Waiver."
A recent decision, Western Pacific Airlines, Inc. v. GATX (In re
Western Pacific Airlines, Inc.), 219 B.R. 305, on rehearing, 221 B.R. 1 (D.
Colo. 1998), ruled that Section 1110 of the U.S. Bankruptcy Code does not
apply in a case after the trustee timely makes the agreement specified in
Section 1110(a)(1)(A) of the U.S. Bankruptcy Code and timely cures defaults
outstanding as of the date of the Chapter 11 petition or that occur during
the first sixty days of the case, with the result, among others, that the
ability of a lessor to exercise remedies based on a default that occurs
after the first 60 days of the Chapter 11 case would be subject to the
automatic stay. US Airways has been advised by its counsel, Skadden Arps,
Slate, Meagher & Flom (Illinois) to the effect that, and accordingly
believes that, this decision construes Section 1110 of the U.S. Bankruptcy
Code in a manner that is inconsistent with both the language of Section
1110 of the U.S. Bankruptcy Code and the legislative history explaining the
purpose and operation of Section 1110 of the U.S. Bankruptcy Code and
accordingly believes that the decision is an incorrect interpretation of
Section 1110 of the U.S. Bankruptcy Code. US Airways has been advised that
the decision is currently on appeal, but that the Chapter 11 case of
Western Pacific Airlines, Inc. has been converted to a case under Chapter
7, under which Section 1110 of the U.S. Bankruptcy Code by its terms does
not apply, and that the parties have filed suggestions of mootness with the
Court of Appeals.
If a bankruptcy, insolvency, receivership or like proceedings is
commenced involving an Owner Participant, it is possible that,
notwithstanding that the applicable Leased Aircraft is owned by the related
Owner Trustee in trust, such Leased Aircraft and the related Lease and
Equipment Notes might become part of such proceeding. In such event,
payments under such Lease or on such Equipment Notes may be interrupted and
the ability of the related Loan Trustee to exercise its remedies under the
related Leased Aircraft Indenture might be restricted, although such Loan
Trustee would retain its status as a secured creditor in respect of the
related Lease and the related Leased Aircraft.
Modification of Indentures and Leases
Without the consent of holders of a majority in principal amount of
the Equipment Notes outstanding under any Indenture, the provisions of such
Indenture and any related Lease, Participation Agreement or Trust Agreement
may not be amended or modified, except to the extent indicated below.
Subject to certain limitations, certain provisions of any Leased
Aircraft Indenture, and of the Lease, the Participation Agreement, and the
Trust Agreement related thereto, may be amended or modified by the parties
thereto without the consent of any holders of the Equipment Notes
outstanding under such Indenture. In the case of each Lease, such
provisions include, among others, provisions relating to (i) the return to
the related Owner Trustee of the related Leased Aircraft pursuant to the
terms of such Lease (except to the extent that such amendment would affect
the rights or exercise of remedies under the Lease) and (ii) the renewal of
such Lease and the option of US Airways pursuant to the terms of such Lease
to terminate the Lease or to purchase the related Leased Aircraft so long
as the same would not adversely affect the Note Holders. (Leased Aircraft
Indentures, Section 9.01(a)) In addition, any Indenture may be amended
without the consent of the holders of Equipment Notes to, among other
things, cure any defect or inconsistency in such Indenture or the Equipment
Notes issued thereunder, provided that such change does not adversely
affect the interests of any such holder. (Indentures, Section 9.01(c))
Without the consent of each Liquidity Provider and the holder of each
Equipment Note outstanding under any Indenture affected thereby, no
amendment or modification of such Indenture may among other things (a)
reduce the principal amount of, or premium, if any, or interest payable on,
any Equipment Notes issued under such Indenture or change the date on which
any principal, premium, if any, or interest is due and payable, (b) permit
the creation of any security interest with respect to the property subject
to the lien of such Indenture, except as permitted by such Indenture, or
deprive any holder of an Equipment Note issued under such Indenture of the
benefit of the lien of such Indenture upon the property subject thereto or
(c) reduce the percentage in principal amount of outstanding Equipment
Notes issued under such Indenture necessary to modify or amend any
provision of such Indenture or to waive compliance therewith. (Indentures,
Section 9.01(b))
Indemnification
US Airways is required to indemnify each Loan Trustee, each Owner
Participant, each Owner Trustee, each Liquidity Provider, the Subordination
Agent, the Escrow Agent and each Trustee, but not the holders of
Certificates (unless otherwise expressly agreed by US Airways), for certain
losses, claims and other matters. US Airways is required under certain
circumstances to indemnify each Owner Participant against the loss of
depreciation deductions and certain other benefits allowable for certain
income tax purposes with respect to the related Leased Aircraft.
The Leases and Certain Provisions of Owned Aircraft Indentures
Each Leased Aircraft will be leased to US Airways by the relevant
Owner Trustee under the relevant lease agreement (each, a "Lease"). Each
Owned Aircraft will be owned by US Airways.
Lease Term Rentals and Payments
Each Leased Aircraft will be leased separately by the relevant Owner
Trustee to US Airways for a term commencing on the Delivery Date and
expiring on a date not earlier than the latest maturity date of the
relevant Equipment Notes issued pursuant to the related Indenture, unless
terminated prior to the originally scheduled expiration date as permitted
by the applicable Lease. The semiannual basic rent payment under each Lease
is payable by US Airways on each related Lease Period Date (or, if such day
is not a Business Day, on the next Business Day), and will be assigned by
the Owner Trustee to the Loan Trustee under the corresponding Leased
Aircraft Indenture to provide the funds necessary to make scheduled
payments of principal and interest due from the Owner Trustee on the
Equipment Notes issued under such Indenture. In certain cases, the
semiannual basic rent payments under the Leases may be adjusted, but each
Lease provides that under no circumstances will rent payments by US Airways
be less than the scheduled payments on the related Equipment Notes. Any
balance of each such semiannual basic rent payment under each Lease, after
payment of amounts due on the Equipment Notes issued under the Indenture
corresponding to such Lease, will be paid over to the Owner Trustee.
(Leases, Section 3)
"Lease Period Date" means, with respect to each Lease, January 30 or
July 30 during the term of such Lease.
Semiannual payments of interest on the Equipment Notes issued by US
Airways under an Owned Aircraft Indenture are payable January 30 and July
30 of each year, commencing on the first such date after issuance thereof.
Payments of principal of the Equipment Notes issued by US Airways under an
Owned Aircraft Indenture are payable January 30 and July 30 in certain
years or in full on final maturity.
Net Lease; Maintenance
Under the terms of each Lease, US Airways' obligations in respect of
each Leased Aircraft will be those of a lessee under a "net lease."
Accordingly, US Airways is obligated under each Lease, among other things
and at its expense, to keep each Aircraft duly registered and insured, to
pay all costs of operating the Aircraft and to maintain, service, repair
and overhaul the Aircraft so as to keep it in as good an operating
condition as when delivered to US Airways, ordinary wear and tear excepted,
and in such condition as required to maintain the applicable airworthiness
certificate for the Aircraft in good standing at all times (other than
during temporary periods of storage or during certain periods of permitted
maintenance or modification). (Leases, Section 7(a)(1))
Possession, Sublease and Transfer
Each Aircraft may be operated by US Airways or, subject to certain
restrictions, by certain other persons. Normal interchange, pooling and
similar agreements customary in the commercial airline industry with
respect to any airframe or engine are permitted. Subleases are also
permitted to be entered into with United States entities and foreign
entities that have their principal executive office in certain specified
countries. (Leases, Section 7(b)(x)) It is uncertain to what extent the
relevant Loan Trustee's security interest would be recognized if an
Aircraft is registered or located in a jurisdiction not a party to the
Convention on the International Recognition of Rights in Aircraft (Geneva
1948) (the "Convention"). Moreover, in the case of an Indenture Default,
the ability of the related Loan Trustee to realize upon its security
interest in an Aircraft could be adversely affected as a legal or practical
matter if such Aircraft were registered or located outside the United
States.
Registration
US Airways is required to keep each Aircraft duly registered under the
Transportation Code with the FAA except (in the case of a Leased Aircraft)
if the relevant Owner Trustee or the relevant Owner Participant fails to
meet the applicable citizenship requirements, and to record each Lease (in
the case of a Leased Aircraft) and Indenture and certain other documents
under the Transportation Code. (Leases, Section 7(a)(1); Owned Aircraft
Indenture, Section 7.02) Such recordation of the Indenture and certain
other documents with respect to each Aircraft will give the relevant Loan
Trustee a first-priority, perfected security interest in such Aircraft
whenever it is located in the United States or any of its territories and
possessions. The Convention provides that such security interest will also
be recognized, with certain limited exceptions, in those jurisdictions that
have ratified or adhere to the Convention.
So long as no Lease Event of Default exists, US Airways has the right
to register the Aircraft subject to such Lease in a country other than the
United States at its own expense, subject to certain conditions set forth
in the related Participation Agreement. These conditions include a
requirement that the lien of the applicable Indenture will continue as a
first priority security interest in the applicable Aircraft. (Leases,
Section 7(a)(1); Participation Agreements, Section 7(d)). The Owned
Aircraft Indentures contain comparable provisions with respect to
registration of the Owned Aircraft. (Owned Aircraft Participation
Agreement, Section 7(b)).
Liens
US Airways is required to maintain each Aircraft free of any liens,
other than the rights of the relevant Loan Trustee, the holders of the
related Equipment Notes, US Airways and the Owner Participant and Owner
Trustee arising under the applicable Indenture, the Lease (in the case of
Leased Aircraft) or the other operative documents related thereto, and
other than certain limited liens permitted under such documents, including
but not limited to (i) liens for taxes either not yet due or being
contested in good faith by appropriate proceedings; (ii) materialmen's,
mechanics' and other similar liens arising in the ordinary course of
business and securing obligations that either are not yet delinquent for
more than sixty (60) days or are being contested in good faith by
appropriate proceedings; (iii) judgment liens so long as such judgment is
discharged or vacated within sixty (60) days or the execution of such
judgment is stayed pending appeal or discharged, vacated or reversed within
sixty (60) days after expiration of such stay; and (iv) any other lien as
to which US Airways has provided a bond or other security adequate in the
reasonable opinion of the Owner Trustee; provided that in the case of each
of the liens described in the foregoing clauses (i) and (ii) such liens and
proceedings do not involve any material danger of the sale, forfeiture or
loss of such Aircraft or the interest of any Owner Participant therein.
(Leases, Section 6; Owned Aircraft Indenture, Section 7.01)
Replacement of Parts; Alterations
US Airways is obligated to replace all parts at its expense that may
from time to time be incorporated or installed in or attached to any
Aircraft and that may become lost, damaged beyond repair, worn out,
destroyed, stolen, seized, confiscated or permanently rendered unfit for
use. US Airways or any permitted sublessee has the right, at its own
expense, to add further parts and accessories and make such alterations,
modifications and additions with respect to each Aircraft as it deems
desirable in the proper conduct of its business and to remove parts which
it deems to be obsolete or no longer suitable or appropriate for use, so
long as such alteration, modification, addition or removal does not
materially diminish the value, utility or remaining useful life of the
related aircraft or engine. (Leases, Sections 8(a) and 8(c); Owned Aircraft
Indenture, Sections 7.03(a) and 7.03(c))
Insurance
US Airways is required to maintain, at its expense (or at the expense
of a permitted lessee, in the case of the Owned Aircraft, or a permitted
sublessee in the case of a Leased Aircraft), all-risk aircraft hull
insurance covering each Aircraft, at all times in an amount (taking into
account any permitted self-insurance) not less than the termination value
for the Aircraft. However, after giving effect to self-insurance permitted
as described below, the amount payable under such insurance may be less
than such amounts payable with respect to the Equipment Notes. (Leases,
Section 11; Owned Aircraft Indenture, Section 7.04)
In addition, US Airways is obligated to maintain (or cause to be
maintained) comprehensive airline liability insurance at its expense,
including, without limitation, passenger liability, bodily injury and
property damage liability, cargo liability and contractual liability
insurance with respect to each Aircraft. Such liability insurance must be
underwritten by insurers of nationally or internationally recognized
responsibility. The amount of such liability insurance coverage per
occurrence may not be less than the amount of comprehensive airline
liability insurance from time to time applicable to aircraft owned or
leased and operated by US Airways of the same type and operating on similar
routes as such Aircraft.
US Airways is also required to maintain war-risk, hijacking or allied
perils insurance if it (or any permitted sublessee) operates any Aircraft,
airframe or engine in any area of recognized hostilities or if US Airways
(or any permitted sublessee) maintains such insurance with respect to other
aircraft operated on the same international routes or areas on or in which
the Aircraft is operated. (Leases, Section 11; Owned Aircraft Indenture,
Section 7.04)
US Airways may self-insure under a program applicable to all aircraft
in its fleet, but the amount of such self-insurance in the aggregate may
not exceed 50% of the highest replacement value of any single aircraft in
US Airways' fleet or 1 1/2% of the average aggregate insurable value
(during the preceding policy year) of all aircraft on which US Airways
carries insurance, whichever is less, unless an insurance broker of
national standing shall certify that the standard among all other major
U.S. airlines is a higher level of self-insurance, in which case, US
Airways may self-insure the Aircraft to such higher level. In addition, US
Airways may self-insure to the extent of any applicable deductible per
Aircraft that does not exceed industry standards for major U.S. airlines.
(Leases, Section 11; Owned Aircraft Indenture, Section 7.04)
In respect of each Aircraft, US Airways is required to name as
additional insured parties the relevant Loan Trustee and holders of the
Equipment Notes and (in the case of a Leased Aircraft) the relevant Owner
Participant and Owner Trustee, in its individual capacity and as owner of
such Aircraft, and the Liquidity Provider under all liability, hull and
property and war risk, hijacking and allied perils insurance policies
required with respect to such Aircraft. In addition, the insurance policies
will be required to provide that, in respect of the interests of such
additional insured persons, the insurance will not be invalidated or
impaired by any act or omission of US Airways, any permitted sublessees, or
any other person. (Leases, Section 11; Owned Aircraft Indenture, Section
7.04)
Lease Termination
US Airways may terminate any Lease (i) on any Lease Period Date
occurring after the end of the calendar year in which the seventh (7th)
anniversary occurred of the date on which such Lease commenced, if it makes
a good faith determination that the Aircraft subject to such Lease is
obsolete or surplus to US Airways' needs or (ii) on the tenth, thirteenth
or sixteenth anniversaries of the date on which the Lease commenced. US
Airways is required to give notice of its intention to exercise its right
of termination described in this paragraph at least one hundred twenty
(120) days prior to the proposed date of termination, which notice may be
withdrawn up to fifteen (15) days prior to such proposed date; provided
that US Airways may give only two (2) such termination notices. In such a
situation, unless the Owner Trustee elects to retain title to such Aircraft
or, in the case of clause (ii) above, US Airways elects to purchase the
Aircraft at a purchase price equal to the greater of Termination Value or
fair market value, US Airways is required to use commercially reasonable
efforts to sell such Aircraft as an agent for such Owner Trustee, and the
Owner Trustee will sell such Aircraft on the date of termination to the
highest cash bidder. If such sale occurs, the Equipment Notes related
thereto are required to be prepaid. If the net proceeds to be received from
such sale are less than the "Termination Value" for such Aircraft (which is
set forth in a schedule to each Lease), US Airways is required to pay to
the applicable Owner Trustee an amount equal to the excess, if any, of the
applicable Termination Value for such Aircraft over such net proceeds. If
US Airways elects to purchase the Aircraft, either (i) the Equipment Notes
related thereto will be prepaid or (ii) subject to receipt of the tax
opinion described under "--Renewal and Purchase Options," US Airways will
assume such Equipment Notes on a full recourse basis. Upon payment of the
Termination Value or, in the case of a purchase by US Airways, the payment
of the applicable purchase price, and an amount equal to the Make-Whole
Premium, if any, payable on such date of payment, together with certain
additional amounts, the lien of the relevant Indenture will be released,
the relevant Lease will terminate, and the obligation of US Airways
thereafter to make scheduled rent payments under such Lease will cease.
(Leases, Section 9; Leased Aircraft Indentures, Section 2.10)
The Owner Trustee has the option to retain title to the Aircraft if US
Airways has given a notice of termination under the Lease. In such event,
such Owner Trustee will pay to the applicable Loan Trustee an amount
sufficient to prepay the outstanding Equipment Notes issued with respect to
such Aircraft (including accrued interest) and the Loan Trustee will be
paid the Make-Whole Premium, in which case the lien of the relevant
Indenture will be released, the relevant Lease will terminate and the
obligation of US Airways thereafter to make scheduled rent payments under
such Lease will cease. (Leases, Section 9; Leased Aircraft Indentures,
Section 2.10)
Events of Loss
If an "Event of Loss" occurs with respect to the airframe or the
airframe and engines of an Aircraft, US Airways must elect within sixty
(60) days after such occurrence either to make payment with respect to such
Event of Loss or to replace such airframe and any such engines. Not later
than the earlier of (i) the first Business Day following the 120th day
following the date of occurrence of such Event of Loss and (ii) an earlier
Business Day irrevocably specified fifteen (15) days in advance by notice
from US Airways to the Owner Trustee (in the case of a Leased Aircraft) and
the Loan Trustee (the "Loss Payment Date"), US Airways must either (i) pay
to the applicable Owner Trustee the Termination Value of such Aircraft (or,
in the case of an Owned Aircraft, pay to the applicable Loan Trustee the
outstanding principal amount of the Equipment Notes relating to such
Aircraft plus accrued and unpaid interest thereon), together with certain
additional amounts, but, in any case, without any Make-Whole Premium or
(ii) substitute an airframe (or airframe and one or more engines, as the
case may be) for the airframe, or airframe and engine(s), that suffered
such Event of Loss. (Leases, Section 10(a); Leased Aircraft Indentures,
Section 2.10; Owned Aircraft Indentures, Section 5.06)
If US Airways elects to replace an airframe (or airframe and one or
more engines, as the case may be) that suffered such Event of Loss, it
will, in the case of a Leased Aircraft, convey to the related Owner Trustee
title to an airframe (or airframe and one or more engines, as the case may
be) or, in the case of an Owned Aircraft Indenture, subject such airframe
(or airframe and one or more engines) to the lien of the Owned Aircraft
Indenture, and such replacement airframe or airframe and engines must be
the same model as the airframe or airframe and engines to be replaced or an
improved model, with a value, utility and remaining useful life at least
equal to the airframe or airframe and engines to be replaced, assuming that
such airframe and such engines had been maintained in accordance with the
related Lease or Owned Aircraft Indenture, as the case may be. US Airways
is also required to provide to the relevant Loan Trustee and (in the case
of a Leased Aircraft) the relevant Owner Trustee and Owner Participant
reasonably acceptable opinions of counsel to the effect, among other
things, that (i) certain specified documents have been duly filed under the
Transportation Code and (ii) such Owner Trustee and Loan Trustee (as
assignee of the Owner Trustee's rights and interests under the Lease), will
be entitled to receive the benefits of Section 1110 of the U.S. Bankruptcy
Code with respect to any such replacement airframe (unless, as a result of
a change in law or court interpretation, such benefits are not then
available. (Leases, Section 10(a); Owned Aircraft Indenture, Section 5.06)
If US Airways elects not to replace such airframe, or airframe and
engine(s), then upon payment of the outstanding principal amount of the
Equipment Notes issued with respect to such Aircraft (in the case of an
Owned Aircraft) or the Termination Value for such Aircraft (in the case of
a Leased Aircraft), together with all additional amounts then due and
unpaid with respect to such Aircraft, which must be at least sufficient to
pay in full as of the date of payment thereof the aggregate unpaid
principal amount under such Equipment Notes together with accrued but
unpaid interest thereon and all other amounts due and owing in respect of
such Equipment Notes, the lien of the Indenture and (in the case of a
Leased Aircraft) the Lease relating to such Aircraft will terminate with
respect to such Aircraft, the obligation of US Airways thereafter to make
the scheduled rent payments (in the case of a Leased Aircraft) or interest
and principal payments (in the case of an Owned Aircraft) with respect
thereto will cease and (in the case of a Leased Aircraft) the related Owner
Trustee will transfer all of its right, title and interest in and to the
related Aircraft to US Airways. The Termination Value and other payments
made under the Leases by US Airways will be deposited with the applicable
Loan Trustee. Amounts in excess of the amounts due and owing under the
Equipment Notes issued with respect to such Aircraft will be distributed by
such Loan Trustee to the applicable Owner Trustee or to US Airways, as the
case may be. (Leases, Section 10; Leased Aircraft Indentures, Section 3.02;
Owned Aircraft Indentures, Sections 3.02 and 5.06)
If an Event of Loss occurs with respect to an engine alone, US Airways
will be required to replace such engine within one hundred twenty (120)
days after the occurrence of such Event of Loss with another engine, free
and clear of all liens (other than certain permitted liens). Such
replacement engine will be (i) a CFM International Model 56-5 (or improved)
type engine or (ii) a CFM engine or another manufacturer's engine suitable
for use on the relevant airframe and having a value and utility equal to or
greater than a CFM Model 56-5 type engine, assuming that such engine had
been maintained in accordance with the Relevant Lease. (Leases, Section
10(b); Owned Aircraft Indenture, Section 5.06(b))
An Event of Loss with respect to an Aircraft, airframe or any engine
means any of the following events with respect
to such property:
o The destruction of such property, damage to such property beyond
economic repair or rendition of such property permanently unfit
for normal use.
o 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.
o Any theft or disappearance of such property for a period of 180
consecutive days or more (or, if earlier, the expiration of the
term).
o The requisition for use of such property by any governmental
entity (other than a requisition for use by the U.S. government or
any government of registry of the aircraft) for a period exceeding
180 consecutive days (or, if earlier, the expiration of the term).
o The requisition for use by the U.S. government (or any government
of registry of the aircraft) that continues until the 30th day
after the last day of the term of the relevant Lease (unless the
Owner Trustee has elected not to treat such event as an Event of
Loss).
o The condemnation, confiscation, requisition or taking of title to
such property for more than 30 days (or, if earlier, the
expiration of the term).
o As a result of any law, rule, regulation, order or other action by
the FAA or any governmental body of the government of registry of
the aircraft, the use of such property in the normal course of
business of air transportation is prohibited for a period of one
hundred eighty (180) consecutive days, unless US Airways (or
sublessee) has undertaken and is diligently carrying forward all
steps which are necessary or desirable to permit the normal use of
such property by US Airways (or such sublessee), but in any event
an Event of Loss will 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 will occur if such "grounding" has been applicable to US
Airways' entire fleet of such aircraft and US Airways, prior to
the expiration of one year from the prohibition of such use, has
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 is diligently carrying forward, in a manner which
does not discriminate against applicable property in so conforming
such property, all steps which are necessary or desirable to
permit the normal use of such property by US Airways (or such
sublessee) but in any event an Event of Loss will occur if such
use is prohibited for a period of two (2) consecutive years or
such use is prohibited at the expiration of the term.
o Any divestiture of title to or interest in an engine in connection
with pooling or certain other arrangements or any event with
respect to an engine that is deemed to be an Event of Loss will be
treated as an Event of Loss with respect to such engine. (Leases,
Section 10; Owned Aircraft Indenture, Section 5.06)
Renewal and Purchase Options
At the end of the term of each Lease after final maturity of the
related Equipment Notes and subject to certain conditions, US Airways has
certain options to renew such Lease for additional limited periods. In
addition, US Airways has the right at the end of the term of each Lease to
purchase the Aircraft subject thereto for an amount to be calculated in
accordance with the terms of such Lease. (Leases, Section 19)
In addition, US Airways may have the right to purchase an Aircraft
from the applicable Owner Trustee prior to the expiration of the term of
such Lease and assume, as direct obligations of US Airways, the Equipment
Notes issued with respect to such Aircraft. Such assumption may occur only
if, among other things, US Airways has provided an opinion of counsel to
the effect that holders of such Equipment Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such assumption
and will be subject to federal income tax on the same amount and in the
same manner and at the same time as would have been the case if such
assumption had not occurred. (Leases, Section 19(b) and Section 20;
Participation Agreements, Section 7(u))
Events of Default under the Leases
The following events constitute Lease Events of Default under each
Lease:
o Failure by US Airways to make any payment of basic rent within
five (5) Business Days after the same has become due or
Termination Value within ten (10) Business Days after receipt by
US Airways of written notice
that the same is past due.
o Failure by US Airways to make a payment of supplemental rent
(other than Termination Value) when the same has become due and
for thirty (30) days after US Airways' receipt of written demand
therefor (provided that failure to pay any amount that is excluded
from the lien of the Indenture shall not constitute an event of
default unless notice is given by the Owner Participant).
o Failure by US Airways to carry and maintain insurance on and in
respect of the Aircraft, airframe and engines, in accordance with
the provisions of such Lease.
o Failure by US Airways to perform or observe in any material
respect any other covenant or agreement to be performed or
observed by it under such Lease or the related Participation
Agreement or certain other related operative documents (other than
the related tax indemnity agreement between US Airways and the
Owner Participant), and such failure continuing unremedied for a
period of thirty (30) days after written notice of such failure by
the applicable Owner Trustee or Loan Trustee unless such failure
is capable of being corrected and US Airways is diligently
proceeding to correct such failure, in which case there is no
Lease Event of Default unless and until such failure continues
unremedied for a period of three hundred sixty (360) days after
the receipt of such notice.
o Any representation or warranty made by US Airways in such Lease or
the related Participation Agreement or in certain other related
operative documents (other than in the related tax indemnity
agreement between US Airways and the Owner Participant) proves to
have been untrue or inaccurate in any material respect at the time
made, such representation or warranty is material at the time in
question and the same remains uncured (to the extent of the
adverse impact thereof) for more than thirty (30) days after the
date of written notice thereof to US Airways.
o The occurrence of certain voluntary events of bankruptcy,
reorganization or insolvency of US Airways or the occurrence of
involuntary events of bankruptcy, reorganization or insolvency
which continues undismissed, unvacated or unstayed for a period of
ninety (90) days. (Leases, Section 14)
Indenture Events of Default under the Owned Aircraft Indenture are
discussed above under "--Indenture Defaults, Notice and Waiver."
Remedies Exercisable upon Events of Default under the Lease
If a Lease Event of Default has occurred and is continuing, the
applicable Owner Trustee may (or, so long as the Indenture is in effect,
the applicable Loan Trustee may, subject to the terms of the Indenture)
exercise one or more of the remedies provided in such Lease with respect to
the related Aircraft. These remedies include the right to repossess and use
or operate such Aircraft, to rescind or terminate such Lease, to sell or
re-lease such Aircraft free and clear of US Airway's rights, except as set
forth in the Lease, and retain the proceeds, and to require US Airways to
pay, as liquidated damages any due and unpaid basic rent plus an amount
equal to, at such Owner Trustee's (or, subject to the terms of the relevant
Leased Aircraft Indenture, the Leased Aircraft Trustee's) option, either
(i) the excess of the present value of all unpaid rent during the remainder
of the term of such Lease over the present value of the fair market rental
value of such Aircraft for the remainder of the term of such Lease or, (ii)
the excess of the Termination Value of such Aircraft over the fair market
sales value of such Aircraft or, if such aircraft has been sold, the net
sales proceeds from the sale of such Aircraft. If the Loan Trustee has
validly terminated such Lease, the Loan Trustee may not sell or lease or
otherwise afford the use of such Aircraft to US Airways or any of its
affiliates. (Leased Aircraft Indentures, Section 4.04)
Transfer of Owner Participant Interests
Subject to certain restrictions, each Owner Participant may transfer
all or any part of its interest in the related Leased Aircraft.
(Participation Agreements, Section 7(k))
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following summary describes the principal U.S. federal income tax
consequences to Certificateholders of the exchange of the Old Class C
Certificates for the New Class C Certificates pursuant to the Exchange
Offer. This summary does not describe any tax consequences arising under
the laws of any state, locality or taxing jurisdiction other than the
United States. This summary is based upon the tax laws and practice of the
United States as in effect on the date of this Prospectus, as well as
judicial and administrative interpretations thereof (in final or proposed
form) available on or before such date. All of the foregoing are subject to
change, which change could apply retroactively. No rulings have been sought
from the Internal Revenue Service (the "IRS") with respect to the U.S.
federal income tax consequences, discussed below, and no assurances can be
given that the IRS will not take contrary positions.
The exchange of the Old Class C Certificates for the New Class C
Certificates pursuant to the Exchange Offer will not be a taxable event for
U.S. federal income tax purposes. As a result, no gain or loss will be
recognized by a holder of the Old Class C Certificates (with attached Old
Escrow Receipts) upon receipt of the New Class C Certificates (with
attached New Escrow Receipts). A holder's tax basis in the New Class C
Certificates received pursuant to the Exchange Offer will be the same as
the holder's tax basis in the Old Class Certificates exchanged therefor and
a holder's tax basis in the New Escrow Receipts received pursuant to the
Exchange Offer will be the same as the holder's tax basis in the Old Escrow
Receipts exchanged therefor. A holder's holding period for the New Class C
Certificates received pursuant to the Exchange Offer will include its
holding period for the Old Class C Certificates exchanged therefor and a
holder's holding period for the New Escrow Receipts received pursuant to
the Exchange Offer will include its holding period for the Old Escrow
Receipts exchanged therefor.
Certificateholders should consult their own tax advisors with respect
to the federal, state, local and foreign tax consequences to them of
exchanging the Old Class C Certificates for the New Class C Certificates
and of the ownership and disposition of the New Class C Certificates
received pursuant to the Exchange Offer in light of their own particular
circumstances.
ERISA CONSIDERATIONS
General
The Employee Retirement Income Security Act of 1974, as amended
("ERISA"), imposes certain requirements on employee benefit plans subject
to Title I of ERISA ("ERISA Plans"), and on those persons who are
fiduciaries with respect to ERISA Plans. Investments by ERISA Plans are
subject to ERISA's general fiduciary requirements, including, but not
limited to, the requirement of investment prudence and diversification and
the requirement that an ERISA Plan's investments be made in accordance with
the documents governing the Plan.
Section 406 of ERISA and Section 4975 of the Code prohibit certain
transactions involving the assets of an ERISA Plan (as well as those plans
that are not subject to ERISA but which are subject to Section 4975 of the
Code, such as individual retirement accounts (together with ERISA Plans,
"Plans")) and certain persons (referred to as "parties in interest" or
"disqualified persons") having certain relationships to such Plans, unless
a statutory or administrative exemption is applicable to the transaction. A
party in interest or disqualified person who engages in a prohibited
transaction may be subject to excise taxes and other penalties and
liabilities under ERISA and the Code.
Under a 1993 decision of the United States Supreme Court, insurance
company general accounts in which Plans have invested may themselves be
treated as holding Plan assets and deemed subject to ERISA's fiduciary
requirements and prohibited transaction rules.
Any Plan fiduciary which proposes to cause a Plan to acquire any New
Class C Certificates should consult with its counsel regarding the
applicability of the fiduciary responsibility and prohibited transaction
provisions of ERISA and Section 4975 of the Code to such an investment, and
to confirm that such purchase and holding will not constitute or result in
a non-exempt prohibited transaction or any other violation of an applicable
requirement of ERISA.
Governmental plans and certain church plans, while not subject to the
fiduciary responsibility provisions of ERISA or the prohibited transaction
provisions of ERISA and Section 4975 of the Code, may nevertheless be
subject to state or other federal laws that are substantially similar to
the foregoing provisions of ERISA and the Code. Fiduciaries of any such
plans should consult with their counsel before acquiring any New Class C
Certificates.
Plan Assets Issues
The Department of Labor has promulgated a regulation, 29 CFR Section
2510.3-101 (the "Plan Asset Regulation"), describing what constitutes the
assets of a Plan with respect to the Plan's investment in an entity for
purposes of ERISA and Section 4975 of the Code. Under the Plan Asset
Regulation, if a Plan invests (directly or indirectly) in a New Class C
Certificate, the Plan's assets will include both the New Class C
Certificate and an undivided interest in each of the underlying assets of
the Class C Trust, including the Equipment Notes held by such Trust, unless
it is established that equity participation in the Trust by benefit plan
investors (including but not limited to Plans and entities whose underlying
assets include Plan assets by reason of an employee benefit plan's
investment in the entity) is not "significant" within the meaning of the
Plan Asset Regulation. In this regard, the extent to which there is equity
participation in the Class C Trust by, or on behalf of, employee benefit
plans will not be monitored. If the assets of the Class C Trust are deemed
to constitute the assets of a Plan, transactions involving the assets and
operations of such Trust could be subject to the prohibited transaction
provisions of ERISA and Section 4975 of the Code.
Prohibited Transaction Exemptions
In addition, whether or not the assets of the Class C Trust are deemed
to be Plan assets under the Plan Asset Regulation, the fiduciary of a Plan
that proposes to acquire and hold any New Class C Certificates should
consider, among other things, whether such acquisition and holding may
involve (i) the direct or indirect extension of credit to a party in
interest or a disqualified person, (ii) the sale or exchange of any
property between a Plan and a party in interest or a disqualified person,
or (iii) the transfer to, or use by or for the benefit of, a party in
interest or a disqualified person, of any Plan assets. Such parties in
interest or disqualified persons could include, without limitation, US
Airways and its affiliates, the Owner Participants, the Underwriters, the
Trustees, the Escrow Agent, the Depositaries, the Owner Trustees and the
Liquidity Provider. Moreover, if Certificates are purchased by a Plan and
Certificates of a subordinate Class are held by a party in interest or a
disqualified person with respect to such Plan, the exercise by the holder
of the subordinate Class of Certificates of its right to purchase the
senior Classes of Certificates upon the occurrence and during the
continuation of a Triggering Event could be considered to constitute a
prohibited transaction unless a statutory or administrative exemption were
applicable. See "Description of the Certificates--Purchase Rights of
Certificateholders." Depending on the identity of the Plan fiduciary making
the decision to acquire or hold Certificates on behalf of a Plan,
Prohibited Transaction Class Exemption ("PTCE") 91-38 (relating to
investments by bank collective investment funds), PTCE 84-14 (relating to
transactions effected by a "qualified professional asset manager"), PTCE
95-60 (relating to investments by an insurance company general account),
PTCE 96-23 (relating to transactions directed by an in-house professional
asset manager) or PTCE 90-1 (relating to investments by insurance company
pooled separate accounts) (collectively, the "Class Exemptions") could
provide an exemption from the prohibited transaction provisions of ERISA
and Section 4975 of the Code. However, there can be no assurance that any
of these Class Exemptions or any other exemption will be available with
respect to any particular transaction involving the New Class C
Certificates.
Each person who acquires or accepts a New Class C Certificate or an
interest therein, will be deemed by such acquisition or acceptance to have
represented and warranted that either: (i) no Plan assets have been used to
purchase such New Class C Certificate or an interest therein or (ii) the
purchase and holding of such New Class C Certificate or interest therein
are exempt from the prohibited transaction restrictions of ERISA and
Section 4975 of the Code pursuant to one or more prohibited transaction
statutory or administrative exemptions.
Special Considerations Applicable to Insurance Company General Accounts
It should be noted that the Small Business Job Protection Act of 1996
added new Section 401(c) of ERISA relating to the status of the assets of
insurance company general accounts under ERISA and Section 4975 of the
Code. Pursuant to Section 401(c), the Department of Labor is required to
issue final regulations (the "General Account Regulations") with respect to
insurance policies issued on or before December 31, 1998 that are supported
by an insurer's general account. The General Account Regulations are to
provide guidance on which assets held by the insurer constitute "plan
assets" for purposes of the fiduciary responsibility provisions of ERISA
and Section 4975 of the Code. Section 401(c) also provides that, except in
the case of avoidance of the General Account Regulations and actions
brought by the Secretary of Labor relating to certain breaches of fiduciary
duties that also constitute breaches of state or federal criminal law,
until the date that is 18 months after the General Account Regulations
become final, no liability under the fiduciary responsibility and
prohibited transaction provisions of ERISA and Section 4975 of the Code may
result on the basis of a claim that the assets of the general account of an
insurance company constitute the assets of any Plan. The plan asset status
of insurance company separate accounts is unaffected by new Section 401(c)
of ERISA, and separate account assets continue to be treated as the assets
of any Plan invested in a separate account, except to the extent provided
in the Plan Asset Regulation.
As of the date hereof, the DOL has issued proposed regulations under
Section 401(c). If the General Account Regulations are adopted
substantially in the form in which proposed, the General Account
Regulations may not exempt the assets of insurance company general accounts
from treatment as "plan assets" after December 31, 1998. The proposed
regulations should not, however, adversely affect the applicability of PTCE
95-60 to the acquisition of New Class C Certificates by insurance company
general accounts.
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Class C Certificates for its own
account pursuant to the Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such New Class C
Certificates. This Prospectus, as it may be amended or supplemented from
time to time, may be used by a broker-dealer in connection with resales of
New Class C Certificates received in exchange for Old Class C Certificates
where such Old Class C Certificates were acquired as a result of
market-making activities or other trading activities. US Airways has agreed
that for a period of one hundred eighty (180) days after the Expiration
Date, it will make this Prospectus, as amended or supplemented, available
to any broker-dealer for use in connection with any such resale. In
addition, until ___________, 1999, all dealers effecting transactions in
the New Class C Certificates may be required to deliver a prospectus.
US Airways will not receive any proceeds from any sale of New Class C
Certificates by broker-dealers. New Class C Certificates received by
broker-dealers for their own account pursuant to the Exchange Offer may be
sold from time to time in one or more transactions in the over-the-counter
market, in negotiated transactions, through the writing of options on the
New Class C Certificates or a combination of such methods of resale, at
market prices prevailing at the time of resale, at prices related to such
prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such New Class C Certificates.
Any broker-dealer that resells New Class C Certificates that were received
by it for its own account pursuant to the Exchange Offer and any broker or
dealer that participates in a distribution of such New Class C Certificates
may be deemed to be an "underwriter" within the meaning of the 1933 Act and
any profit on any such resale of New Class C Certificates and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the 1933 Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the 1933 Act.
For a period of one hundred eighty (180) days after the Expiration
Date, US Airways will promptly send additional copies of this Prospectus
and any amendment or supplement to this Prospectus to any broker-dealer
that requests such documents in the Letter of Transmittal. US Airways has
agreed to pay all expenses incident to the Exchange Offer other than
commissions or concessions of any brokers or dealers and will indemnify the
holders of the Certificates (including any broker-dealers) against certain
liabilities, including liabilities under the 1933 Act.
The Initial Purchaser may sell the Class C Certificates from time to
time in one or more transactions at a fixed price or prices, which may be
changed, or at market prices prevailing at the time of sale (if any), at
prices related to such prevailing market prices (if any) or at negotiated
prices.
LEGAL MATTERS
The validity of the New Class C Certificates is being passed upon for
US Airways by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates.
EXPERTS
The consolidated financial statements of US Airways, Inc. and its
subsidiary as of December 31, 1997 and 1996, and for each of the years in
the three-year period ended December 31, 1997 which are included in US
Airways' Annual Report on Form 10-K for the year ended December 31, 1997,
have been incorporated by reference herein and in the Registration
Statement in reliance upon the report of KPMG LLP, independent certified
public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
The references to AVITAS, AvSolutions and MBA, and to their respective
appraisal reports, each dated as of November 16, 1998, are included herein
in reliance upon the authority of each such firm as an expert with respect
to the matters contained in its appraisal report.
OTHER INFORMATION
Effects of Year 2000
The Company has or is currently operating computer software
applications, systems and products that support important business
functions, including reservations, accounting and flight operations
systems, that will not properly process dates on or after January 1, 2000
(commonly referred to as the "Year 2000" problem). In order to address this
situation, the Company has implemented a plan that addresses the Company's
information technology and non-information technology arenas. The Company
has two teams of full-time staff in place. One team is coordinating the
conversion of the Company's information technology to systems managed by
The SABRE Group ("TSG"), including the Year 2000 compliance for those
systems, as further described below. A second team, headed by the Company's
Chief Information Officer, is coordinating Year 2000 compliance efforts for
non-information technology systems. This team has engaged the consulting
arm of a "big five" public accounting firm to assist them in their efforts.
This team is reviewing the level of the Company's Year 2000 compliance, and
recommending such remedial measures as are necessary.
TSG Year 2000 Project
The Company has a long-term information technology relationship with
TSG pursuant to which it is converting many of its information technology
systems to those provided by TSG. TSG has reported that a majority of its
primary "host" systems (including systems for reservations, flight
operations, and cargo) are already Year 2000 compliant. The balance of
TSG's systems to which the Company will be converting are scheduled to be
Year 2000 compliant no later than August 1, 1999. TSG has agreed to
remediate all non-Year 2000 compliant systems that are covered by the
Company's relationship with TSG, but that are not being converted to a TSG
system. These remediation efforts are scheduled for completion by August 1,
1999.
TSG has also informed the Company that it is in the process of
communicating with TSG's own third party vendors concerning the Year 2000
compliance of their products and services.
Company Year 2000 Project
The Company operates computer software and systems that are not Year
2000 compliant, and that are not covered by the TSG relationship. This
includes both information technology and non-information technology systems
(such as fax machines, miscellaneous airport devices, and aircraft
avionics).
The Company has completed an inventory of items with possible Year
2000 problems. The Company has prioritized these items and has began to
implement a program to assess, remediate and test the non-discretionary
systems based on this prioritization. The Company completed the assessment
of all mission critical items as of January 31,1999. The Company plans to
complete the remediation of all non-discretionary systems by August 31,
1999. The Company is also working with the FAA to ensure full compliance
with any FAA Year 2000 requirements.
The Company has also commenced airport and facility reviews. This
entails reviewing the Year 2000 compliance of the systems in those
locations over which the Company has little or no control, such as certain
flight information displays, elevators, security and other miscellaneous
airport devices. The Company completed these reviews as of December 31,
1998. The Company is also participating in Year 2000 review efforts being
coordinated on an industry-wide basis by the Airline Transport Association
and the International Air Transport Association.
The Company has identified and prioritized its supplier base, and is
commencing formal contact with these vendors to determine their Year 2000
status, and any possible impact on the Company. Approximately 90% of these
vendors have been contacted with 65% vendor responses returned. The Company
will track these responses and evaluate its long term relationship with
these vendors based on the responses it receives.
Contingency Plans
Although TSG has notified the Company that it believes that its Year
2000 compliance program is on schedule, there can be no assurance that the
compliance program will be completed in a timely manner. The Company
expects to remediate or replace all non-compliant internal mission critical
non-TSG systems by August 31, 1999. The Company has implemented
comprehensive Year 2000 compliance monitoring and risk mitigation programs
covering all of its mission critical business partners, including airports
and suppliers of goods and services. Despite these efforts, there can be no
assurance that the Company's own computer software and systems, those of
its suppliers, the airports at which the Company operates, or the air
traffic control system managed by the FAA will be made Year 2000 compliant
in a timely manner. Any such failures could have a material adverse effect
on the business, financial position and results of operations of the
Company.
The Company is establishing contingency plans in the event that any
mission critical, non-discretionary system is not Year 2000 compliant by
the date required. These plans will entail finding alternative
vendors/suppliers who are Year 2000 compliant, purchasing additional
products and inventories/supplies, and reverting to manual systems or
workarounds, prior to December 31, 1999. In the event that the Company is
required to implement a contingency plan, it believes that the result may
be significant delays in operations and flight cancellations. In the event
that such delays and flight cancellations occur, it is possible, depending
on the extent of the delays and cancellations, that there could be a
material adverse impact on the Company's results of operations and
financial position.
As of December 31, 1998, aggregate expenses incurred by the Company to
become Year 2000 compliant, apart from expenses related to the TSG
relationship, have amounted to approximately $2 million. The Company
expects to spend an additional $8 million, apart from the TSG relationship,
in order to become fully Year 2000 compliant. These amounts are also
exclusive of any replacement equipment that may become necessary and have
not yet been identified. With respect to the cost of TSG's Year 2000
compliance program, the Company cannot completely quantify the costs for
Year 2000 compliance in its information technology systems because such
costs have been incorporated into the costs of the broader conversion plan
to TSG systems. However, the Company anticipates incurring $32 million in
expenses for TSG services which are related solely to Year 2000 compliance
efforts on the systems, unrelated to the broader conversion plan. The
Company paid TSG $21 million for these services in 1998 and expects to pay
an additional $11 million in 1999 for these services. Overall, the Company
believes that the cost of becoming Year 2000 compliant is not expected to
have a material adverse effect on the business, financial position or
results of operations of the Company.
AVAILABLE INFORMATION
US Airways has filed with the Commission a Registration Statement on
Form S-4 (together with all amendments, exhibits and schedules, the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act") with respect to the Certificates offered hereby. This
Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the Commission, and to which reference is
hereby made. Statements made in this Prospectus as to the contents of any
contract, agreement or other document referred to are not necessarily
complete. With respect to each such contract, agreement or other document
filed as an exhibit to the Registration Statement, reference is made to the
exhibit for a more complete description of the matter involved.
US Airways is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files periodic reports and other information with the
Commission. Such reports and other information, as well as the Registration
Statement may be inspected at the public reference facilities maintained by
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, Room
1024, and at the regional offices of the Commission located at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and at
7 World Trade Center, 13th Floor, New York, New York 10048. Copies of such
materials may be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. Such material may also be accessed electronically by means of the
Commission's Internet web site (http://www.sec.gov), which contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission. In addition,
reports, proxy statements and other information concerning US Airways may
be inspected and copied at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005.
REPORTS TO CERTIFICATEHOLDERS
State Street Bank and Trust Company, in its capacity as Trustee under
each of the Trusts, will provide the Certificateholders of each Trust
certain periodic reports concerning the distributions made from such Trust.
See "Description of the Certificates--Reports to Certificateholders." Such
reports will not constitute financial statements prepared in accordance
with generally accepted accounting principles.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No. 1-8442)
are hereby incorporated by reference in this Prospectus: (i) US Airways'
Annual Report on Form 10-K for the year ended December 31, 1997, filed on
March 19, 1998, (ii) US Airways' Quarterly Reports on Form 10-Q for the
quarterly periods ended March 31, 1998, filed on May 11, 1998, June 30,
1998, filed on August 6, 1998, and September 30, 1998, filed on November
12, 1998 and (iii) US Airways' Current Reports on Form 8-K filed on January
22, February 4, April 22, June 4, July 2, July 22, September 4, October 21,
November 24, December 9, and December 29, 1998 and January 21, 1999.
All documents filed by US Airways pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the exchange of the Certificates exchanged
hereby will be deemed to be incorporated by reference into this Prospectus
and to be a part hereof from the respective dates of filing of such
documents. Any statement contained in a document incorporated or deemed to
be incorporated herein by reference, or contained in this Prospectus, will
be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference
herein or contained in the Prospectus with respect to the Certificates
modifies or supersedes such statement. Any such statement so modified or
superseded will not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
US Airways will provide without charge to any person to whom a copy of
this Prospectus has been delivered, upon written or oral request, a copy of
any or all of the foregoing documents incorporated herein by reference
(other than exhibits to such documents). Requests should be directed to US
Airways, Inc., 2345 Crystal Drive, Arlington, Virginia 22227, Attn:
Secretary, telephone (703) 872-7000.
APPENDIX I--INDEX OF TERMS
Page
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ABN AMRO.................................................................71
Adjusted Expected Distributions..........................................75
Administration Expenses..................................................74
Agent's Message..........................................................37
Aggregate LTV Collateral Amount .........................................76
AIFS.....................................................................20
Airbus...................................................................33
Airbus Financing Commitment..............................................20
Airbus Financing Termination Event . ....................................64
Aircraft.................................................................77
Aircraft Operative Agreements............................................58
Amendment No. 1 to the Registration Agreement............................33
American Airlines........................................................30
Appraised Current Market Value...........................................76
Appraisers...............................................................77
Assumed Aircraft Value...................................................83
Assumed Amortization Schedule............................................48
Assumed Appraised Value..................................................57
Average Life Date........................................................82
AVITAS...................................................................77
AVSA.....................................................................56
AvSolutions..............................................................77
Base Rate................................................................69
Basic Agreement..........................................................44
Book Entry Confirmation..................................................37
Book Entry Transfer Facility.............................................37
Business Day.............................................................47
Cash Collateral Account..................................................68
Cede.....................................................................59
Certificate Account......................................................46
Certificate Owner........................................................59
Certificateholder........................................................44
Certificates..............................................................5
Citibank.................................................................64
Class A Certificates.....................................................43
Class A Trust............................................................44
Class A Trustee..........................................................24
Class B Certificates.....................................................43
Class B Trust............................................................44
Class B Trustee..........................................................24
Class C Certificates......................................................5
Class C Special Deposit Payments.........................................80
Class C Special Indemnity Payments.......................................80
Class C Trust............................................................44
Class C Trustee..........................................................24
Class Exemptions.........................................................97
Code.....................................................................54
Commission...............................................................43
Company...................................................................5
Controlling Party........................................................13
Convention...............................................................89
CSFB.....................................................................64
Current Distribution Date................................................74
CWA......................................................................21
default..................................................................51
Definitive Certificates..................................................61
Delay Period.............................................................34
Delivery Period..........................................................77
Delivery Period Termination Date.........................................63
Deposit..................................................................62
Deposit Account..........................................................62
Deposit Agreements.......................................................62
Deposit Make-Whole Premium...............................................63
Depositary...............................................................64
Depreciation Assumption..................................................83
Distribution Date........................................................46
DOT......................................................................23
Downgrade Drawing........................................................68
DTC......................................................................49
DTC Participants.........................................................60
Eligible Institution.....................................................38
Equipment Notes..........................................................79
ERISA....................................................................95
ERISA Plans..............................................................95
Escrow Agent.............................................................65
Escrow Agreements........................................................65
Escrow Receipts..........................................................66
Event of Loss............................................................91
Exchange Act............................................................101
Exchange Agent...........................................................42
Exchange Offer...........................................................33
Excusable Delay..........................................................78
Expected Distributions...................................................74
Expiration Date..........................................................36
FAA......................................................................23
Final Distributions......................................................72
Final Drawing............................................................69
Final Maturity Date......................................................45
General Account Regulations..............................................97
H.15(519)................................................................82
IAMAW....................................................................21
Indenture Default........................................................50
Indentures...............................................................56
Indirect Participants....................................................60
Initial Delivered Aircraft...............................................56
Initial Purchaser........................................................33
Intercreditor Agreement..................................................71
Interest Drawings........................................................66
IRS......................................................................95
Issuance Date............................................................33
Kennedy................................................................. 23
LaGuardia............................................................... 23
Lease....................................................................88
Lease Event of Default...................................................50
Lease Period Date........................................................88
Leased Aircraft..........................................................56
Leased Aircraft Indenture................................................56
Letter of Transmittal....................................................34
LIBOR....................................................................70
Liquidity Event of Default...............................................70
Liquidity Expenses.......................................................73
Liquidity Facility.......................................................66
Liquidity Obligations....................................................73
Liquidity Provider.......................................................71
Loan Trustee.............................................................24
Loss Payment Date........................................................91
LTV Appraisal............................................................76
LTV Collateral Amount....................................................76
LTV Ratio................................................................76
LTVs.....................................................................11
Make-Whole Premium.......................................................81
Mandatory Document Terms.................................................58
Mandatory Economic Terms.................................................57
Maximum Amount...........................................................63
Maximum Available Commitment.............................................67
MBA......................................................................77
MetroJet.................................................................28
Minimum Sale Price.......................................................73
Moody's..................................................................25
most recent H.l5(5 19)...................................................82
Multiplier...............................................................36
New Class C Certificates.................................................33
New Escrow Receipt.......................................................66
NMB......................................................................21
Non-Extension Drawing....................................................69
Non-Performing Equipment Note ...........................................76
Non-Premium Amount.......................................................64
Note Holders.............................................................58
Note Purchase Agreement..................................................56
Note Purchase Termination Events.........................................56
Notice of Guaranteed Delivery............................................40
NYSE.....................................................................40
O'Hare...................................................................23
Old Class C Certificates.................................................33
Old Escrow Receipt.......................................................66
Owned Aircraft...........................................................56
Owned Aircraft Indenture.................................................56
Owner Participant........................................................79
Owner Trustee............................................................44
Par Redemption Amount....................................................64
Participating Broker-Dealer..............................................34
Participation Agreement..................................................56
Pass Through Trust Agreements............................................44
Paying Agent.............................................................65
Paying Agent Account.....................................................47
Performing Equipment Note................................................67
Plan Asset Regulation....................................................96
Plans....................................................................95
Pool Balance.............................................................47
Pool Factor..............................................................47
Prospectus................................................................1
PTC Event Of Default.....................................................52
PTCE.....................................................................96
Purchase Agreement.......................................................33
Rating Agencies..........................................................25
Reagan National..........................................................23
Receiptholder............................................................65
Registration Default.....................................................35
Registration Agreement...................................................33
Registration Statement..................................................100
Regular Distribution Dates...............................................45
Remaining Weighted Average Life..........................................82
Replacement Facility.....................................................68
Required Amount..........................................................67
Rules....................................................................60
Scheduled Payments.......................................................45
Section 1110 Period..................................................67, 85
Securities Act..........................................................100
Series A Equipment Notes.................................................79
Series B Equipment Notes.................................................79
Series C Equipment Notes.................................................79
Shelf Registration Statement.............................................35
Southwest Airlines.......................................................22
Special Distribution Date................................................46
Special Payment..........................................................46
Special Payments Account.................................................47
Standard & Poor's........................................................25
Stated Interest Rate.....................................................45
Subordination Agent .....................................................76
Substitute Aircraft......................................................78
Termination Notice.......................................................70
Termination Value........................................................91
Threshold Rating.........................................................68
Transportation Code......................................................53
Travelers................................................................65
Treasury Yield...........................................................81
Triggering Event.........................................................52
Trust Agreements.........................................................79
Trust Indenture Act......................................................41
Trust Property...........................................................44
Trust Supplement.........................................................44
Trustee..................................................................44
Trusts...................................................................44
TSG......................................................................99
US Airways...............................................................19
US Airways Express.......................................................30
US Airways Group.........................................................19
US Airways Shuttle.......................................................30
Appraisals
[LOGO OF AVITAS APPEARS HERE]
- -----------------------------------------------------------------------------
US AIRWAYS, INC. NOVEMBER 16, 1998
- -----------------------------------------------------------------------------
INTRODUCTION
AVITAS, Inc. has been retained by US Airways, Inc. (the "Client") to
provide its opinion as to the Base Value for seventeen Airbus A3 19 and six
A320 aircraft. The subject aircraft are identified and their values are set
forth in Figure 1 on page 3.
The values presented in this report assume that this aircraft will be in
new, "flyaway" condition and fully certificated for commercial operations.
We have further assumed that the subject aircraft will be operated under
the air transport regulations of a major nation.
The values presented in this report do not take into consideration fleet
sales, attached leases, tax considerations or other factors that might be
considered in structuring the terms and conditions of a specific
transaction. These factors do not directly affect the value of the aircraft
itself but can affect the economics of the transaction. Therefore, the
negotiated striking price in an aircraft transaction may take into
consideration factors such as the present value of the future lease stream,
the terms and conditions of the specific lease agreement and the impact of
tax considerations.
DEFINITIONS
AVITAS's value definitions, set forth in full in the appendix at the end of
this report, conform to those of the International Society of Transport
Aircraft Trading ("ISTAT") adopted in January 1994, and are summarized as
follows:
o BASE VALUE is the appraiser's opinion of the underlying economic value
of an aircraft in an open, unrestricted, stable market environment with
a reasonable balance of supply and demand, and assumes full
consideration of its "highest and best use." An aircraft's Base Value is
founded in the historical trend of values and in the projection of value
trends and presumes an arm's-length, cash transaction between willing
and knowledgeable parties, acting prudently, with an absence of duress
and with a reasonable period of time for marketing. Base Value typically
assumes that an aircraft's physical condition is average for an aircraft
of its type and age, and its maintenance time status is at mid-life,
mid-time (or benefiting from an above-average maintenance status if it
is new or nearly new).
--------------[GRAPHIC APPEARS HERE]----------------
WORLD HEADQUARTERS: 1835 Alexander Bell Drive,
Reston, VA 20191 USA . Telephone: (703) 476-2300
Fax: (703) 860-5855 Email: [email protected]
AVITAS EUROPE: Palace House, 3 Cathedral St.
London SEI 9DE . Telephone: 0171-716-6621
Fax: 0717-357-6873 Email: [email protected]
AVITAS ENGINEERING: 5040 N.W. 7th Street, #900
Miami, FL 33126 . Telephone: (305)476-9650
Fax: (305) 476-9915 Email: [email protected]
A DET NORSKE VERITAS COMPANY
- ----------------------------------------------------------------------------
AIRCRAFT VALUE
AVITAS's opinion as to the value of the subject aircraft is presented below
in millions of U.S. dollars.
The Base Value of a new aircraft is the modal price paid by an average
operator in a single unit or small lot sale. Actual transaction prices may
be either above or below that level due to a number of factors. For
example, a launch order or a large fleet order may result in discounts,
whereas a single unit sale to a small operator who needs a substantial
amount of support may be at or above the list price.
Furthermore, implicit in these values is AVITAS's assumption that the new
aircraft will remain with the original operator for at least two years. If
a newly delivered aircraft comes onto the market, the seller is at an
immediate disadvantage as he is likely to be in competition with the
manufacturer who can offer training and support.
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FIGURE 1
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US AIRWAYS, INC.
AIRCRAFT DESCRIPTION &
SUMMARY OF AIRCRAFT VALUES
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AIRCRAFT VALUES IN US$ MILLIONS
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Base Value
No. Type Manufacturer Engine Date of Delivery at Delivery
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1 A319 Airbus CFM56-5B6 Oct-98 $ 37.7
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2 A319 Airbus CFM56-5B6 Oct-98 37.7
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3 A319 Airbus CFM56-5B6 Nov-98 37.7
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4 A319 Airbus CFM56-5B6 Nov-98 37.7
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5 A319 Airbus CFM56-5B6 Dec-98 37.7
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6 A319 Airbus CFM56-5B6 Dec-98 37.7
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7 A319 Airbus CFM56-5B6 Jan-99 38.7
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8 A319 Airbus CFM56-5B6 Jan-99 38.7
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9 A319 Airbus CFM56-5B6 Feb-99 38.7
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10 A319 Airbus CFM56-5B6 Mar-99 38.7
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11 A319 Airbus CFM56-5B6 May-99 39.3
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12 A319 Airbus CFM56-5B6 Jun-99 39.3
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13 A319 Airbus CFM56-5B6 Jun-99 39.3
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14 A319 Airbus CFM56-5B6 Jul-99 39.8
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15 A319 Airbus CFM56-5B6 Jul-99 39.8
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16 A319 Airbus CFM56-5B6 Jul-99 39.8
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17 A319 Airbus CFM56-5B6 Jul-99 39.8
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18 A320 Airbus CFM56-5B4 Jan-99 44.6
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19 A320 Airbus CFM56-5B4 May-99 45.3
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20 A320 Airbus CFM56-5B4 May-99 45.3
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21 A320 Airbus CFM56-5B4 Jun-99 45.3
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22 A320 Airbus CFM56-5B4 Jun-99 45.3
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23 A320 Airbus CFM56-5B4 Jul-99 46.0
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BACKGROUND - AIRBUS A319
The A319 program was launched in June 1993 and the first aircraft of the
type was certificated in April 1996. The aircraft seats 124 passengers in a
typical two-class configuration or 154 in a maximum configuration. It has a
basic range of 2,000 nautical miles with a MTOW of 141,100 pounds and an
optional range of 3,000 nautical miles with a MTOW of 149,900 pounds. The
aircraft is also available at a higher MTOW of 166,450 pounds as a result
of that weight being offered for the A319CJ, the Airbus corporate jet.
However, for an airline operator to take advantage of the longer range
permitted by a higher weight, the operator would have to trade cargo space
in the belly of the aircraft for an additional fuel tank. The A319 has a
12-feet shorter fuselage than the A320, accomplished by removing two
fuselage plugs.
The design of this new aircraft is focused on maintaining a high degree of
commonality with the A320 and the A321 so that an existing A319 operator
could easily transition to its larger versions, where almost all of the
major systems of the A319 are exactly the same.
The A319 is available with either CFM56-5A/-5B or IAE V2500-A5 engines and
meets the noise abatement requirements outlined in U.S. FAR Part 36, Stage
3, and ICAO Annex 16, Chapter III regulations.
CURRENT MARKET - AIRBUS A319
CURRENT MARKET
AVITAS believes that A319 current market is firm as is the narrowbody
market as a whole. With a backlog of 371 firm orders and acceptance in the
North American market, the A319 values should remain firm for the
foreseeable future.
HISTORIC MARKET DEVELOPMENT
The development of the A319, A320, and A321 characterizes the market
strategy of Airbus to build an entire family of aircraft capable of
accommodating a wide range of travel demands while maintaining a high
degree of commonality. Operators that have a mixed fleet of A319, A320s and
A321s will a have greater ability to match capacity to demand, reduce
operating cost, increase crew productivity and simplify ground handling.
This is shown by the fact that the majority of all current operators of
A319 aircraft or with A319 aircraft on order are present A320 customers.
THE OPERATING LEASE MARKET
AVITAS is aware of lease rates for 1996 vintage A319s for $310,000 per
month per aircraft on 10-year operating leases with lessor's cost of $34.5
million per aircraft.
AVAILABILITY
AVITAS is not aware of any used aircraft available. This is in line with
expectations for such a new aircraft program.
RECENT TRANSACTIONS
With the recent introduction of the A319, a secondary market has yet to
develop for this aircraft.
ENGINE CHOICES
The current A319 fleet is powered by CFM56-5A/-5B engines (86%) and IAE
V2500- A5 (14%). However, in the broader scope of the A320 family, 63% are
operated with CFM engines and 37% with IAE engines.
RECENT FLEET DEVELOPMENTS
In August 1998, British Airways announced its first ever Airbus order for
39 A320s and 20 A319s with V2500 engines and options for 129 aircraft.
Deliveries are scheduled from September 1999 through 2004. The aircraft
will replace the carrier's 737-200, Fl00, F28 and MD-83 aircraft operated
by the carrier and its European subsidiaries.
In June 1998, Air France announced that it has placed orders for 16 A319
aircraft, with deliveries beginning in 2002.
In March 1998, the three Latin American carriers TAM of Brazil, TACA Group
and LanChile combined to order 90 A319 and A320 aircraft with options for
an additional 89 aircraft. Breakdown of the order between A319 and A320
aircraft was not announced, however the aircraft will be powered by IAE
V2500 engines. Also in March, United Airlines signed a firm contract to
purchase 10 A319 aircraft for delivery in 2000 and 2001.
Spanish flag carrier Iberia signed a MOU with Airbus in February, 1998 for
orders and options of up to nine A319 aircraft as part of a larger deal
involving the firm order of 50 A319/A320/A321 aircraft and options for 26
additional aircraft.
CURRENT OPERATOR BASE AND BACKLOG
Presented below is the current fleet and backlog for the A319-100 by
operator. Also presented are the A319 by engine type and a presentation of
the A319/A320/A321 family current fleet and backlog.
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FIGURE 2
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A319 FLEET DATA
as of JUNE 1998
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Operator In Service Orders Options Total
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AIR CANADA 33 - - 33
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LUFTHANSA 17 2 20 39
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AIRBUS INDUSTRIE 10 - - 10
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AIR FRANCE 9 4 8 21
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UNITED AIR LINES 9 25 - 34
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SWISSAIR 8 - - 8
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TAP AIR PORTUGAL 4 12 - 16
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EUROWINGS 3 1 2 6
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CROATIA AIRLINES 1 4 6 11
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AMERICA WEST AIRLINES - 22 20 42
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FINNAIR - 5 5 10
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GE CAPITAL AVIATION SERVICES INC. - 2 4 6
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IBERIA - - 9 9
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ILFC - 42 - 42
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LAN CHILE - 11 9 20
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NORTHWEST AIRLINES - 50 100 150
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SABENA - 26 - 26
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SILKAIR - 3 - 3
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TACA INTERNATIONAL AIRLINES - 21 18 39
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TAM TRANSPORTES AEREOS REGIONAIS - 25 25 50
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TUNIS AIR - 3 - 3
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UNKNOWN OPERATOR - 4 - 4
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US AIRWAYS - 109 276 385
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Grand Total 94 371 502 967
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Source: BACK Information Services
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FIGURE 3
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A319 AIRCRAFT BY ENGINE MANUFACTURER
AS OF JUNE 1998
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ENGINE IN SERVICE ORDERS OPTIONS TOTAL
---------------------------------------------------------------------------
CFM 56 81 222 430 733
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V2500 13 116 72 201
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Undecided - 33 - 33
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GRAND TOTAL 94 371 502 967
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Source: BACK Information Services
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FIGURE 4
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A319/A320/A321 SERIES CURRENT FLEET AND BACKLOG
AS OF JUNE 1998
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MODEL IN SERVICE ORDERS OPTIONS TOTAL
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A319-100 94 371 502 967
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A320-100 18 - - 18
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A320-200 631 344 136 1,111
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A321-100 74 34 64 172
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A321-200 28 87 34 149
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GRAND TOTAL 845 836 736 2,417
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Source: BACK Information Services
OUTLOOK AND FUTURE ASSET RISK ANALYSIS
The A319 competes with the Boeing 737-500 and -600 which currently have
combined 368 aircraft in service and 154 on order.
It is AVITAS's opinion that expansion of the A319's operator base will
primarily come from existing A320 operators. Of minor concern is that 12%
of the current backlog is held by GE Capital Aviation Services (GECAS) and
International Lease Finance Corporation (ILFC) who have likely ordered the
aircraft with the flexibility to convert to A320 or A321 aircraft.
BACKGROUND - AIRBUS A320 SERIES
The A320, a Stage 3 compliant short to medium range twin-engine jetliner
was launched in 1984 with certification in 1988. The original was the
A320-100, of which there are only 18 in service among three operators. The
- --100 aircraft have no wing center tank which limits the range and payload.
The A320-200 was first flown and delivered in 1988 to Air France and
British Caledonian Airways. Its typical configuration includes a two-person
cockpit crew with capacity for 150 passengers with high density seating of
179. The A320 has a range of 3,000 nautical miles with 150 passengers and
is powered by CFM56-5A/- 5B, V2500-A1/A5 and V2527/E-A5 engines, with
thrust ranging from 25,000 pounds to 26,500 pounds. The maximum takeoff
weight (MTOW) ranges from 162,000 pounds to 169,750 pounds. A technically
advanced aircraft, the A320 includes such design concepts as fly-by-wire
flight controls, centralized maintenance reporting system, side stick
controllers in the cockpit and the use of composite materials in the major
elements of primary structures including the horizontal and vertical
stabilizers.
The A320 has a common type rating with the A319 and the A321, which means
that they can be operated as one aircraft type and with identical
maintenance procedures.
CURRENT MARKET -- AIRBUS A320-200
CURRENT MARKET
AVITAS is of the opinion that the current market for the Airbus A320 series
aircraft is firm. This is evidenced by a low level of availability and high
demand for the type, which AVITAS attributes to a general resurgence in the
Stage 3 narrowbody aircraft market.
HISTORIC MARKET DEVELOPMENT
The A320 market was very soft during the early 1990s with an excess supply
of new aircraft being delivered into a depressed market. This was caused
not only by bankruptcies of several carriers with A320s on order, but also
by the speculative buying of A320s by leasing companies. During 1994 and
1995, the market for the aircraft firmed substantially.
AVAILABILITY
As of September 1998, twelve A320-200s are advertised as available for
lease. Transaer International Airways has nine available for 6-12 month
ACMI leases. Constellation International Airlines has two available for wet
lease. Indigo Aviation is offering one aircraft for sale or lease.
THE OPERATING LEASE MARKET
During the late 1980s, operating lessors, primarily GPA, GATX, ILFC,
Kawasaki and Orix placed orders for a significant amount of A320 aircraft
for early 1990 deliveries. Unfortunately, the aircraft were delivered
during the soft market of the early 1990s and were placed at lease rates
that were at times less than $200,000 per month. During the last couple of
years, the excess A320 capacity had been placed with riskier credits such
as the U.S. start-up Midway Airlines at rates in the $235,000 per month
range. Lately, the A320 lease market has strengthened resulting in rentals
at the $300,000 per month level or above. AVITAS is aware of several new
aircraft leases in the $330,000 range and one 1992 vintage aircraft being
negotiated at just below $300,000 per month.
RECENT TRANSACTIONS
Oasis International Leasing acquired six A320s operated by Gulf Air in a
sale-leaseback transaction in March 1998. The six aircraft are 1992-1993
vintages and were purchased for an average price of $32.5 million each. In
January 1998, TACA took delivery of two new A320-200 aircraft in a sale and
leaseback transaction in which the lessor paid $41.14 million for each
aircraft. Most of the transactions that have been occurring over the past
year have been leases or sales with leases attached.
OPERATOR BASE AND BACKLOG
As of June 1998, there are 631 aircraft in service among 74 operators and
344 on firm order. Displayed below are the ten largest operators and ten
largest orderholders for the A320-200.
--------------------------------------------------------------------------
FIGURE 5
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A320-200 TEN LARGEST OPERATORS
AS OF JUNE 1998
OPERATORS AIRCRAFT IN SERVICE
--------------------------------------------------------------------------
NORTHWEST AIRLINES 56
--------------------------------------------------------------------------
AIR FRANCE 45
--------------------------------------------------------------------------
UNITED AIR LINES 44
--------------------------------------------------------------------------
AIR CANADA 34
--------------------------------------------------------------------------
LUFTHANSA 33
--------------------------------------------------------------------------
AMERICA WEST AIRLINES 30
--------------------------------------------------------------------------
INDIAN AIRLINES CORPORATION 30
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IBERIA 22
--------------------------------------------------------------------------
ALL NIPPON AIRWAYS 21
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ANSETT AIRLINES 20
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Source: BACK Information Services
--------------------------------------------------------------------------
FIGURE 6
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A320-200 TEN LARGEST ORDERHOLDERS
AS OF JUNE 1998
--------------------------------------------------------------------------
OPERATOR AIRCRAFT ON ORDER
--------------------------------------------------------------------------
IBERIA 31
--------------------------------------------------------------------------
ILFC 28
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GECAS 25
--------------------------------------------------------------------------
UNITED AIRLINES 25
--------------------------------------------------------------------------
AMERICA WEST AIRLINES 24
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ALITALIA 19
--------------------------------------------------------------------------
TACA INTERNATIONAL AIRLINES 16
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US AIRWAYS 15
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TAM TRANSPORTES AEREOS REGIONAIS 13
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NORTHWEST AIRLINES 12
--------------------------------------------------------------------------
Source: BACK Information Services
Presented below is the A320 current fleet and backlog by engine type.
--------------------------------------------------------------------------
FIGURE 7
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A320-200 CURRENT FLEET & BACKLOG BY ENGINE TYPE
AS OF JUNE 1998
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ENGINE TYPE IN SERVICE ORDERS OPTIONS TOTAL
--------------------------------------------------------------------------
CFM56-5 384 178 39 601
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V2500 247 139 95 481
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Unknown 27 2 29
--------------------------------------------------------------------------
GRAND TOTAL 631 344 136 1,111
--------------------------------------------------------------------------
Source: BACK Information Services
Additionally, combined with the other members of the Airbus narrowbody
family, the A319 and A321, the current fleet for the A320 family amounts to
845 aircraft and 836 firm orders.
RECENT FLEET DEVELOPMENTS
In September 1998, GECAS ordered 30 A320 series aircraft and placed options
for ten more. The aircraft will be powered by CFM56 engines and will be
delivered beginning in spring 2003 and continue through 2006.
In August 1998, British Airways announced its first ever Airbus order for 39
A320s and 20 A319s with V2500 engines and options for 129 aircraft. Deliveries
are scheduled from September 1999 through 2004.
The aircraft will replace the carrier's 737-200, F100, F28 and MD-83
aircraft operated by the carrier and its European subsidiaries.
Also in August 1998, Qatar Airways signed a letter of intent to purchase 11
A320 aircraft at a price of $550 million. The first aircraft is due to be
delivered in early 2001. The airline will likely have the option to convert
orders for A320 aircraft to A321 aircraft with an increase in price.
United Air Lines ordered 22 Airbus aircraft in July 1998. The order
includes 12 A320 aircraft and ten A319 aircraft for delivery in 2000 and
2001.
In March this year, the second largest order ever for Airbus was placed
jointly by LanChile, the TACA Group and TAM for 90 firm orders and 89
options of the A320 and the A319 aircraft.
OUTLOOK AND FUTURE ASSET RISK ANALYSIS
AVITAS believes that the A320 will continue to be a significant competitor
in the 150-seat market well into the future with competition from the
Boeing 737-400 and the 737-800 with 30 and 384 firm orders, respectively.
The A320 has more range than the 737-400 and slightly higher seat capacity,
the 737-800 however, fares better than the --400 with a range capacity of
2,900 nautical miles and increased seat capacity by 17 seats.
Airbus has been enjoying a great deal of success in 1998 with the A320
aircraft; the manufacturer has received several large and strategically
important orders. In addition, as of early September 1998, the Asian crisis
has left this family of aircraft largely unscathed, as only eight A320 and
six A321 aircraft orders have been cancelled.
With a well established population of 631 A320-200 aircraft currently in
service among 74 operators, and 344 on firm order scheduled for delivery
throughout the year 2005, the future market base for the type is due to
expand significantly with residual values remaining firm.
COVENANTS
Unless otherwise noted, the values presented in this report assume an
arm's- length, free market transaction for cash between informed, willing
and able parties free of any duress to complete the transaction. If a
distress sale becomes necessary, a substantial discount may be required to
quickly dispose of the equipment.
AVITAS does not have, and does not intend to have, any financial or other
interest in the subject aircraft. Further, this report is prepared for the
exclusive use of the Client and shall not be provided to other parties
without the express consent of the Client.
This report represents the opinion of AVITAS and is intended to be advisory
only in nature. Therefore, AVITAS assumes no responsibility or legal
liability for any action taken, or not taken, by the Client or any other
party, with regard to this equipment. By accepting this report, all parties
agree that AVITAS shall bear no such responsibility or legal liability
including liability for special or consequential damage.
STATEMENT OF INDEPENDENCE
AVITAS hereby states that this valuation report has been independently
prepared and fairly represents AVITAS's opinion of the subject aircraft's
value.
/s/ Douglas B. Kelly
- ---------------------------
Douglas B. Kelly
Director -- Asset Valuation
/s/ Kimberly S. Higgins
- ---------------------------
Kimberly S. Higgins
Market Analyst
APPENDIX A - AVITAS VALUE DEFINITIONS
- -----------------------------------------------------------------------------
o BASE VALUE is the appraiser's opinion of the underlying economic value
of an aircraft in an open, unrestricted, stable market environment with
a reasonable balance of supply and demand and assumes full consideration
of its "highest and best use." An aircraft's Base Value is founded in
the historical trend of values and in the projection of value trends and
presumes an arm's- length, cash transaction between willing and
knowledgeable parties, acting prudently, with an absence of duress and
with a reasonable period of time for marketing. Base Value typically
assumes that an aircraft's physical condition is average for an aircraft
of its type and age, and its maintenance time status is at mid-life,
mid-time (or benefiting from an above-average maintenance status if it
is new or nearly new).
o MARKET VALUE (or CURRENT MARKET VALUE if the value pertains to the time
of the analysis) is the appraiser's opinion of the most likely trading
price that may be generated for an aircraft under the market conditions
that are perceived to exist at the time in question. Market Value
assumes that the aircraft is valued for its highest, best use, that the
parties to the hypothetical transaction are willing, able, prudent and
knowledgeable, and under no unusual pressure for a prompt sale, and that
the transaction would be negotiated in an open and unrestricted market
on an arm's-length basis, for cash or equivalent consideration, and
given an adequate amount of time for effective exposure to prospective
buyers. Market Value assumes that an aircraft's physical condition is
average for an aircraft of its type and age, and its maintenance time
status is at mid-life, mid-time (or benefitting from an above-average
maintenance status if it is new or nearly new). Market Value is
synonymous with Fair Market Value in that both reflect the state of
supply and demand in the market that exists at the time.
o ADJUSTED (CURRENT) MARKET VALUE indicates the Market Value of the
aircraft adjusted for the actual technical status and maintenance
condition of the aircraft, but still assuming the same market conditions
and transaction circumstances as described above.
o DISTRESS VALUE is the appraiser's opinion of the price at which an
aircraft could be sold under abnormal conditions, such as an
artificially limited marketing time period, the perception of the seller
being under duress to sell, an auction, a liquidation, commercial
restrictions, legal complications or other such factors that
significantly reduce the bargaining leverage of the seller and give the
buyer a significant advantage that can translate into heavily discounted
actual trading prices. Apart from the fact that the seller is uncommonly
motivated, the parties to the transaction are otherwise assumed to be
willing, able, prudent and knowledgeable, negotiating under the market
conditions that are perceived to exist at the time, not in an idealized
balanced market. While Distress Value normally implies that the seller
is under some duress, there are occasions when buyers, not sellers, are
distressed and, therefore, willing to pay a premium price.
o FUTURE BASE VALUE is the appraiser's forecast of future aircraft
value(s) setting forth Base Value(s) as defined above.
o SECURITIZED VALUE OR LEASE - ENCUMBERED VALUE is the appraiser's opinion
of the value of an aircraft under lease, given a specified lease payment
stream (rents and term), an estimated future residual value at lease
termination and an appropriate discount rate. The Securitized Value or
Lease - Encumbered Value may be more or less than the appraiser's
opinion of Market Value. The appraiser may not be fully aware of the
credit risks associated with the parties involved, nor the time-value of
money to those parties, nor with possible tax consequences pertaining to
the parties involved, nor with all of the provisions of the lease that
may pertain to items such as security deposits, purchase options at
various dates, term extensions, sub-lease rights, repossession rights,
reserve payments and return conditions.
APPENDIX B - AVITAS APPRAISAL METHODOLOGY
- -----------------------------------------------------------------------------
At AVITAS, we undertake formal periodic value reviews of the approximately
ten dozen aircraft types that we regularly track as well as value updates
as market events and movements require. The primary value opinions we
develop are Market Value, Base Value and Future Base Value. An aircraft's
Market Value is the price at which you could sell the aircraft under the
market conditions prevailing at the time in question and its Base Value is
the theoretical value of the aircraft assuming a balanced market in terms
of supply and demand. In reaching our value opinions, we use data on actual
market transactions, various analytical techniques, a proprietary
forecasting model and our own extensive industry experience. And while
Market Value and Base Value embody different value concepts, we are
continually cross checking their relationships to determine if our value
opinions are reasonable given existing market conditions.
Our broad aviation industry backgrounds are critically important; they add
a diversity of viewpoints and a high degree of realism to our value
opinions. Our backgrounds include: aircraft design, performance analysis,
traffic and yield forecasting, fleet forecasting, aircraft finance, the
negotiation of aircraft loans, finance leases and operating leases, problem
deal workouts, repossessions, aircraft sales, jetliner manufacturing,
maintenance and overhaul activities, econometric modeling and forecasting,
market research, and database development.
o MARKET VALUE In determining Current Market Values, we use a blend of
techniques and tools. First, through various services and our extensive
personal contacts, we collect as much actual transaction data as
possible on aircraft sales, leases, financings and scrappings. Our
published values assume airframes, engines and landing gear to be
halfway through their various overhaul and/or life cycles. Because sales
of half-life aircraft rarely occur, and because sales can include spare
engines, parts, attached lease streams, tax considerations and other
factors, judgment and experience are important in adjusting actual
transaction data to represent clean, half- life Market Values. In
addition, because over the last several years there have been a large
number of aircraft leases, our experience and knowledge of the market is
used to make value inferences from lease rentals and terms.
As a supplement to transaction data, and in some cases in the absence of
actual market activity, we also use other methods to assist in framing
Market Value opinions. We use several analytical tools because we do not
believe that there is any one technique which always results in the "right"
number. Replacement cost analysis can simply be the cost of a new airplane
of the same model or it can be used where it is possible to reproduce an
aircraft. It is often helpful in framing the upper limit of an aircraft's
value, particularly for modified or upgraded aircraft. Examples would be a
passenger aircraft such as the 747-100 which can be converted into
freighter configuration or a Stage 2 airplane which can be hushkitted to
Stage 3 compliance. Value in use or income analysis is another technique in
which an aircraft's earning capacity over time is determined and the
present value of those earnings is calculated. Because different operators
have different costs, yields and hurdle rates of return, this technique can
yield a range of values. Therefore, the appraiser must use his judgment to
determine what value in that range represents a Market Value representative
of the overall marketplace. Another powerful tool which we use is
should-cost analysis, which is a blend of replacement cost and value in use
analysis. This technique is used when there is little or no market data on
a particular airplane type but there is on similar or competing types. By
analyzing the economic and operational profiles of competing aircraft, the
appraiser is able to impute what the aircraft in question should cost to
position it competitively.
Once we have formulated our own internal Market Value opinions, we present
them to a small, select group of outside aviation experts - individuals in
the fields of -aircraft manufacturing, sales, remarketing, financing and
forecasting who we know well and regard very highly - for their review and
frank comments. We consider this "reality check," which often results in
further value refinements, to be a critical part of our value process in
that it helps us combat "ivory tower syndrome."
o BASE VALUE The determination of Base Value, an aircraft's balanced
market, long term value, is a highly subjective matter, one in which
even the most skilled appraisers may have widely divergent views. We use
three main tools in developing Base Values. First, we use our own
research, judgment and perceptions of each aircraft type's long term
competitive strengths and weaknesses vis-a-vis both competing aircraft
types and the marketplace as a whole. Second, we utilize a
transaction-based computer forecasting model developed by a former
AVITAS director and refined over the years. Based on thousands of actual
market transactions, the model sets forth a series of value curves which
describe the value behaviors of aircraft under different circumstances.
Third, we do a final reality check by comparing our opinion of an
aircraft's Base Value to our opinion of its Current Market Value and
current marketplace conditions.
We analyze each aircraft model to determine its historic, current and
projected competitive position with respect to similar aircraft types in
terms of mission capability (i.e., what are the aircraft's capabilities and
to what extent does the market require those capabilities), economic
profile and market penetration. As a result of weighing those factors, we
assign a numerical "strength" to each aircraft for each year of its
economic life, where Strength 10 represents the strongest value performance
and Strength 1 the weakest. The model then takes those strength factors and
translates them into the aircraft's Base and Future Base Values based on
its actual replacement cost (or theoretical replacement cost if it is no
longer in production). After Base Values have been calculated, we compare
them to our Current Market Value opinions as a calibration check of the
computer model. In the infrequent case where the marketplace for that
aircraft is in balance, Base Value and Current Market Value should be the
same. In most cases, though, we must subjectively compare Base Value with
Current Market Value to see if we believe the relationship is reasonable.
This may highlight where Base Value inputs require further refinements.
Because of the dynamics of the aircraft marketplace and our continuing
recalibration, Base Value opinions are not static.
AvSOLUTIONS
November 16, 1998
Mr. Jeffery McDougle
US Airways, Inc.
2345 Crystal Drive
Arlington, Virginia 22227
Dear Mr. McDougle:
AvSOLUTIONS is pleased to provide this opinion on the base value, as
of October 1998, of seventeen Airbus Industrie A319 aircraft and six Airbus
Industrie A320-200 aircraft (the aircraft). The Airbus A319 aircraft are
powered by CFM International CFM56-5B6/P engines and the Airbus A320-200
aircraft are powered by CFM International CFM56-5B4/P engines. The total of
twenty-three aircraft will be delivered new to US Airways, Inc. from the
fourth quarter of 1998 through the third quarter of 1999. A listing of the
particular aircraft is provided as attachment 1 of this document.
Set forth below is a summary of the methodology, considerations and
assumptions utilized in this appraisal.
BASE VALUE
- ----------
Base value is the appraiser's opinion of the underlying economic value
of an aircraft in an open, unrestricted, stable market environment with a
reasonable balance of supply and demand, and assumes full consideration of
its "highest and best use". An aircraft's base value is founded in the
historical trend of values and in the projection of future value trends and
presumes an arm's length, cash transaction between willing, able and
knowledge parties, acting prudently, with an absence of duress and with a
reasonable period of time available for marketing.
CURRENT FAIR MARKET VALUE
- -------------------------
According to the International Society of Transport Aircraft Trading's
(ISTAT) definition of Fair Market Value (FMV), to which AvSOLUTIONS
subscribes, the quoted FMV is the appraiser's opinion of the most likely
trading price that may be generated for an aircraft under the market
circumstances that are perceived to exist at the time in question. The fair
market value assumes that the aircraft is valued for its highest and best
use, that the parties to the hypothetical sales transaction are willing,
able, prudent and knowledgeable, and under no unusual pressure for a prompt
sale, and that the transaction would be negotiated in an open and
unrestricted market on an arm's length basis, for cash equivalent
consideration, and given an adequate amount of time for effective market
exposure to perspective buyers, which AvSOLUTIONS considers to be ten to
eighteen months.
7518-B Diplomat Drive, Manassas, Virginia 20109
Telephone 703-330-0461 Fax 703-330-0581
APPRAISAL METHODOLOGY
- ---------------------
The method employed by AvSOLUTIONS to appraise the current and future
values of aircraft and the associated equipment addresses the factors that
influence the market value of an aircraft, such as its age, condition,
configuration, the population of similar aircraft, similar aircraft on the
market, operating costs, cost to acquire a new aircraft, and the state of
demand for transportation services.
To achieve this objective, cross-sectional data concerning the values
of aircraft in each of several general categories is collected and
analyzed. Cross- sectional data is then postulated and compared with
reported market values at a specified point in time. Such data reflects the
effect of deterioration in aircraft performance due to usage and exposure
to the elements, as well as the effect of obsolescence due to the
evolutionary development and implementation of new designs and materials.
The product of the analysis identifies the relationship between the
value of each aircraft and its characteristics, such as age, model
designation, service configuration and engine type. Once the relationship
is identified, one can then postulate the effects of the difference between
the economic circumstances at the time when the cross-sectional data were
collected and the current situation. Therefore, if one can determine the
current value of an aircraft in one category, it is possible to estimate
the current values of all aircraft in that category.
The manufacturer and size of the aircraft usually determine the
specific category to which it is assigned. Segregating the world airplane
fleet in this manner accommodates the potential effects of different size
and different design philosophies.
The variability of the data used by AvSOLUTIONS to determine the
current and future market values implies that the actual value realized
will fall within a range of values. Therefore, if a contemplated value
falls within the specified confidence range, AvSOLUTIONS cannot reject the
hypothesis that it is a reasonable representation of the current market
situation.
LIMITING CONDITIONS AND ASSUMPTIONS
- -----------------------------------
In order to conduct this valuation, AvSOLUTIONS is solely relying on
information as supplied by US Airways, Inc. or Morgan Stanley, and from
data within AvSOLUTIONS' own database. In determining the base value of the
subject aircraft, the following assumptions have been researched and
determined:
1. AvSOLUTIONS has not inspected these aircraft or their maintenance
records; accordingly, AvSOLUTIONS cannot attest to their specific location
or condition.
2. The aircraft will be delivered new to US Airways, Inc. between the
fourth quarter of 1998 and the third quarter of 1999.
3. The aircraft will be certified, maintained and operated under United
States Federal Aviation Regulation (FAR) part 121.
4. All mandatory inspections and Airworthiness Directives have been
complied with.
5. The aircraft have no damage history.
6. The aircraft are in good condition.
7. AvSOLUTIONS considers the economic useful life of these aircraft to be
at least 32 years.
Based upon the above methodology, considerations and assumptions, it is
AvSOLUTIONS' opinion that the base value of each aircraft is as listed in
attachment 1.
STATEMENT OF INDEPENDENCE
- -------------------------
This appraisal report represents the opinion of AvSOLUTIONS, and is
intended to be advisory in nature. Therefore, AvSOLUTIONS assumes no
responsibility or legal liability for actions taken or not taken by the
Client or any other party with regard to the subject aircraft. By accepting
this report, the Client agrees that AvSOLUTIONS shall bear no
responsibility or legal liability regarding this report. Further, this
report is prepared for the exclusive use of the Client and shall not be
provided to other parties without the Client's express consent.
Aviation Solutions Inc. (AvSOLUTIONS) hereby states that this
valuation report has been independently prepared and fairly represents the
subject aircraft and AvSOLUTIONS' opinion of their values. Aviation
Solutions Inc. (AvSOLUTIONS) further states that it has no present or
contemplated future interest or association with the subject aircraft.
Signed,
/s/ Bryant Lynch
Bryant Lynch
Manager, Commercial Appraisals
ATTACHMENT 1
EETC COLLATERAL SUMMARY
=============================================================================
AIRCRAFT NO. AIRCRAFT DELIVERY ENGINES MTOW BASE VALUE
MO/YR (POUNDS)
- -----------------------------------------------------------------------------
1 Airbus A319 Oct-1998 CFM56-5B6/P 166,450 $38,140,000
- -----------------------------------------------------------------------------
2 Airbus A319 Oct-1998 CFM56-5B6/P 166,450 $38,140,000
- -----------------------------------------------------------------------------
3 Airbus A319 Nov-1998 CFM56-5B6/P 166,450 $38,140,000
- -----------------------------------------------------------------------------
4 Airbus A319 Nov-1998 CFM56-5B6/P 166,450 $38,140,000
- -----------------------------------------------------------------------------
5 Airbus A319 Dec-1998 CFM56-5B6/P 166,450 $38,140,000
- -----------------------------------------------------------------------------
6 Airbus A319 Dec-1998 CFM56-5B6/P 166,450 $38,140,000
- -----------------------------------------------------------------------------
7 Airbus A319 Jan-1999 CFM56-5B6/P 166,450 $38,420,000
- -----------------------------------------------------------------------------
8 Airbus A319 Jan-1999 CFM56-5B6/P 166,450 $38,420,000
- -----------------------------------------------------------------------------
9 Airbus A319 Feb-1999 CFM56-5B6/P 166,450 $38,420,000
- -----------------------------------------------------------------------------
10 Airbus A319 Mar-1999 CFM56-5B6/P 166,450 $38,420,000
- -----------------------------------------------------------------------------
11 Airbus A319 May-1999 CFM56-5B6/P 166,450 $38,700,000
- -----------------------------------------------------------------------------
12 Airbus A319 Jun-1999 CFM56-5B6/P 166,450 $38,700,000
- -----------------------------------------------------------------------------
13 Airbus A319 Jun-1999 CFM56-5B6/P 166,450 $38,700,000
- -----------------------------------------------------------------------------
14 Airbus A319 Jul-1999 CFM56-5B6/P 166,450 $38,980,000
- -----------------------------------------------------------------------------
15 Airbus A319 Jul-1999 CEM56-5B6/P 166,450 $38,980,000
- -----------------------------------------------------------------------------
16 Airbus A319 Jul-1999 CFM56-5B6/P 166,450 $38,980,000
- -----------------------------------------------------------------------------
17 Airbus A319 Jul-1999 CFM56-5B6/P 166,450 $38,980,000
- -----------------------------------------------------------------------------
18 Airbus A320-200 Jan-1999 CFM56-5B4/P 169,750 $44,390,000
- -----------------------------------------------------------------------------
19 Airbus A320-200 May-1999 CFM56-5B4/P 169,750 $44,710,000
- -----------------------------------------------------------------------------
20 Airbus A320-200 May-1999 CFM56-5B4/P 169,750 $44,710,000
- -----------------------------------------------------------------------------
21 Airbus A320-200 Jun-1999 CFM56-5B4/P 169,750 $44,710,000
- -----------------------------------------------------------------------------
22 Airbus A320-200 Jun-1999 CFM56-5B4/P 169,750 $44,710,000
- -----------------------------------------------------------------------------
23 Airbus A320-200 Jul-1999 CFM56-5B4/P 169,750 $45,030,000
- -----------------------------------------------------------------------------
MORTEN BEYER & AGNEW
--------------------
AVIATION CONSULTING FIRM
Appraisal of (17) Airbus A319-100,
(6) A320-200 Aircraft
PREPARED FOR:
US Airways, Inc
NOVEMBER 16, 1998
Washington, D.C. London
8180 Greensboro Drive Lahinch 62, Lashmere
Suite 1000 Copthorne
McLean, Virginia 22102 West Sussex
Phone +703 847 6598 Phone +44 1342 716248
Fax +703 734 1474 Fax +44 1342 718967
[This Page Intentionally Left Blank]
- -----------------------------------------------------------------------------
I. INTRODUCTION AND EXECUTIVE SUMMARY
- -----------------------------------------------------------------------------
Morten Beyer and Agnew, Inc. (MBA), has been retained by US Airways, Inc to
determine the Base Value (BV) of 23 aircraft, delivered new over the next
11 months. The aircraft are further identified in Section III of this
report.
In performing this valuation we did not inspect the aircraft or their
maintenance documentation, and we relied solely on information provided to
us by Morgan Stanley. Based on the information set forth further in this
report, it is our opinion that the BV of the total value of aircraft in
this portfolio is $895,950,000 with their respective individual values
noted in Section III.
MBA uses the definition of certain terms, such as Current Market Value
(CMV) and Base Value (BV), as promulgated by the International Society of
Transport Aircraft Trading (ISTAT), a non-profit association of management
personnel from banks, leasing companies, airlines, manufacturers,
appraisers, brokers, and others who have a vested interest in the
commercial aviation industry.
ISTAT defines CMV as the appraiser's opinion of the most likely trading
price that may be generated for an aircraft under market conditions that
are perceived to exist at the time in question. Market Value (MV) assumes
that the aircraft is valued for its highest, best use; that the parties to
the hypothetical sale transaction are willing, able, prudent and
knowledgeable and under no unusual pressure for a prompt sale; and that the
transaction would be negotiated in an open and unrestricted market on an
arm's-length basis, for cash or equivalent consideration, and given an
adequate amount of time for effective exposure to prospective buyers.
The ISTAT definition of Base Value (BV) states that market circumstances
are assumed to be in a reasonable state of equilibrium. Thus, BV pertains
to an idealized aircraft and market combination, but will not necessarily
reflect the actual CMV of the aircraft in question. BV is founded in the
historical trend of values and is generally used to analyze historical
values or to project future values.
- -----------------------------------------------------------------------------
II. CURRENT MARKET CONDITIONS
- -----------------------------------------------------------------------------
---------------------------------
[GRAPHIC OF AN Airbus A319/ A320
AIRPLANE APPEARS HERE] ---------------------------------
The A320 series has been a remarkably successful competitor on the world
market, offering newer technology and greater interior comfort than its
Boeing 737 rivals. While Boeing has now developed nine different versions
of the B-737 in three series (100/200, 300/400/500, and now
600/700/800/900) Airbus is still producing only its three models. The A320
program got its biggest boost late last year with US Airways commitment to
standardize its entire narrowbody fleet around the A319/320/321 over the
next decade as well as the TACA-Latin American commitment for more than
100. British Airways has since hopped onboard with a huge order (129) that
further erodes Boeing's hold on the segment.
The float of these aircraft is very small, and few transactions have taken
place. We expect that it will be several more years before there are any
significant retirements, and that any aircraft offered will be sold at 100
percent of Base Value. While we have eliminated the value premium for these
aircraft due to the general softening of the market, the A320 series has a
firm hold on an increasing share of the market.
-----------------------------------------------------
*Aircraft Availability as of 10/98 for sale/lease
-----------------------------------------------------
A319 0
-----------------------------------------------------
A320 3 - Wet Lease Only
-----------------------------------------------------
* Information provided by BACK Information Services
- -----------------------------------------------------------------------------
IV. VALUATION
- -----------------------------------------------------------------------------
Aircraft Date of Mfr. Registration # * Base Value
($000,000)
- -----------------------------------------------------------------------------
A319-100 10/98 N700UW 37.06
---------------------------------------------------------
10/98 N7O1UW 37.06
---------------------------------------------------------
11/98 N7O2UW 37.13
---------------------------------------------------------
11/98 N7O3UW 37.13
---------------------------------------------------------
12/98 N704US 37.21
---------------------------------------------------------
12/98 N7O5UW 37.21
---------------------------------------------------------
1/99 N7O6UW 37.28
---------------------------------------------------------
1/99 N7O7UW 37.28
---------------------------------------------------------
2/99 N7O8UW 37.36
---------------------------------------------------------
3/99 N7O9UW 37.43
---------------------------------------------------------
5/99 N71OUW 37.59
---------------------------------------------------------
6/99 N711UW 37.66
---------------------------------------------------------
6/99 N712UW 37.66
---------------------------------------------------------
7/99 N713UW 37.74
---------------------------------------------------------
7/99 N714US 37.74
---------------------------------------------------------
7/99 N715UW 37.74
---------------------------------------------------------
7/99 N716UW 37.74
- -----------------------------------------------------------------------------
A320-200 1/99 N1O1UW 42.97
---------------------------------------------------------
5/99 N1O2UW 43.32
---------------------------------------------------------
5/99 N1O3US 43.32
---------------------------------------------------------
6/99 N1O4UW 43.41
---------------------------------------------------------
6/99 N1O5UW 43.41
---------------------------------------------------------
7/99 N1O6US 43.50
- -----------------------------------------------------------------------------
Total $895,950,000
- -----------------------------------------------------------------------------
* Base Value includes adjustment for additional MTOW.
In developing the BV of these aircraft, MBA did not inspect the aircraft or
its historical maintenance documentation. Therefore, we used certain
assumptions that are generally accepted industry practice to calculate the
value of an aircraft when more detailed information is not available. The
principal assumptions are as follows (for each aircraft):
1. The aircraft is delivered new.
2. The overhaul status of the airframe, engines, landing gear and
other major components are the equivalent of new delivery unless
otherwise specified.
3. The specifications of the aircraft are those most common for an
aircraft of this type new delivery.
4. The aircraft is in a standard airline configuration. 5. Its
modification status is comparable to that most common for an
aircraft of its type and vintage.
6. No accounting was made for lease obligations or terms of ownership.
- -----------------------------------------------------------------------------
V. COVENANTS
- -----------------------------------------------------------------------------
This report has been prepared for the exclusive use of U.S. Airways/Morgan
Stanley and shall not be provided to other parties by MBA without the
express consent of U.S. Airways/Morgan Stanley.
MBA certifies that this report has been independently prepared and that it
fully and accurately reflects MBA's opinion as to the Current Base Value.
MBA further certifies that it does not have, and does not expect to have,
any financial or other interest in the subject or similar aircraft.
This report represents the opinion of MBA as to the Current Base Value of
the subject aircraft and is intended to be advisory only in nature.
Therefore, MBA assumes no responsibility or legal liability for any actions
taken or not taken by U.S. Airways/Morgan Stanley or any other party with
regard to the subject aircraft. By accepting this report, all parties agree
that MBA shall bear no such responsibility or legal liability.
PREPARED BY:
/s/ Bryson P. Monteleone
BRYSON P. MONTELEONE
Manager of Operations
REVIEWED BY:
/s/ Morten S. Beyer
Morten S. Beyer
Chairman and CEO
ISTAT Certified Fellow Appraiser
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
The Company's Restated Certificate of Incorporation and Bylaws
provide that the Company will indemnify its directors, officers and
employees, and will have the power to indemnify its other agents, to the
full extent permitted by the General Corporation Law of the State of
Delaware (the "GCL"), as amended from time to time (but, in the case of any
such amendment, only to the extent that such amendment permits the Company
to provide broader indemnification rights than such law permitted the
Company to provide on June 29, 1989). As of the date of the Prospectus,
Section 145 of the GCL, forming a part of this Registration Statement,
provides as follows:
"(a) A corporation shall have power to indemnify any person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
the corporation) by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by the
person in connection with such action, suit or proceeding if the person
acted in good faith and in a manner the person reasonably believed to be in
or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe
the person's conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which
the person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that the person's conduct was
unlawful.
"(b) A corporation shall have power to indemnify any person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the corporation
to procure a judgment in its favor by reason of the fact that the person is
or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise against expenses (including attorneys' fees) actually
and reasonably incurred by the person in connection with the defense or
settlement of such action or suit if the person acted in good faith and in
a manner the person reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation unless and only to the
extent that the Court of Chancery or the court in which such action or suit
was brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, such person
is fairly and reasonably entitled to indemnity for such expenses which the
Court of Chancery or such other court shall deem proper.
"(c) To the extent that a present or former director or officer
of a corporation has been successful on the merits or otherwise in defense
of any action, suit or proceeding referred to in subsections (a) and (b) of
this section, or in defense of any claim, issue or matter therein, such
person shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection therewith.
"(d) Any indemnification under subsections (a) and (b) of this
section (unless ordered by a court) shall be made by the corporation only
as authorized in the specific case upon determination that indemnification
of the present or former director, officer, employee or agent is proper in
the circumstances because the person has met the applicable standard of
conduct set forth in subsections (a) and (b) of this section. Such
determination shall be made, with respect to a person who is a director or
officer at the time of such determination, (1) by a majority vote of the
directors who are not parties to such action, suit or proceeding, even
though less than a quorum, or (2) by a committee of such directors
designated by majority vote of such directors, even though less than a
quorum, or (3) if there are no such directors, or if such directors so
direct, by independent legal counsel in a written opinion, or (4) by the
stockholders.
"(e) Expenses (including attorneys' fees) incurred by an
officer or director in defending any civil, criminal, administrative or
investigative action, suit or proceeding may be paid by the corporation in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such director or officer to
repay such amount if it shall ultimately be determined that such person is
not entitled to be indemnified by the corporation as authorized in this
section. Such expenses (including attorneys' fees) incurred by former
directors and officers or other employees and agents may be so paid upon
such terms and conditions, if any, as the corporation deems appropriate.
"(f) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other subsections of this section shall not
be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any bylaw,
agreement, vote of stockholders or disinterested directors or otherwise,
both as to action in such person's official capacity and as to action in
another capacity while holding such office.
"(g) A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
any liability asserted against such person and incurred by such person in
any such capacity, or arising out of such person's status as such, whether
or not the corporation would have the power to indemnify such person
against such liability under this section.
"(h) For purposes of this section, references to "the
corporation" shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate existence had
continued, would have had power and authority to indemnify its directors,
officers, and employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is
or was serving at the request of such constituent corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, shall stand in the same position
under this section with respect to the resulting or surviving corporation
as such person would have with respect to such constituent corporation if
its separate existence had continued.
"(i) For purposes of this section, references to 'other
enterprises' shall include employee benefit plans; references to 'fines'
shall include any excise taxes assessed on a person with respect to any
employee benefit plan; and references to 'serving at the request of the
corporation' shall include any services as a director, officer, employee or
agent of the corporation which imposes duties on, or involves services by,
such director, officer, employee, or agent with respect to an employee
benefit plan, its participants or beneficiaries; and a person who acted in
good faith and in a manner such person reasonably believed to be in the
interest of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner not opposed to the best interests
of the corporation' as referred to in this section.
"(j) The indemnification and advancement of expenses provided
by, or granted pursuant to, this section shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
"(k) The Court of Chancery is hereby vested with exclusive
jurisdiction to hear and determine all actions for advancement of expenses
or indemnification brought under this section or under any bylaw,
agreement, vote of stockholders or disinterested directors, or otherwise.
The Court of Chancery may summarily determine a corporation's obligation to
advance expenses (including attorneys' fees)."
The Company maintains directors' and officers' liability
insurance.
Item 21. Exhibits and Financial Statement Schedules
(a) Reference is made to the Exhibit Index which immediately
precedes the exhibits filed with this Registration Statement, which is
incorporated herein by reference.
(b) Not Applicable.
(c) Not Applicable.
Item 22. Undertakings
(a) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933,
each filing of the registrant's annual report pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(b) The undersigned registrant hereby undertakes to respond to
requests for information that is incorporated by reference into the
prospectus pursuant to Item 4, 10(b), 11, or 13 of this form, within one
business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date
of the registration statement through the date of responding to the
request.
(c) The undersigned registrant hereby undertakes to supply by
means of a posteffective amendment all information concerning a
transaction, and the Company being acquired involved therein, if any, that
was not the subject of and included in the registration statement when it
became effective.
(d) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of
Arlington, State of Virginia, on February 26, 1999.
US AIRWAYS, INC.
By: /s/ Rakesh Gangwal
-------------------------------
Rakesh Gangwal, Director, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities indicated, on February 26, 1999.
By: /s/ Stephen M. Wolf
--------------------------------------
Stephen M. Wolf, Director and Chairman
By: /s/ Rakesh Gangwal
--------------------------------------
Rakesh Gangwal, Director, President
and Chief Executive Officer
(Principal Executive Officer)
By: /s/ Thomas A. Mutryn
--------------------------------------
Thomas A. Mutryn
Senior Vice President - Finance and
Chief Financial Officer (Principal
Financial Officer and Accounting
Officer)
By: *
--------------------------------------
Mathias J. DeVito, Director
By: *
--------------------------------------
Peter M. George, Director
By: *
--------------------------------------
George J. W. Goodman, Director
By: *
--------------------------------------
John W. Harris, Director
By: *
--------------------------------------
Edward A. Horrigan, Jr., Director
By: *
--------------------------------------
Robert L. Johnson, Director
By: *
--------------------------------------
Robert LeBuhn, Director
By: *
--------------------------------------
John G. Medlin, Jr., Director
By: *
--------------------------------------
Hanne M. Merriman, Director
By: *
--------------------------------------
Raymond W. Smith, Director
- ------------------
By: /s/ Thomas A. Mutryn
--------------------------------------
Thomas A. Mutryn, Attorney-In-Fact
* Signed pursuant to power of attorney filed herewith.
EXHIBIT INDEX
Exhibit No. Description of Exhibit
- ----------- ----------------------
4.1 Purchase Agreement, dated December 14, 1998, between US
Airways, Inc. and Airbus Industrie Financial Services+
4.2 Registration Agreement, dated December 14, 1998, among US
Airways, Inc., Airbus Industrie Financial Services and
State Street Bank and Trust Company+
4.3 Amendment No. 1 to the Registration Agreement, dated
January 20, 1999, among US Airways, Inc., Airbus
Industrie Financial Services and State Street Bank and
Trust Company+
4.4 Pass Through Trust Agreement, dated December 4, 1998,
between State Street Bank and Trust Company, as Pass
Through Trustee, and US Airways, Inc.+
4.5 Pass Through Trust Supplement No. 1998-1C, dated December
14, 1998, between State Street Bank and Trust Company, as
Pass Through Trustee, and US Airways, Inc.+
4.6 Deposit Agreement (Class C), dated December 14, 1998,
between First Security Bank, National Association, as
Escrow Agent, and Citibank, N.A., as Class C Depositary+
4.7 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*
4.8 Intercreditor Agreement, dated December 14, 1998, between
State Street Bank and Trust Company, as Pass Through
Trustee and as Subordination Agent, and ABN AMRO Bank
N.V., as Liquidity Provider*
4.9 Escrow and Paying Agent Agreement (Class C), dated
December 14, 1998, among First Security Bank, National
Association, as Escrow Agent, Airbus Industrie Financial
Services and State Street Bank and Trust Company, as
Class C Trustee and as Paying Agent+
4.10 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*
4.11 Exhibit A-1 to Note Purchase Agreement-- Form of Leased
Aircraft Participation Agreement*
4.12 Exhibit A-2 to Note Purchase Agreement-- Form of Lease*
4.13 Exhibit A-3 to Note Purchase Agreement-- Form of Leased
Aircraft Indenture*
4.14 Exhibit A-4 to Note Purchase Agreement-- Form of Aircraft
Purchase Agreement Assignment*
4.15 Exhibit A-5 to Note Purchase Agreement-- Form of Leased
Aircraft Trust Agreement*
4.16 Exhibit C-1 to Note Purchase Agreement-- Form of Owned
Aircraft Participation Agreement*
4.17 Exhibit C-2 to Note Purchase Agreement-- Form of Owned
Aircraft Indenture*
4.18 Old Class C Global Certificate+
4.19 Form of New Class C Global Certificate+
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP+
10.1 Airbus A330/A340 Purchase Agreement, dated November 24,
1998, by and between AVSA S.A.R.L. and US Airways Group ,
Inc.**
12.1 Statements re computation of ratios+
23.1 Consent of KPMG LLP+
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in its opinion filed as Exhibit 5.1)+
23.3 Consent of AVITAS, Inc.+
23.4 Consent of AvSolutions, Inc.+
23.5 Consent of Morton Beyer and Agnew, Inc.+
24.1 Powers of Attorney+
25.1 Form T-1 Statement of Eligibility of Trustee under the
Trust Indenture Act of Trustee***
99.1 Form of Letter of Transmittal for the New Class C
Certificates+
99.2 Form of Notice of Guaranteed Delivery for the New Class C
Certificates+
- --------------
+ Filed herewith.
* Incorporated by reference to US Airways' Current Report on Form
8-K filed with the Securities and Exchange Commission on December
29, 1998.
** To be filed as an amendment.
*** Incorporated by reference to US Airways' Registration Statement on
Form S-3 filed with the Securities and Exchange Commission on
September 28, 1998.
EXHIBIT 4.1
PURCHASE AGREEMENT
Dated as of
December 14, 1998
BETWEEN
US AIRWAYS, INC.
AND
AIRBUS INDUSTRIE FINANCIAL SERVICES
CLASS C PASS THROUGH CERTIFICATES, SERIES 1998-1
US AIRWAYS, INC.
CLASS C PASS THROUGH CERTIFICATES, SERIES 1998-1
PURCHASE AGREEMENT
December 14, 1998
Airbus Industrie Financial Services
2nd Floor
George's Dock House
International Financial Services Centre
Dublin 1, Ireland
Dear Sirs:
US AIRWAYS, INC., a Delaware corporation (the "Company"),
proposes that State Street Bank and Trust Company, a Massachusetts trust
company, acting not in its individual capacity but solely as pass through
trustee (the "Trustee") under the Pass Through Trust Agreement referred to
below, issue and sell to Airbus Industrie Financial Services, a corporation
formed under the laws of Ireland ("AIFS" or "Purchaser"), its Class C Pass
Through Certificates, Series 1998-1 in the aggregate principal amount and
with the interest rate and final expected distribution date set forth on
Schedule I hereto (the "Class C Certificates") on the terms and conditions
stated herein.
The Certificates will be issued pursuant to the Pass Through
Trust Agreement dated as of December 4, 1998 (the "Basic Agreement"),
between the Company and the Trustee, as supplemented with respect to the
Class C Certificates by a separate Pass Through Trust Supplement to be
dated as of the Closing Date (as defined below) (the "Series C
Supplement"), between the Company and the Trustee (the Basic Agreement as
supplemented by each Series Supplement being referred to herein as the
"Pass Through Agreement" and the trust created thereby being referred to as
the "Class C Trust").
A portion of the proceeds of the offering of the Class C
Certificates will be paid to the Trustee to be used to purchase Series C
Equipment Notes for the Delivered Aircraft. The remaining cash proceeds of
the offering of Class C Certificates will be paid to First Security Bank,
National Association, a national banking association, as escrow agent (the
"Escrow Agent"), under an Escrow and Paying Agent Agreement among the
Escrow Agent, AIFS, the Trustee and State Street Bank and Trust Company, as
paying agent (the "Paying Agent"), for the benefit of the holders of the
Class C Certificates (the "Escrow Agreement"). The Escrow Agent will
deposit such cash proceeds (each, a "Deposit") with Citibank, N.A., a
national banking association (the "Depositary"), in accordance with the
Deposit Agreement between the Escrow Agent and the Depositary (each, a
"Deposit Agreement"), and will withdraw Deposits upon request to allow the
Trustee to purchase Equipment Notes from time to time pursuant to a Note
Purchase Agreement to be dated as of the Closing Date (the "Note Purchase
Agreement") among the Company, State Street Bank and Trust Company, as
Trustee, as Subordination Agent (as hereinafter defined), as Paying Agent,
and the Escrow Agent. The Escrow Agent will issue receipts to be attached
to Class C Certificates ("Escrow Receipts") representing each holder's
fractional undivided interest in amounts deposited with such Escrow Agent
and will pay to such holders through the related Paying Agent interest
accrued on the Deposits and received by such Paying Agent pursuant to the
related Deposit Agreement at a rate per annum equal to the interest rate
applicable to the corresponding Certificates.
Certain amounts of interest payable on the Class C Certificates
will be entitled to the benefits of a liquidity facility. ABN AMRO Bank
N.V., acting through its Chicago branch (the "Liquidity Provider") will
enter into a revolving credit agreement with respect to the Class C Trust
(the "Liquidity Facility") to be dated as of the Closing Date for the
benefit of the holders of the Class C Certificates. The Liquidity Provider
and the holders of the Class C Certificates (as well as the Company's Class
A Pass Through Certificates, Series 1998-1 (the "Class A Certificates) and
the Class B Pass Through Certificates, Series 1998-1 (the "Class B
Certificates" and together with the Class A Certificates and the Class C
Certificates, the "Pass Through Certificates") will be entitled to the
benefits of an Intercreditor Agreement to be dated as of the Closing Date
(the "Intercreditor Agreement") among the Trustees, State Street Bank and
Trust Company, as subordination agent and trustee thereunder (the
"Subordination Agent"), and the Liquidity Provider.
The Class C Certificates will be offered and sold to the
Purchaser without being registered under the Securities Act of 1933, as
amended (the "Securities Act"), in reliance upon an exemption therefrom.
The Company has prepared an offering memorandum dated the date hereof (the
"Offering Memorandum") setting forth information concerning the Company and
the Class C Certificates. Copies of the Offering Memorandum have been
delivered by the Company to the Purchaser pursuant to the terms of this
Agreement. Any references herein to the Offering Memorandum shall be
deemed to include all amendments and supplements thereto, unless otherwise
noted. The Company hereby confirms that it has authorized the use of the
Offering Memorandum in connection with the resale of the Class C
Certificates by the Purchaser.
Holders of the Class C Certificates (including the Purchaser and
their direct and indirect transferees) will be entitled to the benefits of
an Exchange and Registration Agreement, substantially in the form attached
hereto as Annex A (the "Registration Agreement"), pursuant to which the
Company will agree to file with the Securities and Exchange Commission (the
"Commission") (i) a registration statement under the Securities Act (the
"Exchange Offer Registration Statement") registering an issue of
Certificates (the "Exchange Certificates") which are identical in all
material respects to the Class C Certificates (except that the Exchange
Certificates will not contain terms with respect to transfer restrictions)
and (ii) under certain circumstances, a shelf registration statement
pursuant to Rule 415 under the Securities Act (the "Shelf Registration
Statement").
As used herein, the term Offering Memorandum shall include in
each case the documents, if any, incorporated by reference therein. The
terms "supplement", "amendment", and "amend" as used herein with respect to
the Offering Memorandum shall include all documents deemed to be
incorporated by reference in the Offering Memorandum that are filed with
the Commission pursuant to the Exchange Act after the issue date of such
Offering Memorandum and on or prior to the completion of the offering.
Capitalized terms not otherwise defined in this Agreement shall
have the meanings specified therefor in the Pass Through Agreement, the
Note Purchase Agreement or the Intercreditor Agreement referred to in the
Pass Through Agreement; provided that, as used in this Agreement, the term
"Operative Documents" shall mean the Purchase Agreement, the Deposit
Agreement, the Escrow Agreement, the Intercreditor Agreement, the Liquidity
Facility, the Indentures, the Leases, the Note Purchase Agreement, the
Participation Agreements, the Trust Agreements, the Pass Through Agreement,
the Pass Through Certificates, the Equipment Notes and the Registration
Agreement.
As used in this Agreement, the term "Financing Agreements" shall
mean, collectively, the Note Purchase Agreement, the Pass Through
Agreement, the Liquidity Facility, the Pass Through Certificates, the
Equipment Notes and the Intercreditor Agreement.
1. Representations and Warranties. The Company hereby
represents and warrants to, and agrees with, you that:
(a) The Offering Memorandum, as of its date, did not, and
the Offering Memorandum will not, contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(b) The Offering Memorandum, as of its date, contains or
incorporates by reference all of the information that, if requested by a
prospective purchaser of the Class C Certificates, would be required to be
provided to such prospective purchaser pursuant to Rule 144A(d)(4) under
the Securities Act.
(c) Assuming the accuracy of the representations and
warranties of the Purchaser contained in Section 4 and its compliance with
the agreements set forth therein, it is not necessary, in connection with
the issuance and sale of the Class C Certificates to the Purchaser in the
manner contemplated by this Agreement and the Offering Memorandum, to
register the Class C Certificates under the Securities Act or to qualify
the Pass Through Agreement under the Trust Indenture Act of 1939, as
amended (the "1939 Act").
(d) The accountants who certified the financial statements
included in or incorporated by reference in the Offering Memorandum are
independent public accountants as required by the Securities Act.
(e) None of the Company or any Trust is an "investment
Company", within the meaning of the Investment Company Act of 1940, as
amended (the "Investment Company Act"); and after giving effect to the
offering and sale of the Pass Through Certificates and the application of
the proceeds therefor as described in the Offering Memorandum, no Trust
will be, nor will the escrow arrangements relating to any Trust
contemplated by the respective Escrow Agreement result in the creation of,
an "investment company", as defined in the Investment Company Act.
(f) The Company has complied with all provisions of Section
517.075, Florida Statutes (Chapter 92-198, Laws of Florida) or is exempt
therefrom.
(g) The execution and delivery by the Company of this
Agreement, the Pass Through Agreement and the other Operative Documents to
which the Company is or will be a party, the consummation by the Company of
the transactions contemplated herein and therein and in the Offering
Memorandum and compliance with the terms hereof and thereof do not and will
not result in any violation of the charter or by-laws of the Company and do
not and will not conflict with or violate, or result in a breach of any of
the terms or provisions of, or constitute a default under, or result in the
creation or imposition of any impermissible lien, charge or encumbrance
upon any property or assets of the Company under: (i) any indenture,
mortgage or loan agreement, or any other agreement or instrument to which
the Company is a party or by which it may be bound or to which any of its
properties may be subject (except for such conflicts, breaches, violations,
defaults, liens, charges or encumbrances that, individually or in the
aggregate, would not have a material adverse effect on the financial
condition or on the earnings or business affairs of the Company and its
subsidiaries considered as a single entity); (ii) any existing applicable
law, rule or regulation; or (iii) any judgment, order or decree of any
government, governmental instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any of its properties.
(h) No authorization, approval, consent, license, order of
or registration or filing with, or the giving of notice to, any government,
governmental instrumentality or court, domestic or foreign, or other
regulatory body or authority (other than, in the case of the Class A Pass
Through Certificates and the Class B Pass Through Certificates, with
respect to the effectiveness of the Registration Statement under the
Securities Act or the qualification of the Pass Through Agreements under
the 1939 Act) is required to be obtained or made by the Company for the
valid authorization, execution, delivery and performance by the Company of
this Agreement or any of the Operative Documents to which the Company is a
party or the consummation of the transactions contemplated by this
Agreement or any such Operative Documents, except such as may be required
under (i) in the case of the Class A Pass Through Certificates and the
Class B Pass Through Certificates, the securities or Blue Sky laws of the
various states or (ii) the Transportation Code and the Uniform Commercial
Code as in effect in Delaware and Virginia, which filings or recordings
referred to in this clause (ii), with respect to any particular set of
Financing Agreements, shall have been made or duly presented for filing or
recordation in all material respects or shall be in the process of being
duly filed or filed for recordation in all material respects, on or prior
to the applicable Closing Date (as defined in the Note Purchase Agreement)
for the Aircraft related to such Financing Agreements.
(i) This Agreement has been duly authorized by all
necessary corporate action and duly executed and delivered by the Company.
The Operative Documents to which the Company is or will be a party will be
duly executed and delivered by the Company on or prior to the Closing Date
(as defined herein) or the applicable Closing Date (as defined in the Note
Purchase Agreement), as the case may be.
(j) The Operative Documents to which the Company is or will
be a party have been duly authorized by all necessary corporate action,
will each be substantially in the form heretofore supplied to you and will
constitute, when duly executed and delivered by the Company (assuming that
such Operative Documents constitute valid and binding obligations of each
other party thereto), valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except to
the extent that enforceability thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity). The Basic Agreement as
executed is substantially in the form filed as an exhibit to the
Registration Statement and has been duly qualified under the 1939 Act. The
Class C Certificates and the Operative Documents will conform in all
material respects to the descriptions thereof in the Offering Memorandum.
(k) When executed, issued, authenticated and delivered
pursuant to the provisions of the Pass Through Agreement and sold and paid
for as provided in this Agreement, the Class C Certificates will constitute
valid and legally binding obligations of the Trustee enforceable in
accordance with their terms, except to the extent that enforceability
thereof may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law
or in equity); and the Class C Certificates will be entitled to the
benefits provided by the Pass Through Agreement. When executed,
authenticated, issued and delivered in the manner provided for in the
Escrow Agreement to which the Class C Pass Through Trustee is a party, the
Escrow Receipt will be legally and validly issued and will be entitled to
the benefits of the related Escrow Agreement.
(l) The Equipment Notes to be issued under each applicable
Indenture, when duly executed and delivered by the related Owner Trustee or
the Company, as the case may be, and duly authenticated by the Indenture
Trustee in accordance with the terms of such Indenture, will be duly issued
under such Indenture and will constitute the valid and binding obligations
of such Owner Trustee or the Company, as the case may be, enforceable in
accordance with their terms, except that enforceability thereof may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity); and the
holders thereof will be entitled to the benefits of such Indenture.
(m) No Appraiser (as defined in the Offering Memorandum) is
an affiliate of the Company or has a substantial interest, direct or
indirect, in the Company. None of the officers and directors of any
Appraiser is connected with the Company or any of its affiliates as an
officer, employee, promoter, underwriter, trustee, partner, director or
person performing similar functions.
(n) The Class C Certificates satisfy the eligibility
requirements of Rule 144A(d)(3) under the Securities Act.
(o) Neither the Company nor any of its affiliates has,
directly or through any agent, sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of, any security (as such term is
defined in the Securities Act), which is or will be integrated with the
sale of the Class C Certificates in a manner that would require
registration of the Class C Certificates under the Securities Act.
(p) None of the Company or any of its affiliates or any
other person acting on its or their behalf has engaged, in connection with
the offering of the Class C Certificates, in any form of general
solicitation or general advertising within the meaning of Rule 502(c) under
the Securities Act.
The parties agree that any certificate signed by a duly
authorized officer of the Company and delivered to Purchaser, or to counsel
for the Purchaser, on the Closing Date and in connection with this
Agreement or the offering of the Certificates, shall be deemed a
representation and warranty by (and only by) the Company to the Purchaser
as to the matters covered thereby.
2. Purchase and Delivery. (a) On the basis of the
representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Company hereby agrees to
cause the Trustee to sell to AIFS, and AIFS agrees to purchase from the
Trustee the principal amount of Class C Certificates at a purchase price of
100% of the aggregate stated principal amount thereof (the "Purchase
Price"). Concurrently with the issuance and sale of the Class C
Certificates, the Company shall cause the Escrow Agent to issue and deliver
to the Trustee the Escrow Receipts in accordance with the terms of the
Escrow Agreement, which Escrow Receipts shall be attached to the related
Class C Certificates.
(b) Delivery of and payment of the Purchase Price for the
Class C Certificates to be purchased by you (with attached Escrow Receipts)
shall be made at the offices of Skadden, Arps, Slate, Meagher & Flom, LLP,
1440 New York Avenue, N.W., Washington, D.C. 20005 (or at such other place
as shall be agreed upon by you and the Company) at 10:00 A.M., New York
City time, on the date hereof or such other date (which date shall be no
later than the seventh business day after the date hereof), time and place
as may be agreed upon by the Company and you (such date and time of
delivery and payment for the Class C Certificates (with attached Escrow
Receipts) being herein called the "Closing Date"). Delivery of the Class C
Certificates (with attached Escrow Receipts) issued by the Class C Trust
shall be made to an account designated by you in writing to the Company at
the Depository Trust Company ("DTC") against payment by you of the Purchase
Price therefor by wire transfer of immediately available funds to the
account and in the manner specified in the related Escrow Agreement. The
Class C Certificates (with attached Escrow Receipts) issued by the Class C
Trust shall be in the form of one or more fully registered global
certificates, and shall be deposited with the Class C Trustee as custodian
for DTC and registered in the name of Cede & Co.
3. Conditions to Closing. The obligation of AIFS to purchase
and pay for the Class C Certificates pursuant to this Agreement are subject
to the accuracy of and compliance with the representations and warranties
of the Company contained herein as of the date hereof and the Closing Date,
to the accuracy of the statements of the officers of the Company made in
any certificate furnished pursuant to the provisions hereof, to the
performance by the Company of its covenants and other obligations hereunder
and to the following further conditions:
(a) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date, there shall not have occurred any
downgrading in the rating accorded the Class C Certificates by Standard &
Poor's Ratings Service set forth in the Offering Memorandum other than a
downgrade caused by a downgrade in the rating of the Company.
(b) (i) Each of the representations and warranties of the
Company contained herein shall be true and correct as of the Closing Date
(except to the extent that a representation or warranty expressly relates
to an earlier or later date, in which case it will be true and correct as
of such date); (ii) each of the conditions precedent set forth in Section 6
of that certain Letter Agreement, dated as of October 31, 1997 (the "Letter
Agreement") between AVSA, S.A.R.L. and the Company shall have been
satisfied; (iii) no Termination Event as described in Section 7 of the
Letter Agreement shall have occurred; and (iv) the Company shall have
performed in all material respects all of its obligations to be performed
hereunder on or prior to the Closing Date; provided that the condition set
forth in Section 6(b) of the Letter Agreement shall be deemed satisfied if
the Company delivers to the Indenture Trustee an opinion with respect to
Section 1110 of the U.S. Bankruptcy Code meeting the requirements described
in the section of the Offering Memorandum captioned "Description of
Equipment Notes Remedies"; and AIFS shall have received on the Closing Date
a certificate, dated the Closing Date and signed by a Vice President or
Treasurer of the Company, to the effect that each of the foregoing clauses
(i) through (iv) is true as of the Closing Date. The officer signing and
delivering such certificate may rely on the best of his or her knowledge.
(c) AIFS shall have received on the Closing Date an
opinion, dated the Closing Date, from the General Counsel, Deputy General
Counsel or Associate General Counsel of the Company, in form satisfactory
to AIFS and AIFS' counsel, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the State of Delaware and has all necessary corporate power
and authority under such laws to own its properties, to conduct
its business as described in the Offering Memorandum, to enter
into this Agreement and each of the Operative Documents to which
it is a party and to perform its obligations hereunder and
thereunder (except where the failure to have such power or
authority would not have a material adverse effect on the
Company); and the Company is duly qualified to transact business
as a foreign corporation in good standing in each jurisdiction in
which its ownership of property or the conduct of its business
requires such qualification (except where the failure to so
qualify would not have a material adverse effect upon the
Company);
(ii) The Company is an "air carrier" and a
"citizen of the United States" within the meaning of the
Transportation Code, and is an "air carrier operating under a
certificate of convenience and necessity issued by the Civil
Aeronautics Board" within the meaning of 11 U.S.C. section 1110;
the descriptions in the Offering Memorandum with respect to
statutes, contracts, administrative orders and regulations and
legal and governmental proceedings are accurate and fairly
summarize the information required to be shown; and there are,
to the best of our counsel's knowledge, no statutes,
administrative orders or regulations or pending or threatened
legal or governmental proceedings required to be described in the
Offering Memorandum which are not described as required, nor any
contracts or documents of a character required to be described or
referred to in the Offering Memorandum, that are not so
described, referred to or filed as required;
(iii) The statements in the Offering Memorandum as
to the routes that the Company presently operate or is authorized
to operate are correct in all material respects. Except as
disclosed in the Offering Memorandum, no action or proceeding has
been instituted or to such counsel's knowledge, has been
threatened by the United States Department of Transportation, the
Federal Aviation Administration or the aeronautical authorities
of any other country that would impair the Company's ability to
operate such routes;
(iv) This Agreement has been duly authorized,
executed and delivered by the Company;
(v) No authorization, approval, consent, license,
order of, or registration with, or the giving of notice to, any
government, governmental instrumentality, or court, domestic or
foreign, or other regulatory body or authority (other than, in
the case of the Class C Certificates, with respect to the
qualification of the Basic Agreement under the 1939 Act and other
than, in the case of the Class C Certificates, with respect to
the securities or Blue Sky laws of the various states and with
respect to any registration, filing or recording that may be
required under the Transportation Code and the Uniform Commercial
Code as in effect in various jurisdictions) is required to be
obtained or made by the Company for the valid authorization,
issuance, sale and delivery of the Class C Certificates and the
Equipment Notes relating thereto or for the valid authorization,
execution, delivery and performance by the Company of this
Agreement and each of the Operative Documents to which the
Company is or will be a party or the consummation of the
transactions contemplated by this Agreement and such Operative
Documents;
(vi) The execution and delivery by the Company of
this Agreement, the related Pass Through Agreement and the
Operative Documents to which the Company is or will be a party,
the issuance and sale of the Class C Certificates and the related
Equipment Notes, the issuance of the Escrow Receipts attached to
the Class C Certificates, the consummation by the Company of the
transactions contemplated herein and therein and in the Offering
Memorandum and compliance with the terms hereof and thereof do
not and will not result in any violation of the charter or by-
laws of the Company and do not and will not conflict with or
violate, or result in a breach of any of the terms or provisions
of, or constitute a default under, or result in the creation or
imposition of any impermissible lien, charge or encumbrance upon
any property or assets of the Company under (A) any indenture,
mortgage or loan agreement, or any other agreement or instrument
known to such counsel, to which the Company is a party or by
which either it be bound or to which any of its properties may be
subject (except for such conflicts, breaches, defaults,
violations, liens, charges or encumbrances that, individually or
in the aggregate, would not have a material adverse effect on the
financial condition or on the earnings or business affairs of the
Company and its subsidiaries considered as a single entity); (B)
any existing applicable law, rule or regulation (other than the
securities or Blue Sky laws of the various states, as to which
such counsel need express no opinion); or (C) any judgment, order
or decree known to such counsel of any government, governmental
instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of its properties;
(vii) No default exists in the performance or
observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, loan agreement,
note, lease or other agreement or instrument that is described or
referred to in the Offering Memorandum or filed as an exhibit to
the Registration Statement on Form S-3 (File No. 333-64425) filed
by the Company with the Securities and Exchange Commission (the
"Registration Statement");
(viii) Except as disclosed in the Offering
Memorandum, there is no action, suit or proceeding before or by
any government, governmental instrumentality or court, domestic
or foreign, now pending or, to the knowledge of such counsel,
threatened against or affecting the Company that might reasonably
be expected to result in any material adverse change in the
financial condition or in the earnings or business affairs of the
Company, or that could adversely affect the consummation of the
transactions contemplated by this Agreement or any of the other
Operative Documents to which the Company is or will be a party;
and
(ix) Such counsel has participated in the
preparation of the and the Offering Memorandum and the documents
incorporated by reference in the Offering Memorandum and no facts
have come to such counsel's attention that lead such counsel to
believe that the Offering Memorandum or any amendment or
supplement thereto (except for the financial statements and other
financial or statistical data included or incorporated by
reference therein or omitted therefrom, as to which such counsel
need express no opinion), at the time the Offering Memorandum was
issued, at the time any amended or supplemental Offering
Memorandum was issued or as of the Closing Date, contained any
untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
(d) You shall have received on the Closing Date an opinion,
dated the Closing Date, of Skadden, Arps, Slate, Meagher & Flom LLP,
counsel for the Company, in form and substance reasonably satisfactory to
you and substantially to the effect set forth in Exhibit A hereto.
(e) You shall have received on the Closing Date an opinion
of Bingham Dana, LLP, counsel for State Street Bank and Trust Company,
individually and as Trustee, Subordination Agent and Paying Agent, dated
the Closing Date, in form and substance reasonably satisfactory to you and
substantially to the effect set forth in Exhibit B hereto.
(f) You shall have received on the Closing Date an opinion
of Ray, Quinney & Nebeker, counsel for the Escrow Agent, dated the Closing
Date, in form and substance reasonably satisfactory to you and
substantially to the effect set forth in Exhibit C hereto.
(g) You shall have received an the Closing Date an opinion
of Vedder, Price, Kaufman & Kammholz, counsel for the Liquidity Provider,
dated the Closing Date, in form and substance reasonably satisfactory to
you and substantially to the effect set forth in Exhibit D hereto.
(h) You shall have received on the Closing Date an opinion
of Shearman & Sterling, counsel for the Depositary for the Class C Trust,
dated the Closing Date, and an opinion of in-house counsel to the
Depositary, dated the Closing Date, each in form and substance reasonably
satisfactory to you and substantially to the effect set forth in Exhibit E
hereto.
(i) Each of the Appraisers shall have furnished to AIFS a
letter from such Appraiser, addressed to the Company and dated the Closing
Date, confirming that such Appraiser and each of its directors and officers
(i) is not an affiliate of the Company or any of its affiliates; (ii) does
not have any substantial interest, direct or indirect, in the Company or
any of its affiliates; and (iii) is not connected with the Company or any
of its affiliates as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
(j) At the Closing Date, each of the Operative Documents
shall be in form and substance reasonably satisfactory to you and (other
than the Indentures, Leases and Participation Agreements) shall be duly
executed and delivered by each of the parties thereto; the representations
and warranties of the Company contained in each of such executed Operative
Documents shall be true and correct in all material respects as of the
Closing Date (except to the extent that they relate solely to an earlier or
later date, in which case they shall be true and correct as of such earlier
or later date) and you shall have received a certificate of the President
or a Vice President of the Company, dated as of the Closing Date, to such
effect.
(k) You shall have received on each of the date of this
Agreement and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to
you, from the Company's independent public accountants, containing
statements and information of the type customarily included in accountants'
"agreed upon procedures letters" to underwriters with respect to the
financial statements and certain other financial or statistical data and
certain financial information contained in or incorporated by reference
into the Offering Memorandum.
(l) The Class A Certificates and Class B Certificates (in
each case with attached Escrow Receipts) in the amount and containing the
terms described in the Offering Memorandum shall be concurrently issued and
purchased by the Underwriters.
4. Representations and Warranties of the Purchaser. AIFS
represents and warrants to the Company and the Class C Trust that:
(a) It understands that any subsequent transfer of the
Certificates is subject to certain restrictions and conditions set forth in
the Pass Through Agreement relating to the Class C Certificates and it
agrees to be bound by, and not to resell, pledge or otherwise transfer the
Class C Certificates except in compliance with or pursuant to a transaction
exempt from, such restrictions and conditions and the Securities Act.
(b) It understands that the Class C Certificates have not
been registered under the Securities Act, are being sold to it in a
transaction that is exempt from the registration requirements of the
Securities Act and that the Class C Certificates may not be reoffered or
resold except as permitted in the following sentence. It agrees that, if
it should sell any Class C Certificate within two years after the later of
the original issuance of such Class C Certificate and the last date on
which such Class C Certificate is owned by US Airways, the Trustee or any
affiliate of any of such persons, that if it should sell any Certificate,
it shall do so only (A) to US Airways, Inc., (B) to a person who it
reasonably believes is a "qualified institutional buyer" in compliance with
Rule 144A under the Securities Act, (C) to an institutional "accredited
investor" acquiring $100,000 or more aggregate principal amount of such
Certificate that, prior to such transfer, furnished to the Trustee a signed
letter containing certain representations and agreements relating to the
restrictions on transfer of such Certificate (the form of which letter can
be obtained from the Trustee), (D) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act (if available),
(E) in accordance with another exemption from the Securities Act or (F)
pursuant to an effective registration statement under the Securities Act;
and it further agrees to provide to any person purchasing any of the
Certificates from it (other than pursuant to clauses (D) and (F) above) a
notice advising such purchaser that resales of such Certificates are
restricted as stated in the Trust Supplement No. 1998-1C.
(c) It understands that, on any proposed resale of any
Class C Certificates as contemplated by clause (B) of paragraph (b) above,
it shall be required to furnish to US Airways and to the Trustee such
certifications, legal opinions and other information as US Airways and the
Trustee may reasonably require to confirm that the proposed sale complies
with the foregoing restrictions. It further understands that the Class C
Certificates purchased by it shall bear a legend to the foregoing effect.
(d) It is an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act) and has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of its
investment in the Class C Certificates, and it and any accounts for which
it is acting are each able to bear the economic risks of its or their
investments.
(e) It is not acquiring the Class C Certificates with plan
assets of any plan subject to Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code").
5. Further Agreements of the Company. The Company agrees with
the Purchaser:
(a) At any time prior to the first to occur of (i) the date
on which the Purchaser receives freely transferable Exchange Certificates
in a Registered Exchange Offer (including as a result of the Purchaser
having to deliver a prospectus in connection with any resale of Exchange
Certificates), (ii) the date on which a Shelf Registration Statement is
declared effective, (iii) the date on which the Purchaser ceases to own any
Securities (each of the foregoing capitalized terms are used as defined in
the Registration Agreement) and (iv) the date that is the second
anniversary of the Closing Date (the "Applicable Date"), to advise the
Purchaser promptly and, if requested, confirm such advice in writing, of
the happening of any event which makes any statement of a material fact
made in the Offering Memorandum untrue or which requires the making of any
additions to or changes in the Offering Memorandum (as amended or
supplemented from time to time) in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
to advise the Purchaser promptly of any order preventing or suspending the
use of the Offering Memorandum, of any suspension of the qualification of
the Class C Certificates for offering or sale in any jurisdiction and of
the initiation or threatening of any proceeding for any such purpose; and
to use reasonable efforts to prevent the issuance of any such order
preventing or suspending the use of the Offering Memorandum or suspending
any such qualification and, if any such suspension is issued, to obtain the
lifting thereof at the earliest possible time;
(b) To furnish promptly to the Purchaser as many copies of
the Offering Memorandum (and any amendments or supplements thereto) as may
be reasonably requested;
(c) Prior to making any amendment or supplement to the
Offering Memorandum, to furnish a copy thereof to each of the Purchaser and
counsel for the Purchaser and not to effect any such amendment or
supplement to which the Purchaser shall reasonably object by notice to the
Company after a reasonable period to review;
(d) If, at any time prior to the Applicable Date, any event
shall occur or condition exist as a result of which it is necessary, in the
reasonable opinion of counsel for the Purchaser or counsel for the Company,
to amend or supplement the Offering Memorandum in order that the Offering
Memorandum will not include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein,
in the light of the circumstances existing at the time it is delivered to a
purchaser, not misleading, or if it is necessary to amend or supplement the
Offering Memorandum to comply with applicable law (or to contain current
financial information, which may be incorporated by reference), at the
request of the Purchaser, to promptly prepare such amendment or supplement
as may be necessary to correct such untrue statement or omission or so that
the Offering Memorandum, as so amended or supplemented, will comply with
applicable law;
(e) For so long as the Class C Certificates are outstanding
and are "restricted securities" within the meaning of Rule 144(a)(3) under
the Securities Act, to furnish to holders of the Class C Certificates and
prospective purchasers of the Class C Certificates designated by such
holders, upon request of such holders or such prospective purchasers, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act, unless the Company is then subject to and in compliance
with Section 13 or 15(d) of the Exchange Act (the foregoing agreement being
for the benefit of the holders from time to time of the Class C
Certificates and prospective purchasers of the Class C Certificates
designated by such holders);
(f) To promptly take from time to time such actions as the
Purchaser may reasonably request to qualify the Class C Certificates for
offering and sale under the securities or Blue Sky laws of such
jurisdictions as the Purchaser may designate and to continue such
qualifications in effect until the Applicable Date; and to arrange for the
determination of the eligibility for investment of the Class C Certificates
under the laws of such jurisdictions as the Purchaser may reasonably
request; provided that the Company and its subsidiaries shall not be
obligated to qualify as foreign corporations in any jurisdiction in which
they are not so qualified or to file a general consent to service of
process in any jurisdiction;
(g) Arrange for the Class C Certificates to be eligible for
clearance and settlement through DTC;
(h) Not to, and to cause its affiliates not to, sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as such term is defined in the Securities Act) which could be
integrated with the sale of the Class C Certificates to the Purchaser in a
manner which would require registration of the Class C Certificates under
the Securities Act;
(i) Except following the effectiveness of a Registration
Statement (as defined in the Registration Agreement), not to, and to cause
its affiliates not to, authorize or knowingly permit any person acting on
their behalf to, solicit any offer to buy or offer to sell the Class C
Certificates by means of any form of general solicitation or general
advertising within the meaning of Regulation D or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities Act;
and not to offer, sell, contract to sell or otherwise dispose of, directly
or indirectly, any securities under circumstances where such offer, sale,
contract or disposition would cause the exemption afforded by Section 4(2)
of the Securities Act to cease to be applicable to the offering and sale of
the Class C Certificates as contemplated by this Agreement; and
(j) In connection with sales or potential sales of the
Class C Certificates by the Purchaser, the Company agrees to make its
officers, employees, independent accountants and legal counsel reasonably
available to the Purchaser in connection with each filing of a Form 10-Q,
Form 10-K or a Form 8-K by the Company; provided that the reasonable out-
of-pocket fees and expenses of the Company incurred in connection therewith
for such accountants and legal counsel shall be paid by Purchaser; provided
further that if at the time Purchaser requests access to the Company's
accountants and legal counsel the Company is engaged in a securities
offering and is otherwise making its accountants and legal counsel
available in connection therewith Purchaser shall only be responsible for
any such expenses that the Company would not otherwise have incurred.
6. Indemnification and Contribution. (a) The Company agrees
to indemnify and hold harmless AIFS, its affiliates, their respective
officers, directors, representatives, employees and agents and each person,
if any, who controls AIFS within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and
all losses, claims, damages and liabilities caused by any untrue or alleged
untrue statement of a material fact contained in the Offering Memorandum
(as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein in light of the circumstances
under which they were made not misleading.
(b) [RESERVED]
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to paragraph (a) above, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in
such proceeding and shall pay the reasonable fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel, but the
reasonable fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the
indemnified party shall have agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is
understood the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees and expenses of more than one firm ( in addition to any
local counsel) for all such indemnified parties and that all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by AIFS in the case of parties indemnified pursuant
to paragraph (a) above. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such proceeding.
(d) To the extent the indemnification provided for in
paragraph (a) of this Section 6 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company, on the one hand, and AIFS,
on the other hand, from the offering of the Class C Certificates or (ii) if
the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company on the one hand and AIFS on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Issuer in connection with the offering of
such Securities shall be deemed to be in the same proportion as the
aggregate consideration received by the Trust from the sale by the Trust of
such Securities (or securities which were exchanged into such Securities)
bears to the aggregate consideration received by such Holder in connection
with the resale of such Securities, and such Holder shall be deemed to have
received the rest of the benefits. The relative fault of the Company on
the one hand and of AIFS on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by AIFS and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) The Company and AIFS agree that it would not be just or
equitable if contribution pursuant to this Section 6 were determined by pro
rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above.
The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6, AIFS shall not be
required to contribute any amount in excess of the amount by which the
total price at which the Class C Certificates sold by it were sold exceeds
the principal amount of such Class C Certificates. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The indemnity and
contribution provisions contained in this Section 6 and the representations
and warranties of the Company contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of
this Agreement, (ii) any investigation made by or on behalf of AIFS or any
person controlling AIFS or by or on behalf of the Company, its officers or
directors or any person controlling the Company and (iii) acceptance of and
payment for any of the Class C Certificates. The remedies provided for in
this Section 6 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in
equity.
(f) The indemnity and contribution provisions contained in
this Section 6 and the representations, warranties and other statements of
the Company contained in this Agreement or contained in certificates of
officers of the Company submitted pursuant hereto, shall remain operative
and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of AIFS or any
person controlling AIFS or the Company, its officers or directors or any
person controlling the Company and (iii) acceptance of and payment for any
of the Class C Certificates.
7. Termination. This Agreement shall be subject to
termination in your absolute discretion, by oral notice confirmed in
writing, given by you to the Company, if prior to delivery of and payment
for the Class C Certificates any of the events described in Section 3(a) or
Section 3(b)(iii) occur, and it shall also automatically terminate
immediately if prior to delivery of and payment for the Class C
Certificates upon the termination of (x) the Underwriting Agreement, dated
as of December 4, 1998, among the Company and Morgan Stanley & Co.
Incorporated, Credit Suisse First Boston Corporation, Lehman Brothers Inc.
and Salomon Smith Barney Inc. or (y) the Letter Agreement.
8. Notices. All notices and other communications under this
Agreement shall be in writing, unless otherwise stated herein, and shall be
deemed to have been duly given if delivered, mailed or transmitted by any
standard form of telecommunication. Notices to you shall be directed to you
at 2nd Floor, George's Dock House, International Financial Services Centre,
Dublin 1, Ireland, Attention: Legal Department; and notices to the Company
shall be directed to it at US Airways, Inc., Crystal Park Four, 2345
Crystal Drive, Arlington, VA 22227, Attention: Treasurer.
9. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
10. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
11. Headings. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be
deemed a part of this Agreement.
12. Effect of Operative Documents. (a) The financing
contemplated hereby shall constitute (i) a Seller Financing, (ii) a
Qualifying Financing Transaction and (iii) a utilization in full of the
Seller Commitment (as each such term is defined in the Letter Agreement),
in each case with respect to the Aircraft described in the Offering
Memorandum, in an amount equal to the aggregate principal amount of the
Class C Certificates issued on the Closing Date, less any amount of
Deposits returned to AIFS pursuant to the Operative Documents. Solely with
respect to the financing contemplated by the Operative Documents, and
except as provided in the next succeeding sentence and in Section 13
hereof, the terms and conditions of the Operative Documents will, as of the
Closing Date, supersede and replace the general terms and conditions set
forth in Sections 3 and 4 of the Letter Agreement. Without limiting or
affecting the parties' rights or obligations hereunder or under the
Registration Agreement, the terms and conditions set forth (i) under the
captions "Transfer Rights" and "Transaction Expenses" in Section 4 of the
Letter Agreement and (ii) except as expressly set forth in that certain
Consent, Waiver and Acknowledgment Agreement, dated the date hereof, among
the Company, US Airways Group, Inc., and AVSA, S.A.R.L., in all sections of
the Letter Agreement (other than Sections 3 and 4) shall survive the
execution and delivery hereof and of the Operative Documents and the
Financing Agreements and shall remain in full force and effect in
accordance with their terms, including, without limitation, with respect to
the financing contemplated by the Operative Documents.
(b) Without limiting the first sentence of paragraph (a) of
this Section 12, neither this Agreement nor the consummation of the
financing contemplated hereby shall in any way limit or affect the
application of the Letter Agreement to any other proposed utilization of
the Seller Commitment.
13. Covenants as to Letter Agreement. The Company covenants
that the aggregate principal amount of the Series C Equipment Notes issued
with respect to all of the Aircraft described in the Offering Memorandum
shall not exceed the Seller Commitment. The Company further covenants that
the aggregate principal amount of the Series C Equipment Notes issued with
respect to each Aircraft described in the Offering Memorandum shall not
exceed the Available Per Aircraft Financing Amount (in each case as defined
in Section 1 (a) of the Letter Agreement) with respect to such Aircraft.
The financing of each aircraft will comply with the last sentence of the
first paragraph of the section of the Letter Agreement captioned "General
Terms and Conditions Documentation Tax Indemnities." In addition, the
Equipment Notes issued with respect to any aircraft will comply with the
final sentence of Section 1(g) of the Letter Agreement. The covenants set
forth in this Section 13 shall apply only if AIFS owns one or more Class C
Certificates.
IN WITNESS WHEREOF, we have executed this Purchase Agreement as
of the date first written above.
Very truly yours,
US AIRWAYS, INC.
By: /s/ Thomas A. Mutryn
------------------------------
Name: Thomas A. Mutryn
Title: Sr. V.P., Finance & CFO
Accepted as of the date hereof
Airbus Industrie Financial Services
By: /s/ Yann Ballet
-------------------------------
Name: Yann Ballet
Title: Managing Director
SCHEDULE I
CLASS C PASS THROUGH CERTIFICATES, SERIES 1998-1
Pass Through Aggregate Interest Final Expected
Certificate Designation Principal Amount Rate Distribution Date
----------------------- ---------------- -------- -----------------
1998-1C $141,366,000 6.82% July 30, 2014
Exhibit A
FORM OF OPINION OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
Based upon the foregoing, and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that:
1. Each of the Pass Through Documents to which US Airways is a
party is a valid and binding obligation of US Airways enforceable against
US Airways in accordance with its terms.
2. Each of the Pass Through Agreement, the Intercreditor
Agreement, the Note Purchase Agreement and the Escrow Agreements is a valid
and binding obligation of each Trustee that is a party thereto enforceable
against such Trustee in accordance with its terms.
3. Each of the Liquidity Facilities, the Intercreditor
Agreement and the Note Purchase Agreement is a valid and binding obligation
of the Subordination Agent enforceable against the Subordination Agent in
accordance with its terms.
4. Each of the Escrow Agreements, the Deposit Agreements and
the Note Purchase Agreement is a valid and binding obligation of each
Escrow Agent that is a party thereto enforceable against each such Escrow
Agent in accordance with its terms.
5. Each of the Escrow Agreements and the Note Purchase
Agreement is a valid and binding obligation of the Paying Agent that is a
party thereto enforceable against such Paying Agent in accordance with its
terms.
6. The Pass Through Certificates and the Class C Certificates
are lawfully and validly Outstanding (as such term is defined in the Pass
Through Agreements) under the related Pass Through Agreement and are
entitled to the benefits of such Pass Through Agreement.
7. The Escrow Receipts are validly issued and outstanding and
are entitled to the benefits of the applicable Escrow Agreement.
8. The statements set forth under the headings "Description of
the Certificates", "Description of the Escrow Agreements", "Description of
the Liquidity Facilities", "Description of the Intercreditor Agreement" and
"Description of the Equipment Notes" in the Prospectus Supplement
incorporated in the Offering Memorandum, and the statements set forth under
the heading "Description of the Deposit Agreement" and "Registered Exchange
Offer; Registration Rights; Liquidated Damages" of the Offering Memorandum,
insofar as such statements purport to summarize certain provisions of the
Pass Through Certificates, the Class C Certificates, the Pass Through
Agreements, the Deposit Agreements, the Escrow Agreements, the Escrow
Receipts, the Liquidity Facilities, the Intercreditor Agreement, the
Equipment Notes, the Trust Agreements, the Trust Indentures, the Trust
Supplements, the Leases and the Lease Supplements, provide a fair summary
of such provisions.
9. The statements set forth under "ERISA Considerations" in the
Prospectus Supplement incorporated in the Offering Memorandum, insofar as
such statements purport to summarize certain federal laws of the United
States, provide a fair summary of such laws.
10. The statements set forth under "Description of the Equipment
Notes--Remedies" in the Prospectus Supplement incorporated in the Offering
Memorandum, insofar as such statements purport to summarize provisions of
Section 1110 of the Bankruptcy Code, provide a fair summary of such
provisions.
11. Subject to the assumptions set forth in this letter and the
assumptions and qualifications set forth in the discussion in the
Prospectus and the Prospectus Supplement incorporated in the Offering
Memorandum under the heading "Certain United States Federal Income Tax
Consequence" (the "Discussions"), we are of the opinion that (i) each Pass
Through Trust will not itself be subject to U.S. federal income taxation,
and (ii) the Discussions, insofar as they purport to address the federal
income tax laws of the United States, are accurate in all material
respects. In addition, we express no opinion as to the United States
federal, state, local, foreign or other tax consequences, other than as set
forth in the Discussions. Further, there can be no assurances that the
opinion expressed herein will be accepted by the Internal Revenue Service
(the "IRS"), or, if challenged, by a court. In rendering our opinion, we
have considered the applicable provisions of the Code, Treasury Department
regulations promulgated thereunder, pertinent judicial authorities,
interpretive rulings of the IRS, and such other authorities as we have
considered relevant. It should be noted that statutes, regulations,
judicial decisions, and administrative interpretations are subject to
change or differing interpretations at any time, possibly with retroactive
effect. A change in the authorities or the accuracy or completeness of any
of the information, documents, corporate records, covenants, statements,
representations, or assumptions on which our opinion is based could affect
our conclusions. This opinion is expressed as of the date hereof, and we
are under no obligation to supplement or revise our opinion to reflect any
changes (including changes that have retroactive effect) (i) in applicable
law or (ii) in any information, document, corporate record, covenant,
statement, representation, or assumption stated herein that becomes untrue
or incorrect.
12. None of the Company or any of the Covered Trusts is an
"investment company" within the meaning of the Investment Company Act of
1940, as amended (the "Investment Company Act"); and after giving effect to
the offering and sale of the Pass Through Certificates and the application
of the proceeds thereof as described in the Prospectus and the Prospectus
Supplement, neither the Covered Trusts nor the escrow arrangements
contemplated by the Escrow Agreements will result in the creation of an
"investment company" within the meaning of the Investment Company Act.
13. The issuance and sale of the Class C Certificates to AIFS
pursuant to the Purchase Agreement, the issuance and sale of the Pass
Through Certificates to the Underwriters pursuant to the Underwriting
Agreement, the issuance of the Escrow Receipts attached to the Class C
Certificates and the Pass Through Certificates and the valid authorization,
execution and delivery of the Pass Through Documents to which it is a party
by US Airways and the performance by US Airways of its respective
obligations under the Pass Through Documents to which it is a party do not
require US Airways to obtain or effect any consent, approval,
authorization, registration or qualification of or with any governmental
agency or body of the United States of America (excluding the
Transportation Code and rules and regulations of the FAA) or the State of
New York, except such as may be required by the "Blue Sky" laws of the
various states in connection with the purchase and distribution of the
Class C Certificates and by the Company's performance of its obligations
under the Registration Rights Agreement and, with regard to the Pass
Through Certificates only, except such as are required under the Securities
Act of 1933, as amended (the "1933 Act"), and the Trust Indenture Act of
1939, as amended (the "1939 Act").
14. Neither the execution and delivery by US Airways of the Pass
Through Documents to which US Airways is a party nor the compliance by US
Airways with the respective terms thereof that are applicable to it will
contravene any law, rule or regulation of the State of New York or the
United States of America generally applicable to transactions of this type.
15. Each of the Escrow Agreements creates a valid escrow under
New York law and a valid equitable interest in the escrowed property in
favor of the corresponding Trustee. Neither a New York court nor a United
States federal court applying New York law or the Bankruptcy Code (in the
case of a holder of an Escrow Receipt that is eligible for relief under
Section 109 of the Bankruptcy Code), if properly presented with the issue
and after having properly considered such issue, would permit any holder of
an Escrow Receipt to terminate the related Escrow Agreement, except in
accordance with its terms.
16. So long as an Escrow Agreement has not been terminated and
whether or not any insolvency proceeding has been commenced, creditors of
any person that is a holder of an Escrow Receipt issued under the Escrow
Agreement, a receiver, liquidator, or holder of a lien against the assets
of any such person, and any trustee in bankruptcy of such a person (if the
person is eligible for relief under section 109 of the Bankruptcy Code)
(collectively, the "Creditors") may acquire valid claims or liens, as to
the Deposits established under the Deposit Agreement and as to the related
Deposit Agreement and Escrow Agreement, only against the rights of the
holder of the Escrow Receipt under the Escrow Agreement and do not have,
and may not through the enforcement of such Creditors' rights acquire, any
greater right than the holder of the Escrow Receipt with respect to the
Deposits, Deposit Agreement or Escrow Agreement.
17. No creditor of US Airways or any of its subsidiaries, and no
holder of a lien against the assets of any such person, such as trustees,
receivers or liquidators (whether or not any insolvency proceeding has been
commenced), may acquire valid claims or liens as to the Deposits and the
related Deposit Agreements and Escrow Agreements.
18. Assuming, without independent investigation, (i) the
accuracy of the representations and warranties of the Company set forth in
Section 2 of the Purchase Agreement and of AIFS in Section 4 of the
Purchase Agreement, (ii) the due performance by the Company of the
covenants and agreements set forth in Section 3 and Section 5 of the
Purchase Agreement, and (iii) compliance by AIFS with the offering and
transfer procedures and restrictions described in the Offering Memorandum,
the offer, sale and delivery of the Class C Certificates to AIFS in the
manner contemplated by the Purchase Agreement and the Offering Memorandum
do not require registration under the 1933 Act, and the Indenture does not
require qualification under the 1939 Act, it being understood that we
express no opinion as to any subsequent resale of any Class C Certificates.
Exhibit B
FORM OF OPINION OF BINGHAM DANA LLP
Based upon the foregoing, we are of the opinion that:
1. State Street is a Massachusetts trust company, validly
formed and authorized to operate as a state-chartered trust company under
the laws of the Commonwealth of Massachusetts and has the requisite
corporate and trust power, authority and legal right to execute, deliver
and perform its obligations under the State Street Documents and, in its
capacity as Pass Through Trustee, has requisite corporate power, authority
and legal right to issue and execute the Class C Certificates delivered on
the date herewith.
2. The execution, delivery and performance by State
Street, in its individual capacity or as Pass Through Trustee,
Subordination Agent and Paying Agent, as the case may be, of the State
Street Documents and the consummation by State Street, in its individual
capacity or as Pass Through Trustee, Subordination Agent and Paying Agent,
as the case may be, of the transactions contemplated thereby and compliance
by State Street, in its individual capacity or as Pass Through Trustee,
Subordination Agent and Paying Agent, as the case may be, with the terms
thereof including, without limitation, the execution and issuance of Class
C Certificates delivered on the date herewith, have been duly authorized by
all necessary corporate action on the part of State Street, and neither the
execution and delivery thereof nor the consummation by State Street, in its
individual capacity or as Pass Through Trustee, Subordination Agent and
Paying Agent, as the case may be, of the transactions contemplated thereby
nor compliance by State Street, in its individual capacity or as Pass
Through Trustee, Subordination Agent and Paying Agent, as the case may be,
with any of the terms and provisions thereof (i) does or will violate or
result in a breach of, or constitute any default under, State Street's
charter documents or by-laws or the provisions of any indenture, mortgage,
contract or other agreement, in each case known to us, to which it is a
party or by which it or any of its properties is or may be bound or
affected or (ii) does or will violate any law or governmental rule or
regulation of the United States governing the banking or trust powers of
State Street or of the Commonwealth of Massachusetts, or any order or
judgment known to us and applicable to or binding on State Street.
3. Neither the execution and delivery by State Street, in
its individual capacity or as Pass Through Trustee, Subordination Agent and
Paying Agent, as the case may be, of the State Street Documents or the
issuance of the Offered Certificates issued and delivered on the date
herewith nor the performance by State Street, in its individual capacity or
as Pass Through Trustee, Subordination Agent and Paying Agent, as the case
may be, of any of the transactions contemplated thereby requires the
consent or approval of, the giving of notice to, the registration with, the
recording or filing of any document with, or the taking of any other action
in respect of, any federal or Massachusetts governmental authority or
agency governing the banking or trust powers of State Street or under any
Massachusetts law.
4. Each of the State Street Documents has been duly
executed and delivered by State Street, in its individual capacity or as
Pass Through Trustee, Subordination Agent and Paying Agent, as the case may
be, and is the legal, valid and binding obligation of State Street, in its
individual capacity or as Pass Through Trustee, Subordination Agent and
Paying Agent, as the case may be, enforceable against State Street, in its
individual capacity or as Pass Through Trustee, Subordination Agent and
Paying Agent, as the case may be, in accordance with its terms.
5. The Class C Certificates issued on and dated the date
herewith have been duly issued, authenticated and delivered by State Street
pursuant to the terms of the State Street Documents.
6. To our knowledge, but without having investigated any
governmental records or court dockets, and without having made any other
independent investigation, there are no pending or overtly threatened
actions or proceedings against State Street before any court or
administrative agency or arbitration board or tribunal which individually
or in the aggregate, if determined adversely to it, could reasonably be
expected to affect materially adversely the ability of State Street to
perform its obligations under the State Street Documents.
7. There are no taxes, fees or other governmental charges
("Taxes") payable under the laws of the Commonwealth of Massachusetts with
respect to the execution of and delivery by State Street, in its individual
capacity or as Pass Through Trustee, as the case may be, of any of the
State Street Documents (except for Taxes on any fees payable to State
Street in its individual capacity) which would not have been imposed if
State Street did not have its principal place of business in Massachusetts
or did not perform its administrative duties under the State Street
Documents in Massachusetts, and, assuming that the trust created by the
Trust Agreement will not be taxable as a corporation, but, rather, will be
characterized as a grantor trust under subpart E, Part I of Subchapter J of
the Internal Revenue Code of 1986, as amended, (i) such trust will not be
subject to any fees, taxes or other charges imposed by the Commonwealth of
Massachusetts or any political subdivision or taxing authority thereof
based on income, receipts, value or otherwise, and (ii) Holders that are
not residents of or otherwise subject to tax in Massachusetts will not be
subject to any taxes imposed by the Commonwealth of Massachusetts or any
political subdivision or taxing authority thereof as a result of
purchasing, holding (including receiving payments with respect to) or
selling a Certificate.
Exhibit C
FORM OF OPINION OF RAY, QUINNEY & NEBEKER
Based on and subject to the foregoing, we are of the opinion that:
1. The Escrow Agent is a national banking association duly
organized and validly existing 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 of America pertaining to its banking,
trust and fiduciary powers to conduct its business and operations as
currently conducted and to enter into, execute and deliver the Operative
Agreements to which the Escrow Agent is a party (the "Transaction
Documents") and perform its obligations thereunder.
2. The execution, delivery and performance by the Escrow
Agent of the Transaction Documents, the consummation by the Escrow Agent of
the transactions contemplated thereby and compliance by the Escrow Agent
with the terms thereof (i) have been duly authorized by all necessary
corporate action on the part of the Escrow Agent and do not require any
stockholder approval or consent of any trustee or holder of any
indebtedness or obligations of the Escrow Agent, (ii) do not and will not
contravene, or result in a breach of or constitute any default under its
charter documents or by-laws, or the provisions of any indenture, mortgage,
contract or other agreement known to us, to which it is party or by which
it or any of its properties is or may be bound or affected and (iii) does
not and will not contravene any law or governmental rule or regulation of
the United States of America or the State of Utah, or any order, judgment,
injunction or decree known to us and applicable to or binding on the Escrow
Agent or by which any of its properties is bound, or require the consent or
approval of, the giving of notice to, or the registration with, or the
taking of any action in respect of, or under, the laws of the United States
of America or the laws of the State of Utah or any subdivision or agency
thereof.
3. Each of the Transaction Documents has been duly
executed and delivered by the Escrow Agent and assuming that each such
agreement is the legal, valid and binding obligation of each other party
thereto, is the legal, valid and binding obligation of the Escrow Agent,
enforceable against the Escrow Agent in accordance with its terms.
4. To our knowledge, there are no pending or threatened
actions, suits, investigations or proceedings (whether or not purportedly
on behalf of the Escrow Agent) against or affecting the Escrow Agent or any
of its property before or by any court or administrative agency which,
individually or in the aggregate, if adversely determined, (A) would
adversely affect the ability of the Escrow Agent to perform its obligations
under any of the Transaction Documents or (B) would call into question or
challenge the validity of the Transaction Documents or the enforceability
thereof.
Exhibit D
FORM OF OPINION OF VEDDER, PRICE, KAUFMAN & KAMMHOLZ
Based upon and subject to the foregoing, it is our opinion that:
1. Each of the Liquidity Documents constitutes the legal,
valid and binding obligation of each of the parties thereto enforceable
against such parties in accordance with its terms, except as such
enforceability is limited by (i) bankruptcy, receivership, conservatorship,
insolvency, fraudulent transfer, liquidation, reorganization, moratorium or
other laws affecting creditors' rights and remedies generally from time to
time in effect as the same may be applied in the event of the bankruptcy,
receivership, conservatorship, insolvency, moratorium, liquidation,
reorganization or similar situation of any such party, or other similar
occurrence with respect to any such party or by laws affecting the rights
of creditors of depository institutions, (ii) the possible judicial
application of foreign laws or governmental action affecting creditors'
rights generally, (iii) general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law),
public policy and applicable law relating to fiduciary duties, and (iv) any
implied covenant of good faith and fair dealing.
2. ABN AMRO Bank N.V. is licensed by the Office of Banks
and Real Estate of the State of Illinois to maintain its branch at 135
LaSalle Street, Chicago, Illinois (the "Branch"), in accordance with the
banking law of the State of Illinois and the Branch has the full power,
authority and legal right to execute and deliver the Liquidity Documents.
3. The execution, delivery and performance by ABN AMRO of
the Liquidity Documents, and the consummation of the transactions
contemplated therein do not violate any banking law, or any governmental
rule or regulation relating thereto, of the United States of America, the
State of Illinois or the State of New York.
4. No authorization, consent, approval or other action by,
and no notice to or filing with, any banking authority or regulatory body
of the United States of America, the State of Illinois or the State of New
York is required for the due execution, delivery and performance by ABN
AMRO of the Liquidity Documents other than administrative and ministerial
filings which ABN AMRO is obligated to make in the ordinary course of its
business (which filings we have assumed have been and will continue to be
made in a timely manner).
5. The payment obligations of ABN AMRO under the Liquidity
Documents constitute unsecured and unsubordinated obligations of ABN AMRO.
Exhibit E
FORM OF OPINION OF SHEARMAN & STERLING AND
IN-HOUSE COUNSEL FOR THE DEPOSITARY
Based upon and subject to the foregoing, we are of the opinion that:
1. The Deposit Agreement constitutes the legal, valid and
binding obligation of Citibank, enforceable in accordance with its terms.
2. Subject to the provisions of 12 U.S.C. section 1821, the
obligations of Citibank under the Deposit Agreement will rank equally with
the unsecured deposit obligations of Citibank and all other unsecured
indebtedness of Citibank that is not contractually subordinated to the
payment of such obligations.
3. The Bank is duly organized and validly existing under the
Federal laws of the United States and is duly qualified to conduct banking
business in the State of New York.
4. The execution, delivery and performance by the Bank of the
Deposit Agreement, and the transactions contemplated thereby, have been
duly authorized by all necessary actions and proceedings by or on behalf of
the Bank, do not contravene the Articles of Incorporation or By-Laws of the
Bank and do not violate any law or regulation of the United States of
America or the State of New York or, to the best of my knowledge, any
order, writ, injunction or decree of any court or governmental agency
against the Bank.
5. The Bank has duly executed and delivered the Deposit
Agreement.
6. No authorization, consent or approval of or other action by,
and no notice to or filing with, any United States Federal or New York
state governmental authority or regulatory body is required for the
execution, delivery or performance by the Bank of the Deposit Agreement.
7. To the best of my knowledge after due inquiry, there is no
pending or threatened action, suit, investigation or proceeding against or
affecting the Bank or any of its property before or by any court or
administrative agency in the State of New York that, if adversely
determined, (i) would adversely affect the ability of the Bank to perform
its obligations under the Deposit Agreement or (ii) would call into
question or challenge the validity of the Deposit Agreement or the
enforceability thereof in accordance with the terms thereof.
EXHIBIT 4.2
US AIRWAYS, INC.
6.82% Pass Through Certificates, Series 1998-1, Class C
REGISTRATION AGREEMENT
December 14, 1998
AIRBUS INDUSTRIE FINANCIAL SERVICES
2nd Floor
George's Dock House
International Financial Center
Dublin 1, Ireland
Dear Sirs:
US Airways, Inc., a Delaware corporation ("US Airways" or the
"Issuer"), proposes to issue and sell to Airbus Industrie Financial
Services, a corporation organized under the laws of Ireland (the
"Purchaser"), upon the terms set forth in a purchase agreement dated as of
December 14, 1998 (the "Purchase Agreement"), its 6.82% Pass Through
Certificates, Series 1998-1, Class C (the "Certificates"). Capitalized
terms used but not specifically defined herein are defined in the Purchase
Agreement. As an inducement to the Purchaser to enter into the Purchase
Agreement and in satisfaction of a condition to your obligations
thereunder, US Airways and State Street Bank and Trust Company, solely in
its capacity as trustee (the "Trustee") of the US Airways Pass Through
Trust 1998-1C (the "Class C Trust") agree with you, for the benefit of the
beneficial holders and record holders of the Certificates, the Exchange
Certificates (as defined herein) and the Private Exchange Certificates
(including the Purchaser) (the "Holders") as follows:
1. Registered Exchange Offer. US Airways shall, at its cost,
prepare and, not later than forty-five (45) days after the Closing Date
(or, if the 45th day is not a business day, the first business day
thereafter) (January 28, 1999, assuming the Closing Date is December 14,
1998), file with the Securities and Exchange Commission (the "Commission")
a registration statement (the "Exchange Offer Registration Statement") on
an appropriate form under the Securities Act of 1933, as amended (the "1933
Act"), with respect to a proposed offer (the "Registered Exchange Offer")
to the Holders to cause the Class C Trust to issue and deliver to such
Holders, in exchange for the Certificates, a like principal amount of pass
through certificates (the "Exchange Certificates") of the Class C Trust
with terms substantially identical in all material respects to the
Certificates (except that the Exchange Certificates will not contain terms
with respect to transfer restrictions or liquidated damages), shall use all
reasonable best efforts to cause the Exchange Offer Registration Statement
to become effective under the 1933 Act not later than one hundred twenty
(120) days after the Closing Date (or, if the 120th day is not a business
day, the first business day thereafter) (April 13, 1999, assuming the
Closing Date is December 14, 1998), shall consummate the Exchange Offer not
later than one hundred fifty (150) days after the Closing Date (or, if the
150th day is not a business day, the first business day thereafter) (May
13, 1999 assuming the Closing Date is December 14, 1998), and shall use all
reasonable best efforts to keep the Exchange Offer Registration Statement
effective under the 1933 Act until the close of business on the 180th day
following the expiration of the Registered Exchange Offer (such period
being called the "Exchange Offer Registration Period") for use by
Exchanging Dealers (as defined below) as contemplated in Section 4(g) below
or for use as contemplated by clause (ii) of the fourth paragraph of this
Section 1.
The Issuer shall give the Purchaser written notice (the "Issuer
Effectiveness Notice") at least five (5) business days before the date on
which the Issuer reasonably expects the Exchange Offer Registration
Statement to be declared effective. The Purchaser may give the Issuer
written notice (the "Purchaser Delay Notice") at any time after the date
hereof but in no event later than two (2) business days after the date of
the Issuer Effectiveness Notice of its request to delay the effective date
of the Exchange Offer Registration Statement, and in such notice or in a
written notice delivered promptly thereafter, the Purchaser will specify
another date for the effective date which may not be later than 180 days
after the Closing Date (the length of such delay, the "Delay Period"). The
Issuer will use its reasonable best efforts to have the Exchange Offer
Registration Statement declared effective as requested by the Purchaser in
a valid notice, provided that the Issuer will have at least sixty (60) days
from the date of the notice to have the Exchange Offer Registration
Statement declared effective. The one hundred twenty (120) day and one
hundred fifty (150) day periods described above will be extended by the
Delay Period.
US Airways shall be deemed not to have used all reasonable best
efforts to keep the Exchange Offer Registration Statement effective during
the Exchange Offer Registration Period if US Airways voluntarily takes any
action that would result in Exchanging Dealers not being able to use such
Registration Statement as contemplated in such Section 4(g) or for use as
contemplated by clause (ii) of the next paragraph, unless (i) such action
is required by applicable law, or (ii) US Airways cannot obtain, after
using its reasonable best efforts, financial information (or information
used to prepare such information) necessary for filing the Exchange Offer
Registration Statement or any amendment or supplement thereto, or (iii)
such action is taken by US Airways in good faith and for valid business
reasons (not including avoidance of US Airways' obligations hereunder) to
prevent the disclosure of any material fact(s) related directly or
indirectly to US Airways. The Exchange Certificates will be issued under
the Pass Through Agreement.
Upon the effectiveness of the Exchange Offer Registration
Statement, the Issuer shall promptly cause the Class C Trust to commence
the Registered Exchange Offer, it being the objective of such Registered
Exchange Offer to enable each Holder electing to exchange Certificates for
Exchange Certificates (assuming that such Holder is not an affiliate of US
Airways within the meaning of the 1933 Act, acquires the Exchange
Certificates in the ordinary course of such Holder's business and has no
arrangements with any person to participate in the distribution of the
Exchange Certificates) to trade such Exchange Certificates from and after
their receipt without any limitations or restrictions under the 1933 Act.
Notwithstanding the foregoing, the Purchaser and US Airways acknowledge
that, pursuant to current interpretations by the Commission's staff of
Section 5 of the 1933 Act, and in the absence of an applicable exemption
therefrom, (i) each Holder that is a broker-dealer electing to exchange the
Certificates acquired for its own account as a result of market-making
activities or other trading activities for the Exchange Certificates (an
"Exchanging Dealer") may be required to deliver a prospectus containing the
information set forth in Annex A hereto on the cover, in Annex B hereto in
"The Exchange Offer" section, and in Annex C hereto in the "Plan of
Distribution" section of such prospectus in connection with a sale of any
such Exchange Certificates received by such Exchanging Dealer pursuant to
the Registered Exchange Offer and (ii) the Purchaser (if it elects to sell
Exchange Certificates acquired in exchange for the Certificates originally
purchased by it) may be required to deliver a prospectus containing the
information required by Items 507 and/or 508 of Regulation S-K under the
1933 Act, as applicable, in connection with such a sale.
If, upon consummation of the Registered Exchange Offer, the
Purchaser holds any Certificates, the Issuer, following the delivery of the
Exchange Certificates pursuant to the Registered Exchange Offer, upon the
written request of the Purchaser, shall cause the Class C Trust to issue
and deliver to the Purchaser in exchange (the "Private Exchange") for the
Certificates held by the Purchaser, a like principal amount of the Exchange
Certificates issued under the Pass Through Agreement and identical in all
material respects (including the existence of restrictions on transfer
under the 1933 Act and the securities laws of the several states of the
United States) to the Certificates (the "Private Exchange Certificates,"
and collectively with the Certificates and the Exchange Certificates, the
"Securities").
In connection with the Registered Exchange Offer, the Issuer
shall or shall cause the Class C Trust to:
(a) mail to each Holder a copy of the prospectus forming part of
the Exchange Offer Registration Statement, together with an appropriate
letter of transmittal and related documents;
(b) keep the Registered Exchange Offer open for not less than
thirty (30) days after the date notice thereof is mailed to the Holders (or
longer if required by applicable law);
(c) utilize the services of a depositary for the Registered
Exchange Offer with an address in the Borough of Manhattan, The City of New
York or in the City of Boston;
(d) permit Holders to withdraw tendered Certificates at any time
prior to the close of business, New York time, on the last business day on
which the Registered Exchange Offer shall remain open; and
(e) otherwise comply in all respects with all applicable laws.
As soon as practicable after the close of the Registered Exchange
Offer, or the Private Exchange, as the case may be, the Issuer shall:
(a) accept, or shall cause the Class C Trust to accept, for
exchange all Certificates tendered and not validly withdrawn pursuant to
the Registered Exchange Offer and the Private Exchange;
(b) deliver to the Trustee for cancellation all Certificates so
accepted for exchange; and
(c) cause the Trustee promptly to authenticate and deliver to
each Holder of the Certificates the Exchange Certificates or the Private
Exchange Certificates, as the case may be, equal in principal amount to the
Certificates of such Holder so accepted for exchange.
The Pass Through Agreement will provide that all Securities
issued under such Pass Through Agreement will vote and consent together as
one class and that none of the Securities issued under such Pass Through
Agreement will have the right to vote or consent as a class separate from
one another on any matter. The Issuer shall use its reasonable best
efforts to keep the Exchange Offer Registration Statement effective and to
amend and supplement the prospectus contained therein in order to permit
such prospectus to be used by all persons subject to the prospectus
delivery requirements of the Securities Act for such period of time as
referred to in the first paragraph of this Section 1 or, in the case of the
Purchaser only, such longer period of time as the Purchaser is required to
deliver a prospectus in connection with the sale of securities.
Notwithstanding any other provisions hereof, the Issuer shall
ensure that (i) any Exchange Offer Registration Statement and any amendment
thereto and any prospectus forming part thereof and any supplement thereto
complies in all material respects with the 1933 Act and the rules and
regulations thereunder; (ii) any Exchange Offer Registration Statement and
any amendment thereto does not, when it becomes effective, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; and (iii) any prospectus forming part of any Exchange Offer
Registration Statement, and any supplement to such prospectus, does not
include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements, in the light of the
circumstances under which they were made, not misleading.
Each Holder participating in the Registered Exchange Offer shall
be required to represent to the Issuer that, at the time of the
consummation of the Registered Exchange Offer, (i) any Exchange
Certificates received by such Holder will be acquired in the ordinary
course of business; (ii) such Holder will have no arrangements or
understanding with any person to participate in the distribution of the
Certificates or the Exchange Certificates within the meaning of the 1933
Act; (iii) such Holder is not an "affiliate", as defined in Rule 405 of the
1933 Act, of US Airways, or if it is an affiliate, such Holder acknowledges
that it must comply with the registration and prospectus delivery
requirements of the 1933 Act to the extent applicable; (iv) if such Holder
is not a broker-dealer, that it is not engaged in, and does not intend to
engage in, a distribution of the Exchange Certificates; and (v) if such
Holder is a broker-dealer, that it will receive Exchange Certificates for
its own account in exchange for the Certificates that were acquired as a
result of market-making activities or other trading activities and that it
will be required to acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Certificates.
2. Shelf Registration. If: (i) because of any change in law or
applicable interpretations thereof by the Commission's staff, the Issuer
determines that it is not permitted to effect the Registered Exchange Offer
as contemplated by Section 1 hereof; (ii) for any other reason the
Registered Exchange Offer is not consummated by the 150th day after the
Closing Date (which day shall be extended by the Delay Period, if any, and
if such day is not a business day, the first business day thereafter) (May
13, 1999, assuming (a) the Closing Date is December 14, 1998 and (b) there
is no Delay Period), (iii) the Purchaser so requests if it so determines
that any Holder is not eligible to participate in the Registered Exchange
Offer; (iv) the Purchaser so requests with respect to Certificates not
eligible to be exchanged for Exchange Certificates in the Registered
Exchange Offer; (v) the Purchaser so requests if it so determines that any
Holder that participates in the Registered Exchange Offer does not or will
not receive freely transferable Exchange Certificates in exchange for
tendered Certificates (including as a result of the Holder being required
under applicable law to deliver a prospectus in connection with any resale
of Exchange Certificates) or the Purchaser holds Private Exchange
Certificates (in the case of clause (iii), (iv) or (v), the Purchaser may
make the determination or request at any time after the Closing Date and
shall communicate such determination or request to the Issuer in writing
and, in connection therewith, if such notice is given prior to the
consummation of the Registered Exchange Offer, the Purchaser may request
that the Issuer and the Class C Trust cease performing their obligations
under Section 1, in which event, the Issuer's and the Class C Trust's
obligations under Section 1, as well as any liabilities of the Issuer under
Section 3 related to Section 1, shall terminate); or (vi) if the Issuer so
elects, the following provisions shall apply:
(a) The Issuer shall, subject to Section 5, as promptly as
practicable file (but in no event more than forty-five (45) days after so
required or requested pursuant to this Section 2) with the Commission and
thereafter shall use all reasonable best efforts to cause to be declared
effective within one hundred twenty (120) days after so required or
requested pursuant to this Section 2 a shelf registration statement on an
appropriate form under the 1933 Act relating to the offer and sale of the
Certificates (or Private Exchange Certificates or Exchange Certificates) by
the Holders of the Certificates (or Private Exchange Certificates or
Exchange Certificates) from time to time in accordance with the methods of
distribution elected by such Holders and set forth in such registration
statement (hereafter, a "Shelf Registration Statement" and, together with
any Exchange Offer Registration Statement, a "Registration Statement").
(b) The Issuer shall use all reasonable best efforts to keep the
Shelf Registration Statement continuously effective to permit the
prospectus forming part thereof to be usable by Holders or the Purchaser,
as applicable, for a period of two (2) years from the Closing Date or such
shorter period that will terminate when all the Certificates covered by the
Shelf Registration Statement have been sold pursuant to the Registration
Statement (in any such case, such period being called the "Shelf
Registration Period"). The Issuer shall be deemed not to have used its
reasonable best efforts to cause the Shelf Registration Statement to
become, or to remain, effective during the requisite period if US Airways
voluntarily takes any action that would result in any such Registration
Statement not being declared effective or in the Holders of Securities
covered thereby not being able to offer and sell such Securities during
that period unless (i) such action is required by applicable law, or (ii)
US Airways cannot obtain, after using its reasonable best efforts,
financial information (or information used to prepare such information)
necessary for the Shelf Registration Statement or any amendment or
supplement thereto, or (iii) such action is taken by US Airways in good
faith and for valid business reasons (not including avoidance of US
Airways' obligations hereunder) to prevent the disclosure of any material
fact(s) related directly or indirectly to US Airways. A Shelf Registration
Statement pursuant to this Section 2(b) shall not be deemed to have become
effective unless it has been declared effective by the Commission;
provided, however, that if, after it has been declared effective, the
offering of Securities pursuant to a Shelf Registration Statement is
interfered with by any stop order, injunction or other order or requirement
of the Commission or any other governmental agency or court, or Holders are
not otherwise able to offer and sell Securities covered by such Shelf
Registration Statement, such Shelf Registration Statement shall be deemed
not to have been effective during the period of such interference or period
of unavailability, until the offering of Securities pursuant to such Shelf
Registration Statement may legally resume (and the two year period referred
to above shall be extended by a number of days equal to such period).
(c) Notwithstanding any other provisions hereof, the Issuer
shall use its best efforts to ensure that (i) any Shelf Registration
Statement and any amendment thereto and any prospectus forming part thereof
and any supplement thereto complies in all material respects with the 1933
Act and the rules and regulations thereunder; (ii) any Shelf Registration
Statement and any amendment thereto does not, when it becomes effective,
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; and (iii) any prospectus forming part of any Shelf
Registration Statement, and any supplement to such prospectus, does not
include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements, in the light of the
circumstances under which they were made, not misleading.
3. Liquidated Damages. The parties agree that if the Issuer
fails to fulfill its obligations under Section 1 or 2, the Holders will
suffer damages that will be difficult to ascertain. If (i) any
Registration Statement required by this Agreement is not filed with the
Commission on or prior to the applicable filing deadline specified herein,
(ii) any Registration Statement required by this Agreement is not declared
effective by the Commission on or prior to the applicable effectiveness
deadline specified herein, (iii) the Registered Exchange Offer has not
been consummated on or prior to the consummation deadline specified herein,
or (iv) any Registration Statement required by this Agreement is filed and
declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose without being succeeded within two (2) days
by a post-effective amendment to such Registration Statement that cures
such failure and that is itself declared effective within five (5) days of
filing such post-effective amendment to such Registration Statement (each
such event in clauses (i) through (iv), a "Registration Default"), then the
Issuer agrees to pay to the Class C Trust for distribution to each Holder
liquidated damages in an amount equal to the following: during the first
ninety (90)-day period immediately following the occurrence of such
Registration Default, .0025 (the "Multiplier") times the aggregate
principal amount of such Holder's Securities times the number of days such
Registration Default exists divided by 360 (less any amount thereof that
has been paid as provided in the next paragraph). The amount of the
Multiplier shall increase by .0025 during each subsequent ninety (90)-day
period during which any Registration Default exists, up to a maximum
Multiplier of .01. Notwithstanding the prior sentence, (1) upon the filing
of the Exchange Offer Registration Statement (and/or, if applicable, the
Shelf Registration Statement), in the case of (i) above, (2) upon the
effectiveness of the Exchange Offer Registration Statement (and/or, if
applicable, the Shelf Registration Statement) in the case of (ii) above,
(3) upon consummation of the Registered Exchange Offer in the case of (iii)
above, or (4) upon the filing of a post-effective amendment to the
Registration Statement or an additional Registration Statement that causes
the Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement) to again be declared effective or made usable in
the case of (iv) above, the liquidated damages payable with respect to the
Securities as a result of such clause (i), (ii), (iii) or (iv), as
applicable, will cease, until such time, if any, that another Registration
Default occurs.
Notwithstanding any other provision of this Agreement, liquidated
damages shall not be payable by the Issuer for an aggregate of 30 days,
whether or not consecutive, from the date the Issuer provides the Purchaser
written notice that it has failed to fulfill an obligation under Section 1
or 2 which would result in the Issuer's obligation to pay liquidated
damages hereunder, if (and only so long as) the reason the Issuer failed to
fulfill such obligation is because (i) such failure is required to comply
with applicable law, (ii) US Airways cannot obtain, after using its
reasonable best efforts, financial information (or information used to
prepare such information) necessary for the Exchange Offer Registration
Statement or the Shelf Registration Statement, as the case may be, or any
amendment or supplement thereto, or (iii) such action is taken by US
Airways in good faith and for valid business reasons (not including
avoidance of US Airways' obligations hereunder) to prevent the disclosure
of any material fact(s) related directly or indirectly to US Airways.
All accrued liquidated damages will be paid to Holders entitled
thereto in the manner provided for the payment of interest in the Pass
Through Agreement, on each Regular Distribution Date, as more fully set
forth in the Pass Through Agreement and the Certificates.
4. Registration Procedures. In connection with any Registration
Statement filed pursuant to Section 1 or Section 2 hereof, the following
provisions shall apply:
(a) The Issuer shall (i) furnish to the Purchaser, prior to the
filing thereof with the Commission, a copy of the Registration Statement
and each amendment thereof and each supplement, if any, to the prospectus
included therein and shall use all reasonable best efforts to reflect in
each such document, when so filed with the Commission, such comments as the
Purchaser reasonably may propose; (ii) include the information set forth in
Annex A hereto on the cover, in Annex B hereto in "The Exchange Offer"
section, and in Annex C hereto in the "Plan of Distribution" section of the
prospectus forming a part of the Exchange Offer Registration Statement, and
include the information set forth in Annex D hereto in the Letter of
Transmittal delivered pursuant to the Registered Exchange Offer; (iii) if
requested by the Purchaser, include the information required by Items 507
and/or 508 of Regulation S-K under the 1933 Act, as applicable, in the
prospectus forming a part of the Registration Statement; and (iv) in the
case of a Shelf Registration Statement, include the names of the Holders
who propose to sell Securities pursuant to the Shelf Registration
Statement, as selling security holders.
(b) (1) The Issuer shall advise you (and any Exchanging Dealer
or Holder whom you have requested in writing that the Issuer contact and
whose contact information you have provided to the Issuer before the date
on which such notice is to be supplied):
(i) when any Registration Statement and any amendment thereto
has been filed with the Commission and when the Registration Statement
or any post-effective amendment thereto has become effective; and
(ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the prospectus included
therein or for additional information.
Any notice pursuant to clause (ii) above shall be accompanied by an
instruction to suspend the use of the prospectus until the requisite
changes have been made and a notice that the Registration Statement shall
be deemed not to have been effective during the period of such interference
until the offering of Securities pursuant to such Registration Statement
may legally resume (and any time periods referred to in Section 1 or 2
during which a Registration Statement must be kept effective shall be
extended by a number of days equal to such period). US Airways also shall
provide such notice to the Holders of Securities included within the
coverage of a Shelf Registration Statement and to any Exchanging Dealer, in
the case of an Exchange Offer Registration Statement in each case, which
has provided in writing to the Issuer a telephone or facsimile number or
address for notices. If requested by you or any such Holder or Exchanging
Dealer, US Airways shall confirm such advice in writing.
(2) The Issuer shall advise you (and any Exchanging Dealer or
Holder whom you have requested in writing that the Issuer contact and whose
contact information you have provided to the Issuer before the date on
which such notice is to be supplied):
(i) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose;
(ii) of the receipt by the Issuer of any notification with
respect to the suspension of the qualification of the Securities
included therein for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and
(iii) of the happening of any event that requires the making of
any changes in the Registration Statement or the prospectus so that,
as of such date, the statements therein are not misleading and do not
omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of the
prospectus, in light of the circumstances under which they were made)
not misleading (which advice shall be accompanied by an instruction to
suspend the use of the prospectus until the requisite changes have
been made).
Any notice pursuant to this subsection (2)shall be accompanied by an
instruction to suspend the use of the prospectus until the requisite
changes have been made and a notice that the Registration Statement shall
be deemed not to have been effective during the period of such suspension,
until the offering of Securities pursuant to such Registration Statement
may legally resume (and any time periods referred to in Sections 1 or 2
during which a Registration Statement must be kept effective shall be
extended by a number of days equal to such period). US Airways also shall
provide such notice to the Holders of Securities included within the
coverage of a Shelf Registration Statement and to any Exchanging Dealer, in
the case of an Exchange Offer Registration Statement in each case, which
has provided in writing to the Issuer a telephone or facsimile number or
address for notices. If requested by you or any such Holder or Exchanging
Dealer, US Airways shall confirm such advice in writing.
(c) The Issuer shall make every reasonable effort to obtain the
withdrawal of any order suspending the effectiveness of any Registration
Statement at the earliest possible time.
(d) The Issuer shall furnish to each Holder of Securities
included within the coverage of any Shelf Registration Statement (including
any Exchanging Dealer which so requests in writing or any Purchaser),
without charge, at least one (1) copy of such Shelf Registration Statement
and any post-effective amendment thereto, including financial statements
and schedules, and, if the Holder so requests in writing, all exhibits
(including those incorporated by reference).
(e) The Issuer shall, during the Shelf Registration Period,
deliver to each Holder of Securities included within the coverage of any
Shelf Registration Statement, without charge, as many copies of the
prospectus (including each preliminary prospectus) included in such Shelf
Registration Statement and any amendment or supplement thereto as such
Holder may reasonably request. Subject to the terms of this Agreement, the
Issuer consents to the use of the prospectus or any amendment or supplement
thereto by each of the selling Holders of Securities in connection with the
offering and sale of the Securities covered by the prospectus or any
amendment or supplement thereto.
(f) The Issuer shall furnish to each Exchanging Dealer or the
Purchaser, as applicable, which so requests, without charge, at least one
(1) copy of the Exchange Offer Registration Statement and any post-
effective amendment thereto, including financial statements and schedules,
and, if the Exchanging Dealer or the Purchaser, as applicable, so requests
in writing, all exhibits (including those incorporated by reference).
(g) The Issuer shall, during the Exchange Offer Registration
Period, promptly deliver to each broker-dealer that is the beneficial owner
(as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "1934 Act")) of Exchange Certificates received by such broker-
dealer in the Registered Exchange Offer (a "Participating Broker-Dealer")
and such other persons as may be required to deliver a prospectus following
the Registered Exchange Offer, without charge, as many copies of the
prospectus included in such Exchange Offer Registration Statement and any
amendment or supplement thereto as such person may reasonably request for
delivery by such person in connection with a sale of Exchange Certificates
received by it pursuant to the Registered Exchange Offer. Subject to the
terms of this Agreement, the Issuer consents to the use of the prospectus
or any amendment or supplement thereto by any such Participating Broker-
Dealer or other person as aforesaid.
(h) Prior to the effective date of any Registration Statement,
the Issuer will use its reasonable best efforts to register or qualify or
cooperate with the Holders of Securities included therein and their
respective counsel in connection with the registration or qualification of
such Securities for offer and sale under the state securities or blue sky
laws of such jurisdictions as any such Holder reasonably requests in
writing and do any and all other acts of things necessary or advisable to
enable the offer and sale in such jurisdictions of the Securities covered
by such Registration Statement; provided that the Issuer will not be
required to qualify generally to do business in any jurisdiction where it
is not then so qualified or to take any action which would subject it to
general service of process or to taxation in any such jurisdiction where it
is not then so subject.
(i) The Issuer shall cooperate with the Holders of Securities to
facilitate the timely preparation and delivery of certificates representing
the Securities to be sold pursuant to any Shelf Registration Statement free
of any restrictive legends and in such denominations and registered in such
names as Holders may request prior to sales of the Securities pursuant to
such Shelf Registration Statement.
(j) Upon the occurrence of any event contemplated by paragraphs
(b)(1)(ii) or (b)(2)(iii) above, the Issuer shall promptly prepare and file
with the Commission a post-effective amendment to the Registration
Statement or a supplement to the related prospectus or file any other
required document so that, as thereafter delivered to purchasers of the
Securities included therein, the prospectus will not include an untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading. If the Issuer notifies the
Purchaser, the Holders and any known Participating Broker-Dealer in
accordance with paragraphs (1)(ii) or (2)(i) through (iii) of Section 4(b)
above to suspend the use of the prospectus until the requisite changes to
the prospectus have been made, then the Purchaser, the Holders and any such
Participating Broker-Dealers shall suspend use of such prospectus. In the
event such suspension becomes necessary, the Shelf Registration Statement
shall be deemed not to have been effective during the period of such
suspension until the offering of Securities pursuant to such Registration
Statement may legally resume (and any time periods referred to in Section 1
or 2 during which a Registration Statement must be kept effective shall be
extended by a number of days equal to such period).
(k) Not later than the effective date of the applicable
Registration Statement, the Issuer shall provide a CUSIP number for the
Certificates, the Exchange Certificates, or the Private Exchange
Certificates, as the case may be, and provide the trustee with printed
certificates for the Certificates, the Exchange Certificates or the Private
Exchange Certificates, as the case may be, in a form eligible for deposit
with The Depository Trust Company (it being expressly understood that the
Exchange Certificates will continue to be held in book-entry form in the
same manner as the Certificates). The Issuer shall take such action as is
necessary to assure that all Securities sold pursuant to a Registration
Statement or Rule 144 under the 1933 Act bear the same CUSIP number (which
CUSIP number shall be for the use of unrestricted securities).
(l) The Issuer will cause the Pass Through Agreement to be
qualified under the Trust Indenture Act as required by applicable law in a
timely manner.
(m) The Issuer shall comply with all applicable rules and
regulations of the Commission and shall make generally available to its
security holders as soon as practicable after the effective date of the
applicable Registration Statement an earnings statement satisfying the
provisions of Section 11(a) of the 1933 Act; provided that in no event
shall such earnings statement be delivered more than forty-five (45) days
after the end of the twelve (12) month period (or ninety (90) days, if such
period is a fiscal year) beginning with the first month of the Issuer's
first fiscal quarter commencing after the effective date of the applicable
Registration Statement, which statement shall cover such twelve (12) month
period.
(n) The Issuer may require each Holder of Securities to be sold
pursuant to any Shelf Registration Statement to furnish to the Issuer such
information regarding the Holder and the distribution of such Securities as
the Issuer may from time to time reasonably require for inclusion in such
Registration Statement. The Issuer may exclude from such Registration
Statement the Securities of any Holder that fails to furnish such
information within a reasonable time after receiving such request.
(o) In the case of a Shelf Registration Statement, the Issuer
shall enter into such customary agreements (including, if requested, an
agreement with selling agents (the "Agents") for the Holders in customary
form) and take all such other action, if any, as the Purchaser, the Holders
of a majority in aggregate principal amount of the Securities or the Agent
(if any) shall reasonably request in order to facilitate any disposition of
Securities pursuant to such Shelf Registration Statement.
(p) In the case of a Shelf Registration Statement, the Issuer
shall (i) make reasonably available for inspection by a representative of,
and special counsel ("Special Counsel") acting for the Purchaser or Holders
of a majority in aggregate principal amount of the Securities being sold
and any Agent participating in any disposition of Securities pursuant to
such Shelf Registration Statement, all relevant financial and other
records, pertinent corporate documents and properties of the Issuer, the
trusts and its subsidiaries and (ii) use its reasonable best efforts to
have its officers, directors, employees, accountants and counsel supply all
relevant information reasonably requested by such representative, Special
Counsel or any such Agent (an "Inspector") in connection with such Shelf
Registration Statement, provided that the Issuer shall be required to
comply with the provisions of this Section 4(p) only (A) at the time of the
initial effectiveness of the Shelf Registration Statement, (B) after the
Issuer files a Form 8-K under the 1934 Act (other than a Form 8-K filed in
connection with an earnings announcement), provided that any investigation
conducted under this clause (B) is limited to the material filed (or
reasonably related to the material filed) in the Form 8-K; and (C), except
as specified in clauses (A) and (B), not more than once per quarter.
(q) In the case of a Shelf Registration Statement, the Issuer
shall, if requested by the Purchaser or Holders of a majority in aggregate
principal amount of the Securities, their Special Counsel or the Agents (if
any) in connection with such Shelf Registration Statement, use its
reasonable best efforts to cause (i) its counsel to deliver to the
Purchaser an opinion (and reasonable updates thereof) relating to the Shelf
Registration Statement and the Securities in customary form, (ii) its
officers to execute and deliver all customary documents and certificates
requested by the Purchaser or Holders of a majority in aggregate principal
amount of the Securities being sold, their Special Counsel or the Agents
(if any) and (iii) its independent public accountants to provide a comfort
letter in customary form, subject to the receipt of appropriate
documentation as contemplated and only if permitted by Statement of
Auditing Standards No. 72, provided that the Issuer need comply with the
provisions of this Section 4(q) only at the time of the initial
effectiveness of the Shelf Registration Statement and twice thereafter and
in its sole and absolute discretion upon the request by the Purchaser.
(r) In the case of any Shelf Registration Statement, the Issuer,
if requested by any Holder, shall cause its counsel to deliver an opinion
relating to the Securities included within the coverage of such Shelf
Registration Statement in customary form.
(s) If a Registered Exchange Offer or Private Exchange is to be
consummated, upon delivery of the Certificates by Holders to the Issuer (or
to such other person as directed by the Issuer) in exchange for the
Exchange Certificates or Private Exchange Certificates, as the case may be,
the Issuer shall mark, or cause to be marked, on the Certificates so
exchanged that such Certificates are being canceled in exchange for the
Exchange Certificates or Private Exchange Certificates, as the case may be,
in no event shall the Certificates be marked as paid or otherwise
satisfied.
5. Registration Expenses.
(a) US Airways shall bear all Registration Expenses related to
the performance of its obligations under Section 1 relating to an Exchange
Offer Registration Statement, provided that the Purchaser shall bear all
additional expenses caused by (1) a request to delay the effectiveness of
the Exchange Offer Registration Statement pursuant to a request in an
Purchaser Delay Notice or (2) keeping the Exchange Offer Registration
Statement effective for more than 180 days after the expiration of the
Registered Exchange Offer (as extended by the Delay Period).
(b) The Purchaser shall bear all Registration Expenses in
connection with the Shelf Registration Statement unless prior to the
commencement of the Registered Exchange Offer, the Purchaser instructs the
Issuer not to continue the process for the Registered Exchange Offer (and
waives any penalties for such discontinuance), and the Shelf Registration
Statement is filed pursuant to Section 2 hereof; in that case, the Issuer
will bear the amount of such Registration Expenses for the Shelf
Registration Statement up to the amount it would have borne under Section
5(a) had the Registered Exchange Offer been consummated, and the Purchaser
shall pay any remaining expenses.
(c) For purposes of this Agreement, "Registration Expenses"
shall mean any and all expenses incident to performance of or compliance by
US Airways and the Trustees with this Agreement, including: (i) all
Commission, stock exchange or National Association of Securities Dealers,
Inc. ("NASD") registration and filing fees; (ii) all reasonable fees and
expenses incurred in connection with compliance with state or other
securities or blue sky laws and compliance with the rules of the NASD
(including reasonable fees and disbursements of counsel for any
underwriters or Holders in connection with state or other securities or
blue sky qualifications of any of the Exchange Certificates or
Certificates); (iii) all expenses of any Persons in preparing or assisting
in preparing, word processing, printing and distributing any Registration
Statement, any Prospectus, any amendments or supplements thereto, any
underwriting agreements, securities sales agreements and other documents
relating to the performance of and compliance with this Agreement; (iv) all
rating agency fees; (v) all fees and expenses incurred in connection with
the listing, if any, of any of the Certificates on any securities exchange
or exchanges; (vi) all fees and disbursements relating to the qualification
of the Pass Through Agreements under applicable securities laws; (vii) the
reasonable fees and disbursements of counsel (other than the fees and
disbursements of internal counsel) for the Issuer and of the independent
public accountants of the Issuer, including the expenses of any special
audits or "cold comfort" letters required by or incident to such
performance and compliance; (viii) the reasonable fees and expenses of the
Trustees, including their counsel, and any escrow agent or custodian; and
(ix) any reasonable fees and disbursements of the underwriters or Agents,
if any, retained by the Issuer and the reasonable fees and expenses of any
special experts retained by the Issuer in connection with any Registration
Statement, in each case as are customarily required to be paid by issuers
or sellers of securities, but excluding fees of counsel to the Agents,
underwriters or the Holders and underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of Certificates
by a Holder.
6. Indemnification. (a) In the event of a Shelf Registration
or in connection with any prospectus delivery pursuant to a Registered
Exchange Offer by an Exchanging Dealer as contemplated in Section 4(g) or
by the Purchaser, the Issuer shall indemnify and hold harmless each Holder
and its affiliates (as defined in the 1933 Act), officers, directors, and
employees from and against any and all losses, claims, damages and
liabilities caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment
thereof, or any prospectus forming a part thereof (as amended or
supplemented if the Issuer shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein in light of the circumstances under which they
were made not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission base upon information relating to any Holder
furnished to the Issuer in writing by such Holder expressly for use therein
("Holder Information"); provided, however, that the foregoing indemnity
agreement, with respect to any preliminary prospectus shall not inure to
the benefit of any Holder from whom the person asserting any such losses,
claims, damages or liabilities purchased Securities or any person
controlling such Holder, if a copy of the prospectus (as then amended or
supplemented if the Issuer shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Holder
to such person, if required by law so to have been delivered, at or prior
to the written confirmation of the sale of the Securities to such person,
and if the prospectus (as so amended or supplemented) would have cured the
defects giving rise to such losses, claims, damages or liabilities.
(b) In the event of a Shelf Registration Statement, each Holder
agrees, severally and not jointly, to indemnify and hold harmless the
Issuer, its directors, its officers who sign the Registration Statement and
each person, if any, who controls the Issuer within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act to the
same extent as the foregoing indemnity from the Issuer to such Holder, but
only with reference to the Holder Information of such Holder; provided,
however, that no such Holder shall be liable for any indemnity claims
hereunder in excess of the net proceeds received by such Holder from the
sale of Securities pursuant to such Shelf Registration Statement.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or (b) above, such
person (the "indemnified party") shall promptly notify the person against
whom such indemnity may be sought (the "indemnifying party") in writing and
the indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in
such proceeding and shall pay the reasonable fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel, but the
reasonable fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the
indemnified party shall have agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is
understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees and expenses of more than one firm ( in addition to any
local counsel) for all such indemnified parties and that all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by such Holder in the case of parties indemnified
pursuant to paragraph (a) above and by the Company in the case of parties
indemnified pursuant to paragraph (b) above. The indemnifying party shall
not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in paragraph
(a) or (b) of this Section 6 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect
the relative benefits received by the Issuer, on the one hand, and such
Holder, on the other hand, from the offering of the Securities or (ii) if
the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Issuer on the one hand and such Holder on the other hand in connection with
the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations.
The relative benefits received by the Issuer in connection with the
offering of such Securities shall be deemed to be in the same proportion as
the aggregate consideration received by the Trust from the sale by the
Trust of such Securities (or Securities which were exchanged into such
Securities) bears to the aggregate consideration received by such Holder in
connection with the resale of such Securities, and such Holder shall be
deemed to have received the rest of the benefits. The relative fault of
the Issuer on the one hand and of such Holder on the other hand shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Issuer or by such Holder and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission.
(e) The Issuer and the Purchaser agree that it would not be just
or equitable if contribution pursuant to this Section 6 were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above.
The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in paragraph 6(d) above
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6, no Holder shall be
required to contribute any amount in excess of the amount by which the
total price at which the Securities sold by it to any purchaser exceeds the
amount of any damages that such Holder has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 6 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 6 and the representation, warranties and other statements of the
Issuer contained in this Agreement or contained in certificates of officers
of the Issuer submitted pursuant hereto, shall remain operative and in full
force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Holder or any person
controlling any Holder or the Issuer, its officers or directors or any
person controlling the Issuer and (iii) acceptance of and payment for any
of the Securities.
7. Rules 144 and 144A. The Issuer shall use its reasonable best
efforts to file the reports required to be filed by it under the 1933 Act
and the 1934 Act in a timely manner and, if at any time the Issuer is not
required to file such reports, it will, upon the written request of any
Holder of Certificates, make publicly available other information so long
as necessary to permit sales of such Holder's securities pursuant to Rules
144 and 144A. The Issuer covenants that it will take such further action
as any Holder of Certificates may reasonably request, all to the extent
required from time to time to enable such Holder to sell Certificates
without registration under the Securities Act within the limitation of the
exemptions provided by Rules 144 and 144A (including, without limitation,
the requirements of Rule 144A(d)(4)). Upon the written request of any
Holder of Certificates, the Issuer shall deliver to such Holder a written
statement as to whether it has complied with such requirements.
8. Miscellaneous.
(a) Amendment and Waivers. The provisions of this Agreement may
not be amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless US Airways
has obtained the written consent of Holders of a majority in aggregate
principal amount of the Securities. Notwithstanding the foregoing, a
waiver or consent to depart from the provisions hereof with respect to a
matter that relates exclusively to the rights of Holders whose Securities
are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect the rights of other Holders may be given by
Holders of a majority in aggregate principal amount of the Securities being
sold by such Holders pursuant to such Registration Statement.
(b) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-
class mail, telex, telecopier, or air courier guaranteeing overnight
delivery:
(i) if to a Holder, at the most current address given by such
Holder to the Issuer in accordance with the provisions of this
Section 6(b), which address initially is, with respect to each Holder,
the address of such Holder maintained by the Registrar under the Pass
Through Agreement, with a copy in like manner to the Purchaser;
(ii) if to the Purchaser, initially at the respective addresses
set forth in the Purchase Agreement with copies to the parties
specified therein; and
(iii) if to the Issuer, initially at its address set forth in
the Purchase Agreement, with copies to the parties specified therein.
All such notices and communications shall be deemed to have been
duly given when received.
The Purchaser or US Airways by notice to the other may designate
additional or different addresses for subsequent notices or communications.
(c) Successors and Assigns. This Agreement shall be binding
upon US Airways and each of its successors and assigns.
(d) Counterparts. This agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(e) Headings. The headings in this agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(f) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
Specified times of day refer to New York City time.
(g) Severability. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
(h) Securities Held by the Issuer. Whenever the consent or
approval of Holders of a specified percentage of principal amount of
Securities is required hereunder, Securities held by the Issuer or any of
its affiliates (other than subsequent Holders of Securities if such
subsequent Holders are deemed to be affiliates solely by reason of their
holdings of such Securities) shall not be counted in determining whether
such consent or approval was given by the Holders of such required
percentage.
(i) No Inconsistent Agreements. US Airways has not, as of the
date hereof, entered into, nor shall it, on or after the date hereof, enter
into, any agreement with respect to its securities that is inconsistent
with the rights granted to the Holders herein or otherwise conflicts with
the provisions hereof.
(j) Copies of Agreement. US Airways shall provide a copy of
this Agreement to prospective purchasers of the Certificates identified to
them by the Purchaser upon request.
(k) Letter Agreement. The rights and obligations of the parties
hereunder shall be independent of the rights and obligations under the
captions "Transfer Rights" and "Transaction Expenses" in Section 4 of that
certain "Letter Agreement dated as of October 31, 1997 (as amended from
time to time, the "Letter Agreement" and the provisions described above,
the "Applicable Provisions") between AVSA, S.A.R.L. and US Airways, and the
Applicable Provisions shall not affect or limit the rights or obligations
of the parties hereunder, provided that without limiting the foregoing, the
rights and obligations under the "Transfer Rights" caption described above
shall survive the execution and delivery of this Agreement and shall remain
in full force and effect in accordance with their terms.
(l) Underwritten Offering. Notwithstanding anything to the
contrary herein, neither the Purchaser nor any Holder shall be entitled to
use the registration rights granted to it in this Agreement to effect an
underwritten public offering.
(m) Class C Trust. The Trustee shall take such action as may be
reasonably requested by the Company in connection with the Company
satisfying its obligations arising under this Agreement.
Please confirm that the foregoing correctly sets forth the
agreement between US Airways and you.
Very truly yours,
US AIRWAYS, INC.
By: /s/ Thomas A. Mutyrn
------------------------------
Name: Thomas A. Mutyrn
Title: Sr. V.P., Finance & CFO
CONFIRMED AND ACCEPTED
as of the date first above written:
AIRBUS INDUSTRIE FINANCIAL SERVICES
By: /s/ Yann Ballet
------------------------------
Name: Yann Ballet
Title: Managing Director
(counterpart signature page for Registration Agreement)
CONFIRMED AND ACCEPTED
as of the date first above written:
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: /s/ Ruth A. Smith
-------------------------
Name: Ruth A. Smith
Title: Vice President
ANNEX A TO
REGISTRATION AGREEMENT
Each broker-dealer that receives Exchange Certificates for its
own account pursuant to the Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange
Certificates. The Letter of Transmittal states that by so acknowledging
and by delivering a prospectus, a broker-dealer will not be deemed to admit
that it is an "underwriter" within the meaning of the 1933 Act. This
Prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of Exchange Certificates
received in exchange for the Certificates where such Certificates were
acquired by such broker-dealer as a result of market-making activities or
other trading activities. The Issuer has agreed that, for a period of one
hundred eighty (180) days after the Expiration Date (as defined herein), it
will make this Prospectus available to any broker-dealer for use in
connection with any such resale. See "Plan of Distribution".
ANNEX B TO
REGISTRATION AGREEMENT
Each broker-dealer that receives Exchange Certificates for its
own account in exchange for the Certificates, where such Certificates were
acquired by such broker-dealer as a result of market-making activities or
other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Certificates.
See "Plan of Distribution".
ANNEX C TO
REGISTRATION AGREEMENT
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Certificates for its
own account pursuant to the Registered Exchange Offer must acknowledge that
it will deliver a prospectus in connection with any resale of such Exchange
Certificates. This Prospectus, as it may be amended or supplemented from
time to time, may be used by a broker-dealer in connection with resales of
Exchange Certificates received in exchange for Existing Certificates where
such Existing Certificates were acquired as a result of market-making
activities or other trading activities. The Issuer has agreed that for a
period of one hundred eighty (180) days after the Expiration Date, it will
make this Prospectus, as amended or supplemented, available to any broker-
dealer for use in connection with any such resale. In addition, until
__________, 199__, all dealers effecting transactions in the Exchange
Certificates may be required to deliver a prospectus.(1)
-----------------------
(1) The legend required by Item 502(e) of Regulation S-K must appear on
the back page of the Exchange Offer Prospectus.
The Issuer will not receive any proceeds from any sale of
Exchange Certificates by broker-dealers. Exchange Certificates received by
broker-dealers for their own account pursuant to the Exchange Offer may be
sold from time to time in one or more transactions in the over-the-counter
market, in negotiated transactions, through the writing of options on the
Exchange Certificates or a combination of such methods of resale, at market
prices prevailing at the time of resale, at prices related to such
prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such Exchange Certificates. Any
broker-dealer that resells Exchange Certificates that were received by it
for its own account pursuant to the Exchange offer and any broker or dealer
that participates in a distribution of such Exchange Certificates may be
deemed to be an "underwriter" within the meaning of the 1933 Act and any
profit on any such resale of Exchange Certificates and any commissions or
concessions received by any such persons may be deemed to be underwriting
compensation under the 1933 Act. The Letter of Transmittal states that by
acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter"
within the meaning of the 1933 Act.
For a period of one hundred eighty (180) days after the
Expiration Date, the Issuer will promptly send additional copies of this
Prospectus and any amendment or supplement to this Prospectus to any
broker-dealer that requests such documents in the Letter of Transmittal.
The Issuer has agreed to pay all expenses incident to the Exchange Offer
other than commissions or concessions of any brokers or dealers and will
indemnify the holders of the Certificates (including any broker-dealers)
against certain liabilities, including liabilities under the 1933 Act.
ANNEX D TO
REGISTRATION AGREEMENT
Rider A
( ) CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND TEN (10) COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name: _______________________________________________________________
Address: _______________________________________________________________
_______________________________________________________________
Rider B
[IF THE UNDERSIGNED IS NOT A BROKER-DEALER, THE UNDERSIGNED
REPRESENTS THAT IT IS NOT ENGAGED IN, AND DOES NOT INTEND TO ENGAGE IN, A
DISTRIBUTION OF EXCHANGE CERTIFICATES. IF THE UNDERSIGNED IS A BROKER-
DEALER THAT WILL RECEIVE EXCHANGE CERTIFICATES FOR ITS OWN ACCOUNT IN
EXCHANGE FOR CERTIFICATES, IT REPRESENTS THAT THE CERTIFICATES TO BE
EXCHANGED FOR EXCHANGE CERTIFICATES WERE ACQUIRED BY IT AS A RESULT OF
MARKET-MAKING OR OTHER TRADING ACTIVITIES AND ACKNOWLEDGES THAT IT WILL
DELIVER A PROSPECTUS IN CONNECTION WITH ANY RESALE OF SUCH EXCHANGE
CERTIFICATES; HOWEVER, BY SO ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS,
THE UNDERSIGNED WILL NOT BE DEEMED TO ADMIT THAT IT IS AN "UNDERWRITER"
WITHIN THE MEANING OF THE 1933 ACT.]
EXHIBIT 4.3
US AIRWAYS, INC.
6.82% Pass Through Certificates, Series 1998-1, Class C
AMENDMENT NO. 1 TO
REGISTRATION AGREEMENT
January 20, 1999
AIRBUS INDUSTRIE FINANCIAL SERVICES
2nd Floor
George's Dock House
International Financial Center
Dublin 1, Ireland
Dear Sirs:
Reference is made to the Registration Agreement dated as of
December 14, 1998 (the "Registration Agreement"), by and between US
Airways, Inc., a Delaware corporation ("US Airways" or the "Issuer") and
Airbus Industrie Financial Services, a corporation organized under the laws
of Ireland (the "Purchaser"), and agreed to by State Street Bank and Trust
Company, solely in its capacity as trustee (the "Trustee") of the US
Airways Pass Through Trust 1998-1C (the "Class C Trust"). Capitalized
terms used but not specifically defined herein are defined in the
Registration Agreement and, if not defined therein, in the Purchase
Agreement dated as of December 14, 1998 by and between US Airways and the
Purchaser pursuant to which US Airways issued and sold its 6.82% Class C
Pass Through Certificates, Series 1998-1 to the Purchaser. The parties to
the Registration Agreement hereby agree as follows:
1. Paragraphs 1 and 2 of Section 1 of the Registration
Agreement shall be amended and restated as follows:
1. Registered Exchange Offer. US Airways shall, at
its cost, prepare and, not later than seventy-five (75) days
after the Closing Date (or, if the 75th day is not a business
day, the first business day thereafter) (March 1, 1999, assuming
the Closing Date is December 14, 1998), file with the Securities
and Exchange Commission (the "Commission") a registration
statement (the "Exchange Offer Registration Statement") on an
appropriate form under the Securities Act of 1933, as amended
(the "1933 Act"), with respect to a proposed offer (the
"Registered Exchange Offer") to the Holders to cause the Class C
Trust to issue and deliver to such Holders, in exchange for the
Certificates, a like principal amount of pass through
certificates (the "Exchange Certificates") of the Class C Trust
with terms substantially identical in all material respects to
the Certificates (except that the Exchange Certificates will not
contain terms with respect to transfer restrictions or liquidated
damages), shall use all reasonable best efforts to cause the
Exchange Offer Registration Statement to become effective under
the 1933 Act not later than one hundred fifty (150) days after
the Closing Date (or, if the 150th day is not a business day, the
first business day thereafter) (May 13, 1999, assuming the
Closing Date is December 14, 1998), shall consummate the Exchange
Offer not later than one hundred eighty (180) days after the
Closing Date (or, if the 180th day is not a business day, the
first business day thereafter) (June 14, 1999 assuming the
Closing Date is December 14, 1998), and shall use all reasonable
best efforts to keep the Exchange Offer Registration Statement
effective under the 1933 Act until the close of business on the
180th day following the expiration of the Registered Exchange
Offer (such period being called the "Exchange Offer Registration
Period") for use by Exchanging Dealers (as defined below) as
contemplated in Section 4(g) below or for use as contemplated by
clause (ii) of the fourth paragraph of this Section 1.
The Issuer shall give the Purchaser written notice (the
"Issuer Effectiveness Notice") at least five (5) business days
before the date on which the Issuer reasonably expects the
Exchange Offer Registration Statement to be declared effective.
The Purchaser may give the Issuer written notice (the "Purchaser
Delay Notice") at any time after the date hereof but in no event
later than two (2) business days after the date of the Issuer
Effectiveness Notice of its request to delay the effective date
of the Exchange Offer Registration Statement, and in such notice
or in a written notice delivered promptly thereafter, the
Purchaser will specify another date for the effective date which
may not be later than 210 days after the Closing Date (the length
of such delay, the "Delay Period"). The Issuer will use its
reasonable best efforts to have the Exchange Offer Registration
Statement declared effective as requested by the Purchaser in a
valid notice, provided that the Issuer will have at least sixty
(60) days from the date of the notice to have the Exchange Offer
Registration Statement declared effective. The one hundred fifty
(150) day and one hundred eighty (180) day periods described
above will be extended by the Delay Period.
2. Paragraph 1 of Section 2 of the Registration Agreement shall
be amended and restated as follows:
2. Shelf Registration. If: (i) because of any change
in law or applicable interpretations thereof by the Commission's
staff, the Issuer determines that it is not permitted to effect
the Registered Exchange Offer as contemplated by Section 1
hereof; (ii) for any other reason the Registered Exchange Offer
is not consummated by the 180th day after the Closing Date (which
day shall be extended by the Delay Period, if any, and if such
day is not a business day, the first business day thereafter)
(June 14, 1999, assuming (a) the Closing Date is December 14,
1998 and (b) there is no Delay Period), (iii) the Purchaser so
requests if it so determines that any Holder is not eligible to
participate in the Registered Exchange Offer; (iv) the Purchaser
so requests with respect to Certificates not eligible to be
exchanged for Exchange Certificates in the Registered Exchange
Offer; (v) the Purchaser so requests if it so determines that any
Holder that participates in the Registered Exchange Offer does
not or will not receive freely transferable Exchange Certificates
in exchange for tendered Certificates (including as a result of
the Holder being required under applicable law to deliver a
prospectus in connection with any resale of Exchange
Certificates) or the Purchaser holds Private Exchange
Certificates (in the case of clause (iii), (iv) or (v), the
Purchaser may make the determination or request at any time after
the Closing Date and shall communicate such determination or
request to the Issuer in writing and, in connection therewith, if
such notice is given prior to the consummation of the Registered
Exchange Offer, the Purchaser may request that the Issuer and the
Class C Trust cease performing their obligations under Section 1,
in which event, the Issuer's and the Class C Trust's obligations
under Section 1, as well as any liabilities of the Issuer under
Section 3 related to Section 1, shall terminate); or (vi) if the
Issuer so elects, the following provisions shall apply:
3. The parties acknowledge that the provisions of Section 3 of
the Registration Agreement shall be subject to the terms of this amendment.
4. Upon the effectiveness of this amendment, all references in
the Registration Agreement and all other agreements, documents,
certificates, exhibits and instruments executed pursuant thereto, to the
Registration Agreement including, without limitation, references to "this
Agreement," "hereunder," "hereof," "herein" and words of like import
contained in the Registration Agreement shall, except where the context
otherwise requires, mean and be a reference to the Registration Agreement
as amended hereby.
5. Except as expressly amended hereby, all of the provisions of
the Registration Agreement shall remain unaltered and in full force and
effect and, as amended hereby, the Registration Agreement is in all
respects agreed to, ratified and confirmed by the parties hereto.
6. This amendment may be executed in any number of counterparts
and by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
7. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
8. If any one or more of the provisions contained herein, or
the application thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.
Please confirm that the foregoing correctly sets forth the
agreement between US Airways and you.
Very truly yours,
US AIRWAYS, INC.
By: /s/ Thomas A. Mutryn
-------------------------------
Name: Thomas A. Mutryn
Title: Senior Vice President of
Finance and Chief
Financial Officer
CONFIRMED AND ACCEPTED
as of the date first above written:
AIRBUS INDUSTRIE FINANCIAL SERVICES
By: /s/ P. Beroves
----------------------------
Name: P. Beroves
Title: Director
(counterpart signature page for Amendment No. 1 to Registration Agreement)
CONFIRMED AND ACCEPTED
as of the date first above written:
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: /s/ Ruth A. Smith
---------------------------
Name: Ruth A. Smith
Title: Vice President
EXHIBIT 4.4
PASS THROUGH TRUST AGREEMENT
Dated as of December 4, 1998
between
US AIRWAYS, INC.
and
STATE STREET BANK AND TRUST COMPANY,
as Trustee
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.02. Compliance Certificates and Opinions . . . . . . . . . . 13
Section 1.03. Form of Documents Delivered to Trustee . . . . . . . . . 14
Section 1.04. Directions of Certificateholders . . . . . . . . . . . . 14
ARTICLE II
ORIGINAL ISSUANCE OF CERTIFICATES:
ACQUISITION OF TRUST PROPERTY
Section 2.01. Amount Unlimited; Issuable in Series . . . . . . . . . . 16
Section 2.02. Acquisition of Equipment Notes . . . . . . . . . . . . . 18
Section 2.03. Acceptance by Trustee . . . . . . . . . . . . . . . . . 20
Section 2.04. Limitation of Powers . . . . . . . . . . . . . . . . . . 21
ARTICLE III
THE CERTIFICATES
Section 3.01. Form, Denomination and Execution of Certificates . . . . 21
Section 3.02. Authentication of Certificates . . . . . . . . . . . . . 22
Section 3.03. Temporary Certificates . . . . . . . . . . . . . . . . . 22
Section 3.04. Transfer and Exchange . . . . . . . . . . . . . . . . . 23
Section 3.05. Book-Entry and Definitive Certificates . . . . . . . . . 23
Section 3.06. Mutilated, Destroyed, Lost or Stolen Certificates . . . 26
Section 3.07. Persons Deemed Owners . . . . . . . . . . . . . . . . . 26
Section 3.08. Cancellation . . . . . . . . . . . . . . . . . . . . . . 27
Section 3.09. Limitation of Liability for Payments . . . . . . . . . . 27
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS
Section 4.01. Certificate Account and Special Payments Account . . . . 27
Section 4.02. Distributions from Certificate Account and Special
Payments Account . . . . . . . . . . . . . . . . . . . 28
Section 4.03. Statements to Certificateholders . . . . . . . . . . . . 30
Section 4.04. Investment of Special Payment Moneys . . . . . . . . . . 31
ARTICLE V
THE COMPANY
Section 5.01. Maintenance of Corporate Existence . . . . . . . . . . . 31
Section 5.02. Consolidation, Merger, Etc. . . . . . . . . . . . . . . 32
ARTICLE VI
DEFAULT
Section 6.01. Indenture Events of Default and Triggering Events . . . 33
Section 6.02. Incidents of Sale of Equipment Notes . . . . . . . . . . 34
Section 6.03. Judicial Proceedings Instituted by Trustee; Trustee
May Bring Suit . . . . . . . . . . . . . . . . . . . . 35
Section 6.04. Control by Certificateholders . . . . . . . . . . . . . 35
Section 6.05. Waiver of Past Defaults . . . . . . . . . . . . . . . . 36
Section 6.06. Right of Certificateholders to Receive Payments Not
to Be Impaired . . . . . . . . . . . . . . . . . . . . 37
Section 6.07. Certificateholders May Not Bring Suit Except Under
Certain Conditions . . . . . . . . . . . . . . . . . . 37
Section 6.08. Remedies Cumulative . . . . . . . . . . . . . . . . . . 38
Section 6.09. Undertaking for Costs . . . . . . . . . . . . . . . . . 38
ARTICLE VII
THE TRUSTEE
Section 7.01. Certain Duties and Responsibilities . . . . . . . . . . 38
Section 7.02. Notice of Defaults . . . . . . . . . . . . . . . . . . . 39
Section 7.03. Certain Rights of Trustee . . . . . . . . . . . . . . . 39
Section 7.04. Not Responsible for Recitals or Issuance of
Certificates . . . . . . . . . . . . . . . . . . . . . 41
Section 7.05. May Hold Certificates . . . . . . . . . . . . . . . . . 41
Section 7.06. Money Held in Trust . . . . . . . . . . . . . . . . . . 41
Section 7.07. Compensation and Reimbursement . . . . . . . . . . . . . 41
Section 7.08. Corporate Trustee Required; Eligibility . . . . . . . . 42
Section 7.09. Resignation and Removal; Appointment of Successor . . . 43
Section 7.10. Acceptance of Appointment by Successor . . . . . . . . . 45
Section 7.11. Merger, Conversion, Consolidation or Succession to
Business . . . . . . . . . . . . . . . . . . . . . . . 45
Section 7.12. Maintenance of Agencies . . . . . . . . . . . . . . . . 46
Section 7.13. Money for Certificate Payments to be Held in Trust . . . 47
Section 7.14. Registration of Equipment Notes in Trustee's Name . . . 48
Section 7.15. Representations and Warranties of Trustee . . . . . . . 48
Section 7.16. Withholding Taxes; Information Reporting . . . . . . . . 49
Section 7.17. Trustee's Liens . . . . . . . . . . . . . . . . . . . . 49
Section 7.18. Preferential Collection of Claims . . . . . . . . . . . 50
ARTICLE VIII
CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE
Section 8.01. The Company to Furnish Trustee with Names and
Addresses of Certificateholders . . . . . . . . . . . 50
Section 8.02. Preservation of Information; Communications to
Certificateholders . . . . . . . . . . . . . . . . . . 50
Section 8.03. Reports by Trustee . . . . . . . . . . . . . . . . . . . 50
Section 8.04. Reports by the Company . . . . . . . . . . . . . . . . . 51
ARTICLE IX
SUPPLEMENTAL AGREEMENTS
Section 9.01. Supplemental Agreements Without Consent of
Certificateholders . . . . . . . . . . . . . . . . . . 52
Section 9.02. Supplemental Agreements with Consent of
Certificateholders . . . . . . . . . . . . . . . . . . 53
Section 9.03. Documents Affecting Immunity or Indemnity . . . . . . . 55
Section 9.04. Execution of Supplemental Agreements . . . . . . . . . . 55
Section 9.05. Effect of Supplemental Agreements . . . . . . . . . . . 55
Section 9.06. Conformity with Trust Indenture Act . . . . . . . . . . 55
Section 9.07. Reference in Certificates to Supplemental Agreements . . 55
ARTICLE X
AMENDMENTS TO INDENTURE AND NOTE DOCUMENTS
Section 10.01. Amendments and Supplements to Indenture and Other
Note Documents . . . . . . . . . . . . . . . . . . . . 55
ARTICLE XI
TERMINATION OF TRUSTS
Section 11.01. Termination of the Trusts . . . . . . . . . . . . . . . 57
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Limitation on Rights of Certificateholders . . . . . . . 58
Section 12.02. Liabilities of Certificateholders . . . . . . . . . . . 58
Section 12.03. Registration of Equipment Notes in Name of
Subordination Agent . . . . . . . . . . . . . . . . . 58
Section 12.04. Notices . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 12.05. Governing Law . . . . . . . . . . . . . . . . . . . . . 60
Section 12.06. Severability of Provisions . . . . . . . . . . . . . . . 60
Section 12.07. Trust Indenture Act Controls . . . . . . . . . . . . . . 60
Section 12.08. Effect of Headings and Table of Contents . . . . . . . . 60
Section 12.09. Successors and Assigns . . . . . . . . . . . . . . . . . 60
Section 12.10. Benefits of Agreement . . . . . . . . . . . . . . . . . 61
Section 12.11. Legal Holidays . . . . . . . . . . . . . . . . . . . . . 61
Section 12.12. Counterparts . . . . . . . . . . . . . . . . . . . . . . 61
Section 12.13. Communication by Certificateholders with Other
Certificateholders . . . . . . . . . . . . . . . . . . 61
Section 12.14. Intention of Parties . . . . . . . . . . . . . . . . . . 61
EXHIBIT A Form of Certificate . . . . . . . . . . . . . . . . . . . A-1
Reconciliation and tie between US Airways Pass Through Trust Agreement,
dated as of December 4, 1998 and the Trust Indenture Act of 1939. This
reconciliation does not constitute part of the Pass Through Trust
Agreement.
Trust Indenture Act Pass Through Trust
of 1939 Section Agreement Section
------------------- ------------------
310(a)(1) 7.08
(a)(2) 7.08
312(a) 3.05; 8.01; 8.02
313(a) 8.03
314(a)(1)-(3) 8.04(a)-(c)
(a)(4) 8.04(d)
(c)(1) 1.02
(c)(2) 1.02
(d)(1) 1.02; 7.13; 11.01
(d)(2) 1.02; 7.13; 11.01
(d)(3) 1.02; 2.01
(e) 1.02
315(b) 7.02
316(a)(last sentence) 1.04(c)
(a)(1)(A) 6.04
(a)(1)(B) 6.05
(b) 6.06
(c) 1.04(d)
317(a)(1) 6.03
(b) 7.13
318(a) 12.07
PASS THROUGH TRUST AGREEMENT
This PASS THROUGH TRUST AGREEMENT, dated as of December 4, 1998 (the
"Basic Agreement"), between US AIRWAYS, INC., a Delaware corporation (the
"Company"), and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust
company, as Trustee, is made with respect to the formation from time to
time of separate US Airways Pass Through Trusts, and the issuance from time
to time of separate series of Pass Through Certificates representing
fractional undivided interests in the respective Trusts.
W I T N E S S E T H:
WHEREAS, from time to time, the Company and the Trustee may enter
into a Trust Supplement (this and certain other defined terms used herein
are defined in Section 1.01) pursuant to which the Trustee shall declare
the creation of a separate Trust for the benefit of the Holders of the
series of Certificates to be issued in respect of such Trust, and the
initial Holders of the Certificates of such series, as the grantors of such
Trust, by their respective acceptances of the Certificates of such series,
shall join in the creation of such Trust with the Trustee;
WHEREAS, all Certificates to be issued in respect of each separate
Trust will be issued as a separate series pursuant to this Agreement, will
evidence fractional undivided interests in such Trust and will have no
rights, benefits or interests in respect of any other separate Trust or the
property held therein, subject, however, to the provisions of any
Intercreditor Agreement to which one or more Trusts may be a party;
WHEREAS, from time to time, pursuant to the terms and conditions of
this Agreement with respect to each separate Trust formed hereunder, the
Trustee on behalf of such Trust shall purchase one or more issues of
Equipment Notes having the same interest rate as, and final maturity dates
not later than the final Regular Distribution Date of, the series of
Certificates issued in respect of such Trust and, subject to the terms of
any related Intercreditor Agreement, shall hold such Equipment Notes in
trust for the benefit of the Certificateholders of such Trust;
WHEREAS, to facilitate the sale of Equipment Notes to, and the
purchase of Equipment Notes by, the Trustee on behalf of each Trust created
from time to time pursuant to this Agreement, the Company as the "issuer",
as such term is defined in and solely for purposes of the Securities Act of
1933, as amended, of the Certificates to be issued in respect of each Trust
and as the "obligor", as such term is defined in and solely for purposes of
the Trust Indenture Act has duly authorized the execution and delivery of
this Basic Agreement and each Trust Supplement with respect to all such
Certificates and is undertaking to perform certain administrative and
ministerial duties hereunder and is also undertaking to pay the fees and
expenses of the Trustee; and
WHEREAS, this Basic Agreement, as supplemented from time to time, is
subject to the provisions of the Trust Indenture Act and shall, to the
extent applicable, be governed by such provisions;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. For all purposes of this Basic Agreement,
except as otherwise expressly provided or unless the context otherwise
requires:
(1) the terms used herein that are defined in this Article I
have the meanings assigned to them in this Article I, and include the
plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, or by the
rules promulgated under the Trust Indenture Act, have the meanings
assigned to them therein;
(3) all references in this Basic Agreement to designated
"Articles", "Sections", "Subsections" and other subdivisions are to
the designated Articles, Sections, Subsections and other subdivisions
of this Basic Agreement;
(4) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Basic Agreement as a whole and
not to any particular Article, Section, Subsection or other
subdivision;
(5) unless the context otherwise requires, whenever the words
"including", "include" or "includes" are used herein, it shall be
deemed to be followed by the phrase "without limitation"; and
(6) the term "this Agreement" (as distinguished from "this
Basic Agreement") refers, unless the context otherwise requires, to
this Basic Agreement as supplemented by the Trust Supplement creating
a particular Trust and establishing the series of Certificates issued
or to be issued in respect thereof, with reference to such Trust and
such series of Certificates, as this Basic Agreement as so
supplemented may be further supplemented with respect to such Trust
and such series of Certificates.
Act: Has the meaning, with respect to any Certificateholder,
specified in Section 1.04(a).
Affiliate: Means, with respect to any specified Person, any
other Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such Person. For the
purposes of this definition, "control", when used with respect to any
specified Person, means the power, directly or indirectly, to direct
the management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise, and the
terms "controlling" and "controlled" have meanings correlative to the
foregoing.
Aircraft: Means one or more aircraft, including engines
therefor, owned by or leased to the Company and securing one or more
Equipment Notes.
Authorized Agent: Means, with respect to the Certificates of
any series, any Paying Agent or Registrar for the Certificates of
such series.
Basic Agreement: Means this Pass Through Trust Agreement, as
the same may from time to time be supplemented, amended or modified,
but does not include any Trust Supplement.
Book-Entry Certificates: Means, with respect to the
Certificates of any series, a beneficial interest in the Certificates
of such series, ownership and transfers of which shall be made
through book entries as described in Section 3.05.
Business Day: Means, with respect to the Certificates of any
series, any day other than a Saturday, a Sunday or a day on which
commercial banks are required or authorized to close in New York, New
York, or, so long as any Certificate of such series is outstanding,
the city and state in which the Trustee or any related Loan Trustee
maintains its Corporate Trust Office or receives and disburses funds.
Certificate: Means any one of the certificates executed and
authenticated by the Trustee, substantially in the form of Exhibit A
hereto.
Certificate Account: Means, with respect to the Certificates of
any series, the account or accounts created and maintained for such
series pursuant to Section 4.01(a) and the related Trust Supplement.
Certificateholder or Holder: Means, with respect to the
Certificates of any series, the Person in whose name a Certificate of
such series is registered in the Register for Certificates of such
series.
Certificate Owner: Means, with respect to the Certificates of
any series, for purposes of Section 3.05, the Person who owns a
Book-Entry Certificate of such series.
Clearing Agency: Means an organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange
Act of 1934, as amended.
Clearing Agency Participant: Means a broker, dealer, bank,
other financial institution or other Person for whom from time to
time a Clearing Agency effects, directly or indirectly, book-entry
transfers and pledges of securities deposited with the Clearing
Agency.
Company: Means US Airways, Inc., a Delaware corporation, or its
successor in interest pursuant to Section 5.02, or (only in the
context of provisions hereof, if any, when such reference is required
for purposes of compliance with the Trust Indenture Act) any other
"obligor" (within the meaning of the Trust Indenture Act) with
respect to the Certificates of any series.
Controlling Party: Means the Person entitled to act as such
pursuant to the terms of any Intercreditor Agreement.
Corporate Trust Office: Means, with respect to the Trustee or
any Loan Trustee, the office of such trustee in the city at which at
any particular time its corporate trust business shall be principally
administered.
Cut-off Date: Means, with respect to the Certificates of any
series, the date designated as such in the Trust Supplement
establishing such series.
Definitive Certificates: Has the meaning, with respect to the
Certificates of any series, specified in Section 3.05.
Direction: Has the meaning specified in Section 1.04(a).
Equipment Notes: Means, with respect to the Certificates of any
series, all of the equipment notes issued under the Indentures
related to such series of Certificates.
ERISA: Means the Employee Retirement Income Security Act of
1974, as amended from time to time, or any successor federal statute.
Escrow Account: Has the meaning, with respect to the
Certificates of any series, specified in Section 2.02(b).
Escrowed Funds: Has the meaning, with respect to any
Trust, specified in Section 2.02(b).
Event of Default: Means, in respect of any Trust, an Indenture
Event of Default under any Indenture pursuant to which Equipment
Notes held by such Trust were issued.
Fractional Undivided Interest: Means the fractional undivided
interest in a Trust that is evidenced by a Certificate relating to
such Trust.
Indenture: Means, with respect to any Trust, each of the one or
more separate trust indenture and security agreements or trust
indenture and mortgages or similar documents described in, or on a
schedule attached to, the Trust Supplement and an indenture having
substantially the same terms and conditions which relates to a
Substitute Aircraft, as each such indenture may be amended or
supplemented in accordance with its respective terms; and
"Indentures" means all of such agreements.
Indenture Event of Default: Means, with respect to any
Indenture, any Indenture Event of Default (as such term is defined in
such Indenture).
Initial Regular Distribution Date: Means, with respect to the
Certificates of any series, the first Regular Distribution Date on
which a Scheduled Payment is to be made.
Intercreditor Agreement: Means any agreement by and among the
Trustee, as trustee hereunder with respect to one or more Trusts, one
or more Liquidity Providers and a Subordination Agent providing,
among other things, for the distribution of payments made in respect
of Equipment Notes held by such Trusts.
Issuance Date: Means, with respect to the Certificates of any
series, the date of the issuance of such Certificates.
Lease: Means any lease between an Owner Trustee, as the lessor,
and the Company, as the lessee, referred to in the related Indenture,
as such lease may be amended, supplemented or otherwise modified in
accordance with its terms; and "Leases" means all such Leases.
Letter of Representations: Means, with respect to the
Certificates of any series, an agreement among the Company, the
Trustee and the initial Clearing Agency substantially in the form
attached as an Exhibit to the related Trust Supplement.
Liquidity Facility: Means, with respect to the Certificates of
any series, any revolving credit agreement, letter of credit or
similar facility relating to the Certificates of such series between
a bank or other financial institution and a Subordination Agent, as
amended, replaced, supplemented or otherwise modified from time to
time in accordance with its terms and the terms of any Intercreditor
Agreement.
Liquidity Provider: Means, with respect to the Certificates of
any series, a bank or other financial institution that agrees to
provide a Liquidity Facility for the benefit of the holders of
Certificates of such series.
Loan Trustee: Means, with respect to any Equipment Note or the
Indenture applicable thereto, the bank or trust company designated as
loan or indenture trustee under such Indenture, and any successor to
such Loan Trustee as such trustee; and "Loan Trustees" means all of
the Loan Trustees under the Indentures.
Note Documents: Means, with respect to the Certificates of any
series, the Equipment Notes with respect to such Certificates and,
with respect to such Equipment Notes, the related Indenture, Note
Purchase Agreement and, if the related Aircraft is leased to the
Company, the related Lease and the related Owner Trustee's Purchase
Agreement.
Note Purchase Agreement: Means, with respect to the
Certificates of any series, any note purchase, refunding,
participation or similar agreement providing for, among other things,
the purchase of Equipment Notes by the Trustee on behalf of the
relevant Trust; and "Note Purchase Agreements" means all such
agreements.
Officer's Certificate: Means a certificate signed, (a) in the
case of the Company, by (i) the Chairman or Vice Chairman of the
Board of Directors, the President, any Executive Vice President, any
Senior Vice President or the Treasurer of the Company, signing alone,
or (ii) any Vice President of the Company signing together with the
Secretary, the Assistant Secretary, the Treasurer or any Assistant
Treasurer of the Company or (b) in the case of the Trustee or an
Owner Trustee or a Loan Trustee, a Responsible Officer of the Trustee
or such Owner Trustee or such Loan Trustee, as the case may be.
Opinion of Counsel: Means a written opinion of legal counsel
who (a) in the case of counsel for the Company may be (i) a senior
attorney of the Company one of whose principal duties is furnishing
advice as to legal matters, (ii) Skadden, Arps, Slate, Meagher & Flom
LLP (and any affiliate thereof) or (iii) such other counsel
designated by the Company and reasonably acceptable to the Trustee
and (b) in the case of any Owner Trustee or any Loan Trustee, may be
such counsel as may be designated by any of them whether or not such
counsel is an employee of any of them, and who shall be reasonably
acceptable to the Trustee.
Other Agreements: Has the meaning specified in Section 6.01(b).
Outstanding: When used with respect to Certificates of any
series, means, as of the date of determination, all Certificates of
such series theretofore authenticated and delivered under this
Agreement, except:
(i) Certificates of such series theretofore cancelled by
the Registrar or delivered to the Trustee or the Registrar for
cancellation;
(ii) All of the Certificates of such series if money in
the full amount required to make the final distribution with
respect to such series pursuant to Section 11.01 hereof has
been theretofore deposited with the Trustee in trust for the
Holders of the Certificates of such series as provided in
Section 4.01, pending distribution of such money to such
Certificateholders pursuant to payment of such final
distribution payment; and
(iii) Certificates of such series in exchange for or in
lieu of which other Certificates of such series have been
authenticated and delivered pursuant to this Agreement.
Owner Participant: Means, with respect to any Equipment Note,
the "Owner Participant", if any, as referred to in the Indenture
pursuant to which such Equipment Note is issued and any permitted
successor or assign of such Owner Participant; and "Owner
Participants" at any time of determination means all of the Owner
Participants thus referred to in the Indentures.
Owner Trustee: Means, with respect to any Equipment Note, the
"Owner Trustee", if any, as referred to in the Indenture pursuant to
which such Equipment Note is issued, not in its individual capacity
but solely as trustee; and "Owner Trustees" means all of the Owner
Trustees party to any of the related Indentures.
Owner Trustee's Purchase Agreement: Has the meaning, with
respect to the Certificates of any series if the related Aircraft is
leased to the Company, specified therefor in the related Lease.
Paying Agent: Means, with respect to the Certificates of any
series, the paying agent maintained and appointed for the
Certificates of such series pursuant to Section 7.12.
Permitted Investments: Means obligations of the United States
of America or agencies or instrumentalities thereof for the payment
of which the full faith and credit of the United States of America is
pledged, maturing in not more than 60 days after the date of
acquisition thereof or such lesser time as is required for the
distribution of any Special Payments on a Special Distribution Date.
Person: Means any person, including any individual,
corporation, limited liability company, partnership, joint venture,
association, joint-stock company, trust, trustee, unincorporated
organization, or government or any agency or political subdivision
thereof.
Pool Balance: Means, with respect to the Certificates of any
series as of any date, (i) the original aggregate face amount of the
Certificates of any series less (ii) the aggregate amount of all
payments made in respect of such Certificates other than payments
made in respect of interest or premium thereon or reimbursement of
any costs or expenses incurred in connection therewith. The Pool
Balance as of any Distribution Date shall be computed after giving
effect to the payment of principal, if any, on the Equipment Notes or
other Trust Property held in the Trust and the distribution thereof
to be made on such Distribution Date.
Pool Factor: Means, with respect to any series of Certificates
as of any date, the quotient (rounded to the seventh decimal place)
computed by dividing (i) the Pool Balance of such series as at such
date by (ii) the original aggregate face amount of the Certificates
of such series. The Pool Factor as of any Distribution Date shall be
computed after giving effect to the payment of principal, if any, on
the Equipment Notes or other Trust Property held in the Trust and the
distribution thereof to be made on such Distribution Date.
Postponed Notes: Means, with respect to any Trust or the
related series of Certificates, the Equipment Notes to be held in
such Trust as to which a Postponement Notice shall have been
delivered pursuant to Section 2.02(b).
Postponement Notice: Means, with respect to any Trust or the
related series of Certificates, an Officer's Certificate of the
Company signed by an officer of the Company (1) requesting that the
Trustee temporarily postpone purchase of the related Equipment Notes
to a date later than the Issuance Date of such series of
Certificates, (2) identifying the amount of the purchase price of
each such Equipment Note and the aggregate purchase price for all
such Equipment Notes, (3) setting forth the reasons for such
postponement and (4) with respect to each such Equipment Note, either
(a) setting or resetting a new Transfer Date (which shall be on or
prior to the applicable Cut-off Date) for payment by the Trustee of
such purchase price and issuance of the related Equipment Note
(subject to subsequent change from time to time in accordance with
the relevant Note Purchase Agreement), or (b) indicating that such
new Transfer Date (which shall be on or prior to the applicable
Cut-off Date) will be set by subsequent written notice not less than
one Business Day prior to such new Transfer Date (subject to
subsequent change from time to time in accordance with the relevant
Note Purchase Agreement).
Potential Purchaser: Has the meaning, with respect to any
Certificateholder, specified in Section 6.01(b).
PTC Event of Default: Means, with respect to the Certificates
of any series, any failure to pay within ten Business Days of the due
date thereof: (i) the outstanding Pool Balance of such series of
Certificates on the date specified in any Trust Supplement for such
payment or (ii) interest due on the Certificates of such series on
any Distribution Date (unless the related Subordination Agent shall
have made an Interest Drawing or Drawings (as defined in the related
Intercreditor Agreement), or a withdrawal or withdrawals pursuant to
a cash collateral account under such Intercreditor Agreement, with
respect thereto in an aggregate amount sufficient to pay such
interest and shall have distributed such amount to the Trustee).
Purchasing Certificateholder: Has the meaning, with respect to
any Certificateholder, specified in Section 6.01(b).
Record Date: Means, with respect to any Trust or the related
series of Certificates, (i) for Scheduled Payments to be distributed
on any Regular Distribution Date, other than the final distribution
with respect to such series, the 15th day (whether or not a Business
Day) preceding such Regular Distribution Date, and (ii) for Special
Payments to be distributed on any Special Distribution Date, other
than the final distribution with respect to such series, the 15th day
(whether or not a Business Day) preceding such Special Distribution
Date.
Register and Registrar: Means, each with respect to the
Certificates of any series, the register maintained and the registrar
appointed pursuant to Sections 3.04 and 7.12.
Regular Distribution Date: Means, with respect to distributions
of Scheduled Payments in respect of any series of Certificates, each
date designated as such in this Agreement, until payment of all the
Scheduled Payments to be made under the Equipment Notes held in the
Trust have been made.
Request: Means a request by the Company setting forth the
subject matter of the request accompanied by an Officer's Certificate
and an Opinion of Counsel as provided in Section 1.02 of this Basic
Agreement.
Responsible Officer: Means, with respect to any Trustee, any
Loan Trustee and any Owner Trustee, any officer in the Corporate
Trust Department of the Trustee, Loan Trustee or Owner Trustee or any
other officer customarily performing functions similar to those
performed by the persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred
because of his knowledge of and familiarity with a particular
subject.
Responsible Party: Means, with respect to the Certificates of
any series, the person designated as such in the related Trust
Supplement.
Scheduled Payment: Means, with respect to any Equipment Note,
(i) any payment of principal or interest on such Equipment Note
(other than any such payment which is not in fact received by the
Trustee or any Subordination Agent within five days of the date on
which such payment is scheduled to be made) or (ii) any payment of
interest on the Certificates of any series with funds drawn under the
Liquidity Facility for such series (other than any such payment which
is not in fact received by the Trustee or any Subordination Agent
within five days of the date upon which payment is scheduled to be
made), which payment in the case of clauses (i) or clause (ii)
represents the installment of principal on such Equipment Note at the
stated maturity of such installment, the payment of regularly
scheduled interest accrued on the unpaid principal amount of such
Equipment Note, or both; provided, however, that any payment of
principal, premium, if any, or interest resulting from the redemption
or purchase of any Equipment Note shall not constitute a Scheduled
Payment.
SEC: Means the Securities and Exchange Commission, as from time
to time constituted or created under the Securities Exchange Act of
1934, as amended, or, if at any time after the execution of this
instrument such Commission is not existing and performing the duties
now assigned to it under the Trust Indenture Act, then the body
performing such duties on such date.
Selling Certificateholder: Has the meaning, with respect to any
Certificateholder, specified in Section 6.01(b).
Special Distribution Date: Means, with respect to the
Certificates of any series, each date on which a Special Payment is
to be distributed as specified in this Agreement.
Special Payment: Means (i) any payment (other than a Scheduled
Payment) in respect of, or any proceeds of, any Equipment Note or
Trust Indenture Estate (as defined in each Indenture), (ii) the
amounts required to be distributed pursuant to the last paragraph of
Section 2.02(b) or (iii) the amounts required to be distributed
pursuant to the penultimate paragraph of Section 2.02(b).
Special Payments Account: Means, with respect to the
Certificates of any series, the account or accounts created and
maintained for such series pursuant to Section 4.01(b) and the
related Trust Supplement.
Specified Investments: Means, with respect to any Trust, unless
otherwise specified in the related Trust Supplement, (i) obligations
of, or guaranteed by, the United States Government or agencies
thereof, (ii) open market commercial paper of any corporation
incorporated under the laws of the United States of America or any
state thereof rated at least P-2 or its equivalent by Moody's
Investors Service, Inc. or at least A-2 or its equivalent by Standard
& Poor's Ratings Services, a division of The McGraw-Hill Companies,
Inc., (iii) certificates of deposit issued by commercial banks
organized under the laws of the United States or of any political
subdivision thereof having a combined capital and surplus in excess
of $100,000,000 which banks or their holding companies have a rating
of A or its equivalent by Moody's Investors Service, Inc. or Standard
& Poor's Ratings Services, a division of The McGraw-Hill Companies,
Inc.; provided, however, that the aggregate amount at any one time so
invested in certificates of deposit issued by any one bank shall not
exceed 5% of such bank's capital and surplus, (iv) U.S.
dollar-denominated offshore certificates of deposit issued by, or
offshore time deposits with, any commercial bank described in clause
(iii) above or any subsidiary thereof and (v) repurchase agreements
with any financial institution having combined capital and surplus of
at least $100,000,000 with any of the obligations described in
clauses (i) through (iv) above as collateral; provided further that
if all of the above investments are unavailable, the entire amounts
to be invested may be used to purchase federal funds from an entity
described in clause (iii) above.
Subordination Agent: Has the meaning specified therefor in any
Intercreditor Agreement.
Substitute Aircraft: Means, with respect to any Trust, any
Aircraft of a type specified in this Agreement and, at the election
of the Company, substituted prior to the applicable Cut-off Date, if
any, pursuant to the terms of this Agreement.
Transfer Date: Has the meaning assigned to that term or any of
the terms "Delivery Date", "Funding Date" or "Closing Date" in a Note
Purchase Agreement, and in any event refers to any such date as it
may be changed from time to time in accordance with the terms of such
Note Purchase Agreement.
Triggering Event: Has the meaning specified therefor in any
Intercreditor Agreement.
Trust: Means, with respect to the Certificates of any series,
the trust under this Agreement.
Trustee: Means State Street Bank and Trust Company, or its
successor in interest, and any successor or other trustee appointed
as provided herein.
Trust Indenture Act: Except as otherwise provided in Section
9.06, means, with respect to any particular Trust, the Trust
Indenture Act of 1939, as in force at the date as of which the
related Trust Supplement was executed.
Trust Property: Means, with respect to any Trust, (i) subject
to any related Intercreditor Agreement, the Equipment Notes held as
the property of such Trust, all monies at any time paid thereon and
all monies due and to become due thereunder, (ii) funds from time to
time deposited in the related Escrow Account, the related Certificate
Account and the related Special Payments Account and, subject to the
related Intercreditor Agreement, any proceeds from the sale by the
Trustee pursuant to Article VI hereof of any such Equipment Note,
(iii) all rights of such Trust and the Trustee, on behalf of the
Trust, under any Intercreditor Agreement, including, without
limitation, all monies receivable in respect of such rights, and (iv)
all monies receivable under any Liquidity Facility for such Trust.
Trust Supplement: Means an agreement supplemental hereto
pursuant to which (i) a separate Trust is created for the benefit of
the Holders of the Certificates of a series, (ii) the issuance of the
Certificates of such series representing fractional undivided
interests in such Trust is authorized and (iii) the terms of the
Certificates of such series are established.
Section 1.02. Compliance Certificates and Opinions. Upon any
application or request (except with respect to matters set forth in Article
II) by the Company, any Owner Trustee or any Loan Trustee to the Trustee to
take any action under any provision of this Basic Agreement or, in respect
of the Certificates of any series, this Agreement, the Company, such Owner
Trustee or such Loan Trustee, as the case may be, shall furnish to the
Trustee (i) an Officer's Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Basic
Agreement or this Agreement relating to the proposed action have been
complied with and (ii) an Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent, if any, have been complied
with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any
provision of this Basic Agreement or this Agreement relating to such
particular application or request, no additional certificate or opinion
need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Basic Agreement or, in respect
of the Certificates of any series, this Agreement (other than a certificate
provided pursuant to Section 8.04(d)) or any Trust Supplement shall
include:
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions in
this Basic Agreement
or this Agreement relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.03. Form of Documents Delivered to Trustee. In any case
where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or
that they be so certified or covered by only one document, but one such
Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters and any such Person may
certify or give an opinion as to such matters in one or several documents.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or
other instruments under this Basic Agreement or, in respect of the
Certificates of any series, this Agreement, they may, but need not, be
consolidated and form one instrument.
Section 1.04. Directions of Certificateholders. (a) Any direction,
consent, request, demand, authorization, notice, waiver or other action
provided by this Agreement in respect of the Certificates of any series to
be given or taken by Certificateholders (a "Direction") may be embodied in
and evidenced by one or more instruments of substantially similar tenor
signed by such Certificateholders in person or by an agent or proxy duly
appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Trustee and, when it is hereby expressly required pursuant
to this Agreement, to the Company or any Loan Trustee. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Certificateholders signing
such instrument or instruments. Proof of execution of any such instrument
or of a writing appointing any such agent or proxy shall be sufficient for
any purpose of this Trust Agreement and conclusive in favor of the Trustee,
the Company and the related Loan Trustee, if made in the manner provided in
this Section 1.04.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the certificate of any notary
public or other officer of any jurisdiction authorized to take
acknowledgments of deeds or administer oaths that the Person executing such
instrument acknowledged to him the execution thereof, or by an affidavit of
a witness to such execution sworn to before any such notary or such other
officer, and where such execution is by an officer of a corporation or
association or a member of a partnership, on behalf of such corporation,
association or partnership, such certificate or affidavit shall also
constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other reasonable manner which
the Trustee deems sufficient.
(c) In determining whether the Certificateholders of the
requisite Fractional Undivided Interests of Certificates of any series
Outstanding have given any Direction under this Agreement, Certificates
owned by the Company or any Affiliate thereof shall be disregarded and
deemed not to be Outstanding for purposes of any such determination. In
determining whether the Trustee shall be protected in relying upon any such
Direction, only Certificates which the Trustee knows to be so owned shall
be so disregarded. Notwithstanding the foregoing, (i) if any such Person
owns 100% of the Certificates of any series Outstanding, such Certificates
shall not be so disregarded, and (ii) if any amount of Certificates of any
series so owned by any such Person have been pledged in good faith, such
Certificates shall not be disregarded if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to
such Certificates and that the pledgee is not the Company or any Affiliate
thereof.
(d) The Company may, at its option, by delivery of an Officer's
Certificate to the Trustee, set a record date to determine the
Certificateholders in respect of the Certificates of any series, entitled
to give any Direction. Notwithstanding Section 316(c) of the Trust
Indenture Act, such record date shall be the record date specified in such
Officer's Certificate, which shall be a date not more than 30 days prior to
the first solicitation of Certificateholders of the applicable series in
connection therewith. If such a record date is fixed, such Direction may be
given before or after such record date, but only the Certificateholders of
record of the applicable series at the close of business on such record
date shall be deemed to be Certificateholders for the purposes of
determining whether Certificateholders of the requisite proportion of
Outstanding Certificates of such series have authorized or agreed or
consented to such Direction, and for that purpose the Outstanding
Certificates shall be computed as of such record date; provided, however,
that no such Direction by the Certificateholders on such record date shall
be deemed effective unless it shall become effective pursuant to the
provisions of this Agreement not later than one year after such record
date.
(e) Any Direction by the Holder of any Certificate shall bind
the Holder of every Certificate issued upon the transfer thereof or in
exchange therefor or in lieu thereof, whether or not notation of such
Direction is made upon such Certificate.
(f) Except as otherwise provided in Section 1.04(c),
Certificates of any series owned by or pledged to any Person shall have an
equal and proportionate benefit under the provisions of this Agreement,
without preference, priority or distinction as among all of the
Certificates of such series.
ARTICLE II
ORIGINAL ISSUANCE OF CERTIFICATES:
ACQUISITION OF TRUST PROPERTY
Section 2.01. Amount Unlimited; Issuable in Series. (a) The aggregate
principal amount of Certificates which may be authenticated and delivered
under this Basic Agreement is unlimited. The Certificates may be issued
from time to time in one or more series and shall be designated generally
as the "Pass Through Certificates", with such further designations added or
incorporated in such title for the Certificates of each series as specified
in the related Trust Supplement. Each Certificate shall bear upon its face
the designation so selected for the series to which it belongs. All
Certificates of the same series shall be substantially identical except
that the Certificates of a series may differ as to denomination and as may
otherwise be provided in the Trust Supplement establishing the Certificates
of such series. Each series of Certificates issued pursuant to this
Agreement will evidence fractional undivided interests in the related Trust
and, except as may be contained in any Intercreditor Agreement, will have
no rights, benefits or interests in respect of any other Trust or the Trust
Property held therein. All Certificates of the same series shall be in all
respects equally and ratably entitled to the benefits of this Agreement
without preference, priority or distinction on account of the actual time
or times of authentication and delivery, all in accordance with the terms
and provisions of this Agreement.
(b) The following matters shall be established with respect to
the Certificates of each series issued hereunder by a Trust Supplement
executed and delivered by and among the Company and the Trustee:
(1) the formation of the Trust as to which the Certificates of
such series represent fractional undivided interests and its
designation (which designation shall distinguish such Trust from each
other Trust created under this Basic Agreement and a Trust
Supplement);
(2) the specific title of the Certificates of such series
(which title shall distinguish the Certificates of such series from
each other series of Certificates created under this Basic Agreement
and a Trust Supplement);
(3) any limit upon the aggregate principal amount of the
Certificates of such series which may be authenticated and delivered
(which limit shall not pertain to Certificates authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Certificates of the series pursuant to Sections 3.03,
3.04 and 3.06);
(4) the Cut-off Date with respect to the Certificates of such
series;
(5) the Regular Distribution Dates applicable to the
Certificates of such series;
(6) the Special Distribution Dates applicable to the
Certificates of such series;
(7) if other than as provided in Section 7.12(b), the Registrar
or the Paying Agent for the Certificates of such series, including
any Co-Registrar or additional Paying Agent;
(8) if other than as provided in Section 3.02, the
denominations in which the Certificates of such series shall be
issuable;
(9) if other than United States dollars, the currency or
currencies (including currency units) in which the Certificates of
such series shall be denominated;
(10) the specific form of the Certificates of such series
(including the interest rate applicable thereto) and whether or not
Certificates of such series are to be issued as Book-Entry
Certificates and, if such Certificates are to be Book-Entry
Certificates, the form of Letter of Representations, if any (or, in
the case of any Certificates denominated in a currency other than
United States dollars and if other than as provided in Section 3.05,
whether and the circumstances under which beneficial owners of
interests in such Certificates in permanent global form may exchange
such interests for Certificates of such series and of like tenor of
any authorized form and denomination);
(11) a description of the Equipment Notes to be acquired and
held in the related Trust and of the related Aircraft and Note
Documents;
(12) provisions with respect to the terms for which the
definitions set forth in Article I hereof or the terms of Section
11.01 hereof permit or require further specification in the related
Trust Supplement;
(13) any restrictions (including legends) in respect of ERISA;
(14) whether such series will be subject to an Intercreditor
Agreement and, if so, the specific designation of such Intercreditor
Agreement and the rights of Potential Purchasers upon the occurrence
of a Triggering
Event;
(15) whether such series will have the benefit of a Liquidity
Facility and, if so, any terms appropriate thereto;
(16) whether there will be a deposit agreement or other
arrangement prior to the delivery of one or more Aircraft and, if so,
any terms appropriate thereto;
(17) the "Responsible Party" for purposes of directing the
Trustee to make Specified Investments; and
(18) any other terms of the Certificates of such series (which
terms shall not be inconsistent with the provisions of the Trust
Indenture Act), including any terms of the Certificates of such
series which may be required or advisable under United States laws or
regulations or advisable in connection with the marketing of
Certificates of the series.
(c) At any time and from time to time after the execution and
delivery of this Basic Agreement and a Trust Supplement forming a Trust and
establishing the terms of Certificates of a series, Certificates of such
series shall be executed, authenticated and delivered by the Trustee to the
Person or Persons specified by the Company upon request of the Company and
upon satisfaction or waiver of any conditions precedent set forth in such
Trust Supplement or in any other document to which a Trustee is a party
relating to the issuance of the Certificates of such series.
Section 2.02. Acquisition of Equipment Notes. (a) Unless otherwise
specified in the related Trust Supplement, on or prior to the Issuance Date
of the Certificates of a series, the Trustee shall execute and deliver the
related Note Purchase Agreements in the form delivered to the Trustee by
the Company and shall, subject to the respective terms thereof, perform its
obligations under such Note Purchase Agreements. The Trustee shall issue
and sell such Certificates, in authorized denominations and in such
Fractional Undivided Interests, so as to result in the receipt of
consideration in an amount equal to the aggregate purchase price of the
Equipment Notes contemplated to be purchased by the Trustee under the
related Note Purchase Agreements and, concurrently therewith, the Trustee
shall purchase, pursuant to the terms and conditions of the Note Purchase
Agreements, such Equipment Notes at a purchase price equal to the amount of
such consideration so received. Except as provided in Sections 3.03, 3.04
and 3.06 hereof, the Trustee shall not execute, authenticate or deliver
Certificates of such series in excess of the aggregate amount specified in
this paragraph. The provisions of this Subsection (a) are subject to the
provisions of Subsection (b) below.
(b) If on or prior to the Issuance Date with respect to a
series of Certificates the Company shall deliver to the Trustee a
Postponement Notice relating to one or more Postponed Notes, the Trustee
shall postpone the purchase of such Postponed Notes and shall deposit into
an escrow account (as to such Trust, the "Escrow Account") to be maintained
as part of the related Trust an amount equal to the purchase price of such
Postponed Notes (the "Escrowed Funds"). The portion of the Escrowed Funds
so deposited with respect to any particular Postponed Notes shall be
invested by the Trustee at the written direction and risk of, and for the
benefit of, the Responsible Party in Specified Investments (i) maturing no
later than any scheduled Transfer Date relating to such Postponed Notes or
(ii) if no such Transfer Date has been scheduled, maturing on the next
Business Day, or (iii) if the Company has given notice to the Trustee that
such Postponed Notes will not be issued, maturing on the next applicable
Special Distribution Date, if such investments are reasonably available for
purchase. The Trustee shall make withdrawals from the Escrow Account only
as provided in this Agreement. Upon request of the Company on one or more
occasions and the satisfaction or waiver of the closing conditions
specified in the applicable Note Purchase Agreements on or prior to the
related Cut-off Date, the Trustee shall purchase the applicable Postponed
Notes with the Escrowed Funds withdrawn from the Escrow Account. The
purchase price shall equal the principal amount of such Postponed Notes.
The Trustee shall hold all Specified Investments until the maturity
thereof and will not sell or otherwise transfer Specified Investments. If
Specified Investments held in an Escrow Account mature prior to any
applicable Transfer Date, any proceeds received on the maturity of such
Specified Investments (other than any earnings thereon) shall be reinvested
by the Trustee at the written direction and risk of, and for the benefit
of, the Responsible Party in Specified Investments maturing as provided in
the preceding paragraph.
Any earnings on Specified Investments received from time to time by
the Trustee shall be promptly distributed to the Responsible Party. The
Responsible Party shall pay to the Trustee for deposit to the relevant
Escrow Account an amount equal to any losses on such Specified Investments
as incurred. On the Initial Regular Distribution Date in respect of the
Certificates of any series, the Responsible Party will pay (in immediately
available funds) to the Trustee an amount equal to the interest that would
have accrued on any Postponed Notes with respect to such Certificates, if
any, purchased after the Issuance Date if such Postponed Notes had been
purchased on the Issuance Date, from the Issuance Date to, but not
including, the date of the purchase of such Postponed Notes by the Trustee.
If, in respect of the Certificates of any series, the Company
notifies the Trustee prior to the Cut-off Date that any Postponed Notes
will not be issued on or prior to the Cut-off Date for any reason, on the
next Special Distribution Date for such Certificates occurring not less
than 15 days following the date of such notice, (i) the Responsible Party
shall pay to the Trustee for deposit in the related Special Payments
Account, in immediately available funds, an amount equal to the interest
that would have accrued on the Postponed Notes designated in such notice at
a rate equal to the interest rate applicable to such Certificates from the
Issuance Date to, but not including, such Special Distribution Date and
(ii) the Trustee shall transfer an amount equal to that amount of Escrowed
Funds that would have been used to purchase the Postponed Notes designated
in such notice and the amount paid by the Responsible Party pursuant to the
immediately preceding clause (i) to the related Special Payments Account
for distribution as a Special Payment in accordance with the provisions
hereof.
If, on such Cut-off Date, an amount equal to less than all of the
Escrowed Funds (other than Escrowed Funds referred to in the immediately
preceding paragraph) has been used to purchase Postponed Notes, on the next
such Special Distribution Date occurring not less than 15 days following
such Cut-off Date (i) the Responsible Party shall pay to the Trustee for
deposit in such Special Payments Account, in immediately available funds,
an amount equal to the interest that would have accrued on such Postponed
Notes contemplated to be purchased with such unused Escrowed Funds (other
than Escrowed Funds referred to in the immediately preceding paragraph) but
not so purchased at a rate equal to the interest rate applicable to such
Certificates from the Issuance Date to, but not including, such Special
Distribution Date and (ii) the Trustee shall transfer such unused Escrowed
Funds and the amount paid by the Responsible Party pursuant to the
immediately preceding clause (i) to such Special Payments Account for
distribution as a Special Payment in accordance with the provisions hereof.
Section 2.03. Acceptance by Trustee. The Trustee, upon the execution
and delivery of a Trust Supplement creating a Trust and establishing a
series of Certificates, shall acknowledge its acceptance of all right,
title and interest in and to the Trust Property to be acquired pursuant to
Section 2.02 hereof and the related Note Purchase Agreements and shall
declare that the Trustee holds and will hold such right, title and interest
for the benefit of all then present and future Certificateholders of such
series, upon the trusts herein and in such Trust Supplement set forth. By
the acceptance of each Certificate of such series issued to it under this
Agreement, each initial Holder of such series as grantor of such Trust
shall thereby join in the creation and declaration of such Trust.
Section 2.04. Limitation of Powers. Each Trust shall be constituted
solely for the purpose of making the investment in the Equipment Notes
provided for in the related Trust Supplement, and, except as set forth
herein, the Trustee shall not be authorized or empowered to acquire any
other investments or engage in any other activities and, in particular, the
Trustee shall not be authorized or empowered to do anything that would
cause such Trust to fail to qualify as a "grantor trust" for federal income
tax purposes (including, as subject to this restriction, acquiring any
Aircraft (as defined in the related Indentures) by bidding such Equipment
Notes or otherwise, or taking any action with respect to any such Aircraft
once acquired).
ARTICLE III
THE CERTIFICATES
Section 3.01. Form, Denomination and Execution of Certificates. The
Certificates of each series shall be issued in fully registered form
without coupons and shall be substantially in the form attached hereto as
Exhibit A, with such omissions, variations and insertions as are permitted
by this Agreement, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange on which such
Certificates may be listed or to conform to any usage in respect thereof,
or as may, consistently herewith, be determined by the Trustee or the
officers executing such Certificates, as evidenced by the Trustee's or
respective officers' execution of the Certificates.
Except as provided in Section 3.05, the definitive Certificates of
such series shall be typed, printed, lithographed or engraved or produced
by any combination of these methods or may be produced in any other manner
permitted by the rules of any securities exchange on which the Certificates
may be listed, all as determined by the officers executing such
Certificates, as evidenced by their execution of such Certificates.
Except as otherwise provided in the related Trust Supplement, the
Certificates of each series shall be issued in minimum denominations of
$1,000 or integral multiples thereof except that one Certificate of such
series may be issued in a different denomination.
The Certificates of such series shall be executed on behalf of the
Trustee by manual or facsimile signature of a Responsible Officer of the
Trustee. Certificates of any series bearing the manual or facsimile
signature of an individual who was, at the time when such signature was
affixed, authorized to sign on behalf of the Trustee shall be valid and
binding obligations of the Trustee, notwithstanding that such individual
has ceased to be so authorized prior to the authentication and delivery of
such Certificates or did not hold such office at the date of such
Certificates.
Section 3.02. Authentication of Certificates. (a) On the Issuance
Date, the Trustee shall duly execute, authenticate and deliver Certificates
of each series in authorized denominations equaling in the aggregate the
aggregate principal amount of the Equipment Notes that may be purchased by
the Trustee pursuant to the related Note Purchase Agreements, and
evidencing the entire ownership of the related Trust. Thereafter, the
Trustee shall duly execute, authenticate and deliver the Certificates of
such series as herein provided.
(b) No Certificate of any series shall be entitled to any
benefit under this Agreement, or be valid for any purpose, unless there
appears on such Certificate a certificate of authentication substantially
in the form set forth in Exhibit A hereto executed by the Trustee by manual
signature, and such certificate of authentication upon any Certificate
shall be conclusive evidence, and the only evidence, that such Certificate
has been duly authenticated and delivered hereunder. All Certificates of
any series shall be dated the date of their authentication.
Section 3.03. Temporary Certificates. Until definitive Certificates
are ready for delivery, the Trustee shall execute, authenticate and deliver
temporary Certificates of each series. Temporary Certificates of each
series shall be substantially in the form of definitive Certificates of
such series but may have insertions, substitutions, omissions and other
variations determined to be appropriate by the officers executing the
temporary Certificates of such series, as evidenced by their execution of
such temporary Certificates. If temporary Certificates of any series are
issued, the Trustee will cause definitive Certificates of such series to be
prepared without unreasonable delay. After the preparation of definitive
Certificates of such series, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of such temporary
Certificates at the office or agency of the Trustee designated for such
purpose pursuant to Section 7.12, without charge to the Certificateholder.
Upon surrender for cancellation of any one or more temporary Certificates,
the Trustee shall execute, authenticate and deliver in exchange therefor a
like face amount of definitive Certificates of like series, in authorized
denominations and of a like Fractional Undivided Interest. Until so
exchanged, such temporary Certificates shall be entitled to the same
benefits under this Agreement as definitive Certificates.
Section 3.04. Transfer and Exchange. The Trustee shall cause to be
kept at the office or agency to be maintained by it in accordance with the
provisions of Section 7.12 a register (the "Register") for each series of
Certificates in which, subject to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of Certificates
of such series and of transfers and exchanges of such Certificates as
herein provided. The Trustee shall initially be the registrar (the
"Registrar") for the purpose of registering such Certificates of each
series and transfers and exchanges of such Certificates as herein provided.
All Certificates issued upon any registration of transfer or exchange
of Certificates of any series shall be valid obligations of the applicable
Trust, evidencing the same interest therein, and entitled to the same
benefits under this Agreement, as the Certificates of such series
surrendered upon such registration of transfer or exchange.
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office or such other office or agency, the Trustee shall
execute, authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Certificates of like series, in authorized
denominations of a like aggregate Fractional Undivided Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of like series, in authorized denominations and of a
like aggregate Fractional Undivided Interest, upon surrender of the
Certificates to be exchanged at any such office or agency. Whenever any
Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate and deliver the Certificates that the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or
surrendered for registration of transfer or exchange shall be duly endorsed
or accompanied by a written instrument of transfer in form satisfactory to
the Trustee and the Registrar duly executed by the Certificateholder
thereof or its attorney duly authorized in writing.
No service charge shall be made to a Certificateholder for any
registration of transfer or exchange of Certificates, but the Trustee shall
require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of
Certificates. All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Trustee.
Section 3.05. Book-Entry and Definitive Certificates. (a) The
Certificates of any series may be issued in the form of one or more
typewritten Certificates representing the Book-Entry Certificates of such
series, to be delivered to The Depository Trust Company, the initial
Clearing Agency, by, or on behalf of, the Company. In such case, the
Certificates of such series delivered to The Depository Trust Company shall
initially be registered on the Register in the name of CEDE & Co., the
nominee of the initial Clearing Agency, and no Certificate Owner will
receive a definitive certificate representing such Certificate Owner's
interest in the Certificates of such series, except as provided above and
in Subsection (d) below. As to the Certificates of any series, unless and
until definitive, fully registered Certificates (the "Definitive
Certificates") have been issued pursuant to Subsection (d) below:
(i) the provisions of this Section 3.05 shall be
in full force and
effect;
(ii) the Company, the Paying Agent, the Registrar and the
Trustee may deal with the Clearing Agency Participants for all
purposes (including the making of distributions on the
Certificates) as the authorized representatives of the
Certificate Owners;
(iii) to the extent that the provisions of this Section
3.05 conflict with any other provisions of this Agreement
(other than the provisions of any Trust Supplement expressly
amending this Section 3.05 as permitted by this Basic
Agreement), the provisions of this Section 3.05 shall control;
(iv) the rights of Certificate Owners shall be exercised
only through the Clearing Agency and shall be limited to those
established by law and agreements between such Certificate
Owners and the Clearing Agency Participants; and until
Definitive Certificates are issued pursuant to Subsection (d)
below, the Clearing Agency will make book-entry transfers among
the Clearing Agency Participants and receive and transmit
distributions of principal, interest and premium, if any, on
the Certificates to such Clearing Agency Participants; and
(v) whenever this Agreement requires or permits actions
to be taken based upon instructions or directions of
Certificateholders of such series holding Certificates of such
series evidencing a specified percentage of the Fractional
Undivided Interests in the related Trust, the Clearing Agency
shall be deemed to represent such percentage only to the extent
that it has received instructions to such effect from Clearing
Agency Participants owning or representing, respectively, such
required percentage of the beneficial interest in Certificates
of such series and has delivered such instructions to the
Trustee. The Trustee shall have no obligation to determine
whether the Clearing Agency has in fact received any such
instructions.
(b) Whenever notice or other communication to the
Certificateholders of such series is required under this Agreement, unless
and until Definitive Certificates shall have been issued pursuant to
Subsection (d) below, the Trustee shall give all such notices and
communications specified herein to be given to Certificateholders of such
series to the Clearing Agency.
(c) Unless and until Definitive Certificates of a series are
issued pursuant to Subsection (d) below, on the Record Date prior to each
applicable Regular Distribution Date and Special Distribution Date, the
Trustee will request from the Clearing Agency a securities position listing
setting forth the names of all Clearing Agency Participants reflected on
the Clearing Agency's books as holding interests in the Certificates on
such Record Date.
(d) If with respect to the Certificates of any series (i) the
Company advises the Trustee in writing that the Clearing Agency is no
longer willing or able to discharge properly its responsibilities and the
Trustee or the Company is unable to locate a qualified successor, (ii) the
Company, at its option, advises the Trustee in writing that it elects to
terminate the book-entry system through the Clearing Agency or (iii) after
the occurrence of an Event of Default, Certificate Owners of Book-Entry
Certificates of such series evidencing Fractional Undivided Interests
aggregating not less than a majority in interest in the related Trust, by
Act of such Certificate Owners delivered to the Company and the Trustee,
advise the Company, the Trustee and the Clearing Agency through the
Clearing Agency Participants in writing that the continuation of a
book-entry system through the Clearing Agency Participants is no longer in
the best interests of the Certificate Owners of such series, then the
Trustee shall notify all Certificate Owners of such series, through the
Clearing Agency, of the occurrence of any such event and of the
availability of Definitive Certificates. Upon surrender to the Trustee of
all the Certificates of such series held by the Clearing Agency,
accompanied by registration instructions from the Clearing Agency
Participants for registration of Definitive Certificates in the names of
Certificate Owners of such series, the Trustee shall issue and deliver the
Definitive Certificates of such series in accordance with the instructions
of the Clearing Agency. Neither the Company, the Registrar, the Paying
Agent nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in
relying on, such registration instructions. Upon the issuance of Definitive
Certificates of such series, the Trustee shall recognize the Person in
whose name the Definitive Certificates are registered in the Register as
Certificateholders hereunder. Neither the Company nor the Trustee shall be
liable if the Trustee or the Company is unable to locate a qualified
successor Clearing Agency.
(e) Except as otherwise provided in the related Trust
Supplement, the Trustee shall enter into the applicable Letter of
Representations with respect to such series of Certificates and fulfill its
responsibilities thereunder.
(f) The provisions of this Section 3.05 may be made
inapplicable to any series or may be amended with respect to any series in
the related Trust Supplement.
Section 3.06. Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate is surrendered to the Registrar, or the
Registrar receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate, and (b) there is delivered to the Registrar and
the Trustee such security, indemnity or bond, as may be required by them to
save each of them harmless, then, in the absence of notice to the Registrar
or the Trustee that such destroyed, lost or stolen Certificate has been
acquired by a bona fide purchaser, and provided, however, that the
requirements of Section 8-405 of the Uniform Commercial Code in effect in
any applicable jurisdiction are met, the Trustee shall execute,
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate or Certificates of
like series, in authorized denominations and of like Fractional Undivided
Interest and bearing a number not contemporaneously outstanding.
In connection with the issuance of any new Certificate under this
Section 3.06, the Trustee shall require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the
Trustee and the Registrar) connected therewith.
Any duplicate Certificate issued pursuant to this Section 3.06 shall
constitute conclusive evidence of the appropriate Fractional Undivided
Interest in the related Trust, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.
The provisions of this Section 3.06 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen
Certificates.
Section 3.07. Persons Deemed Owners. Prior to due presentment of a
Certificate for registration of transfer, the Trustee, the Registrar and
any Paying Agent may treat the Person in whose name any Certificate is
registered (as of the day of determination) as the owner of such
Certificate for the purpose of receiving distributions pursuant to Article
IV and for all other purposes whatsoever, and none of the Trustee, the
Registrar or any Paying Agent shall be affected by any notice to the
contrary.
Section 3.08. Cancellation. All Certificates surrendered for payment
or transfer or exchange shall, if surrendered to the Trustee or any agent
of the Trustee other than the Registrar, be delivered to the Registrar for
cancellation and shall promptly be cancelled by it. No Certificates shall
be authenticated in lieu of or in exchange for any Certificates cancelled
as provided in this Section 3.08, except as expressly permitted by this
Agreement. All cancelled Certificates held by the Registrar shall be
destroyed and a certification of their destruction delivered to the
Trustee.
Section 3.09. Limitation of Liability for Payments. All payments and
distributions made to Certificateholders of any series in respect of the
Certificates of such series shall be made only from the Trust Property of
the related Trust and only to the extent that the Trustee shall have
sufficient income or proceeds from such Trust Property to make such
payments in accordance with the terms of Article IV of this Agreement. Each
Certificateholder, by its acceptance of a Certificate, agrees that it will
look solely to the income and proceeds from the Trust Property of the
related Trust for any payment or distribution due to such Certificateholder
pursuant to the terms of this Agreement and that it will not have any
recourse to the Company, the Trustee, the Loan Trustees, the Owner Trustees
or the Owner Participants, except as otherwise expressly provided herein or
in the related Intercreditor Agreement.
The Company is a party to this Agreement solely for purposes of
meeting the requirements of the Trust Indenture Act, and therefore shall
not have any right, obligation or liability hereunder (except as otherwise
expressly provided herein).
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS
Section 4.01. Certificate Account and Special Payments Account. (a)
The Trustee shall establish and maintain on behalf of the
Certificateholders of each series a Certificate Account as one or more
non-interest-bearing accounts. The Trustee shall hold such Certificate
Account in trust for the benefit of the Certificateholders of such series,
and shall make or permit withdrawals therefrom only as provided in this
Agreement. On each day when a Scheduled Payment is made to the Trustee
(under an Intercreditor Agreement, if applicable) with respect to the
Certificates of such series, the Trustee, upon receipt thereof, shall
immediately deposit the aggregate amount of such Scheduled Payment in such
Certificate Account.
(b) The Trustee shall establish and maintain on behalf of the
Certificateholders of each series a Special Payments Account as one or more
accounts, which shall be non-interest bearing except as provided in Section
4.04. The Trustee shall hold the Special Payments Account in trust for the
benefit of the Certificateholders of such series and shall make or permit
withdrawals therefrom only as provided in this Agreement. On each day when
one or more Special Payments are made to the Trustee (under an
Intercreditor Agreement, if applicable) with respect to the Certificates of
such series, the Trustee, upon receipt thereof, shall immediately deposit
the aggregate amount of such Special Payments in such Special Payments
Account.
(c) The Trustee shall present (or, if applicable, cause the
Subordination Agent to present) to the related Loan Trustee of each
Equipment Note such Equipment Note on the date of its stated final maturity
or, in the case of any Equipment Note which is to be redeemed in whole
pursuant to the related Indenture, on the applicable redemption date under
such Indenture.
Section 4.02. Distributions from Certificate Account and Special
Payments Account. (a) On each Regular Distribution Date with respect to a
series of Certificates or as soon thereafter as the Trustee has confirmed
receipt of the payment of all or any part of the Scheduled Payments due on
the Equipment Notes held (subject to the Intercreditor Agreement) in the
related Trust on such date, the Trustee shall distribute out of the
applicable Certificate Account the entire amount deposited therein pursuant
to Section 4.01(a). There shall be so distributed to each Certificateholder
of record of such series on the Record Date with respect to such Regular
Distribution Date (other than as provided in Section 11.01 concerning the
final distribution) by check mailed to such Certificateholder, at the
address appearing in the Register, such Certificateholder's pro rata share
(based on the Fractional Undivided Interest in the Trust held by such
Certificateholder) of the total amount in the applicable Certificate
Account, except that, with respect to Certificates registered on the Record
Date in the name of a Clearing Agency (or its nominee), such distribution
shall be made by wire transfer in immediately available funds to the
account designated by such Clearing Agency (or such nominee).
(b) On each Special Distribution Date with respect to any
Special Payment with respect to a series of Certificates or as soon
thereafter as the Trustee has confirmed receipt of any Special Payments due
on the Equipment Notes held (subject to the Intercreditor Agreement) in the
related Trust or realized upon the sale of such Equipment Notes, the
Trustee shall distribute out of the applicable Special Payments Account the
entire amount of such applicable Special Payment deposited therein pursuant
to Section 4.01(b). There shall be so distributed to each Certificateholder
of record of such series on the Record Date with respect to such Special
Distribution Date (other than as provided in Section 11.01 concerning the
final distribution) by check mailed to such Certificateholder, at the
address appearing in the Register, such Certificateholder's pro rata share
(based on the Fractional Undivided Interest in the related Trust held by
such Certificateholder) of the total amount in the applicable Special
Payments Account on account of such Special Payment, except that, with
respect to Certificates registered on the Record Date in the name of a
Clearing Agency (or its nominee), such distribution shall be made by wire
transfer in immediately available funds to the account designated by such
Clearing Agency (or such nominee).
(c) The Trustee shall, at the expense of the Company, cause
notice of each Special Payment with respect to a series of Certificates to
be mailed to each Certificateholder of such series at his address as it
appears in the Register. In the event of redemption or purchase of
Equipment Notes held in the related Trust, such notice shall be mailed not
less than 15 days prior to the Special Distribution Date for the Special
Payment resulting from such redemption or purchase, which Special
Distribution Date shall be the date of such redemption or purchase. In the
event that the Trustee receives a notice from the Company that Postponed
Notes will not be purchased by the Trustee pursuant to Section 2.02, such
notice of Special Payment shall be mailed as soon as practicable after
receipt of such notice from the Company and shall state the Special
Distribution Date for such Special Payment, which shall occur 15 days after
the date of such notice of Special Payment or (if such 15th day is not
practicable) as soon as practicable thereafter. In the event that any
Special Payment is to be made pursuant to the last paragraph of Section
2.02(b) hereof, there shall be mailed on the Cut-off Date (or, if such
mailing on the Cut-off Date is not practicable, as soon as practicable
after the Cut-off Date), notice of such Special Payment stating the Special
Distribution Date for such Special Payment, which shall occur 15 days after
the date of such notice of such Special Payment (or, if such 15th day is
not practicable, as soon as practicable thereafter). In the case of any
other Special Payments, such notice shall be mailed as soon as practicable
after the Trustee has confirmed that it has received funds for such Special
Payment, stating the Special Distribution Date for such Special Payment
which shall occur not less than 15 days after the date of such notice and
as soon as practicable thereafter. Notices mailed by the Trustee shall set
forth:
(i) the Special Distribution Date and the Record Date
therefor (except as otherwise provided in Section 11.01),
(ii) the amount of the Special Payment (taking into
account any payment to be made by the Company pursuant to
Section 2.02(b)) for each $1,000 face amount Certificate and
the amount thereof constituting principal, premium, if any, and
interest,
(iii) the reason for the Special Payment, and
(iv) if the Special Distribution Date is the same date as
a Regular Distribution Date for the Certificates of such
series, the total amount to be received on such date for each
$1,000 face amount Certificate.
If the amount of premium, if any, payable upon the redemption or purchase
of an Equipment Note has not been calculated at the time that the Trustee
mails notice of a Special Payment, it shall be sufficient if the notice
sets forth the other amounts to be distributed and states that any premium
received will also be distributed.
If any redemption of the Equipment Notes held in any Trust is
cancelled, the Trustee, as soon as possible after learning thereof, shall
cause notice thereof to be mailed to each Certificateholder of the related
series at its address as it appears on the Register.
Section 4.03. Statements to Certificateholders. (a) On each Regular
Distribution Date and Special Distribution Date, the Trustee will include
with each distribution of a Scheduled Payment or Special Payment, as the
case may be, to Certificateholders of the related series a statement
setting forth the information provided below. Such statement shall set
forth (per $1,000 aggregate principal amount of Certificate as to (i) and
(ii) below) the following information:
(i) the amount of such distribution hereunder allocable
to principal and the amount allocable to premium, if any;
(ii) the amount of such distribution hereunder allocable
to interest; and
(iii) the Pool Balance and the Pool Factor of the related
Trust.
With respect to the Certificates registered in the name of a Clearing
Agency or its nominee, on the Record Date prior to each Distribution Date,
the Trustee will request from the Clearing Agency a securities position
listing setting forth the names of all the Clearing Agency Participants
reflected on the Clearing Agency's books as holding interests in the
Certificates on such Record Date. On each Distribution Date, the applicable
Trustee will mail to each such Clearing Agency Participant the statement
described above and will make available additional copies as requested by
such Clearing Agency Participant for forwarding to holders of interests in
the Certificates.
(b) Within a reasonable period of time after the end of each
calendar year but not later than the latest date permitted by law, the
Trustee shall furnish to each Person who at any time during such calendar
year was a Certificateholder of record a statement containing the sum of
the amounts determined pursuant to clauses (a)(i) and (a)(ii) above with
respect to the related Trust for such calendar year or, in the event such
Person was a Certificateholder of record during a portion of such calendar
year, for the applicable portion of such year, and such other items as are
readily available to the Trustee and which a Certificateholder shall
reasonably request as necessary for the purpose of such Certificateholder's
preparation of its federal income tax returns. With respect to Certificates
registered in the name of a Clearing Agency or its nominee, such statement
and such other items shall be prepared on the basis of information supplied
to the Trustee by the Clearing Agency Participants and shall be delivered
by the Trustee to such Clearing Agency Participants to be available for
forwarding by such Clearing Agency Participants to the holders of interests
in the Certificates in the manner described in Section 4.03(a).
Section 4.04. Investment of Special Payment Moneys. Any money
received by the Trustee pursuant to Section 4.01(b) representing a Special
Payment which is not distributed on the date received shall, to the extent
practicable, be invested by the Trustee in Permitted Investments selected
by the Company in written instructions to the Trustee pending distribution
of such Special Payment pursuant to Section 4.02. Absent receipt of such
instructions from the Company, such Special Payment shall remain uninvested
by the Trustee pending receipt of written investment instructions. Any
investment made pursuant to this Section 4.04 shall be in such Permitted
Investments having maturities not later than the date that such moneys are
required to be used to make the payment required under Section 4.02 on the
applicable Special Distribution Date and the Trustee shall hold any such
Permitted Investments until maturity. The Trustee shall have no liability
with respect to any investment made pursuant to this Section 4.04, other
than by reason of the willful misconduct or negligence of the Trustee. All
income and earnings from such investments shall be distributed on such
Special Distribution Date as part of such Special Payment.
ARTICLE V
THE COMPANY
Section 5.01. Maintenance of Corporate Existence. The Company, at its
own cost and expense, will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence, rights
and franchises, except as otherwise specifically permitted in Section 5.02;
provided, however, that the Company shall not be required to preserve any
right or franchise if the Company shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the
Company.
Section 5.02. Consolidation, Merger, Etc. The Company shall not
consolidate with or merge into any other corporation or convey, transfer or
lease substantially all of its assets as an entirety to any Person unless:
(a) the corporation formed by such consolidation or into
which the Company is merged or the Person that acquires by
conveyance, transfer or lease substantially all of the assets of the
Company as an entirety shall be (i) organized and validly existing
under the laws of the United States of America or any state thereof
or the District of Columbia, (ii) a "citizen of the United States" as
defined in 49 U.S.C. ss.ss. 40102(a)(15), as amended, and (iii) a
United States certificated air carrier, if and so long as such status
is a condition of entitlement to the benefits of Section 1110 of the
Bankruptcy Reform Act of 1978, as amended (11 U.S.C. ss.ss. 1110),
with respect to the Leases or the Aircraft owned by the Company;
(b) the corporation formed by such consolidation or into
which the Company is merged or the Person which acquires by
conveyance, transfer or lease substantially all of the assets of the
Company as an entirety shall execute and deliver to the Trustee
applicable to the Certificates of each series a duly authorized,
valid, binding and enforceable agreement in form and substance
reasonably satisfactory to the Trustee containing an assumption by
such successor corporation or Person of the due and punctual
performance and observance of each covenant and condition of the Note
Documents and of this Agreement applicable to the Certificates of
each series to be performed or observed by the Company; and
(c) the Company shall have delivered to the Trustee an
Officer's Certificate of the Company and an Opinion of Counsel of the
Company (that may be the Company's General Counsel or other senior
attorney of the Company) reasonably satisfactory to the Trustee, each
stating that such consolidation, merger, conveyance, transfer or
lease and the assumption agreement mentioned in clause (b) above
comply with this Section 5.02 and that all conditions precedent
herein provided for relating to such transaction have been complied
with.
Upon any consolidation or merger, or any conveyance, transfer or
lease of substantially all of the assets of the Company as an entirety in
accordance with this Section 5.02, the successor corporation or Person
formed by such consolidation or into which the Company is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company
under this Agreement applicable to the Certificates of each series with the
same effect as if such successor corporation or Person had been named as
the Company herein. No such conveyance, transfer or lease of substantially
all of the assets of the Company as an entirety shall have the effect of
releasing any successor corporation or Person which shall have become such
in the manner prescribed in this Section 5.02 from its liability in respect
of this Agreement and any Note Document applicable to the Certificates of
such series to which it is a party.
ARTICLE VI
DEFAULT
Section 6.01. Indenture Events of Default and Triggering Events. (a)
Upon the occurrence and during the continuation of any Indenture Event of
Default under any Indenture, the Trustee may (i) to the extent it is the
Controlling Party at such time (as determined pursuant to the related
Intercreditor Agreement), direct the exercise of remedies as provided in
such related Intercreditor Agreement and (ii) if there is no related
Intercreditor Agreement, direct the exercise of remedies or take other
action as provided in the relevant Indenture to the extent that it may do
so as the holder of the Equipment Notes issued under such Indenture and
held in the related Trust.
(b) By acceptance of its Certificate, each Certificateholder
agrees that at any time after the occurrence and during the continuation of
a Triggering Event, each Certificateholder of Certificates of certain
series (each, a "Potential Purchaser" and, collectively, the "Potential
Purchasers") will have certain rights to purchase the Certificates of one
or more other series, all as set forth in the Trust Supplement applicable
to the Certificates held by such Potential Purchaser. The purchase price
with respect to the Certificates of any series shall be equal to the Pool
Balance of the Certificates of such series, together with accrued and
unpaid interest thereon to the date of such purchase, without premium, but
including any other amounts then due and payable to the Certificateholders
of such series under this Agreement, any related Intercreditor Agreement or
any other Note Document or on or in respect of the Certificates of such
series; provided, however, that if such purchase occurs after a Record
Date, such purchase price shall be reduced by the amount to be distributed
hereunder on the related Distribution Date (which deducted amounts shall
remain distributable to, and may be retained by, the Certificateholder as
of such Record Date); provided, further, that no such purchase of
Certificates of such series shall be effective unless the purchasing
Certificateholder (each, a "Purchasing Certificateholder" and,
collectively, the "Purchasing Certificateholders") shall certify to the
Trustee that contemporaneously with such purchase, one or more Purchasing
Certificateholders are purchasing, pursuant to the terms of this Agreement
and the other Agreements, if any, relating to the Certificates of a series
that are subject to the same Intercreditor Agreement (such other
Agreements, the "Other Agreements"), the Certificates of each such series
that the Trust Supplement applicable to the Certificates held by the
Purchasing Certificateholder specifies may be purchased by such Purchasing
Certificateholder. Each payment of the purchase price of the Certificates
of any series shall be made to an account or accounts designated by the
Trustee and each such purchase shall be subject to the terms of this
Section 6.01. By acceptance of its Certificate, each Certificateholder
(each, a "Selling Certificateholder" and, collectively, the "Selling
Certificateholders") of a series that is subject to purchase by Potential
Purchasers, all as set forth in the Trust Supplement applicable to the
Certificates held by the Selling Certificateholders, agrees that, at any
time after the occurrence and during the continuance of a Triggering Event,
it will, upon payment of the purchase price specified herein by one or more
Purchasing Certificateholders, forthwith sell, assign, transfer and convey
to such Purchasing Certificateholder (without recourse, representation or
warranty of any kind except for its own acts), all of the right, title,
interest and obligation of such Selling Certificateholder in this
Agreement, any related Intercreditor Agreement, the related Liquidity
Facility, the related Note Documents and all Certificates of such series
held by such Selling Certificateholder (excluding all right, title and
interest under any of the foregoing to the extent such right, title or
interest is with respect to an obligation not then due and payable as
respects any action or inaction or state of affairs occurring prior to such
sale) and the Purchasing Certificateholder shall assume all of such Selling
Certificateholder's obligations under this Agreement, any related
Intercreditor Agreement, the related Liquidity Facility and the related
Note Documents. The Certificates of such series will be deemed to be
purchased on the date payment of the purchase price is made notwithstanding
the failure of any Selling Certificateholder to deliver any Certificates of
such series and, upon such a purchase, (i) the only rights of the Selling
Certificateholders will be to deliver the Certificates to the Purchasing
Certificateholder and receive the purchase price for such Certificates of
such series and (ii) if the Purchasing Certificateholder shall so request,
such Selling Certificateholder will comply with all of the provisions of
Section 3.04 hereof to enable new Certificates of such series to be issued
to the Purchasing Certificateholder in such denominations as it shall
request. All charges and expenses in connection with the issuance of any
such new Certificates shall be borne by the Purchasing Certificateholder.
Section 6.02. Incidents of Sale of Equipment Notes. Upon any sale of
all or any part of the Equipment Notes held in the Trust made either under
the power of sale given under this Agreement or otherwise for the
enforcement of this Agreement, the following shall be applicable:
(1) Certificateholders and Trustee May Purchase Equipment
Notes. Any Certificateholder, the Trustee in its individual or any
other capacity or any other Person may bid for and purchase any of
the Equipment Notes held in the Trust, and upon compliance with the
terms of sale, may hold, retain, possess and dispose of such
Equipment Notes in their own absolute right without further
accountability.
(2) Receipt of Trustee Shall Discharge Purchaser. The receipt
of the Trustee making such sale shall be a sufficient discharge to
any purchaser for his purchase money, and, after paying such purchase
money and receiving such receipt, such purchaser or its personal
representative or assigns shall not be obliged to see to the
application of such purchase money, or be in any way answerable for
any loss, misapplication or non-application thereof.
(3) Application of Moneys Received Upon Sale. Any moneys
collected by the Trustee upon any sale made either under the power of
sale given by this Agreement or otherwise for the enforcement of this
Agreement shall be applied as provided in Section 4.02.
Section 6.03. Judicial Proceedings Instituted by Trustee; Trustee May
Bring Suit. If there shall be a failure to make payment of the principal
of, premium, if any, or interest on any Equipment Note held in the related
Trust, or if there shall be any failure to pay Rent (as defined in the
relevant Lease) under any Lease when due and payable, then the Trustee, in
its own name and as trustee of an express trust, as holder of such
Equipment Notes, to the extent permitted by and in accordance with the
terms of any related Intercreditor Agreement and any related Note Documents
(subject to rights of the applicable Owner Trustee or Owner Participant to
cure any such failure to pay principal of, premium, if any, or interest on
any Equipment Note or to pay Rent under any Lease in accordance with the
applicable Indenture), shall be entitled and empowered to institute any
suits, actions or proceedings at law, in equity or otherwise, for the
collection of the sums so due and unpaid on such Equipment Notes or under
such Lease and may prosecute any such claim or proceeding to judgment or
final decree with respect to the whole amount of any such sums so due and
unpaid.
Section 6.04. Control by Certificateholders. Subject to Section 6.03
and any related Intercreditor Agreement, the Certificateholders holding
Certificates of a series evidencing Fractional Undivided Interests
aggregating not less than a majority in interest in the related Trust shall
have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee with respect to such
Trust or pursuant to the terms of such Intercreditor Agreement, or
exercising any trust or power conferred on the Trustee under this Agreement
or such Intercreditor Agreement, including any right of the Trustee as
Controlling Party under such Intercreditor Agreement or as holder of the
Equipment Notes held in the related Trust; provided, however, that
(1) such Direction shall not in the opinion of the Trustee be
in conflict with any rule of law or with this Agreement and would not
involve the Trustee in personal liability or expense,
(2) the Trustee shall not determine that the action so directed
would be unjustly prejudicial to the Certificateholders of such
series not taking part in such Direction, and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such Direction.
Section 6.05. Waiver of Past Defaults. Subject to any related
Intercreditor Agreement, the Certificateholders holding Certificates of a
series evidencing Fractional Undivided Interests aggregating not less than
a majority in interest in the Trust (i) may on behalf of all of the
Certificateholders waive any past Event of Default hereunder and its
consequences or (ii) if the Trustee is the Controlling Party, may direct
the Trustee to instruct the applicable Loan Trustee to waive any past
Indenture Event of Default under any related Indenture and its
consequences, and thereby annul any Direction given by such
Certificateholders or the Trustee to such Loan Trustee with respect
thereto, except a default:
(1) in the deposit of any Scheduled Payment or Special Payment
under Section 4.01 or in the distribution of any payment under
Section 4.02 on the Certificates of a series, or
(2) in the payment of the principal of (premium, if any) or
interest on the Equipment Notes held in the related Trust, or
(3) in respect of a covenant or provision hereof which under
Article IX hereof cannot be modified or amended without the consent
of each Certificateholder holding an Outstanding Certificate of a
series affected thereby.
Upon any such waiver, such default shall cease to exist with respect to the
Certificates of such series and any Event of Default arising therefrom
shall be deemed to have been cured for every purpose and any direction
given by the Trustee on behalf of the Certificateholders of such series to
the relevant Loan Trustee shall be annulled with respect thereto; but no
such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon. Upon any such waiver, the
Trustee shall vote the Equipment Notes issued under the relevant Indenture
to waive the corresponding Indenture Event of Default.
Section 6.06. Right of Certificateholders to Receive Payments Not to
Be Impaired. Anything in this Agreement to the contrary notwithstanding,
including, without limitation, Section 6.07 hereof, but subject to any
related Intercreditor Agreement, the right of any Certificateholder to
receive distributions of payments required pursuant to Section 4.02 hereof
on the applicable Certificates when due, or to institute suit for the
enforcement of any such payment on or after the applicable Regular
Distribution Date or Special Distribution Date, shall not be impaired or
affected without the consent of such Certificateholder.
Section 6.07. Certificateholders May Not Bring Suit Except Under
Certain Conditions. A Certificateholder of any series shall not have the
right to institute any suit, action or proceeding at law or in equity or
otherwise with respect to this Agreement, for the appointment of a receiver
or for the enforcement of any other remedy under this Agreement, unless:
(1) such Certificateholder previously shall have given written
notice to the Trustee of a continuing Event of Default;
(2) Certificateholders holding Certificates of such series
evidencing Fractional Undivided Interests aggregating not less than
25% of the related Trust shall have requested the Trustee in writing
to institute such action, suit or proceeding and shall have offered
to the Trustee indemnity as provided in Section 7.03(e);
(3) the Trustee shall have refused or neglected to institute
any such action, suit or proceeding for 60 days after receipt of such
notice, request and offer of indemnity; and
(4) no direction inconsistent with such written request shall
have been given to the Trustee during such 60-day period by
Certificateholders holding Certificates of such series evidencing
Fractional Undivided Interests aggregating not less than a majority
in interest in the related Trust.
It is understood and intended that no one or more of the
Certificateholders of any series shall have any right in any manner
whatsoever hereunder or under the related Trust Supplement or under the
Certificates of such series to (i) surrender, impair, waive, affect,
disturb or prejudice any property in the Trust Property of the related
Trust, or the lien of any related Indenture on any property subject
thereto, or the rights of the Certificateholders of such series or the
holders of the related Equipment Notes, (ii) obtain or seek to obtain
priority over or preference with respect to any other such
Certificateholder of such series or (iii) enforce any right under this
Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all the Certificateholders of such series subject to
the provisions of this Agreement.
Section 6.08. Remedies Cumulative. Every remedy given hereunder to
the Trustee or to any of the Certificateholders of any series shall not be
exclusive of any other remedy or remedies, and every such remedy shall be
cumulative and in addition to every other remedy given hereunder or now or
hereafter given by statute, law, equity or otherwise.
Section 6.09. Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Agreement, or in any suit against the
Trustee for any action taken, suffered or omitted by it as Trustee, a court
may require any party litigant in such suit to file an undertaking to pay
the costs of such suit, and may assess costs against any such party
litigant, in the manner and to the extent provided in the Trust Indenture
Act; provided, however, that neither this Section 6.09 nor the Trust
Indenture Act shall be deemed to authorize any court to require such an
undertaking or to make such an assessment in any suit instituted by the
Company.
ARTICLE VII
THE TRUSTEE
Section 7.01. Certain Duties and Responsibilities. (a) Except during
the continuance of an Event of Default in respect of a Trust, the Trustee
undertakes to perform such duties in respect of such Trust as are
specifically set forth in this Agreement, and no implied covenants or
obligations shall be read into this Agreement against the Trustee.
(b) In case an Event of Default in respect of a Trust has
occurred and is continuing, the Trustee shall exercise such of the rights
and powers vested in it by this Agreement in respect of such Trust, and use
the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(c) No provision of this Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that
(1) this Subsection shall not be construed to limit the effect
of Subsection (a) of this Section 7.01; and
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the
pertinent facts.
(d) Whether or not herein expressly so provided, every
provision of this Agreement relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to the
provisions of this Section 7.01.
Section 7.02. Notice of Defaults. (a) As promptly as practicable
after, and in any event within 90 days after, the occurrence of any default
(as such term is defined below) hereunder known to the Trustee, the Trustee
shall transmit by mail to the Company, any related Owner Trustees, any
related Owner Participants, the related Loan Trustees and the
Certificateholders holding Certificates of the related series in accordance
with Section 313(c) of the Trust Indenture Act, notice of such default
hereunder known to the Trustee, unless such default shall have been cured
or waived; provided, however, that, except in the case of a default in the
payment of the principal, premium, if any, or interest on any Equipment
Note, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the Trustee in good
faith shall determine that the withholding of such notice is in the
interests of the Certificateholders of the related series. For the purpose
of this Section 7.02 in respect of any Trust, the term "Default" means any
event that is, or after notice or lapse of time or both would become, an
Event of Default in respect of that Trust.
(b) The Trustee shall not be deemed to have knowledge of any
Default unless a Responsible Officer of the Trustee shall have received
written notice of such Default; provided, however, that the Trustee shall
be deemed to have notice of any failure to receive Scheduled Payments
hereunder.
Section 7.03. Certain Rights of Trustee. Subject to the
provisions of Section 315 of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting
or refraining from acting in reliance upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture or other paper or document
believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Request;
(c) whenever in the administration of this Agreement or
any Intercreditor Agreement, the Trustee shall deem it desirable that
a matter be proved or established prior to taking, suffering or
omitting any action hereunder, the Trustee (unless other evidence be
herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officer's Certificate of the Company, any
related Owner Trustee or any related Loan Trustee;
(d) the Trustee may consult with counsel and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement or any
Intercreditor Agreement at the Direction of any of the
Certificateholders pursuant to this Agreement or any Intercreditor
Agreement, unless such Certificateholders shall have offered to the
Trustee reasonable security or indemnity against the cost, expenses
and liabilities which might be incurred by it in compliance with such
Direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture or other paper or
document;
(g) the Trustee may execute any of the trusts or powers
under this Agreement or any Intercreditor Agreement or perform any
duties under this Agreement or any Intercreditor Agreement either
directly or by or through agents or attorneys, and the Trustee shall
not be responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it under this
Agreement or any Intercreditor Agreement;
(h) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the Direction of the Certificateholders holding Certificates of
any series evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the related Trust relating to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Agreement or any Intercreditor
Agreement; and
(i) the Trustee shall not be required to expend or risk
its own funds in the performance of any of its duties under this
Agreement, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk is not reasonably
assured to it.
Section 7.04. Not Responsible for Recitals or Issuance of
Certificates. The recitals contained herein and in the Certificates of each
series, except the certificates of authentication, shall not be taken as
the statements of the Trustee, and the Trustee assumes no responsibility
for their correctness. Subject to Section 7.15, the Trustee makes no
representations as to the validity or sufficiency of this Basic Agreement,
any Equipment Notes, any Intercreditor Agreement, the Certificates of any
series, any Trust Supplement or any Note Documents, except that the Trustee
hereby represents and warrants that this Basic Agreement has been, and each
Trust Supplement, each Certificate, each Note Purchase Agreement and each
Intercreditor Agreement of, or relating to, each series will be executed
and delivered by one of its officers who is duly authorized to execute and
deliver such document on its behalf.
Section 7.05. May Hold Certificates. The Trustee, any Paying Agent,
Registrar or any of their Affiliates or any other agent, in their
respective individual or any other capacity, may become the owner or
pledgee of Certificates and, subject to Sections 310(b) and 311 of the
Trust Indenture Act, if applicable, may otherwise deal with the Company,
any Owner Trustees or the Loan Trustees with the same rights it would have
if it were not Trustee, Paying Agent, Registrar or such other agent.
Section 7.06. Money Held in Trust. Money held by the Trustee or the
Paying Agent in trust under this Agreement need not be segregated from
other funds except to the extent required herein or by law and neither the
Trustee nor the Paying Agent shall have any liability for interest upon any
such moneys except as provided for herein.
Section 7.07. Compensation and Reimbursement. The Company agrees:
(1) to pay, or cause to be paid, to the Trustee from time to
time reasonable compensation for all services rendered by it
hereunder (which compensation shall not be limited by any provision
of law in regard to the compensation of a trustee of an express
trust); and
(2) except as otherwise expressly provided herein or in any
Trust Supplement, to reimburse, or cause to be reimbursed, the
Trustee upon its request for all reasonable out-of-pocket expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Basic Agreement, any Trust
Supplement or any Intercreditor Agreement (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence, willful misconduct or bad faith or as
may be incurred due to the Trustee's breach of its representations
and warranties set forth in Section 7.15; and
(3) to indemnify, or cause to be indemnified, the Trustee with
respect to the Certificates of any series, pursuant to the particular
sections of the Note Purchase Agreement specified in the related
Trust Supplement.
The Trustee shall be entitled to reimbursement from, and shall have a
lien prior to the Certificates of each series upon, all property and funds
held or collected by the Trustee in its capacity as Trustee with respect to
such series or the related Trust for any tax incurred without negligence,
bad faith or willful misconduct, on its part, arising out of or in
connection with the acceptance or administration of such Trust (other than
any tax attributable to the Trustee's compensation for serving as such),
including any costs and expenses incurred in contesting the imposition of
any such tax. The Trustee shall notify the Company of any claim for any tax
for which it may seek reimbursement. If the Trustee reimburses itself from
the Trust Property of such Trust for any such tax, it will mail a brief
report within 30 days setting forth the amount of such tax and the
circumstances thereof to all Certificateholders of such series as their
names and addresses appear in the Register.
Section 7.08. Corporate Trustee Required; Eligibility. Each Trust
shall at all times have a Trustee which shall be eligible to act as a
trustee under Section 310(a) of the Trust Indenture Act and shall have a
combined capital and surplus of at least $75,000,000 (or a combined capital
and surplus in excess of $5,000,000 and the obligations of which, whether
now in existence or hereafter incurred, are fully and unconditionally
guaranteed by a corporation organized and doing business under the laws of
the United States, any state or territory thereof or of the District of
Columbia and having a combined capital and surplus of at least
$75,000,000). If such corporation publishes reports of conditions at least
annually, pursuant to law or to the requirements of federal, state,
territorial or District of Columbia supervising or examining authority,
then for the purposes of this Section 7.08 the combined capital and surplus
of such corporation shall be deemed to be its combined capital and surplus
as set forth in its most recent report of conditions so published.
In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 7.08 to act as Trustee of
any Trust, the Trustee shall resign immediately as Trustee of such Trust in
the manner and with the effect specified in Section 7.09.
Section 7.09. Resignation and Removal, Appointment of Successor. (a)
No resignation or removal of the Trustee and no appointment of a successor
Trustee of any Trust pursuant to this Article shall become effective until
the acceptance of appointment by the successor Trustee under Section 7.10.
(b) The Trustee may resign at any time as Trustee of any or all
Trusts by giving prior written notice thereof to the Company, the
Authorized Agents, the related Owner Trustees and the related Loan
Trustees. If an instrument of acceptance by a successor Trustee shall not
have been delivered to the Company, the related Owner Trustees and the
Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Direction of the
Certificateholders of the related series holding Certificates evidencing
Fractional Undivided Interests aggregating not less than a majority in
interest in such Trust delivered to the Trustee and to the Company, the
related Owner Trustees and the related Loan Trustees.
(d) If at any time in respect of any Trust:
(1) the Trustee shall fail to comply with Section 310 of the
Trust Indenture Act, if applicable, after written request therefor by
the Company or by any Certificateholder who has been a bona fide
Certificateholder for at least six months; or
(2) the Trustee shall cease to be eligible under Section 7.08
and shall fail to resign after written request therefor by the
Company or by any such Certificateholder; or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation;
then, in any case, (i) the Company may remove the Trustee or (ii) any
Certificateholder of the related series who has been a bona fide
Certificateholder for at least six months may, on behalf of itself and all
others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee of
such Trust.
(e) If a Responsible Officer of the Trustee shall obtain actual
knowledge of an Avoidable Tax (as defined below) in respect of any Trust
which has been or is likely to be asserted, the Trustee shall promptly
notify the Company and shall, within 30 days of such notification, resign
as Trustee of such Trust hereunder unless within such 30-day period the
Trustee shall have received notice that the Company has agreed to pay such
tax. The Company shall promptly appoint a successor Trustee of such Trust
in a jurisdiction where there are no Avoidable Taxes. As used herein, an
"Avoidable Tax" in respect of such Trust means a state or local tax: (i)
upon (w) such Trust, (x) such Trust Property, (y) Certificateholders of
such Trust or (z) the Trustee for which the Trustee is entitled to seek
reimbursement from the Trust Property of such Trust, and (ii) which would
be avoided if the Trustee were located in another state, or jurisdiction
within a state, within the United States of America. A tax shall not be an
Avoidable Tax in respect of any Trust if the Company or any Owner Trustee
shall agree to pay, and shall pay, such tax.
(f) If the Trustee shall resign, be removed or become incapable
of acting as Trustee of any Trust or if a vacancy shall occur in the office
of the Trustee of any Trust for any cause, the Company shall promptly
appoint a successor Trustee of such Trust. If, within one year after such
resignation, removal or incapability, or other occurrence of such vacancy,
a successor Trustee of such Trust shall be appointed by Direction of the
Certificateholders of the related series holding Certificates of such
series evidencing Fractional Undivided Interests aggregating not less than
a majority in interest in such Trust delivered to the Company, the related
Owner Trustees, the related Loan Trustee and the retiring Trustee, then the
successor Trustee of such Trust so appointed shall, with the approval of
the Company of such appointment, which approval shall not be unreasonably
withheld, forthwith upon its acceptance of such appointment, become the
successor Trustee of such Trust and supersede the successor Trustee of such
Trust appointed as provided above. If no successor Trustee shall have been
so appointed as provided above and accepted appointment in the manner
hereinafter provided, the resigning Trustee or any Certificateholder who
has been a bona fide Certificateholder of the related series for at least
six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a
successor Trustee of such Trust.
(g) The successor Trustee of a Trust shall give notice of the
resignation and removal of the Trustee and appointment of the successor
Trustee by mailing written notice of such event by first-class mail,
postage prepaid, to the Certificateholders of the related series as their
names and addresses appear in the Register. Each notice shall include the
name of such successor Trustee and the address of its Corporate Trust
Office.
Section 7.10. Acceptance of Appointment by Successor. Every successor
Trustee appointed hereunder shall execute and deliver to the Company and to
the retiring Trustee with respect to any or all Trusts an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee with respect to such Trusts shall become effective and
such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the
retiring Trustee; but, on request of the Company or the successor Trustee,
such retiring Trustee shall execute and deliver an instrument transferring
to such successor Trustee all such rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such
successor Trustee all Trust Property held by such retiring Trustee in
respect of such Trusts hereunder, subject nevertheless to its lien, if any,
provided for in Section 7.07. Upon request of any such successor Trustee,
the Company, the retiring Trustee and such successor Trustee shall execute
and deliver any and all instruments containing such provisions as shall be
necessary or desirable to transfer and confirm to, and for more fully and
certainly vesting in, such successor Trustee all such rights, powers and
trusts.
If a successor Trustee is appointed with respect to one or more (but
not all) Trusts, the Company, the predecessor Trustee and each successor
Trustee with respect to any Trust shall execute and deliver a supplemental
agreement hereto which shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and
duties of the predecessor Trustee with respect to the Trusts as to which
the predecessor Trustee is not retiring shall continue to be vested in the
predecessor Trustee, and shall add to or change any of the provisions of
this Basic Agreement and the applicable Trust Supplements as shall be
necessary to provide for or facilitate the administration of the Trusts
hereunder by more than one Trustee, it being understood that nothing herein
or in such supplemental agreement shall constitute such Trustees as
co-Trustees of the same Trust and that each such Trustee shall be Trustee
of separate Trusts.
No institution shall accept its appointment as a Trustee hereunder
unless at the time of such acceptance such institution shall be qualified
and eligible under this Article VII.
Section 7.11. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation succeeding to all or substantially all of the corporate
trust business of the Trustee, shall be the successor of the Trustee
hereunder; provided, however, that such corporation shall be otherwise
qualified and eligible under this Article VII, without the execution or
filing of any paper or any further act on the part of any of the parties
hereto. In case any Certificates shall have been executed or authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
execution or authentication and deliver the Certificates so executed or
authenticated with the same effect as if such successor Trustee had itself
executed or authenticated such Certificates.
Section 7.12. Maintenance of Agencies. (a) With respect to each
series of Certificates, there shall at all times be maintained an office or
agency in the location set forth in Section 12.04 where Certificates of
such series may be presented or surrendered for registration of transfer or
for exchange, and for payment thereof, and where notices and demands, to or
upon the Trustee in respect of such Certificates or this Agreement may be
served; provided, however, that, if it shall be necessary that the Trustee
maintain an office or agency in another location with respect to the
Certificates of any series (e.g., the Certificates of such series shall be
represented by Definitive Certificates and shall be listed on a national
securities exchange), the Trustee will make all reasonable efforts to
establish such an office or agency. Written notice of the location of each
such other office or agency and of any change of location thereof shall be
given by the Trustee to the Company, any Owner Trustees, the Loan Trustees
(in the case of any Owner Trustee or Loan Trustee, at its address specified
in the Note Documents or such other address as may be notified to the
Trustee) and the Certificateholders of such series. In the event that no
such office or agency shall be maintained or no such notice of location or
of change of location shall be given, presentations and demands may be made
and notices may be served at the Corporate Trust Office of the Trustee.
(b) There shall at all times be a Registrar and a Paying Agent
hereunder with respect to the Certificates of each series. Each such
Authorized Agent shall be a bank or trust company, shall be a corporation
organized and doing business under the laws of the United States or any
state, with a combined capital and surplus of at least $75,000,000, or a
corporation having a combined capital and surplus in excess of $5,000,000,
the obligations of which are guaranteed by a corporation organized and
doing business under the laws of the United States or any state, with a
combined capital and surplus of at least $75,000,000, and shall be
authorized under such laws to exercise corporate trust powers, subject to
supervision by federal or state authorities. The Trustee shall initially be
the Paying Agent and, as provided in Section 3.04, Registrar hereunder with
respect to the Certificates of each series. Each Registrar shall furnish to
the Trustee, at stated intervals of not more than six months, and at such
other times as the Trustee may request in writing, a copy of the Register
maintained by such Registrar.
(c) Any corporation into which any Authorized Agent may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, consolidation or conversion to which
any Authorized Agent shall be a party, or any corporation succeeding to the
corporate trust business of any Authorized Agent, shall be the successor of
such Authorized Agent, if such successor corporation is otherwise eligible
under this Section 7.12, without the execution or filing of any paper or
any further act on the part of the parties hereto or such Authorized Agent
or such successor corporation.
(d) Any Authorized Agent may at any time resign by giving
written notice of resignation to the Trustee, the Company, any related
Owner Trustees and the related Loan Trustees. The Company may, and at the
request of the Trustee shall, at any time terminate the agency of any
Authorized Agent by giving written notice of termination to such Authorized
Agent and to the Trustee. Upon the resignation or termination of an
Authorized Agent or in case at any time any such Authorized Agent shall
cease to be eligible under this Section 7.12 (when, in either case, no
other Authorized Agent performing the functions of such Authorized Agent
shall have been appointed), the Company shall promptly appoint one or more
qualified successor Authorized Agents, reasonably satisfactory to the
Trustee, to perform the functions of the Authorized Agent which has
resigned or whose agency has been terminated or who shall have ceased to be
eligible under this Section 7.12. The Company shall give written notice of
any such appointment made by it to the Trustee, any related Owner Trustees
and the related Loan Trustees; and in each case the Trustee shall mail
notice of such appointment to all Certificateholders of the related series
as their names and addresses appear on the Register for such series.
(e) The Company agrees to pay, or cause to be paid, from time
to time to each Authorized Agent reasonable compensation for its services
and to reimburse it for its reasonable expenses.
Section 7.13. Money for Certificate Payments to Be Held in Trust. All
moneys deposited with any Paying Agent for the purpose of any payment on
Certificates shall be deposited and held in trust for the benefit of the
Certificateholders entitled to such payment, subject to the provisions of
this Section 7.13. Moneys so deposited and held in trust shall constitute a
separate trust fund for the benefit of the Certificateholders with respect
to which such money was deposited.
The Trustee may at any time, for the purpose of obtaining the
satisfaction and discharge of this Agreement or for any other purpose,
direct any Paying Agent to pay to the Trustee all sums held in trust by
such Paying Agent, such sums to be held by the Trustee upon the same trusts
as those upon which such sums were held by such Paying Agent; and, upon
such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Section 7.14. Registration of Equipment Notes in Trustee's Name.
Subject to the provisions of any Intercreditor Agreement, the Trustee
agrees that all Equipment Notes to be purchased by any Trust and Permitted
Investments, if any, shall be issued in the name of the Trustee as trustee
for the applicable Trust or its nominee and held by the Trustee in trust
for the benefit of the Certificateholders of such series, or, if not so
held, the Trustee or its nominee shall be reflected as the owner of such
Equipment Notes or Permitted Investments, as the case may be, in the
register of the issuer of such Equipment Notes or Permitted Investments, as
the case may be.
Section 7.15. Representations and Warranties of Trustee. The
Trustee hereby represents and warrants that:
(a) the Trustee is a state chartered trust company
organized and validly existing in good standing under the laws of the
Commonwealth of
Massachusetts.
(b) the Trustee has full power, authority and legal right
to execute, deliver and perform this Agreement, any Intercreditor
Agreement and the Note Purchase Agreements and has taken all
necessary action to authorize the execution, delivery and performance
by it of this Agreement, any Intercreditor Agreement and the Note
Purchase Agreements;
(c) the execution, delivery and performance by the
Trustee of this Agreement, any Intercreditor Agreement and the Note
Purchase Agreements (i) will not violate any provision of any United
States federal law or the law of the state of the United States where
it is located governing the banking and trust powers of the Trustee
or any order, writ, judgment, or decree of any court, arbitrator or
governmental authority applicable to the Trustee or any of its
assets, (ii) will not violate any provision of the charter documents
or by-laws of the Trustee, and (iii) will not violate any provision
of, or constitute, with or without notice or lapse of time, a default
under, or result in the creation or imposition of any lien on any
properties included in the Trust Property pursuant to the provisions
of any mortgage, indenture, contract, agreement or other undertaking
to which it is a party, which violation, default or lien could
reasonably be expected to have an adverse effect on the Trustee's
performance or ability to perform its duties hereunder or thereunder
or on the transactions contemplated herein or therein;
(d) the execution, delivery and performance by the
Trustee of this Agreement, any Intercreditor Agreement and the Note
Purchase Agreements will not require the authorization, consent, or
approval of, the giving of notice to, the filing or registration
with, or the taking of any other action in respect of, any
governmental authority or agency of the United States or the state of
the United States where it is located regulating the banking and
corporate trust activities of the Trustee; and
(e) this Agreement, any Intercreditor Agreement and the
Note Purchase Agreements have been or will be duly executed and
delivered by the Trustee and upon such execution and delivery will
constitute the legal, valid and binding agreements of the Trustee,
enforceable against it in accordance with their respective terms;
provided, however, that enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally and (ii)
general principles of equity.
Section 7.16. Withholding Taxes; Information Reporting. As to the
Certificates of any series, the Trustee, as trustee of the related grantor
trust created by this Agreement, shall exclude and withhold from each
distribution of principal, premium, if any, and interest and other amounts
due under this Agreement or under the Certificates of such series any and
all withholding taxes applicable thereto as required by law. The Trustee
agrees to act as such withholding agent and, in connection therewith,
whenever any present or future taxes or similar charges are required to be
withheld with respect to any amounts payable in respect of the Certificates
of such series, to withhold such amounts and timely pay the same to the
appropriate authority in the name of and on behalf of the
Certificateholders of such series, that it will file any necessary
withholding tax returns or statements when due, and that, as promptly as
possible after the payment thereof, it will deliver to each such
Certificateholder of such series appropriate documentation showing the
payment thereof, together with such additional documentary evidence as such
Certificateholders may reasonably request from time to time. The Trustee
agrees to file any other information reports as it may be required to file
under United States law.
Section 7.17. Trustee's Liens. The Trustee in its individual capacity
agrees that it will, in respect of each Trust created by this Agreement, at
its own cost and expense promptly take any action as may be necessary to
duly discharge and satisfy in full any mortgage, pledge, lien, charge,
encumbrance, security interest or claim ("Trustee's Liens") on or with
respect to the Trust Property of such Trust which is attributable to the
Trustee either (i) in its individual capacity and which is unrelated to the
transactions contemplated by this Agreement or the related Note Documents
or (ii) as Trustee hereunder or in its individual capacity and which arises
out of acts or omissions which are not contemplated by this Agreement.
Section 7.18. Preferential Collection of Claims. The Trustee shall
comply with Section 311(a) of the Trust Indenture Act, excluding any
creditor relationship listed in Section 311(b) of the Trust Indenture Act.
If the Trustee shall resign or be removed as Trustee, it shall be subject
to Section 311(a) of the Trust Indenture Act to the extent provided
therein.
ARTICLE VIII
CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE
Section 8.01. The Company to Furnish Trustee with Names and Addresses
of Certificateholders. The Company will furnish to the Trustee within 15
days after each Record Date with respect to a Scheduled Payment, and at
such other times as the Trustee may request in writing within 30 days after
receipt by the Company of any such request, a list, in such form as the
Trustee may reasonably require, of all information in the possession or
control of the Company as to the names and addresses of the
Certificateholders of each series, in each case as of a date not more than
15 days prior to the time such list is furnished; provided, however, that
so long as the Trustee is the sole Registrar for such series, no such list
need be furnished; and provided further, however, that no such list need be
furnished for so long as a copy of the Register is being furnished to the
Trustee pursuant to Section 7.12.
Section 8.02. Preservation of Information, Communications to
Certificateholders. The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Certificateholders of
each series contained in the most recent list furnished to the Trustee as
provided in Section 7.12 or Section 8.01, as the case may be, and the names
and addresses of Certificateholders of each series received by the Trustee
in its capacity as Registrar, if so acting. The Trustee may destroy any
list furnished to it as provided in Section 7.12 or Section 8.01, as the
case may be, upon receipt of a new list so furnished.
Section 8.03. Reports by Trustee. Within 60 days after May 15 of each
year commencing with the first full year following the issuance of any
series of Certificates, the Trustee shall transmit to the
Certificateholders of such series, as provided in Section 313(c) of the
Trust Indenture Act, a brief report dated as of May 15, if required by
Section 313(a) of the Trust Indenture Act.
Section 8.04. Reports by the Company. The Company shall:
(a) file with the Trustee, within 30 days after the
Company is required to file the same with the SEC, copies of the
annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the SEC may
from time to time by rules and regulations prescribe) which the
Company is required to file with the SEC pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934, as amended; or,
if the Company is not required to file information, documents or
reports pursuant to either of such sections, then to file with the
Trustee and the SEC, in accordance with rules and regulations
prescribed by the SEC, such of the supplementary and periodic
information, documents and reports which may be required pursuant to
section 13 of the Securities Exchange Act of 1934, as amended, in
respect of a security listed and registered on a national securities
exchange as may be prescribed in such rules and regulations;
(b) file with the Trustee and the SEC, in accordance with
the rules and regulations prescribed by the SEC, such additional
information, documents and reports with respect to compliance by the
Company with the conditions and covenants of the Company provided for
in this Agreement, as may be required by such rules and regulations,
including, in the case of annual reports, if required by such rules
and regulations, certificates or opinions of independent public
accountants, conforming to the requirements of Section 1.02;
(c) transmit to all Certificateholders, in the manner and
to the extent provided in Section 313(c) of the Trust Indenture Act
such summaries of any information, documents and reports required to
be filed by the Company pursuant to subsections (a) and (b) of this
Section 8.04 as may be required by rules and regulations prescribed
by the SEC; and
(d) furnish to the Trustee, not less often than annually,
a brief certificate from the principal executive officer, principal
financial officer or principal accounting officer as to his knowledge
of the Company's compliance with all conditions and covenants under
this Agreement (it being understood that for purposes of this
paragraph (d), such compliance shall be determined without regard to
any period of grace or requirement of notice provided under this
Agreement).
ARTICLE IX
SUPPLEMENTAL AGREEMENTS
Section 9.01. Supplemental Agreements Without Consent of
Certificateholders. Without the consent of the Certificateholders, the
Company may (but will not be required to), and the Trustee (subject to
Section 9.03) shall, at the Company's request, at any time and from time to
time, enter into one or more agreements supplemental hereto or, if
applicable, to an Intercreditor Agreement, a Note Purchase Agreement or a
Liquidity Facility, in form satisfactory to the Trustee, for any of the
following purposes:
(1) to provide for the formation of a Trust, the issuance of a
series of Certificates and other matters contemplated by Section
2.01(b); or
(2) to evidence the succession of another corporation to the
Company and the assumption by any such successor of the covenants of
the Company herein contained or of the Company's obligations under
any Intercreditor Agreement, any Note Purchase Agreement or any
Liquidity Facility; or
(3) to add to the covenants of the Company for the benefit of
the Certificateholders of any series, or to surrender any right or
power conferred upon the Company in this Agreement, any Intercreditor
Agreement or any Liquidity Facility; or
(4) to correct or supplement any provision in this Agreement,
any Intercreditor Agreement, any Note Purchase Agreement or any
Liquidity Facility which may be defective or inconsistent with any
other provision herein or therein or to cure any ambiguity or to
modify any other provision with respect to matters or questions
arising under this Agreement, any Intercreditor Agreement, any Note
Purchase Agreement or any Liquidity Facility, provided, however, that
any such action shall not materially adversely affect the interests
of the Certificateholders of any series; to correct any mistake in
this Agreement, any Intercreditor Agreement, any Note Purchase
Agreement or any Liquidity Facility; or, as provided in any
Intercreditor Agreement, to give effect to or provide for a
Replacement Liquidity Facility (as defined in such Intercreditor
Agreement); or
(5) to comply with any requirement of the SEC, any applicable
law, rules or regulations of any exchange or quotation system on
which the Certificates of any series are listed or of any regulatory
body; or
(6) to modify, eliminate or add to the provisions of this
Agreement, any Intercreditor Agreement, any Note Purchase Agreement
or any Liquidity Facility to such extent as shall be necessary to
continue the qualification of this Agreement, any Intercreditor
Agreement, any Note Purchase Agreement or any Liquidity Facility
(including any supplemental agreement) under the Trust Indenture Act
or under any similar Federal statute hereafter enacted, and to add to
this Agreement, any Intercreditor Agreement, any Note Purchase
Agreement or any Liquidity Facility such other provisions as may be
expressly permitted by the Trust Indenture Act, excluding, however,
the provisions referred to in Section 316(a)(2) of the Trust
Indenture Act as in effect at the date as of which this Basic
Agreement was executed or any corresponding provision in any similar
Federal statute hereafter enacted; or
(7) to evidence and provide for the acceptance of appointment
under this Agreement, any Intercreditor Agreement, any Note Purchase
Agreement or any Liquidity Facility by a successor Trustee with
respect to one or more Trusts and to add to or change any of the
provisions of this Agreement, any Intercreditor Agreement or any
Liquidity Facility as shall be necessary to provide for or facilitate
the administration of the Trust, pursuant to the requirements of
Section 7.10; or
(8) to provide the information required under Section 7.12 and
Section 12.04 as to the Trustee; or
(9) to make any other amendments or modifications hereto,
provided, however, that such amendments or modifications shall apply
to Certificates of any series to be thereafter issued;
provided, however, that no such supplemental agreement shall adversely
affect the status of any Trust as a grantor trust under Subpart E, Part I
of Subchapter J of Chapter 1 of Subtitle A of the Internal Revenue Code of
1986, as amended, for U.S. federal income tax purposes.
Section 9.02. Supplemental Agreements With Consent of
Certificateholders. With respect to each separate Trust and the series of
Certificates relating thereto, with the consent of the Certificateholders
holding Certificates of such series (including consents obtained in
connection with a tender offer or exchange offer for the Certificates)
evidencing Fractional Undivided Interests aggregating not less than a
majority in interest in such Trust, by Direction of said Certificateholders
delivered to the Company and the Trustee, the Company may (with the consent
of the Owner Trustees, if any, relating to such Certificates, which consent
shall not be unreasonably withheld), but shall not be obligated to, and the
Trustee (subject to Section 9.03) shall, enter into an agreement or
agreements supplemental hereto for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Agreement, any Intercreditor Agreement or any Liquidity Facility to the
extent applicable to such Certificateholders or of modifying in any manner
the rights and obligations of such Certificateholders under this Agreement,
any Intercreditor Agreement or any Liquidity Facility; provided, however,
that no such agreement shall, without the consent of the Certificateholder
of each Outstanding Certificate affected thereby:
(1) reduce in any manner the amount of, or delay the timing of,
any receipt by the Trustee of payments on the Equipment Notes held in
such Trust or distributions that are required to be made herein on
any Certificate of such series, or change any date of payment on any
Certificate of such series, or change the place of payment where, or
the coin or currency in which, any Certificate of such series is
payable, or impair the right to institute suit for the enforcement of
any such payment or distribution on or after the Regular Distribution
Date or Special Distribution Date applicable thereto; or
(2) permit the disposition of any Equipment Note included in
the Trust Property of such Trust except as permitted by this
Agreement, or otherwise deprive such Certificateholder of the benefit
of the ownership of the Equipment Notes in such Trust; or
(3) alter the priority of distributions specified in the
Intercreditor Agreement in a manner materially adverse to the
interests of the Certificateholders of any series; or
(4) reduce the specified percentage of the aggregate Fractional
Undivided Interests of such Trust that is required for any such
supplemental agreement, or reduce such specified percentage required
for any waiver (of compliance with certain provisions of this
Agreement or certain defaults hereunder and their consequences)
provided for in this Agreement; or
(5) modify any of the provisions of this Section 9.02 or
Section 6.05, except to increase any such percentage or to provide
that certain other provisions of this Agreement cannot be modified or
waived without the consent of the Certificateholder of each
Certificate of such series affected thereby; or
(6) adversely affect the status of any Trust as a grantor trust
under Subpart E, Part I of Subchapter J of Chapter 1 of Subtitle A of
the Internal Revenue Code of 1986, as amended, for U.S. federal
income tax
purposes.
It shall not be necessary for any Direction of such
Certificateholders under this Section 9.02 to approve the particular form
of any proposed supplemental agreement, but it shall be sufficient if such
Direction shall approve the
substance thereof.
Section 9.03. Documents Affecting Immunity or Indemnity. If in the
opinion of the Trustee any document required to be executed by it pursuant
to the terms of Section 9.01 or 9.02 affects any interest, right, duty,
immunity or indemnity in favor of the Trustee under this Basic Agreement or
any Trust Supplement, the Trustee may in its discretion decline to execute
such document.
Section 9.04. Execution of Supplemental Agreements. In executing, or
accepting the additional trusts created by, any supplemental agreement
permitted by this Article or the modifications thereby of the trusts
created by this Agreement, the Trustee shall be entitled to receive, and
shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental agreement is authorized or
permitted by this Agreement.
Section 9.05. Effect of Supplemental Agreements. Upon the execution
of any agreement supplemental to this Agreement under this Article, this
Basic Agreement shall be modified in accordance therewith, and such
supplemental agreement shall form a part of this Basic Agreement for all
purposes; and every Certificateholder of each series theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby to
the extent applicable to such series.
Section 9.06. Conformity With Trust Indenture Act. Every supplemental
agreement executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.
Section 9.07. Reference in Certificates to Supplemental Agreements.
Certificates of each series authenticated and delivered after the execution
of any supplemental agreement applicable to such series pursuant to this
Article may bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental agreement; and, in such case,
suitable notation may be made upon Outstanding Certificates of such series
after proper presentation and demand.
ARTICLE X
AMENDMENTS TO INDENTURE AND NOTE DOCUMENTS
Section 10.01. Amendments and Supplements to Indenture and Other Note
Documents. In the event that the Trustee, as holder (or beneficial owner
through the Subordination Agent) of any Equipment Notes (or as a
prospective purchaser of any Postponed Notes) in trust for the benefit of
the Certificateholders of any series or as Controlling Party under an
Intercreditor Agreement, receives (directly or indirectly through the
Subordination Agent) a request for a consent to any amendment,
modification, waiver or supplement under any Indenture, other Note Document
or any other related document, the Trustee shall forthwith send a notice of
such proposed amendment, modification, waiver or supplement to each
Certificateholder of such series registered on the Register as of the date
of such notice. The Trustee shall request from the Certificateholders of
such series a Direction as to (a) whether or not to take or refrain from
taking (or direct the Subordination Agent to take or refrain from taking)
any action which a holder of (or, with respect to Postponed Notes, a
prospective purchaser of) such Equipment Note has the option to direct, (b)
whether or not to give or execute (or direct the Subordination Agent to
give or execute) any waivers, consents, amendments, modifications or
supplements as a holder of (or, with respect to Postponed Notes, a
prospective purchaser of) such Equipment Note or a Controlling Party and
(c) how to vote (or direct the Subordination Agent to vote) any Equipment
Note (or, with respect to a Postponed Note, its commitment to acquire such
Postponed Note) if a vote has been called for with respect thereto.
Provided such a request for Certificateholder Direction shall have been
made, in directing any action or casting any vote or giving any consent as
the holder of any Equipment Note (or in directing the Subordination Agent
in any of the foregoing), (i) other than as Controlling Party, the Trustee
shall vote for or give consent to any such action with respect to such
Equipment Note (or Postponed Note) in the same proportion as that of (A)
the aggregate face amounts of all Certificates actually voted in favor of
or for giving consent to such action by such Direction of
Certificateholders to (B) the aggregate face amount of all Outstanding
Certificates and (ii) as Controlling Party, the Trustee shall vote as
directed in such Certificateholder Direction by the Certificateholders of
such series evidencing a Fractional Undivided Interest aggregating not less
than a majority in interest in the Trust. For purposes of the immediately
preceding sentence, a Certificate shall have been "actually voted" if the
Holder of such Certificate has delivered to the Trustee an instrument
evidencing such Holder's consent to such Direction prior to one Business
Day before the Trustee directs such action or casts such vote or gives such
consent. Notwithstanding the foregoing, but subject to Section 6.04 and any
Intercreditor Agreement, the Trustee may, with respect to the Certificates
of any series, in its own discretion and at its own direction, consent and
notify the relevant Loan Trustee of such consent (or direct the
Subordination Agent to consent and notify the Loan Trustee of such consent)
to any amendment, modification, waiver or supplement under any related
Indenture or any other related Note Document if an Event of Default
hereunder shall have occurred and be continuing or if such amendment,
modification, waiver or supplement will not materially adversely affect the
interests of the Certificateholders of such series.
ARTICLE XI
TERMINATION OF TRUSTS
Section 11.01. Termination of the Trusts. In respect of each Trust
created by the Basic Agreement as supplemented by a related Trust
Supplement, the respective obligations and responsibilities of the Company
and the Trustee with respect to such Trust shall terminate upon the
distribution to all Holders of Certificates of the series of such Trust and
the Trustee of all amounts required to be distributed to them pursuant to
this Agreement and the disposition of all property held as part of the
Trust Property of such Trust; provided, however, that in no event shall
such Trust continue beyond 21 years less one day following the death of the
last survivor of all 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 of a Trust, specifying the applicable
Regular Distribution Date (or applicable Special Distribution Date, as the
case may be) upon which the Certificateholders of any series may surrender
their Certificates to the Trustee for payment of the final distribution and
cancellation, shall be mailed promptly by the Trustee to Certificateholders
of such series not earlier than the minimum number of days and not later
than the maximum number of days specified therefor in the related Trust
Supplement preceding such final distribution specifying (A) the Regular
Distribution Date (or Special Distribution Date, as the case may be) upon
which the proposed final payment of the Certificates of such series will be
made upon presentation and surrender of Certificates of such series at the
office or agency of the Trustee therein specified, (B) the amount of any
such proposed final payment, and (C) that the Record Date otherwise
applicable to such Regular Distribution Date (or Special Distribution Date,
as the case may be) is not applicable, payments being made only upon
presentation and surrender of the Certificates of such series at the office
or agency of the Trustee therein specified. The Trustee shall give such
notice to the Registrar at the time such notice is given to
Certificateholders of such series. Upon presentation and surrender of the
Certificates of such series in accordance with such notice, the Trustee
shall cause to be distributed to Certificateholders of such series amounts
distributable on such Regular Distribution Date (or Special Distribution
Date, as the case may be) pursuant to Section 4.02.
In the event that all of the Certificateholders of such series shall
not surrender their Certificates for cancellation within six months after
the date specified in the above-mentioned written notice, the Trustee shall
give a second written notice to the remaining Certificateholders of such
series to surrender their Certificates for cancellation and receive the
final distribution with respect thereto. No additional interest shall
accrue on the Certificates of such series after any Regular Distribution
Date (or Special Distribution Date, as the case may be) of such series, as
specified in the first written notice. In the event that any money held by
the Trustee for the payment of distributions on the Certificates of such
series shall remain unclaimed for two years (or such lesser time as the
Trustee shall be satisfied, after 60 days' notice from the Company, is one
month prior to the escheat period provided under applicable law) after the
final distribution date with respect thereto, the Trustee shall pay to each
Loan Trustee the appropriate amount of money relating to such Loan Trustee
and shall give written notice thereof to the related Owner Trustees and the
Company.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Limitation on Rights of Certificateholders. The death
or incapacity of any Certificateholder of any series shall not operate to
terminate this Agreement or the related Trust, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting
or to take any action or commence any proceeding in any court for a
partition or winding up of the Trust, nor otherwise affect the rights,
obligations, and liabilities of the parties hereto or any of them.
Section 12.02. Liabilities of Certificateholders. Neither the
existence of the Trust nor any provision in this Agreement is intended to
or shall limit the liability the Certificateholders would otherwise incur
if the Certificateholders owned Trust Property as co-owners, or incurred
any obligations of the Trust, directly rather than through the Trust.
Section 12.03. Registration of Equipment Notes in Name of
Subordination Agent. If a Trust is party to an Intercreditor Agreement, the
Trustee agrees that all Equipment Notes to be purchased by such Trust shall
be issued in the name of the Subordination Agent under such Intercreditor
Agreement or its nominee and held by such Subordination Agent in trust for
the benefit of the Certificateholders, or, if not so held, such
Subordination Agent or its nominee shall be reflected as the owner of such
Equipment Notes in the register of the issuer of such Equipment Notes.
Section 12.04. Notices. (a) Unless otherwise specifically provided
herein or in the applicable Trust Supplement with respect to any Trust, all
notices required under the terms and provisions of this Basic Agreement or
such Trust Supplement with respect to such Trust shall be in English and in
writing, and any such notice may be given by United States mail, courier
service or telecopy, and any such notice shall be effective when delivered
or received or, if mailed, three days after deposit in the United States
mail with proper postage for ordinary mail prepaid,
if to the Company:
US Airways, Inc.
2345 Crystal Drive
Arlington, VA 22227
Attention: Treasurer
Telephone: (703) 872-5918
Fax: (703) 872-5936
with a copy to the attention of the Buyer's Office of the General
Counsel at the same address:
Attention: Aircraft Counsel
Fax: (703) 872-5252
if to the Trustee:
State Street Bank and Trust Company
Two International Place, 4th Floor
Boston, MA 02110
Attention: Corporate Trust Department
Facsimile: (617) 664-5151
Telephone: (617) 664-5340
(b) The Company or the Trustee, by notice to the other, may
designate additional or different addresses for subsequent notices or
communications.
(c) Any notice or communication to Certificateholders of any
series shall be mailed by first-class mail to the addresses for
Certificateholders of such series shown on the Register kept by the
Registrar and to addresses filed with the Trustee for Certificate Owners of
such series. Failure so to mail a notice or communication or any defect in
such notice or communication shall not affect its sufficiency with respect
to other Certificateholders or Certificate Owners of such series.
(d) If a notice or communication is mailed in the manner
provided above within the time prescribed, it is conclusively presumed to
have been duly given, whether or not the addressee receives it.
(e) If the Company mails a notice or communication to the
Certificateholders of such series, it shall mail a copy to the Trustee and
to each Paying Agent for such series at the same time.
(f) Notwithstanding the foregoing, all communications or
notices to the Trustee shall be deemed to be given only when received by a
Responsible Officer of the Trustee.
(g) The Trustee shall promptly furnish the Company with a copy
of any demand, notice or written communication received by the Trustee
hereunder from any Certificateholder, Owner Trustee or Loan Trustee.
Section 12.05. Governing Law. THIS BASIC AGREEMENT, TOGETHER WITH ALL
TRUST SUPPLEMENTS AND CERTIFICATES, SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 12.06. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements,
provisions, or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in
no way affect the validity or enforceability of the other provisions of
this Agreement or the related Trust, or of the Certificates of such series
or the rights of the Certificateholders thereof.
Section 12.07. Trust Indenture Act Controls. This Agreement is
subject to the provisions of the Trust Indenture Act and shall, to the
extent applicable, be governed by such provisions. If any provision of this
Agreement limits, qualifies or conflicts with another provision which is
required to be included in this Agreement by the Trust Indenture Act, the
required provision shall control.
Section 12.08. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience
only and shall not affect the construction hereof.
Section 12.09. Successors and Assigns. All covenants, agreements,
representations and warranties in this Agreement by the Trustee and the
Company shall bind and, to the extent permitted hereby, shall inure to the
benefit of and be enforceable by their respective successors and assigns,
whether so expressed or not.
Section 12.10. Benefits of Agreement. Nothing in this Agreement or in
the Certificates of any series, express or implied, shall give to any
Person, other than the parties hereto and their successors hereunder, and
the Certificateholders of each series, any benefit or any legal or
equitable right, remedy or claim under this Agreement.
Section 12.11. Legal Holidays. In any case where any Regular
Distribution Date or Special Distribution Date relating to any Certificate
of any series shall not be a Business Day with respect to such series, then
(notwithstanding any other provision of this Agreement) payment need not be
made on such date, but may be made on the next succeeding Business Day with
the same force and effect as if made on such Regular Distribution Date or
Special Distribution Date, and no interest shall accrue during the
intervening period.
Section 12.12. Counterparts. For the purpose of facilitating the
execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which
counterparts shall constitute but one and the same instrument.
Section 12.13. Communication by Certificateholders With Other
Certificateholders. Certificateholders of any series may communicate with
other Certificateholders of such series with respect to their rights under
this Basic Agreement, the related Trust Supplement or the Certificates of
such series pursuant to Section 312(b) of the Trust Indenture Act. The
Company, the Trustee and any and all other persons benefitted by this
Agreement shall have the protection afforded by Section 312(c) of the Trust
Indenture Act.
Section 12.14. Intention of Parties. The parties hereto intend that
each Trust be classified for U.S. federal income tax purposes as a grantor
trust under Subpart E, Part I of Subchapter J of the Internal Revenue Code
of 1986, as amended, and not as a trust or association taxable as a
corporation or as a partnership. The powers granted and obligations
undertaken pursuant to this Agreement shall be so construed so as to
further such intent.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the
day and year first written above.
US AIRWAYS, INC.
By: /s/ Thomas A. Mutryn
-----------------------------
Name: Thomas A. Mutryn
Title: Senior Vice President,
Finance and Chief
Financial Officer
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: /s/ Ruth A. Smith
-----------------------------
Name: Ruth A. Smith
Title: Vice President
EXHIBIT A
FORM OF CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.(1)
- -------------
(1) This legend to appear on Book-Entry Certificates to be deposited with
The Depository Trust Company.
US AIRWAYS ____________ PASS THROUGH TRUST
Pass Through Certificate, Series _________
Final Regular Distribution Date: _______, ____
evidencing a fractional undivided interest in
a trust, the property of which includes certain
equipment notes each secured by Aircraft owned
by or leased to US Airways, Inc.
Certificate
No._________ $__________ Fractional Undivided Interest representing
._____% of the Trust per $1,000 face amount
THIS CERTIFIES THAT __________________, for value received, is the
registered owner of a $___________ (________ dollars) Fractional Undivided
Interest in the US Airways Pass Through Trust, Series [___] (the "Trust")
created by State Street Bank and Trust Company, as trustee (the "Trustee"),
pursuant to a Pass Through Trust Agreement dated as of [ ], 1998 (the
"Basic Agreement"), as supplemented by Trust Supplement No. _______ thereto
dated __________, ____(collectively, the "Agreement"), between the Trustee
and US Airways, Inc., a corporation incorporated under Delaware law (the
"Company"), a summary of certain of the pertinent provisions of which is
set forth below. To the extent not otherwise defined herein, the
capitalized terms used herein have the meanings assigned to them in the
Agreement. This Certificate is one of the duly authorized Certificates
designated as "___% US Airways Pass Through Certificate, Series ____"
(herein called the "Certificates"). This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement. By virtue
of its acceptance hereof, the Certificateholder of this Certificate assents
to and agrees to be bound by the provisions of the Agreement and any
related Intercreditor Agreement. The property of the Trust includes certain
Equipment Notes and all rights of the Trust to receive any payments under
any Intercreditor Agreement or Liquidity Facility (the "Trust Property").
Each issue of the Equipment Notes is or will be secured by, among other
things, a security interest in aircraft leased to or owned by the Company.
The Certificates represent fractional undivided interests in the
Trust and the Trust Property, and have no rights, benefits or interest in
respect of any other separate trust established pursuant to the terms of
the Basic Agreement for any other series of certificates issued pursuant
thereto.
Subject to and in accordance with the terms of the Agreement and any
related Intercreditor Agreement, from funds then available to the Trustee,
there will be distributed on each __________ and ___________ (a "Regular
Distribution Date"), commencing on _________, 199_, to the Person in whose
name this Certificate is registered at the close of business on the 15th
day preceding the Regular Distribution Date, an amount in respect of the
Scheduled Payments on the Equipment Notes due on such Regular Distribution
Date, the receipt of which has been confirmed by the Trustee, equal to the
product of the percentage interest in the Trust evidenced by this
Certificate and an amount equal to the sum of such Scheduled Payments.
Subject to and in accordance with the terms of the Agreement and any
related Intercreditor Agreement, in the event that Special Payments on the
Equipment Notes are received by the Trustee, from funds then available to
the Trustee, there shall be distributed on the applicable Special
Distribution Date, to the Person in whose name this Certificate is
registered at the close of business on the 15th day preceding the Special
Distribution Date, an amount in respect of such Special Payments on the
Equipment Notes, the receipt of which has been confirmed by the Trustee,
equal to the product of the percentage interest in the Trust evidenced by
this Certificate and an amount equal to the sum of such Special Payments so
received. If a Regular Distribution Date or Special Distribution Date is
not a Business Day, distribution shall be made on the immediately following
Business Day with the same force and effect as if made on such Regular
Distribution Date or Special Distribution Date and no interest shall accrue
during the intervening period. The Trustee shall mail notice of each
Special Payment and the Special Distribution Date therefor to the
Certificateholder of this Certificate.
Distributions on this Certificate will be made by the Trustee by
check mailed to the Person entitled thereto, without the presentation or
surrender of this Certificate or the making of any notation hereon. Except
as otherwise provided in the Agreement and notwithstanding the above, the
final distribution on this Certificate will be made after notice mailed by
the Trustee of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the office or agency of the Trustee
specified in such notice.
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company or the Trustee or
any affiliate thereof. The Certificates are limited in right of payment,
all as more specifically set forth on the face hereof and in the Agreement.
All payments or distributions made to Certificateholders under the
Agreement shall be made only from the Trust Property and only to the extent
that the Trustee shall have sufficient income or proceeds from the Trust
Property to make such payments in accordance with the terms of the
Agreement. Each Certificateholder of this Certificate, by its acceptance
hereof, agrees that it will look solely to the income and proceeds from the
Trust Property to the extent available for distribution to such
Certificateholder as provided in the Agreement. This Certificate does not
purport to summarize the Agreement and reference is made to the Agreement
for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby. A copy of the Agreement
may be examined during normal business hours at the principal office of the
Trustee, and at such other places, if any, designated by the Trustee, by
any Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any
time by the Company and the Trustee with the consent of the
Certificateholders holding Certificates evidencing Fractional Undivided
Interests aggregating not less than a majority in interest in the Trust.
Any such consent by the Certificateholder of this Certificate shall be
conclusive and binding on such Certificateholder and upon all future
Certificateholders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange hereof or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without
the consent of the Certificateholders of any of the Certificates.
As provided in the Agreement and subject to certain limitations set
forth, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the offices
or agencies maintained by the Trustee in its capacity as Registrar, or by
any successor Registrar duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the
Registrar, duly executed by the Certificateholder hereof or such
Certificateholder's attorney duly authorized in writing, and thereupon one
or more new Certificates of authorized denominations evidencing the same
aggregate Fractional Undivided Interest in the Trust will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $1,000 Fractional Undivided Interest
and integral multiples thereof except that one Certificate may be issued in
a different denomination. As provided in the Agreement and subject to
certain limitations therein set forth, the Certificates are exchangeable
for new Certificates of authorized denominations evidencing the same
aggregate Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee shall require payment of a sum sufficient to
cover any tax or governmental charge payable in connection therewith.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered
as the owner hereof for all purposes, and neither the Trustee, the
Registrar, nor any such agent shall be affected by any notice to the
contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them
pursuant to the Agreement and the disposition of all property held as part
of the Trust Property.
THIS CERTIFICATE AND THE AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES AND CERTIFICATEHOLDERS HEREUNDER AND THEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to
any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
US AIRWAYS PASS THROUGH TRUST
By: STATE STREET BANK
AND TRUST COMPANY
as Trustee
By: __________________________
Title: _______________________
Dated: _________________
[FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Certificates
referred to in the
within-mentioned Agreement.
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: ______________________________
Authorized Officer
EXHIBIT 4.5
TRUST SUPPLEMENT No. 1998-1C
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 1998-1C
6.82% US Airways
Pass Through Certificates,
Series 1998-1C
This Trust Supplement No. 1998-1C, dated as of December 14, 1998
(herein called the "Trust Supplement"), between US Airways, 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 has received delivery of four Aircraft and
has obtained commitments from Airbus for the delivery of certain additional
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 1998-1C (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;
WHEREAS, the Escrow Agent, the Trustee, the Escrow Paying Agent,
and AIFS have contemporaneously herewith entered into an Escrow Agreement
with the Escrow Paying Agent pursuant to which AIFS has delivered to the
Escrow Agent a portion of the proceeds from the sale of the Applicable
Certificates and has 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 Airbus 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 Citibank, N.A. 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 F hereto (the "Delivered
Aircraft Equipment Notes") in respect of each of the four Aircraft
delivered prior to the date hereof and one additional Aircraft delivered on
or shortly after the date hereof (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; and
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.
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 "6.82% US Airways Pass Through Certificates, Series 1998-1C"
(including the Exchange Certificates and the Private Exchange Certificates,
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 and in connection
with the performance of the Registration Agreement) is $141,366,000.
(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.
(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 E.
(f) The Applicable Certificates are subject to the Intercreditor
Agreement, the Deposit Agreement, and the Escrow Agreement.
(g) The Applicable Certificates will have the benefit of the
Liquidity Facility and the Registration Agreement.
(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. Capitalized terms used herein and
not defined herein shall have the meaning ascribed to them in the Basic
Agreement. 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.
AIFS: Means Airbus Industrie Financial Services.
Airbus: Means Airbus Industrie G.I.E.
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.
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.
Class C Certificate Purchase Agreement: Means the Purchase
Agreement dated as of the date hereof between US Airways, Inc. and
AIFS.
Class C Special Indemnity Payment: Has the meaning specified in
the Participation Agreements.
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
Citibank, N.A. and the Escrow Agent, as the same may be amended,
supplemented or otherwise modified from time to time in accordance
with its terms.
DTC: The Depository Trust Company, its nominees and their
respective successors.
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 AIFS,
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.
Exchange Certificate: Means any of the certificates,
substantially in the form of Exhibit A, issued in exchange for an
Initial Certificate pursuant to the Registration Agreement and
authenticated under this Agreement.
Exchange Offer Registration Statement: Means the Exchange Offer
Registration Statement defined in the Registration Agreement.
Final Maturity Date: Means January 30, 2016.
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.
Global Certificates: Has the meaning assigned to such term in
Section 9.01(a).
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 Note Purchase Agreement or
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.
Initial Certificate: Means any of the certificates issued and
authenticated, under this Agreement, substantially in the form of
Exhibit A, other than an Exchange Certificate or a Private Exchange
Certificate.
Institutional Accredited Investor or IAI: Means an institutional
investor that is an "accredited investor" within the meaning set forth
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act.
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 AIFS 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.
Non-U.S. Person: Means a Person that is not a "U.S. person," as
defined in Regulation S.
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 Equipment Notes by the Trustee on behalf of the Trust, as the same
may be amended, supplemented or otherwise modified from time to time,
in accordance with its terms.
Notice of Purchase Withdrawal: Has the meaning specified in the
Deposit Agreement.
Offering Memorandum: Means the Offering Memorandum dated
December 14, 1998, relating to the offering of the Applicable
Certificates.
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 No. 1998-1B dated the date hereof
relating to US Airways Pass Through Trust 1998-1B.
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 1998-1B, 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 F 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.
Physical Certificates: Has the meaning specified in Section
9.01(b).
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 other than payments made in respect of
interest or premium thereon or reimbursement of any costs or expenses
incurred in connection therewith. The Pool Balance as of any
Distribution Date shall be computed after giving effect to 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 F 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 F 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.
Private Exchange Certificate: Means any of the certificates,
substantially in the form of Exhibit A, issued in exchange for an
Initial Certificate pursuant to the Registration Agreement and
authenticated under this Agreement.
Private Placement Legend: Has the meaning specified in Section
9.02(a).
QIB: Means a "qualified institutional buyer" as defined in Rule
144A.
Registration Agreement: Means the Registration Agreement, dated
as of the date hereof, between the Initial Purchaser, the Trustee and
the Company, as amended, supplemented or otherwise modified from time
to time in accordance with its terms.
Registration Statement: Means the Registration Statement defined
in the Registration Agreement.
Rule 144A: Means Rule 144A under the Securities Act and any
successor rule thereto.
SEC: Means the Securities and Exchange Commission, as from time
to time constituted or created under the Securities Exchange Act of
1934, as amended, or, if at any time after the execution of this
instrument such Commission is not existing and performing the duties
now assigned to it under the Trust Indenture Act, then the body
performing such duties on such date.
Securities Act: Means the United States Securities Act of 1933,
as amended from time to time, or any successor thereto.
Special Redemption Premium: Means the premium payable by the
Company in respect of the Final Withdrawal pursuant to the Note
Purchase Agreement.
Special Payment: Means any payment (other than a Scheduled
Payment) in respect of, or any proceeds of, any Equipment Note or
Trust Indenture Estate (as defined in each Indenture) or Special
Redemption Premium.
Substitute Aircraft: Has the meaning specified in the Note
Purchase Agreement.
Termination Date: Means the date on which first occurs a
"Termination Event" as defined in that certain Aircraft Financing
Letter Agreement, dated as of October 31, 1997 between AVSA, S.A.R.L.
and the Company.
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.
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.
(e) Upon the payment of a Class C Special Indemnity Payment to
the Trustee under the Participation Agreement or a Class C Special
Deposit Payment to the Trustee under the Note Purchase Agreement, the
Trustee, upon receipt thereof, shall immediately deposit the aggregate
amount of such payments in the Certificate Account.
(f) Distribute the amount of each Class C Special Indemnity
Payment or Class C Special Deposit Payment, if any, on the next
succeeding Regular Distribution Date after the Trustee has confirmed
receipt of any such payment.
(g) If any Class C Special Indemnity Payment or Class C Special
Deposit Payment is distributed on a Regular Distribution Date, the
information required to be provided to Certificateholders pursuant to
Section 4.03(a) of the Basic Agreement shall include the amount of
such distribution allocable to any such 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 $100,000 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;
(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 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 3.03 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 (which shall not
expire upon any purchase of the Class A Certificates pursuant to the
agreements governing the Class B Trust) 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 and the Class B Certificates upon ten
days' written notice to the Class A Trustee, the Class B 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 and the Class B 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
and the Class B Certificates pursuant to this Section 4.01(a)
As used in this Section 4.01(a), the terms "Class A
Certificateholder", "Class A Trust", "Class A Certificate", "Class A
Trustee", "Class B Certificateholder", "Class B Trust", "Class B
Certificate" and "Class B Trustee" shall have the respective meanings
assigned to such terms in the Intercreditor Agreement.
(b) Except as expressly set forth above, 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, the
Participation Agreements relating to the Delivered Aircraft and the
Registration Agreement 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 Class C Certificate Purchase 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 Class C Certificate Purchase
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 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 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 F 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 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 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 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 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 or the
Termination Date, (i) (A) the Trustee shall give the Escrow Agent notice
that the Trustee's obligation to purchase Equipment Notes under the Note
Purchase Agreement has terminated and instruct the Escrow Agent to provide
a notice of Final Withdrawal to the Depositary substantially in the form of
Exhibit B to the Deposit Agreement (the "Final Withdrawal Notice") and (B)
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, the Note Documents and the
Registration Agreement 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, the Note Documents and the Registration Agreement 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, the Note Documents and the Registration Agreement to which
it is a party (i) will not violate any provision of any United States
federal law or the law of the state of the United States where it is
located governing the banking and trust powers of the Trustee or any
order, writ, judgment, or decree of any court, arbitrator or
governmental authority applicable to the Trustee or any of its assets,
(ii) will not violate any provision of the articles of association or
by-laws of the Trustee, and (iii) will not violate any provision of,
or constitute, with or without notice or lapse of time, a default
under, or result in the creation or imposition of any lien on any
properties included in the Trust Property pursuant to the provisions
of any mortgage, indenture, contract, agreement or other undertaking
to which it is a party, which violation, default or lien could
reasonably be expected to have an adverse effect on the Trustee's
performance or ability to perform its duties hereunder or thereunder
or on the transactions contemplated herein or therein;
(c) the execution, delivery and performance by the Trustee of
this Trust Supplement, the Intercreditor Agreement, the Escrow
Agreement, the Note Documents and the Registration Agreement 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, the Note Documents and the Registration Agreement 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 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 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
MISCELLANEOUS PROVISIONS
Section 8.01. 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 8.02. 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 8.03. 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 8.04. 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.
ARTICLE IX
THE CERTIFICATES
Section 9.01. Additions to Article III of the Basic Agreement.
In addition to the provisions of Article III of the Basic Agreement, the
following provisions shall apply to the Applicable Trust:
(a) Initial Certificates offered and sold in reliance on Rule
144A or to an Institutional Accredited Investor, or resold in reliance on
Regulation S and Rule 904 under the Securities Act, each shall be issued
initially in the form of one or more permanent global Certificates in
registered form, substantially in the form set forth as Exhibit A
(respectively, the "144A Global Certificate," the "IAI Global Certificate,"
and the "Regulation S Global Certificate," each, a "Global Certificate"),
duly executed and authenticated by the Trustee as provided in Section 3.02
of the Basic Agreement. The Global Certificates shall be registered in the
name of Cede & Co., as nominee for DTC, and deposited with the Trustee, as
custodian for DTC. The aggregate principal amount of the Global
Certificates may from time to time be decreased by adjustments made on the
records of DTC or its nominee, or of the Trustee, as custodian for DTC or
its nominee, as hereinafter provided.
(b) Initial Certificates offered and sold other than pursuant to
Rule 144A or pursuant to Regulation S or to Institutional Accredited
Investors shall be issued in the form of permanent certificated
Certificates in registered form, in substantially the form set forth as
Exhibit A (the "Physical Certificates"). All other Certificates shall be
Global Certificates.
(c) The Applicable Certificates shall be in registered form and
shall be typed, printed, lithographed or engraved or produced by any
combination of these methods or may be produced in any other manner, all as
determined by the officers executing such Certificates, as evidenced by
their execution of such Certificates.
Section 9.02 Restrictive Legends. Subject to Section 9.03(a)
of this Trust Supplement, unless and until (i) an Initial Certificate or a
Private Exchange Certificate is sold under an effective Registration
Statement, (ii) an Initial Certificate is exchanged for an Exchange
Certificate pursuant to an effective Exchange Offer Registration Statement,
(iii) an Initial Certificate or a Private Exchange Certificate is sold
pursuant to Rule 144, (iv) as otherwise provided in the Private Placement
Legend or (v) the Company and the holder thereof otherwise agree, in each
case as provided for in the Registration Agreement, each Global Certificate
and each Physical Certificate shall bear the following legend (the "Private
Placement Legend") on the face thereof:
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS
AND ACCORDINGLY, THIS CERTIFICATE OR ANY INTEREST OR PARTICIPATION HEREIN
MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, ANY PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER: (1) REPRESENTS THAT (A)
IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501 (a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR"), OR (C) IT IS
OTHERWISE ACQUIRING THIS CERTIFICATE IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; (2) AGREES THAT IT WILL
NOT WITHIN TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THIS
CERTIFICATE OR THE LAST DATE ON WHICH THIS CERTIFICATE WAS OWNED BY US
AIRWAYS, INC., THE TRUSTEE OR ANY AFFILIATE OF ANY SUCH PERSON RESELL OR
OTHERWISE TRANSFER THIS CERTIFICATE EXCEPT (A) TO US AIRWAYS, INC, (B) TO A
PERSON WHO THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO AN
INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING $100,000 OR MORE AGGREGATE
PRINCIPAL AMOUNT OF SUCH CERTIFICATE THAT, PRIOR TO SUCH TRANSFER,
FURNISHED TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS
AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS CERTIFICATE
(THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE), (D) PURSUANT
TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), (E) IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE SECURITIES ACT OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT; AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS CERTIFICATE IS TRANSFERRED (OTHER THAN PURSUANT TO
CLAUSES (D) AND (F) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS CERTIFICATE AS A
RESTRICTED SECURITY WITHIN TWO YEARS AFTER THE LATER OF THE ORIGINAL
ISSUANCE OF THIS CERTIFICATE OR THE LAST DATE ON WHICH THIS CERTIFICATE WAS
HELD BY US AIRWAYS, INC., THE TRUSTEE OR ANY AFFILIATE OF ANY SUCH PERSONS
THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE TRANSFER NOTICE
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE
TRUSTEE; PROVIDED THAT THE COMPANY AND THE TRUSTEE SHALL HAVE THE RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C) OR (E) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON
THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTIONS TERMINATE. THE
CLASS C TRUST SUPPLEMENT CONTAINS A PROVISION REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS CERTIFICATE IN VIOLATION OF THE
FOREGOING RESTRICTIONS.
(b) Each Global Certificate of each class shall also bear the
following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IN EXCHANGE FOR THIS CERTIFICATE
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
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF
OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
CERTIFICATE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTION 9.03 OF THE TRUST SUPPLEMENT NO.
1998-1C.
(c) Each Certificate shall also bear the following legend on the
face thereof:
ANY PERSON ACQUIRING OR ACCEPTING THIS CERTIFICATE OR AN INTEREST
HEREIN WILL, BY SUCH ACQUISITION OR ACCEPTANCE, BE DEEMED TO HAVE
REPRESENTED AND WARRANTED THAT EITHER: (I) THE ASSETS OF AN EMPLOYEE
BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR OF A PLAN SUBJECT TO
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), HAVE NOT BEEN USED TO PURCHASE THIS CERTIFICATE OR AN
INTEREST HEREIN OR (II) THE PURCHASE AND HOLDING OF THIS CERTIFICATE
OR INTEREST HEREIN ARE EXEMPT FROM THE PROHIBITED TRANSACTION
RESTRICTIONS OF ERISA AND THE CODE PURSUANT TO ONE OR MORE PROHIBITED
TRANSACTION STATUTORY OR ADMINISTRATIVE EXEMPTIONS.
Section 9.03. Special Transfer Provisions. Unless and until
(i) an Initial Certificate or a Private Exchange Certificate is sold under
an effective Registration Statement, (ii) an Initial Certificate is
exchanged for an Exchange Certificate pursuant to an effective Exchange
Offer Registration Statement, (iii) an Initial Certificate or a Private
Exchange Certificate is sold pursuant to Rule 144, (iv) as otherwise
provided in the Private Placement Legend or (v) the Company and the holder
thereof otherwise agree, the Registrar shall refuse to register any
exchange except in accordance with the following provisions:
(a) Private Placement Legend. Upon the transfer, exchange or
replacement of Applicable Certificates not bearing the Private Placement
Legend, the Registrar shall deliver Applicable Certificates that do not
bear the Private Placement Legend. Upon the transfer, exchange or
replacement of Applicable Certificates bearing the Private Placement
Legend, the Registrar shall deliver only Applicable Certificates that bear
the Private Placement Legend, except as contemplated by Section 9.02.
(b) General. By its acceptance of any Applicable Certificate
bearing the Private Placement Legend, each Holder of such Applicable
Certificate acknowledges the restrictions on transfer of such Applicable
Certificate set forth in this Trust Supplement and agrees that it shall
transfer such Certificate only as provided in this Trust Supplement. The
Registrar shall not register a transfer of any Applicable Certificate
unless such transfer complies with the restrictions on transfer of such
Certificate set forth in this Trust Supplement. In connection with any
transfer of Applicable Certificates, each Certificateholder agrees by its
acceptance of the Applicable Certificates to furnish the Registrar or the
Trustee such certifications, legal opinions or other information as the
Private Placement Legend requires to confirm that such transfer is being
made pursuant to an exemption from, or a transaction not subject to, the
registration requirements of the Securities Act.
Until such time as no Applicable Certificates remain Outstanding,
the Registrar shall retain copies of all letters, notices and other written
communications received pursuant to this Section 9.03. The Trustee, if not
the Registrar at such time, shall have the right to inspect and make copies
of all such letters, notices or other written communications at any
reasonable time upon the giving of reasonable written notice to the
Registrar.
Transfers of the Applicable Certificates (and interests therein)
among different types of Global Certificates (including a Global
Certificate not containing a Private Placement Legend) and from Global
Certificates to a Physical Certificate and from Physical Certificates to
Global Certificates shall be made in accordance with the procedures set
forth on Exhibit G hereto which shall be prepared on a reasonable basis by
US Airways promptly after the date hereof, and shall be subject to the
reasonable approval of AIFS, and shall be provided to the Trustee.
ARTICLE X
THE COMPANY
Section 10.01. Consolidation, Merger, 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".
IN WITNESS WHEREOF, the Company and the Trustee have caused this
Trust Supplement to be duly executed by their respective officers thereto
duly authorized, as of the day and year first written above.
US AIRWAYS, INC.
By: /s/ Thomas A. Mutryn
-------------------------------
Name: Thomas A. Mutryn
Title: Sr. V.P., Finance & CFO
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: /s/ Ruth A. Smith
-------------------------------
Name: Ruth A. Smith
Title: Vice President
EXHIBIT A
FORM OF CERTIFICATE
CUSIP No._______________
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND
ACCORDINGLY, THIS CERTIFICATE OR ANY INTEREST OR PARTICIPATION HEREIN MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT
OR BENEFIT OF, ANY PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE.
BY ITS ACQUISITION HEREOF, THE HOLDER: (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501 (a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR"), OR (C) IT IS
OTHERWISE ACQUIRING THIS CERTIFICATE IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; (2) AGREES THAT IT WILL
NOT WITHIN TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THIS
CERTIFICATE OR THE LAST DATE ON WHICH THIS CERTIFICATE WAS OWNED BY US
AIRWAYS, INC., THE TRUSTEE OR ANY AFFILIATE OF ANY SUCH PERSON RESELL OR
OTHERWISE TRANSFER THIS CERTIFICATE EXCEPT (A) TO US AIRWAYS, INC., (B) TO
A PERSON WHO THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO AN
INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING $100,000 OR MORE AGGREGATE
PRINCIPAL AMOUNT OF SUCH CERTIFICATE THAT, PRIOR TO SUCH TRANSFER,
FURNISHED TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS
AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS CERTIFICATE
(THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE), (D) PURSUANT
TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), (E) IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE SECURITIES ACT OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT; AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS CERTIFICATE IS TRANSFERRED (OTHER THAN PURSUANT TO
CLAUSES (D) AND (F) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS CERTIFICATE AS A
RESTRICTED SECURITY WITHIN TWO YEARS AFTER THE LATER OF THE ORIGINAL
ISSUANCE OF THIS CERTIFICATE OR THE LAST DATE ON WHICH THIS CERTIFICATE WAS
HELD BY US AIRWAYS, INC., THE TRUSTEE OR ANY AFFILIATE OF ANY SUCH PERSONS
THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE TRANSFER NOTICE
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE
TRUSTEE; PROVIDED THAT THE COMPANY AND THE TRUSTEE SHALL HAVE THE RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C) OR (E) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON
THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTIONS TERMINATE. THE
CLASS C TRUST SUPPLEMENT CONTAINS A PROVISION REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS CERTIFICATE IN VIOLATION OF THE
FOREGOING RESTRICTIONS.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IN EXCHANGE FOR THIS CERTIFICATE 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 HEREON IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
CERTIFICATE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTION 9.03 OF THE TRUST SUPPLEMENT NO. 1998-1C.
ANY PERSON ACQUIRING OR ACCEPTING THIS CERTIFICATE OR AN INTEREST HEREIN
WILL, BY SUCH ACQUISITION OR ACCEPTANCE, BE DEEMED TO HAVE REPRESENTED AND
WARRANTED THAT EITHER: (I) THE ASSETS OF AN EMPLOYEE BENEFIT PLAN SUBJECT
TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR OF A PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), HAVE NOT BEEN USED TO
PURCHASE THIS CERTIFICATE OR AN INTEREST HEREIN OR (II) THE PURCHASE AND
HOLDING OF THIS CERTIFICATE OR INTEREST HEREIN ARE EXEMPT FROM THE
PROHIBITED TRANSACTION RESTRICTIONS OF ERISA AND THE CODE PURSUANT TO ONE
OR MORE PROHIBITED TRANSACTION STATUTORY OR ADMINISTRATIVE EXEMPTIONS.
US AIRWAYS PASS THROUGH TRUST 1998-1C
___% US Airways [Initial][Exchange] Pass Through Certificate,
Series 1998-1C
Issuance Date: _____________
Final Expected Distribution Date: July 30, 2014
Evidencing A Fractional Undivided Interest In The US Airways Pass
Through Trust 1998-1C, 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._________% of the Trust per $_____
face amount
THIS CERTIFIES THAT _________, for value received, is the
registered owner of a $___________ (________________ Dollars) Fractional
Undivided Interest in the US Airways 1998-1C Pass Through Trust (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"), as supplemented by Trust Supplement No.
1998-1C (collectively, the "Agreement") between the Trustee and US Airways,
Inc., a Delaware corporation (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 a duly
authorized global Certificate designated as "___% US Airways
[Initial][Exchange] Pass Through Certificates, Series 1998-1C" (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.
Interest applicable to this Certificate will be payable at 6.82%
per annum.
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.
The Holder of this Certificate is entitled to the benefits of the
Registration Agreement, dated as of December 14, 1998, between the Company,
the Trustee and the Purchaser named therein (the "Registration Agreement").
If (i) any Registration Statement required by the Registration Agreement is
not (i) filed with the Securities and Exchange Commission (the
"Commission") on or prior to the applicable filing deadline specified in
the Registration Agreement, (ii) any Registration Statement required by the
Registration Agreement is not declared effective by the Commission on or
prior to the applicable effectiveness deadline specified in the
Registration Agreement, (iii) the Registered Exchange Offer has not been
consummated on or prior to the consummation deadline specified in the
Registration Agreement or (iv) any Registration Statement required by the
Registration Agreement is filed and declared effective but shall thereafter
cease to be effective or fail to be usable for its intended purpose without
being succeeded within two (2) days by a post-effective amendment to such
Registration Statement that cures such failure and that is itself declared
effective within five (5) days of filing such post-effective amendment to
such Registration Statement (each such event in clauses (i) through (iv), a
"Registration Default"), then US Airways agrees to pay to the Class C Trust
for distribution to each Holder effected thereby liquidated damages in an
amount equal to the following: during the first ninety (90)-day period
immediately following the occurrence of such Registration Default, .0025
(the "Multiplier") times the aggregate principal amount of such holder's
Class C Certificates times the number of days such Registration Default
exists divided by 360 (less any amount thereof that has been paid as
provided in the next paragraph). The amount of the Multiplier shall
increase by .0025 during each subsequent ninety (90)-day period up to a
maximum Multiplier of .01. Notwithstanding the prior sentence, (1) upon
the filing of the Registered Exchange Offer Registration Statement (and/or,
if applicable, the Shelf Registration Statement), in the case of (i) above,
(2) upon the effectiveness of the Registered Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement) in the
case of (ii) above, (3) upon consummation of the Registered Exchange Offer
in the case of (iii) above, or (4) upon the filing of a post-effective
amendment to the Registration Statement or an additional Registration
Statement that causes the Registered Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement) to again be
declared effective or made usable in the case of (iv) above, the liquidated
damages payable with respect to the Securities as a result of such clause
(i), (ii), (iii) or (iv), as applicable, will cease, until such time, if
any, that another Registration Default occurs.
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 $______ 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.
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 1998-1C
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: ___________________
EXHIBIT B
FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby
sell(s), assign(s) and transfer(s) unto:
Insert Taxpayer Identification No.
-------------------
please print or typewrite name and address including zip code of assignee
-------------------
the within Certificate and all rights thereunder, hereby irrevocably
constituting and appointing
-------------------
attorney to transfer said Certificate on the books of the Trustee with full
power of substitution in the premises.
In connection with any transfer of this Certificate
occurring prior to the date that is the earlier of the date of an effective
Registration Statement or December 14, 2000, the undersigned confirms that
without utilizing any general solicitation or general advertising that:
[Check One]
[ ] (a) this Certificate is being transferred in compliance
with the exemption from registration under the
Securities Act of 1933, as amended, provided by Rule
144A thereunder.
or
[ ] (b) this Certificate is being transferred other than in
accordance with (a) above and documents are being
furnished that comply with the conditions of transfer
set forth in this Certificate and the Agreement.
If neither of the foregoing boxes is checked, the Trustee or other
Registrar shall not be obligated to register this Certificate in the name
of any Person other than the Holder hereof unless and until the conditions
to any such transfer of registration set forth herein and in Section 9.03
of the Trust Supplement shall have been satisfied.
Date: [Name of Transferor]
-------------------------------
NOTE: The signature must correspond with the
name as written upon the face of the within-
mentioned instrument in every particular,
without alteration or any change whatsoever.
Signature Guarantee:
---------------------------
EXHIBIT C
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS PURSUANT TO REGULATION S
[Date]
State Street Bank and Trust Company
[Address]
Re: US Airways Pass Through Trust 1998-1C
(the "Trust"), US Airways Pass Through
Certificates, Series 1998-1C (the "Certificates")
Dear Sirs:
In connection with our proposed sale of $_______ Fractional
Undivided Interest of the Certificates, we confirm that such sale has been
effected pursuant to and in accordance with Regulation S under the
Securities Act of 1933, as amended, and, accordingly, we represent that:
1. the offer of the Certificates was not made to a person in the
United States;
2. either (a) at the time the buy order was originated, the
transferee was outside the United States or we and any person
acting on our behalf reasonably believed that the transferee was
outside the United States or (b) the transaction was executed in,
on or through the facilities of a designated off-shore securities
market and neither we nor any person acting on our behalf knows
that the transaction has been pre-arranged with a buyer in the
United States;
3. no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S, as applicable; and
4. the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
In addition, if the sale is made during a restricted period and
the provisions of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S are
applicable thereto, we confirm that such sale has been made in accordance
with the applicable provisions of Rule 903(c)(3) or Rule 904(c)(1), as the
case may be.
You and US Airways, Inc. are entitled to rely upon this letter
and are irrevocably authorized to produce this letter or a copy hereof to
any interested party in any administrative or legal proceedings or official
inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
------------------------------
Authorized Signature
EXHIBIT D
FORM OF CERTIFICATE TO BE
DELIVERED IN CONNECTION WITH
TRANSFERS TO NON-QIB ACCREDITED INVESTORS
[Date]
State Street Bank and Trust Company
[Address]
Re: US Airways Pass Through Trust 1998-1C
(the "Trust"), US Airways Pass Through
Certificates, Series 1998-1C (the "Certificates")
Dear Sirs:
In connection with our proposed purchase of $_________ aggregate
principal amount of the Certificates, we confirm that:
1. We understand that any subsequent transfer of the Certificates is
subject to certain restrictions and conditions set forth in the
Pass Through Trust Agreement, dated as of December 4, 1998, as
supplemented by Trust Supplement No. 1998-1C, relating to the
Certificates (the "Pass Through Trust Agreement") and the
undersigned agrees to be bound by, and not to resell, pledge or
otherwise transfer the Certificates except in compliance with,
such restrictions and conditions and the Securities Act of 1933,
as amended (the "Securities Act").
2. We understand that the Certificates have not been registered
under the Securities Act, and that the Certificates may not be
offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which
we are acting as hereinafter stated, that if we should sell any
Certificate, we shall do so only (A) to US Airways, Inc., (B) to
a person who the holder reasonably believes is a "qualified
institutional buyer" in compliance with Rule 144A under the
Securities Act, (C) to an institutional "accredited investor"
acquiring $100,000 or more aggregate principal amount of such
Certificate that, prior to such transfer, furnished to the
Trustee a signed letter containing certain representations and
agreements relating to the restrictions on transfer of this
certificate (the form of which letter can be obtained from the
Trustee), (D) pursuant to the exemption from registration
provided by Rule 144 under the Securities Act (if available), (E)
in accordance with another exemption from the Securities Act or
(F) pursuant to an effective registration statement under the
Securities Act; and we further agree to provide to any person
purchasing any of the Certificates from us a notice advising such
purchaser that resales of the Notes are restricted as stated
herein. We further understand that the Certificates purchased by
us shall bear a legend to the foregoing effect.
3. We understand that, in connection with any transfer of this
Certificate as a restricted security within two years after the
later of the original issuance of this Certificate or the last
date on which this Certificate was held by US Airways, Inc., the
Trustee, or any affiliate of any such persons, the holder must
check the appropriate box set forth on the transfer notice
attached to the Certificate relating to the manner of such
transfer and submit this Certificate to the Trustee; provided
that the Company and the Trustee shall have the right prior to
any such offer, sale or transfer pursuant to clause (C) or (E) in
paragraph 2 to require the delivery of an opinion of counsel,
certification and/or other information satisfactory to each of
them. We further understand that the Certificates purchased by
us shall bear a legend to the foregoing effect.
4. We are [an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7)](1)/[a non-institutional
"accredited investor" (as defined in Rule 501(a), (4), (5), (6)
or (8)](2) of Regulation D under the Securities Act) and have such
knowledge and experience in financial and business matters as to
be [, or have access to financial, legal, accounting and tax
advisors and have consulted the same to the extent necessary for
us to be,](2) capable of evaluating the merits and risks of our
investment in the Certificates and we and any accounts for which
we are acting are each able to bear the economic risk of our or
its investment.
5. We are acquiring the Certificates purchased by us for our own
account [or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we
exercise sole investment discretion.] (1)
You and US Airways, Inc. are entitled to rely upon this letter
and are irrevocably authorized to produce this letter or a copy hereof to
any interested party in any administrative or legal proceedings or official
inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:
-------------------------------
Authorized Signature
- -----------------------
(1) For institutional accredited investors only.
(2) For non-institutional accredited investors only.
EXHIBIT E
[DTC Letter of Representations]
EXHIBIT F
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 G
OTHER SPECIAL TRANSFER PROVISIONS
The following provisions shall supplement and, to the extent
inconsistent with, shall supercede and replace Sections 3.04 and 3.05 of
the Basic Agreement.
(a) Transfers other than to QIBs, IAIs, or pursuant to Regulation
S. The following provisions shall apply with respect to the registration of
any proposed transfer of an Applicable Certificate bearing, both before and
after the transfer, a Private Placement Legend (a "Restricted Certificate")
other than to any QIB, IAI which is not a QIB, or pursuant to Regulation S:
(i) The Registrar shall register the transfer of any such
Restricted Certificate, if the proposed transferee has delivered to
the Registrar a letter substantially in the form of Exhibit D hereto,
and if (x) the proposed transferee agrees that it will not within two
years after the later of the original issuance of this certificate or
the last date on which this certificate was owned by US Airways, Inc.,
the Trustee or any affiliate of any such person resell or otherwise
transfer this certificate except (a) to US Airways, Inc., (b) to a
person who the transferee reasonably believes is a Qualified
Institutional Buyer in compliance with Rule 144A under the Securities
Act, (c) to an Institutional Accredited Investor acquiring $100,000 or
more aggregate principal amount of such Certificate that, prior to
such transfer, furnished to the Trustee a signed letter containing
certain representations and agreements relating to the restrictions on
transfer of this Certificate (the form of which letter substantially
in the form of Exhibit D), (d) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act (if
available), (e) in accordance with another exemption from the
Securities Act or (f) pursuant to an effective registration statement
under the Securities Act; (y) the proposed transferee agrees that it
will deliver to each person to whom this certificate is transferred
(other than pursuant to clauses (d) and (f) above) a notice
substantially to the effect of this legend; and (z) the proposed
transferor and transferee have delivered to the Registrar such other
documents as are required by the Private Placement Legend.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in a Global Certificate, upon receipt by the
Registrar of (x) the documents, if any, required by paragraph (i) and
(y) instructions given in accordance with DTC's and the Registrar's
procedures, the Registrar shall reflect on its books and records the
date of the transfer and a decrease in the principal amount of such
Global Certificate in an amount equal to the Fractional Undivided
Interest represented by the beneficial interest in such Global
Certificate to be transferred, and the Company shall execute, and the
Trustee shall authenticate and deliver to the transferor or at its
direction, one or more Physical Certificates of like class, tenor and
amount, or an interest in a Restricted Certificate (other than a Rule
144A Global Certificate).
(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer to a QIB:
(i) The Registrar shall register the transfer if (x) such
transfer is being made by a proposed transferor who has checked the
box provided for on the Form of Transfer Notice attached to the
Initial Certificate or Private Exchange Certificate stating, or has
otherwise advised the Trustee and the Registrar in writing, that the
sale has been made in compliance with the provisions of Rule 144A to a
transferee who the transferor reasonably believes is a QIB and has
notified the transferee that the transferor is relying upon its
foregoing representations in order to claim the exemption from
registration provided by Rule 144A; and (y) the proposed transferor
and transferee have delivered to the Registrar such other documents as
are required by the Private Placement Legend.
(ii) If the Certificate to be transferred is a Physical
Certificate, upon receipt by the Registrar of the documents referred
to in clause (i) above and instructions given in accordance with DTC's
and the Registrar's procedures therefor, the Registrar shall reflect
on its books and records the date of such transfer and an increase in
the Fractional Undivided Interest of the Rule 144A Global Certificate
in an amount equal to the Fractional Undivided Interest of the
Physical Certificates being transferred, and the Trustee shall cancel
such Physical Certificates. If the proposed transfer is a transfer of
a beneficial interest in one Global Certificate, the provisions of
paragraph (e) below shall apply.
(c) Transfers to IAIs. The following provisions shall apply
with respect to the registration of any proposed transfer of, or an
interest in, a Restricted Certificate (other than the IAI Global
Certificate) to an IAI who is not a QIB:
(i) The Registrar shall register the transfer if the
proposed transferee has delivered to the Registrar a letter
substantially in the form of Exhibit D and the proposed transferor and
transferee have delivered to the Registrar such other documents as are
required by the Private Placement Legend.
(ii) If the Certificate to be transferred is a Physical
Certificate, upon receipt by the Registrar of the documents referred
to in clause (i) above and instructions given in accordance with DTC's
and the Registrar's procedures therefor, the Registrar shall reflect
on its books and records the date of such transfer and an increase in
the Fractional Undivided Interest of the IAI Global Certificate in an
amount equal to the Fractional Undivided Interest of the Physical
Certificates being transferred, and the Trustee shall cancel such
Physical Certificates. If the proposed transfer is a transfer of a
beneficial interest in one Global Certificate to a beneficial interest
in another Global Certificate, the provisions of paragraph (e) below
shall apply.
(d) Transfers to Non-U.S. Persons. The following provisions
shall apply with respect to any registration of any transfer of an Initial
Certificate in accordance with Regulation S:
(i) The Registrar shall register any proposed transfer to
any Non-U.S. Person if the Certificate to be transferred is a Physical
Certificate or an interest in the Global Certificate, upon receipt of
a certificate substantially in the form of Exhibit C from the proposed
transferor. The Registrar shall promptly send a copy of such
certificate to the Company.
(ii) Upon receipt by the Registrar of (x) the documents, if
any, required by paragraph (ii) and (y) instructions in accordance
with DTC's and the Registrar's procedures, the Registrar shall reflect
on its books and records the date of such transfer and a decrease in
the Fractional Undivided Interest of such Global Certificate in an
amount equal to the Fractional Undivided Interest represented by the
beneficial interest in such Global Certificate to be transferred, and
(B) upon receipt by the Registrar of instructions given in accordance
with DTC's and the Registrar's procedures, the Registrar shall reflect
on its books and records the date and an increase in the Fractional
Undivided Interest of the Regulation S Global Certificate in an amount
equal to the Fractional Undivided Interest of the Physical Certificate
or the Regulation S Global Certificate to be transferred, and the
Trustee shall cancel the Physical Certificate if any, so transferred
or decrease the Fractional Undivided Interest of such Global
Certificate.
(iii) Upon a sale or transfer after the expiration of the
"restricted period" as defined in Regulation S of any Restricted
Certificate acquired pursuant to Regulation S, such Certificate shall
no longer bear the Private Placement Legend.
(e) Transfers of and between Global Certificates. (i) Transfers
of any Global Certificate shall be limited to transfers of such Global
Certificate in whole, but not in part, to nominees of DTC, its successor or
such successor's nominees. Beneficial interests in the Global Certificate
may be transferred in accordance with the rules and procedures of DTC and
the provisions of Section 9.03 and this Exhibit G. If the proposed transfer
is a transfer of a beneficial interest in one Global Certificate to a
beneficial interest in another Global Certificate, the Registrar shall
reflect on its books and records the date of such transfer and an increase
in the principal amount of the Global Certificate to which such interest is
being transferred in an amount equal to the principal amount of the
interest to be so transferred, and the Registrar shall reflect on its books
and records the date of such transfer and a corresponding decrease in the
principal amount of the Global Certificate from which such interest is
being transferred.
EXHIBIT 4.6
DEPOSIT AGREEMENT
(Class C)
Dated as of December 14, 1998
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION
as Escrow Agent
and
CITIBANK, N.A.
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 . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE IV PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE V REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . 6
ARTICLE VI TRANSFER . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE VII AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE VIII NOTICES . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE IX OBLIGATIONS UNCONDITIONAL . . . . . . . . . . . . . . . . 8
ARTICLE X ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . 8
ARTICLE XI GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE XII WAIVER OF JURY TRIAL RIGHT . . . . . . . . . . . . . . . 9
ARTICLE XIII COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . 9
Schedule I Schedule of Deposits
Exhibit A Notice of Purchase Withdrawal
Exhibit B Notice of Final Withdrawal
This DEPOSIT AGREEMENT (Class C) 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 Citibank, N.A., a national banking
association, 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 1998-1C pursuant to which the US Airways Pass Through Trust,
Series 1998-1C Certificates referred to therein (the "Certificates") are
being issued;
WHEREAS, US Airways and Airbus Industrie Financial Services, a
corporation formed under the laws of Ireland ("AIFS") have entered into a
Purchase Agreement dated as of December 14, 1998 pursuant to which US
Airways will cause the Pass Through Trustee to issue and sell the
Certificates to AIFS;
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, AIFS, 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, AIFS and the Pass Through Trustee intend that the Net
Proceeds be held in escrow by the Escrow Agent on behalf of AIFS and its
successors, assigns and transferees as registered owners of the
Certificates (together, with AIFS, 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 AIFS and the other Investors and to establish accounts from
which the Escrow Agent shall make withdrawals upon request of and proper
certification by the Pass Through Trustee.
NOW, THEREFORE, in consideration of the obligations contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby
agree as follows:
ARTICLE I
FORMATION OF DEPOSITS
Section 1.1 Acceptance of Depositary. The Depositary hereby
agrees to act as depositary bank as provided herein and in connection
therewith to accept all amounts to be delivered to or held by the
Depositary pursuant to the terms of this Agreement. The Depositary further
agrees to hold, maintain and safeguard the Deposits and the Accounts (as
defined below) during the term of this Agreement in accordance with the
provisions of this Agreement. The Escrow Agent shall not have any right to
withdraw, assign or otherwise transfer moneys held in the Accounts except
as permitted by this Agreement.
Section 1.2 Establishment of Accounts. The Escrow Agent hereby
instructs the Depositary, and the Depositary agrees, to establish the
separate deposit accounts listed on Schedule I hereto and to establish such
additional separate deposit accounts as may be required in connection with
the deposits contemplated by Section 2.4 hereof (each, an "Account" and
collectively, the "Accounts"), each in the name of the Escrow Agent and all
on the terms and conditions set forth in this Agreement.
ARTICLE II
MAINTENANCE OF DEPOSITS
Section 2.1 Deposits. The Escrow Agent shall direct AIFS 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: Citibank, N.A., Reference: US Airways 1998-1, A/C#
3064-0009, ABA# 021000089 and the Depositary shall accept from AIFS on
behalf of the Escrow Agent the sum of US$112,495,918. 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 6.82% 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 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 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.
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 and (ii) pay the
full amount deducted or withheld (including in respect of such additional
amounts) to the competent taxation authority. 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;
(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
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 shall be deemed to be given and effective upon receipt
thereof. All notices shall be sent to (x) in the case of the Depositary,
Citibank, N.A., 450 Mamaroneck Avenue, 3rd Floor, Harrison, NY 10528,
Attention: Tara Ramnarine (Telecopier: 914-899-7163 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 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.
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: /s/ C. Scott Nielsen
---------------------------------
Name: C. Scott Nielsen
Title: Vice President
CITIBANK, N.A., as Depositary
By: /s/ Arthur Deffar
--------------------------------
Name: Arthur Deffar
Title: Managing Director
Schedule I
SCHEDULE OF DEPOSITS
--------------------
(Class C)
DATE TAIL NO. DEPOSIT AMOUNT ACCOUNT NO. MATURITY DATE
12/14/98 N705UW $5,793,467 3064-0009 10/31/1999
12/14/98 N101UW 7,063,070 3064-0009 10/31/1999
12/14/98 N706US 5,793,467 3064-0009 10/31/1999
12/14/98 N707UW 5,793,467 3064-0009 10/31/1999
12/14/98 N708UW 5,788,248 3064-0009 10/31/1999
12/14/98 N709UW 5,797,284 3064-0009 10/31/1999
12/14/98 N102UW 7,110,663 3064-0009 10/31/1999
12/14/98 N103US 7,110,663 3064-0009 10/31/1999
12/14/98 N710UW 5,823,677 3064-0009 10/31/1999
12/14/98 N104UW 7,125,015 3064-0009 10/31/1999
12/14/98 N105UW 7,125,015 3064-0009 10/31/1999
12/14/98 N711UW 5,831,762 3064-0009 10/31/1999
12/14/98 N712US 5,831,762 3064-0009 10/31/1999
12/14/98 N106US 7,134,730 3064-0009 10/31/1999
12/14/98 N713UW 5,843,407 3064-0009 10/31/1999
12/14/98 N714US 5,843,407 3064-0009 10/31/1999
12/14/98 N715UW 5,843,407 3064-0009 10/31/1999
12/14/98 N716UW 5,843,407 3064-0009 10/31/1999
EXHIBIT A
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:___________, ____
cc: Art Deffaa
Telecopy No.: (212) 793-3734
EXHIBIT B
NOTICE OF FINAL 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. (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:__________, ____
cc: Art Deffaa
Telecopy No.: (212) 793-3734
EXHIBIT 4.9
ESCROW AND PAYING AGENT AGREEMENT
(Class C)
Dated as of December 14, 1998
among
FIRST SECURITY BANK, NATIONAL ASSOCIATION
as Escrow Agent
AIRBUS INDUSTRIE FINANCIAL SERVICES
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 1998-1C
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 . . . . . . . . . . . 4
Section 1.5 Mutilated, Destroyed, Lost or Stolen
Escrow Receipt . . . . . . . . . . . . . . . . . 5
Section 1.6 Additional Escrow Amounts . . . . . . . . . . . 5
Section 1.7 Resignation or Removal of Escrow Agent . . . . . 6
Section 1.8 Persons Deemed Owners . . . . . . . . . . . . . 6
Section 1.9 Further Assurances . . . . . . . . . . . . . . . 6
SECTION 2. Paying Agent . . . . . . . . . . . . . . . . . . . . 6
Section 2.1 Appointment of Paying Agent . . . . . . . . . . 6
Section 2.2 Establishment of Paying Agent Account . . . . . 7
Section 2.3 Payments from Paying Agent Account . . . . . . . 7
Section 2.4 Withholding Taxes . . . . . . . . . . . . . . . 8
Section 2.5 Resignation or Removal of Paying Agent . . . . . 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 . . . . . . . . . . . . . . . . . . . . . . . 10
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 . . . . . . . . . . . . . . . . . . . . . 14
SECTION 11. Entire Agreement . . . . . . . . . . . . . . . . . 14
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
This ESCROW AND PAYING AGENT AGREEMENT (Class C) 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"); Airbus Industrie
Financial Services, a corporation formed under the laws of Ireland ("AIFS";
and together with its transferees and assigns as registered owners of the
Certificates, the "Investors"); 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 1998-1C (the "Pass
Through Trust") pursuant to which the US Airways Pass Through Trust, Series
1998-1C Certificates referred to therein (the "Certificates") are being
issued;
WHEREAS, US Airways and AIFS have entered into a Purchase
Agreement dated the date hereof, pursuant to which the Pass Through Trustee
will issue and sell the Certificates to AIFS;
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, AIFS 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 satis-
faction 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 Citibank,
N.A., 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. AIFS, for and on
behalf of itself and each other Investor from time to time holding an
Escrow Receipt, hereby irrevocably appoints, authorizes and directs the
Escrow Agent to act as escrow agent and fiduciary hereunder and under the
Deposit Agreement for such specific purposes and with such powers as are
specifically delegated to the Escrow Agent by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto. Any
and all money received and held by the Escrow Agent under this Agreement or
the Deposit Agreement shall be held in escrow by the Escrow Agent in
accordance with the terms of this Agreement. This Agreement is irrevocable
and the Investors' rights with respect to any monies received and held in
escrow by the Escrow Agent under this Agreement or the Deposit Agreement
shall only be as provided under the terms and conditions of this Agreement
and the Deposit Agreement. The Escrow Agent (which term as used in this
sentence shall include reference to its affiliates and its own and its
affiliates' officers, directors, employees and agents):
(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,
AIFS or any other Investor 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, AIFS,
any other Investor 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. AIFS, for and on behalf of
itself and each other Investor, hereby irrevocably instructs the Escrow
Agent, and the Escrow Agent agrees: (a) to enter into the Deposit Agree-
ment; (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"), immedi-
ately 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 "Termina-
tion 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 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 Re-
ceipts. The Escrow Agent hereby directs AIFS to, and AIFS hereby acknowl-
edges that on the date hereof it shall, irrevocably deliver to the Deposi-
tary on behalf of the Escrow Agent, an amount in U.S. dollars ("Dollars")
and immediately available funds equal to $112,495,918 for deposit on behalf
of the Escrow Agent with the Depositary in accordance with Section 2.1 of
the Deposit Agreement. AIFS hereby instructs the Escrow Agent, upon
receipt of such sum from AIFS, 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.
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.
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 Inves-
tors"). 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 Inves-
tors 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.
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 obliga-
tions 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 AIFS and the other Investors
from time to time holding Escrow Receipts, 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 AIFS and the other Investors from time to
time holding Escrow Receipts. 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.
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.
(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 appropri-
ate 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 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 With-
drawal, 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.
SECTION 5. Representations And Warranties of The Escrow
Agent. The Escrow Agent represents and warrants to US Airways, AIFS, 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 inden-
ture, 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 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, AIFS, the
Escrow Agent and the Pass Through Trustee as follows:
(a) it is a corporation duly organized and validly existing
in good standing under the laws of its jurisdiction of incorporation;
(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 consti-
tutes 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;
(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 AIFS or any other Investor, the Escrow Agent shall
enter into an amendment to this Agreement for any of the following pur-
poses:
(a) to correct or supplement any provision in this Agree-
ment 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 Agree-
ment, provided that any such action shall not materially adversely affect
the interests of AIFS or any other Investor; 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 appoint-
ment 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 AIFS and any other Investor, 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 Administra-
tion (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 con-
trary.
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, AIFS and the Pass Through Trustee with
respect to the subject matter hereof, and supersedes all prior and contem-
poraneous 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, AIFS, EACH OTHER INVESTOR 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.
IN WITNESS WHEREOF, the Escrow Agent, the Paying Agent, AIFS and
the Pass Through Trustee have caused this Escrow and Paying Agent Agreement
(Class C) to be duly executed as of the day and year first above written.
STATE STREET BANK AND TRUST FIRST SECURITY BANK, NATIONAL
COMPANY, not in its indi- ASSOCIATION, as Escrow Agent
vidual capacity, but solely
as Pass Through Trustee for
and on behalf of US Airways By: /s/ C. Scott Nielsen
Pass Through Trust 1998-1C --------------------------------
Name: C. Scott Nielsen
Title: Vice President
By: /s/ Ruth A. Smith
-------------------------
Name: Ruth A. Smith AIRBUS INDUSTRIE FINANCIAL SERVICES
Title: Vice President
By: /s/ Yann Ballet
STATE STREET BANK AND TRUST --------------------------------
COMPANY as Paying Agent Name: Yann Ballet
Title: Managing Director
By: /s/ Ruth A. Smith
-------------------------
Name: Ruth A. Smith
Title: Vice President
EXHIBIT A
US Airways 1998-1C 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 C) 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"), Airbus Industrie
Financial Services, a corporation formed under the laws of Ireland, 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 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 Certifi-
cate 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: __________, 1998
FIRST SECURITY BANK, NATIONAL ASSOCIATION, as
Escrow Agent
By __________________________________________
Name:
Title:
EXHIBIT B
Withdrawal Certificate
(Class C)
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 Partici-
pation Agreement pursuant to the Note Purchase Agreement have been satis-
fied. 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 _______________.
Very truly yours,
STATE STREET BANK AND TRUST COMPANY, not in its
individual capacity but solely as Pass Through
Trustee
By ____________________________________________
Name:
Title:
Dated:____________,____
NOTICE OF PURCHASE WITHDRAWAL
CITIBANK, N.A.
399 Park Avenue, 12th Floor
Zone 2
New York, NY 10043
Attention: [___]
Telecopier: [___]
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:___________, ____
EXHIBIT 4.18
CUSIP No. 90332U AC 7
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND
ACCORDINGLY, THIS CERTIFICATE OR ANY INTEREST OR PARTICIPATION HEREIN MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT
OR BENEFIT OF, ANY PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE.
BY ITS ACQUISITION HEREOF, THE HOLDER: (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501 (a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR"), OR (C) IT IS
OTHERWISE ACQUIRING THIS CERTIFICATE IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; (2) AGREES THAT IT WILL
NOT WITHIN TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THIS
CERTIFICATE OR THE LAST DATE ON WHICH THIS CERTIFICATE WAS OWNED BY US
AIRWAYS, INC., THE TRUSTEE OR ANY AFFILIATE OF ANY SUCH PERSON RESELL OR
OTHERWISE TRANSFER THIS CERTIFICATE EXCEPT (A) TO US AIRWAYS, INC., (B) TO
A PERSON WHO THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO AN
INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING $100,000 OR MORE AGGREGATE
PRINCIPAL AMOUNT OF SUCH CERTIFICATE THAT, PRIOR TO SUCH TRANSFER,
FURNISHED TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS
AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS CERTIFICATE
(THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE), (D) PURSUANT
TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), (E) IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE SECURITIES ACT OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT; AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS CERTIFICATE IS TRANSFERRED (OTHER THAN PURSUANT TO
CLAUSES (D) AND (F) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS CERTIFICATE AS A
RESTRICTED SECURITY WITHIN TWO YEARS AFTER THE LATER OF THE ORIGINAL
ISSUANCE OF THIS CERTIFICATE OR THE LAST DATE ON WHICH THIS CERTIFICATE WAS
HELD BY US AIRWAYS, INC., THE TRUSTEE OR ANY AFFILIATE OF ANY SUCH PERSONS
THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE TRANSFER NOTICE
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE
TRUSTEE; PROVIDED THAT THE COMPANY AND THE TRUSTEE SHALL HAVE THE RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C) TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON
THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTIONS TERMINATE. THE
CLASS C TRUST SUPPLEMENT CONTAINS A PROVISION REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS CERTIFICATE IN VIOLATION OF THE
FOREGOING RESTRICTIONS.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IN EXCHANGE FOR THIS CERTIFICATE 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 HEREON IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
CERTIFICATE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTION 9.03 OF THE TRUST SUPPLEMENT NO. 1998-1C.
ANY PERSON ACQUIRING OR ACCEPTING THIS CERTIFICATE OR AN INTEREST HEREIN
WILL, BY SUCH ACQUISITION OR ACCEPTANCE, BE DEEMED TO HAVE REPRESENTED AND
WARRANTED THAT EITHER: (I) THE ASSETS OF AN EMPLOYEE BENEFIT PLAN SUBJECT
TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR OF A PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), HAVE NOT BEEN USED TO
PURCHASE THIS CERTIFICATE OR AN INTEREST HEREIN OR (II) THE PURCHASE AND
HOLDING OF THIS CERTIFICATE OR INTEREST HEREIN ARE EXEMPT FROM THE
PROHIBITED TRANSACTION RESTRICTIONS OF ERISA AND THE CODE PURSUANT TO ONE
OR MORE PROHIBITED TRANSACTION STATUTORY OR ADMINISTRATIVE EXEMPTIONS.
US AIRWAYS PASS THROUGH TRUST 1998-1C
6.82% US Airways Pass Through Certificate, Series 1998-1C
Issuance Date: December 14, 1998
Final Expected Distribution Date: July 30, 2014
Evidencing A Fractional Undivided
Interest In The US Airways Pass
Through Trust 1998-1C, The Property
Of Which Includes Certain Equipment
Notes Each Secured By An Aircraft
Leased To Or Owned By US Airways, Inc.
Certificate
No. 1 $141,366,000 Fractional Undivided Interest
representing 0.070738367% of the Trust per $100,000
face amount
THIS CERTIFIES THAT Cede & Co., for value received, is the
registered owner of a $141,366,000 (One Hundred Forty One Million Three
Hundred Sixty Six Thousand Dollars) Fractional Undivided Interest in the US
Airways 1998-1C Pass Through Trust (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"), as supplemented by Trust Supplement No. 1998-1C (collectively,
the "Agreement") between the Trustee and US Airways, Inc., a Delaware
corporation (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 a duly authorized global
Certificate designated as "6.82% US Airways Initial Pass Through
Certificates, Series 1998-1C" (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.
Interest applicable to this Certificate will be payable at 6.82%
per annum.
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.
The Holder of this Certificate is entitled to the
benefits of the Registration Agreement, dated as of December 14, 1998,
between the Company, the Trustee and the Purchaser named therein (the
"Registration Agreement"). If (i) any Registration Statement required by
the Registration Agreement is not (i) filed with the Securities and
Exchange Commission (the "Commission") on or prior to the applicable filing
deadline specified in the Registration Agreement, (ii) any Registration
Statement required by the Registration Agreement is not declared effective
by the Commission on or prior to the applicable effectiveness deadline
specified in the Registration Agreement, (iii) the Registered Exchange
Offer has not been consummated on or prior to the consummation deadline
specified in the Registration Agreement or (iv) any Registration Statement
required by the Registration Agreement is filed and declared effective but
shall thereafter cease to be effective or fail to be usable for its
intended purpose without being succeeded within two (2) days by a post-
effective amendment to such Registration Statement that cures such failure
and that is itself declared effective within five (5) days of filing such
post-effective amendment to such Registration Statement (each such event in
clauses (i) through (iv), a "Registration Default"), then US Airways agrees
to pay to the Class C Trust for distribution to each Holder effected
thereby liquidated damages in an amount equal to the following: during the
first ninety (90)-day period immediately following the occurrence of such
Registration Default, .0025 (the "Multiplier") times the aggregate
principal amount of such holder's Class C Certificates times the number of
days such Registration Default exists divided by 360 (less any amount
thereof that has been paid as provided in the next paragraph). The amount
of the Multiplier shall increase by .0025 during each subsequent ninety
(90)-day period up to a maximum Multiplier of .01. Notwithstanding the
prior sentence, (1) upon the filing of the Registered Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration
Statement), in the case of (i) above, (2) upon the effectiveness of the
Registered Exchange Offer Registration Statement (and/or, if applicable,
the Shelf Registration Statement) in the case of (ii) above, (3) upon
consummation of the Registered Exchange Offer in the case of (iii) above,
or (4) upon the filing of a post-effective amendment to the Registration
Statement or an additional Registration Statement that causes the
Registered Exchange Offer Registration Statement (and/or, if applicable,
the Shelf Registration Statement) to again be declared effective or made
usable in the case of (iv) above, the liquidated damages payable with
respect to the Securities as a result of such clause (i), (ii), (iii) or
(iv), as applicable, will cease, until such time, if any, that another
Registration Default occurs.
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 $100,000 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.
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 1998-1C
By: STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: /s/ Ruth A. Smith
------------------------------
Name: Ruth A. Smith
Title: Vice President
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: /s/ Ruth A. Smith
----------------------------------
Name: Ruth A. Smith
Title: Vice President
Dated: December 14, 1998
EXHIBIT 4.19
CUSIP No. _______________
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IN EXCHANGE FOR THIS CERTIFICATE 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 HEREON IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
CERTIFICATE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTION 9.03 OF THE TRUST SUPPLEMENT NO. 1998-1C.
ANY PERSON ACQUIRING OR ACCEPTING THIS CERTIFICATE OR AN INTEREST HEREIN
WILL, BY SUCH ACQUISITION OR ACCEPTANCE, BE DEEMED TO HAVE REPRESENTED AND
WARRANTED THAT EITHER: (I) THE ASSETS OF AN EMPLOYEE BENEFIT PLAN SUBJECT
TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR OF A PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), HAVE NOT BEEN USED TO
PURCHASE THIS CERTIFICATE OR AN INTEREST HEREIN OR (II) THE PURCHASE AND
HOLDING OF THIS CERTIFICATE OR INTEREST HEREIN ARE EXEMPT FROM THE
PROHIBITED TRANSACTION RESTRICTIONS OF ERISA AND THE CODE PURSUANT TO ONE
OR MORE PROHIBITED TRANSACTION STATUTORY OR ADMINISTRATIVE EXEMPTIONS.
US AIRWAYS PASS THROUGH TRUST 1998-1C
6.82% US Airways Pass Through Certificate, Series 1998-1C
Initial Issuance Date: December 14, 1998
Final Expected Distribution Date: July 30, 2014
Evidencing A Fractional Undivided
Interest In The US Airways Pass
Through Trust 1998-1C, The Property
Of Which Includes Certain Equipment
Notes Each Secured By An Aircraft
Leased To Or Owned By US Airways, Inc.
Certificate
No. 2 $141,366,000 Fractional Undivided Interest
representing 0.000707384% of the Trust per $1,000
face amount
THIS CERTIFIES THAT Cede & Co., for value received, is the
registered owner of a $141,366,000 (One Hundred Forty One Million Three
Hundred Sixty Six Thousand Dollars) Fractional Undivided Interest in the US
Airways Pass Through Trust 1998-1C (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"), as supplemented by Trust Supplement No. 1998-1C, dated as of
December 14, 1998 (collectively, the "Agreement"), between the Trustee and
US Airways, Inc., a Delaware corporation (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 a duly
authorized global Certificate designated as "6.82% US Airways Exchange Pass
Through Certificate, Series 1998-1C" (the "Certificate"). 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.
Interest applicable to this Certificate will be payable at 6.82%
per annum.
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.
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 1998-1C
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: _____________________
EXHIBIT 5.1
February 26, 1999
US Airways, Inc.
2345 Crystal Drive
Arlington, Virginia 22227
Re: US Airways, Inc.
Registration Statement on Form S-4
Ladies and Gentlemen:
We have acted as special counsel for US Airways, Inc., a Delaware
corporation (the "Company"), in connection with the Company's offer to
exchange (the "Exchange Offer") up to $141,366,000 aggregate principal
amount of its outstanding Class C Pass Through Certificates, Series 1998-1
(the "Old Class C Certificates"), for its Class C Pass Through
Certificates, Series 1998-1 (the "New Class C Certificates"). The Old
Class C Certificates represent, and the New Class C Certificates will
represent, a fractional undivided interest in the Company's Pass Through
Trust 1998-1C (the "Class C Trust"). The Class C Trust was formed pursuant
to a Pass Through Trust Agreement between the Company and State Street Bank
and Trust Company, as trustee (the "Trustee"), dated as of December 4, 1998
(the "Basic Agreement"), and Trust Supplement No. 1998-1C thereto, dated as
of December 14, 1998 (the "Trust Supplement" and, together with the Basic
Agreement, the "Class C Pass Through Trust Agreement").
This opinion is being furnished in accordance with the
requirements of Item 601(b)(5) of Regulation S-K under the Securities Act
of 1933, as amended (the "Act").
In connection with this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of (i) the
Registration Statement on Form S-4 with respect to the New Class C
Certificates as filed with the Securities and Exchange Commission (the
"Commission") under the Act (such Registration Statement, as so amended,
the "Registration Statement"); (ii) the Class C Pass Through Trust
Agreement; (iii) the forms of the Old Class C Certificates and the New
Class C Certificates, each filed as an exhibit to the Registration
Statement; (v) the Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939, as amended, on Form T-1 of the Trustee; (vi)
the Amended and Restated Certificate of Incorporation of the Company, as
currently in effect; (vii) the By-laws of the Company, as currently in
effect; and (viii) resolutions adopted by the Board of Directors of the
Company on May 19, 1998 relating to the filing of the Registration
Statement. We also have examined originals or copies, certified or
otherwise identified to our satisfaction, of such records of the Company
and such agreements, certificates of public officials, certificates of
officers or other representatives of the Company and others, and such other
documents, certificates and records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as certified, conformed or
photostatic copies and the authenticity of the originals of such latter
documents. In making our examination of documents executed by parties
other than the Company, we have assumed that such parties (including the
Trustee) had the power, corporate or other, to enter into and perform all
obligations thereunder, and have also assumed the due authorization by all
requisite action, corporate or other, and the due execution and delivery by
such parties of such documents and the validity and binding effect thereof
on such parties. As to any facts material to the opinions expressed herein
which we did not independently establish or verify, we have relied upon
oral or written statements and representations of officers and other
representatives of the Company and others.
In rendering the opinions set forth below, we have assumed that
(i) the Registration Statement, as finally amended (including all necessary
post-effective amendments), has become effective and (ii) the New Class C
Certificates will be issued and exchanged in compliance with applicable
federal and state securities laws and solely in the manner stated in the
Registration Statement.
Members of our firm are admitted to the practice of law in the
State of New York, and we do not express any opinion as to the laws of any
other jurisdiction, other than the DGCL and the laws of the United States
of America to the extent referred to specifically herein.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that when (i) the Registration Statement becomes effective and (ii)
the New Class C Certificates have been duly executed and authenticated in
accordance with the Class C Pass Through Trust Agreement and delivered in
exchange for the Old Class C Certificates in accordance with the Exchange
Offer, the New Class C Certificates will be valid and binding obligations
of the Trustee as trustee of the Trust.
Our opinion set forth above is subject to the effects of
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance
and other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of
good faith and fair dealing.
We hereby consent to the filing of this opinion with the
Commission as an exhibit to the Registration Statement. We also consent to
the reference to us under the caption "Legal Matters" in the Registration
Statement. In giving this consent, we do not thereby admit that we are
included in the category of persons whose consent is required under Section
7 of the Act or the rules and regulations of the Commission.
Very truly yours,
Skadden, Arps, Slate, Meagher & Flom (Illinois)
EXHIBIT 12.1
<TABLE>
<CAPTION>
US AIRWAYS, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
YEARS ENDED DECEMBER 31,
--------------------------------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
(IN THOUSANDS EXCEPT RATIO AMOUNTS)
Earnings:
<S> <C> <C> <C> <C> <C>
Pre-tax income (loss) $ 935,844 $ 673,229 $191,043 $ 37,398 $(716,183)
Add (deduct):
Fixed charges:
Interest expense $ 223,604 $ 260,029 $283,936 $301,923 $ 285,846
Amortization of debt
issue expense 6,507 2,684 2,844 3,724 4,300
Interest factor in
noncapitalized rentals 346,948 320,625 303,383 316,977 364,462
Interest capitalized 10,478 (11,582) (8,398) (8,781) (13,760)
Amortization of previously
capitalized interest 10,011 10,269 10,286 10,238 8,802
--------- --------- -------- -------- --------
$1,533,392 $ 1,255,254 $783,094 $661,479 $(66,533)
Fixed charges:
Interest expense $ 223,604 $ 260,029 $283,936 $301,923 $285,846
Amortization of debt issue
expense 6,507 2,684 2,844 3,724 4,300
Interest factor in
noncapitalized rentals 346,948 320,625 303,383 316,977 364,462
$ 577,059 $ 583,338 $590,163 $622,624 $654,608
--------- ----------- -------- -------- --------
Ratio of earnings to fixed charges 2.7 2.2 1.3 1.1 o
- ----------------------------------
</TABLE>
o For the year ended December 31, 1994 earnings were not sufficient to
cover fixed charges. Additional earnings of approximately $721 million
would have been required to achieve a ratio of 1.0.
EXHIBIT 23.1
Consent of Independent Auditors
The Board of Directors
US Airways, Inc.:
We consent to the use of our report dated February 25, 1998 incorporated
herein by reference and to the reference to our firm under the heading
"Experts" in the prospectus.
KPMG LLP
Washington, DC
February 26, 1999
EXHIBIT 23.3
CONSENT OF THE APPRAISERS
[Letterhead of AVITAS]
The Board of Directors
US Airways, Inc.
2345 Crystal Drive
Arlington, VA 22227
Ladies and Gentlemen:
We consent to the use of our report dated November 16, 1998,
included in US Airways, Inc.'s Registration Statement on Form S-4 relating
to the offer of Pass Through Certificates (Class C), Series 1998-1, by US
Airways, Inc. and to the reference to our firm in such Registration
Statement.
AVITAS, Inc.
By: /S/ Kimberly S. Higgins
-------------------------------------
Name: Kimberly S. Higgins
Title: Market Analyst
Washington, D.C.
January 8, 1999
EXHIBIT 23.4
CONSENT OF THE APPRAISERS
[Letterhead of AvSolutions]
The Board of Directors
US Airways, Inc.
2345 Crystal Drive
Arlington, VA 22227
Ladies and Gentlemen:
We consent to the use of our report dated November 16, 1998,
included in US Airways, Inc.'s Registration Statement on Form S-4 relating
to the offer of Pass Through Certificates (Class C), Series 1998-1, by US
Airways, Inc. and to the reference to our firm in such Registration
Statement.
AvSolutions, Inc.
By: /S/ Bryant Lynch
-------------------------------------
Name: Bryant Lynch
Title: Manager, Commercial
Appraisals
Washington, D.C.
January 8, 1999
EXHIBIT 23.5
CONSENT OF THE APPRAISERS
[Letterhead of MB & A]
The Board of Directors
US Airways, Inc.
2345 Crystal Drive
Arlington, VA 22227
Ladies and Gentlemen:
We consent to the use of our report dated November 16, 1998,
included in US Airways, Inc.'s Registration Statement on Form S-4 relating
to the offer of Pass Through Certificates (Class C), Series 1998-1, by US
Airways, Inc. and to the reference to our firm in such Registration
Statement.
Morton, Beyer & Agnew, Inc.
By: /S/ Bryson P. Monteleone
------------------------------------
Name: Bryson P. Monteleone
Title: Manager of Operations
Washington, D.C.
January 7, 1999
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, Mathias J. Devito, Director of
US Airways, Inc. (the "Company"), do hereby appoint Lawrence M. Nagin and
Thomas A. Mutryn, and each of them (with full power to each of them to act
alone), attorney and agent for me and in my name and on my behalf to sign
all Registration Statements on Form S-4 or other appropriate Forms,
including any supplements and amendments thereto, of the Company which
shall be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, with respect to the proposed
registration of the Company's Class C Pass Through Certificates, Series
1998-1.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of
January 1999.
/S/ Mathias J. Devito
--------------------------------
Mathias J. Devito, Director
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, Peter M. George, Director of
US Airways, Inc. (the "Company"), do hereby appoint Lawrence M. Nagin and
Thomas A. Mutryn, and each of them (with full power to each of them to act
alone), attorney and agent for me and in my name and on my behalf to sign
all Registration Statements on Form S-4 or other appropriate Forms,
including any supplements and amendments thereto, of the Company which
shall be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, with respect to the proposed
registration of the Company's Class C Pass Through Certificates, Series
1998-1.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of
January 1999.
/S/ Peter M. George
--------------------------------
Peter M. George, Director
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, George J. W. Goodman, Director
of US Airways, Inc. (the "Company"), do hereby appoint Lawrence M. Nagin
and Thomas A. Mutryn, and each of them (with full power to each of them to
act alone), attorney and agent for me and in my name and on my behalf to
sign all Registration Statements on Form S-4 or other appropriate Forms,
including any supplements and amendments thereto, of the Company which
shall be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, with respect to the proposed
registration of the Company's Class C Pass Through Certificates, Series
1998-1.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of
January 1999.
/S/ George J. Goodman
--------------------------------
George J. W. Goodman, Director
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, John W. Harris, Director of US
Airways, Inc. (the "Company"), do hereby appoint Lawrence M. Nagin and
Thomas A. Mutryn, and each of them (with full power to each of them to act
alone), attorney and agent for me and in my name and on my behalf to sign
all Registration Statements on Form S-4 or other appropriate Forms,
including any supplements and amendments thereto, of the Company which
shall be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, with respect to the proposed
registration of the Company's Class C Pass Through Certificates, Series
1998-1.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of
January 1999.
/S/ John W. Harris
--------------------------------
John W. Harris, Director
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, Edward A. Horrigan, Jr.,
Director of US Airways, Inc. (the "Company"), do hereby appoint Lawrence M.
Nagin and Thomas A. Mutryn, and each of them (with full power to each of
them to act alone), attorney and agent for me and in my name and on my
behalf to sign all Registration Statements on Form S-4 or other appropriate
Forms, including any supplements and amendments thereto, of the Company
which shall be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, with respect to the proposed
registration of the Company's Class C Pass Through Certificates, Series
1998-1.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of
January 1999.
Edward A. Horrigan, Jr.
---------------------------------
Edward A. Horrigan, Jr., Director
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, Robert L. Johnson, Director of
US Airways, Inc. (the "Company"), do hereby appoint Lawrence M. Nagin and
Thomas A. Mutryn, and each of them (with full power to each of them to act
alone), attorney and agent for me and in my name and on my behalf to sign
all Registration Statements on Form S-4 or other appropriate Forms,
including any supplements and amendments thereto, of the Company which
shall be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, with respect to the proposed
registration of the Company's Class C Pass Through Certificates, Series
1998-1.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of
January 1999.
/S/ Robert L. Johnson
--------------------------------
Robert L. Johnson, Director
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, Robert LeBuhn, Director of US
Airways, Inc. (the "Company"), do hereby appoint Lawrence M. Nagin and
Thomas A. Mutryn, and each of them (with full power to each of them to act
alone), attorney and agent for me and in my name and on my behalf to sign
all Registration Statements on Form S-4 or other appropriate Forms,
including any supplements and amendments thereto, of the Company which
shall be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, with respect to the proposed
registration of the Company's Class C Pass Through Certificates, Series
1998-1.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of
January 1999.
/S/ Robert LeBuhn
--------------------------------
Robert LeBuhn, Director
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, John G. Medlin, Jr., Director
of US Airways, Inc. (the "Company"), do hereby appoint Lawrence M. Nagin
and Thomas A. Mutryn, and each of them (with full power to each of them to
act alone), attorney and agent for me and in my name and on my behalf to
sign all Registration Statements on Form S-4 or other appropriate Forms,
including any supplements and amendments thereto, of the Company which
shall be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, with respect to the proposed
registration of the Company's Class C Pass Through Certificates, Series
1998-1.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of
January 1999.
/S/ John G. Medlin, Jr.
--------------------------------
John G. Medlin, Jr., Director
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, Hanne M. Merriman, Director of
US Airways, Inc. (the "Company"), do hereby appoint Lawrence M. Nagin and
Thomas A. Mutryn, and each of them (with full power to each of them to act
alone), attorney and agent for me and in my name and on my behalf to sign
all Registration Statements on Form S-4 or other appropriate Forms,
including any supplements and amendments thereto, of the Company which
shall be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, with respect to the proposed
registration of the Company's Class C Pass Through Certificates, Series
1998-1.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of
January 1999.
/S/ Hanne M. Merriman
--------------------------------
Hanne M. Merriman, Director
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, Raymond W. Smith, Director of
US Airways, Inc. (the "Company"), do hereby appoint Lawrence M. Nagin and
Thomas A. Mutryn, and each of them (with full power to each of them to act
alone), attorney and agent for me and in my name and on my behalf to sign
all Registration Statements on Form S-4 or other appropriate Forms,
including any supplements and amendments thereto, of the Company which
shall be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, with respect to the proposed
registration of the Company's Class C Pass Through Certificates, Series
1998-1.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of
January 1999.
/S/ Raymond W. Smith
--------------------------------
Raymond W. Smith, Director
EXHIBIT 99.1
LETTER OF TRANSMITTAL
US AIRWAYS, INC.
OFFER TO EXCHANGE
CLASS C PASS THROUGH CERTIFICATES, SERIES 1998-1 WHICH
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OUTSTANDING
CLASS C PASS THROUGH CERTIFICATES, SERIES 1998-1
PURSUANT TO THE PROSPECTUS DATED __________, 1999.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
__________, 1999, UNLESS EXTENDED. TENDERED OLD CLASS C CERTIFICATES MAY BE
WITHDRAWN AT ANY TIME ON OR PRIOR TO THE EXPIRATION DATE.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
STATE STREET BANK AND TRUST COMPANY
BY HAND, REGISTERED MAIL OR OVERNIGHT CARRIER:
State Street Bank and Trust Company
Corporate Trust Department
Two International Place -- 4th Floor
Boston, MA 02110
Attn: Susan Lavey
Phone: (617) 664-5314
BY FACSIMILE (GUARANTEED DELIVERY FORMS ONLY):
(617) 664-5290
Attn: Susan Lavey
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE
TO A NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE VALID
DELIVERY.
THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE
THIS LETTER OF TRANSMITTAL IS COMPLETED.
Capitalized terms used but not defined herein shall have the same
meaning given them in the Prospectus (as defined below).
The undersigned acknowledges receipt of the Prospectus, dated
________, 1999 (the "Prospectus"), of US Airways, Inc., a Delaware
corporation (the "Company"), and this Letter of Transmittal, which together
constitute the offer (the "Exchange Offer") to exchange an aggregate
principal amount of up to $141,366,000 of Class C Pass Through
Certificates, Series 1998-1, which have been registered under the
Securities Act of 1933, as amended (collectively, the "New Class C
Certificates"), for an equal principal amount of the outstanding Class C
Pass Through Certificates, Series 1998-1 (the "Old Class C Certificates").
The Exchange Offer is being made in order to satisfy certain obligations of
the Company contained in the Registration Agreement, dated as of December
14, 1998, as amended, between the Company and the Initial Purchaser named
therein (the "Registration Agreement").
For each Old Class C Certificate accepted for exchange, the holder of
such Old Class C Certificate will receive a New Class C Certificate having
a principal amount equal to that of the surrendered Old Class C
Certificate. New Class C Certificates will accrue interest at the
applicable per annum rate of 6.82%, from the most recent date to which
interest was paid on the Old Class C Certificates or, if no interest has
been paid, from December 14, 1998 (the "Issuance Date"). Interest on the
New Class C Certificates is payable on January 30 and July 30 of each year,
commencing upon the consummation of the Exchange Offer, subject to the
terms of the Intercreditor Agreement (as defined in the Prospectus). If (i)
any Registration Statement required by the Registration Agreement is not
filed with the Securities and Exchange Commission (the "Commission") on or
prior to the applicable filing deadline specified in the Registration
Agreement, (ii) any Registration Statement required by the Registration
Agreement is not declared effective by the Commission on or prior to the
applicable effectiveness deadline specified in the Registration Agreement,
(iii) the Exchange Offer has not been consummated on or prior to the
consummation deadline specified in the Registration Agreement or (iv) any
Registration Statement required by the Registration Agreement is filed and
declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose without being succeeded within two (2) days
by a post-effective amendment to such Registration Statement that cures
such failure and that is itself declared effective within five (5) days of
filing such post-effective amendment to such Registration Statement (each
such event in clauses (i) through (iv), a "Registration Default"), then US
Airways agrees to pay to the Class C Trust for distribution to each holder
effected thereby liquidated damages in an amount equal to the following:
during the first ninety (90)-day period immediately following the
occurrence of such Registration Default, .0025 (the "Multiplier") times the
aggregate principal amount of such holder's Old Class C Certificates times
the number of days such Registration Default exists divided by 360 (less
any amount thereof that has been paid as provided in the next paragraph).
The amount of the Multiplier shall increase by .0025 during each subsequent
ninety (90)-day period up to a maximum Multiplier of .01. Once US Airways
cures a default described in clause (i), (ii), (iii) or (iv) of the
preceding sentence, the liquidated damages payable with respect to the Old
Class C Certificates as a result of such clause (i), (ii), (iii) or (iv),
as applicable, will cease, until such time, if any, that another
Registration Default occurs.
The Company reserves the right, at any time or from time to time, to
extend the Exchange Offer at its discretion, in which event the term
"Expiration Date" shall mean the latest time and date to which the Exchange
Offer is extended. The Company shall notify the holders of the Old Class C
Certificates of any extension by means of a press release or other public
announcement prior to 9:00 A.M., New York City time, on the next business
day after the previously scheduled Expiration Date.
This Letter is to be completed by a holder of Old Class C
Certificates if Old Class C Certificates are to be forwarded herewith or if
a tender of Old Class C Certificates, if available, is to be made by
book-entry transfer to the account maintained by the Exchange Agent at The
Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to
the procedure set forth in "The Exchange Offer" section of the Prospectus
and an Agent's Message is not delivered. Tenders by book-entry transfer may
also be made by delivering an Agent's Message in lieu of this Letter of
Transmittal. The term "Agent's Message" means a message, transmitted by the
Book-Entry Transfer Facility to and received by the Exchange Agent and
forming a part of a Book-Entry Confirmation (as defined below), which
states that the Book-Entry Transfer Facility has received an express
acknowledgment from the tendering participant, which acknowledgment states
that such participant has received and agrees to be bound by, and makes the
representations and warranties contained in this Letter of Transmittal and
that the Company may enforce this Letter of Transmittal against such
participant. Holders of Old Class C Certificates whose certificates are not
immediately available, or who are unable to deliver their certificates or
confirmation of the book-entry tender of their Old Class C Certificates
into the Exchange Agent's account at the Book-Entry Transfer Facility (a
"Book-Entry Confirmation") and all other documents required by this Letter
to the Exchange Agent on or prior to the Expiration Date, must tender their
Old Class C Certificates according to the guaranteed delivery procedures
set forth in "The Exchange Offer--Guaranteed Delivery Procedures" section
of the Prospectus. See Instruction 1. Delivery of documents to the
Book-Entry Transfer Facility does not constitute delivery to the Exchange
Agent.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
ALL TENDERING HOLDERS COMPLETE THIS BOX:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
DESCRIPTION OF OLD CLASS C CERTIFICATES TENDERED
------------------------------------------------------------------------------------------
IF BLANK, PLEASE PRINT NAME
AND ADDRESS OLD CLASS C CERTIFICATES
OF REGISTERED HOLDER(S) (ATTACH ADDITIONAL LIST IF NECESSARY)
------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PRINCIPAL AMOUNT
AGGREGATE OF OLD CLASS C
CERTIFICATE OR PRINCIPAL AMOUNT CERTIFICATES
REGISTRATION OF OLD CLASS C TENDERED
NUMBER(S)* CERTIFICATES (IF LESS THAN ALL)**
----------------------------------------------------------
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
TOTAL:
------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by book-entry holders. Such holders should
check the appropriate box below and provide the required
information.
** Old Class C Certificates may be tendered in whole or in part in
multiples of $1,000. All Old Class C Certificates held shall be
deemed tendered unless a lesser number is specified in this column.
See Instruction 4.
The undersigned has completed, executed and delivered this Letter of
Transmittal to indicate the action the undersigned desires to take with
respect to the Exchange Offer. Holders who wish to tender their Old Class C
Certificates must complete this Letter in its entirety.
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)
[__] CHECK HERE IF TENDERED OLD CLASS C CERTIFICATES ARE BEING DELIVERED
BY BOOK- ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE
EXCHANGE AGENT WITH DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution _______________________________________
DTC Account Number _______________ Transaction Code Number __________
[__] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED
DELIVERY IF TENDERED OLD CLASS C CERTIFICATES ARE BEING DELIVERED
PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE
EXCHANGE AGENT AND COMPLETE THE FOLLOWING (SEE INSTRUCTION 1):
Name(s) of Registered Holder(s) _____________________________________
Date of Execution of Notice of Guaranteed Delivery __________________
Name of Eligible Institution which Guaranteed Delivery ______________
If Guaranteed Delivery is to be made by Book-Entry Transfer:
Name of Tendering Institution _______________________________________
DTC Account Number _______________ Transaction Code Number __________
[__] CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OLD
CLASS C CERTIFICATES ARE TO BE RETURNED BY CREDITING THE DTC ACCOUNT
NUMBER SET FORTH ABOVE.
[__] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD CLASS C
CERTIFICATES FOR YOUR OWN ACCOUNT AS A RESULT OF MARKET MAKING OR
OTHER TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH
TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF
ANY AMENDMENTS OR SUPPLEMENTS THERETO.
Name: _____________________________________________________________________
Address: __________________________________________________________________
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer,
the undersigned hereby tenders to the Company the above described principal
amount of Old Class C Certificates in exchange for an identical principal
amount of New Class C Certificates. Subject to, and effective upon, the
acceptance for exchange of the Old Class C Certificates tendered herewith,
the undersigned hereby exchanges, assigns and transfers to or upon the
order of the Company all right, title and interest in and to such Old Class
C Certificates as are being tendered herewith, including all rights to
accrued and unpaid interest thereon as of the Expiration Date. The
undersigned hereby irrevocably constitutes and appoints the Exchange Agent
as its agent and attorney-in-fact (with full knowledge that the Exchange
Agent is also acting as agent of the Company in connection with the
Exchange Offer) to cause the Old Class C Certificates to be assigned,
transferred and exchanged.
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED
HAS FULL POWER AND AUTHORITY TO TENDER, EXCHANGE, ASSIGN AND TRANSFER THE
OLD CLASS C CERTIFICATES TENDERED HEREBY AND TO ACQUIRE NEW CLASS C
CERTIFICATES ISSUABLE UPON THE EXCHANGE OF SUCH TENDERED OLD CLASS C
CERTIFICATES, AND THAT, WHEN THE OLD CLASS C CERTIFICATES ARE ACCEPTED FOR
EXCHANGE, THE COMPANY WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE
THERETO, FREE AND CLEAR OF ALL LIENS, RESTRICTIONS, CHARGES AND
ENCUMBRANCES, AND THAT THE OLD CLASS C CERTIFICATES TENDERED HEREBY ARE NOT
SUBJECT TO ANY ADVERSE CLAIMS OR PROXIES. THE UNDERSIGNED HEREBY FURTHER
REPRESENTS THAT ANY NEW CLASS C CERTIFICATES ACQUIRED IN EXCHANGE FOR OLD
CLASS C CERTIFICATES TENDERED HEREBY WILL HAVE BEEN ACQUIRED IN THE
ORDINARY COURSE OF BUSINESS OF THE PERSON RECEIVING SUCH CERTIFICATES,
WHETHER OR NOT SUCH PERSON IS THE UNDERSIGNED, THAT NEITHER THE HOLDER OF
SUCH OLD CLASS C CERTIFICATES NOR ANY SUCH OTHER PERSON IS ENGAGED IN, OR
HAS AN ARRANGEMENT OR UNDERSTANDING WITH ANY PERSON TO PARTICIPATE IN THE
DISTRIBUTION OF SUCH NEW CLASS C CERTIFICATES, AND THAT NEITHER THE HOLDER
OF SUCH OLD CLASS C CERTIFICATES NOR ANY SUCH OTHER PERSON IS AN
"AFFILIATE," AS DEFINED IN RULE 405 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OF THE COMPANY. THE UNDERSIGNED WILL, UPON
REQUEST, EXECUTE AND DELIVER ANY ADDITIONAL DOCUMENTS DEEMED BY THE COMPANY
OR THE EXCHANGE AGENT TO BE NECESSARY OR DESIRABLE TO COMPLETE THE
EXCHANGE, ASSIGNMENT AND TRANSFER OF THE OLD CLASS C CERTIFICATES TENDERED
HEREBY. THE UNDERSIGNED HAS READ AND AGREES TO ALL OF THE TERMS OF THE
EXCHANGE OFFER.
The undersigned understands that tenders of Old Class C Certificates
pursuant to any one of the procedures described in "The Exchange
Offer--Procedures for Tendering" in the Prospectus and in the instructions
herein will, upon the Company's acceptance for exchange of such tendered
Old Class C Certificates, constitute a binding agreement between the
undersigned and the Company upon the terms and subject to the conditions of
the Exchange Offer.
The undersigned also warrants that it will, upon request, execute and
deliver any additional documents deemed by the Exchange Agent or the
Company to be necessary or desirable to complete the exchange, assignment
and transfer of tendered Old Class C Certificates or transfer ownership of
such Old Class C Certificates on the account books maintained by a
book-entry transfer facility. The undersigned further agrees that
acceptance of any tendered Old Class C Certificates by the Company and the
issuance of New Class C Certificates in exchange therefor shall constitute
performance in full by the Company of its obligations under the
Registration Agreement and that the Company shall have no further
obligations or liabilities thereunder for the registration of the Old Class
C Certificates or the New Class C Certificates.
The Exchange Offer is not conditioned upon any principal amount of
Old Class C Certificates being tendered for exchange. However, the Exchange
Offer is subject to certain conditions set forth in the Prospectus under
the caption "The Exchange Offer--Conditions." The undersigned recognizes
that as a result of these conditions (which may be waived, in whole or in
part, by the Company), as more particularly set forth in the Prospectus,
the Company may not be required to exchange any of the Old Class C
Certificates tendered hereby and, in such event, the Old Class C
Certificates not exchanged will be returned to the undersigned at the
address shown below the signature of the undersigned.
The name(s) and addressee(s) of the registered holder(s) of the Old
Class C Certificates tendered hereby should be printed above, if they are
not already set forth above, as they appear on the certificates
representing such Old Class C Certificates. The certificate number(s) and
the Old Class C Certificates that the undersigned wishes to tender should
be indicated in the appropriate boxes above.
The undersigned acknowledges that this Exchange Offer is being made
in reliance on the position of the staff of the Commission as set forth in
certain interpretive letters addressed to third parties in other
transactions substantially similar to the Exchange Offer, which lead the
Company to believe that New Class C Certificates issued pursuant to the
Exchange Offer to a holder in exchange for Old Class C Certificates may be
offered for resale, resold and otherwise transferred by a holder (other
than (i) a broker-dealer who purchased Old Class C Certificates directly
from the Company for resale pursuant to Rule 144A or any other available
exemption under the Securities Act, (ii) an "affiliate" of the Company
within the meaning of Rule 405 under the Securities Act, or (iii) a
broker-dealer who acquired the Old Class C Certificates as a result of
market-making or other trading activities) without further compliance with
the registration and prospectus delivery provisions of the Securities Act,
provided, that such holder is acquiring the New Class C Certificates in the
ordinary course of business and is not participating, and has no
arrangement or understanding with any person to participate, in the
distribution of the New Class C Certificates. Accordingly, the undersigned
represents that (i) it is not an "affiliate" of the Company as defined in
Rule 405 of the Securities Act, (ii) it is not a broker-dealer that
acquired Old Class C Certificates directly from the Company in order to
resell them pursuant to Rule 144A of the Securities Act or any other
available exemption under the Securities Act, (iii) it will acquire the New
Class C Certificates in the ordinary course of business and (iv) it is not
participating, and does not intend to participate, and has no arrangement
or understanding with any person to participate, in the distribution of the
New Class C Certificates. The undersigned acknowledges that if it is unable
to make these representations to the Company, it will not be able to rely
on the interpretations of the staff of the Commission described above and
therefore will be required to comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any sale or
other transfer of such Old Class C Certificates unless such sale is made
pursuant to an exemption from such requirements. If the undersigned is not
a broker-dealer, the undersigned represents that it is not engaged in, and
does not intend to engage in, a distribution of New Class C Certificates.
If the undersigned is a broker-dealer that will receive New Class C
Certificates for its own account in exchange for Old Class C Certificates,
it represents that it acquired the Old Class C Certificates for its own
account as a result of market-making activities or other trading activities
and acknowledges that it will deliver a prospectus meeting the requirements
of the Securities Act in connection with any resale of such New Class C
Certificates; however, by so acknowledging and by delivering a prospectus,
the undersigned will not be deemed to admit that it is an "underwriter"
within the meaning of Section 2(11) of the Securities Act. Failure to
comply with any of the above-mentioned requirements could result in the
undersigned or any such other person incurring liability under the
Securities Act for which such persons are not indemnified by the Company.
Unless otherwise indicated in the box entitled "Special Issuance
Instructions" or the box entitled "Special Delivery Instructions" in this
Letter of Transmittal, all New Class C Certificates delivered in exchange
for tendered Old Class C Certificates, and any Old Class C Certificates
delivered herewith but not exchanged, will be registered in the name of the
undersigned and shall be delivered to the undersigned at the address shown
below the signature of the undersigned. If a New Class C Certificate is to
be issued to a person other than the person(s) signing this Letter of
Transmittal, or if the New Class C Certificate is to be mailed to someone
other than the person(s) signing this Letter of Transmittal or to the
person(s) signing this Letter of Transmittal at an address different than
the address shown on this letter of Transmittal, the appropriate boxes of
this Letter of Transmittal should be completed. If Old Class C Certificates
are surrendered by holder(s) that have completed either the box entitled
"Special Issuance Instructions" or the box entitled "Special Delivery
Instructions" in this Letter of Transmittal, signature(s) on this Letter of
Transmittal must be guaranteed by an Eligible Institution (as defined in
Instruction 3).
All authority herein conferred or agreed to be conferred in this
Letter of Transmittal shall survive the death or incapacity of the
undersigned and any obligation of the undersigned hereunder shall be
binding upon the heirs, executors, administrators, personal
representatives, trustees in bankruptcy, legal representatives, successors
and assigns of the undersigned. Tendered Old Class C Certificates may be
withdrawn in accordance with Instruction 2 hereto at any time prior to the
Expiration Date.
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF OLD
CLASS C CERTIFICATES TENDERED" ABOVE AND SIGNING THIS LETTER, WILL BE
DEEMED TO HAVE TENDERED THE OLD CLASS C CERTIFICATES AS SET FORTH IN SUCH
BOX.
REGISTERED HOLDERS OF OLD
CLASS C CERTIFICATES SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 HEREIN OR, IN THE CASE
OF CERTAIN FOREIGN PERSONS, SUBSTITUTE FORM W-8 HEREIN)
____________________________________________________________________________
____________________________________________________________________________
SIGNATURE(S) OF HOLDER(S)
Date:_________________________________
(Must be signed by the registered holder(s) exactly as name(s)
appear(s) on Old Class C Certificate(s) hereby tendered or on a security
position listing or by person(s) authorized to become the registered
holder(s) by certificates and documents transmitted herewith. If signature
is by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or
representative capacity, please provide the following information and see
Instruction 3 below.)
Name(s): ___________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(PLEASE PRINT)
Capacity (full title): _____________________________________________________
____________________________________________________________________________
____________________________________________________________________________
Address: ___________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone No.: _______________________________________________
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTION 3 BELOW)
Authorized Signature: ______________________________________________________
Name: ______________________________________________________________________
____________________________________________________________________________
(PLEASE TYPE OR PRINT)
Title: _____________________________________________________________________
Name of Firm: ______________________________________________________________
Address: ___________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone No.: _______________________________________________
Date:_________________________________
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SIGNATURE GUARANTEE REQUIRED--SEE (SIGNATURE GUARANTEE REQUIRED--SEE
INSTRUCTIONS 3 AND 4) INSTRUCTIONS 3 AND 4)
TO BE COMPLETED ONLY if New Class C TO BE COMPLETED ONLY if New Class C
Certificates or Old Class C Certificates or Old Class C
Certificates not tendered or not Certificates not tendered or not
accepted are to be issued in the accepted are to be sent to someone
name of someone other than the other than the undersigned, or to
undersigned. the undersigned at an address
other than that shown above under
Issue: "Description of Old Class C
[ ] New Class C Certificates: Certificates Tendered."
[ ] Old Class C Certificates:
Mail:
Name: ____________________________ [ ] New Class C Certificates:
(PLEASE PRINT) [ ] Old Class C Certificates:
Address: _________________________ Name: _____________________________
__________________________________ (PLEASE-PRINT)
__________________________________
(INCLUDE ZIP CODE) Address: __________________________
___________________________________
Telephone Number: _________________ ___________________________________
(INCLUDE ZIP CODE)
Book Entry Transfer
Facility Account: _______________ Telephone Number: _________________
___________________________________ ___________________________________
EMPLOYER IDENTIFICATION OR SOCIAL EMPLOYER IDENTIFICATION OR SOCIAL
SECURITY NUMBER SECURITY NUMBER
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer to Exchange
Class C Pass Through Certificates, Series 1998-1, which have been
registered under the Securities Act of 1933, as amended, for any and all
outstanding Class C Pass Through Certificates, Series 1998-1.
1. DELIVERY OF THIS LETTER AND OLD CLASS C CERTIFICATES; GUARANTEED DELIVERY
PROCEDURES.
This Letter is to be completed by holders of Old Class C Certificates
if certificates are to be forwarded herewith or if tenders are to be made
pursuant to the procedures for delivery by book-entry transfer set forth in
"The Exchange Offer--Book-Entry Transfer" section of the Prospectus and an
Agent's Message is not delivered. Tenders by book-entry transfer may also
be made by delivering an Agent's Message in lieu of this Letter of
Transmittal. The term "Agent's Message" means a message, transmitted by the
Book-Entry Transfer Facility to and received by the Exchange Agent and
forming a part of a Book-Entry Confirmation, which states that the
Book-Entry Transfer Facility has received an express acknowledgment from
the tendering participant, which acknowledgment states that such
participant has received and agrees to be bound by, and makes the
representations and warranties contained in, the Letter of Transmittal and
that the Company may enforce the Letter of Transmittal against such
participant. Certificates for all physically tendered Old Class C
Certificates, or Book-Entry Confirmation, as the case may be, as well as a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof or an Agent's Message in lieu thereof) and any other documents
required by this Letter of Transmittal, must be received by the Exchange
Agent at the address set forth herein on or prior to the Expiration Date,
or the tendering holder must comply with the guaranteed delivery procedures
set forth below. Old Class C Certificates tendered hereby must be in
multiples of $1,000.
Holders of Old Class C Certificates whose certificates for Old Class
C Certificates are not immediately available or who cannot deliver their
certificates and all other required documents to the Exchange Agent on or
prior to the Expiration Date, or who cannot complete the procedure for
book-entry transfer on a timely basis, may tender their Old Class C
Certificates pursuant to the guaranteed delivery procedures set forth in
"The Exchange Offer--Guaranteed Delivery Procedures" section of the
Prospectus. Pursuant to such procedures, (i) such tender must be made
through an Eligible Institution (as defined below), (ii) prior to the
Expiration Date, the Exchange Agent must receive from such Eligible
Institution a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Company (by facsimile
transmission, mail or hand delivery), setting forth the name and address of
the holder of Old Class C Certificates and the amount of Old Class C
Certificates tendered, stating that the tender is being made thereby and
guaranteeing that within three New York Stock Exchange ("NYSE") trading
days after the date of execution of the Notice of Guaranteed Delivery, the
certificates for all physically tendered Old Class C Certificates, or a
Book-Entry Confirmation, as the case may be, together with a properly
completed and duly executed Letter of Transmittal (or a facsimile thereof
or an Agent's Message in lieu thereof), with any required signature
guarantees and any other documents required by this Letter will be
deposited by the Eligible Institution with the Exchange Agent, and (iii)
the certificates for all physically tendered Old Class C Certificates, in
proper form for transfer, or Book-Entry Confirmation, as the case may be,
together with a properly completed and duly executed Letter of Transmittal
(or a facsimile thereof or an Agent's Message in lieu thereof), with any
required signature guarantees and all other documents required by this
Letter, are received by the Exchange Agent within three NYSE trading days
after the date of execution of the Notice of Guaranteed Delivery.
THE METHOD OF DELIVERY OF THIS LETTER, THE OLD CLASS C CERTIFICATES
AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE
TENDERING HOLDERS, BUT THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY
RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT. IF OLD CLASS C CERTIFICATES
ARE SENT BY MAIL, IT IS SUGGESTED THAT THE MAILING BE MADE SUFFICIENTLY IN
ADVANCE OF THE EXPIRATION DATE TO PERMIT DELIVERY TO THE EXCHANGE AGENT
PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
See "The Exchange Offer" section of the Prospectus.
2. PARTIAL TENDERS (NOT APPLICABLE TO CERTIFICATEHOLDERS WHO TENDER BY
BOOK-ENTRY TRANSFER); WITHDRAWAL OF TENDER.
If less than all of the Old Class C Certificates evidenced by a
submitted certificate are to be tendered, the tendering holder(s) should
fill in the aggregate principal amount of Old Class C Certificates to be
tendered in the box above entitled "Description of Old Class C
Certificates--Principal Amount of Old Class C Certificates Tendered." A
reissued certificate representing the balance of nontendered Old Class C
Certificates will be sent to such tendering holder, unless otherwise
provided in the appropriate box on this Letter, promptly after the
Expiration Date. All of the Old Class C Certificates delivered to the
Exchange Agent will be deemed to have been tendered unless otherwise
indicated.
Tenders of Old Class C Certificates may be withdrawn at any time
prior to 5:00 p.m., New York City time, on the Expiration Date. For a
withdrawal to be effective, a written notice of withdrawal must be received
by the Exchange Agent prior to 5:00 p.m., New York City time, on the
Expiration Date. Any such notice of withdrawal must specify the name of the
person having tendered the Old Class C Certificates to be withdrawn,
identify the Old Class C Certificates to be withdrawn (including the
principal amount of such Old Class C Certificates) and (where certificates
for Old Class C Certificates have been transmitted) specify the name in
which such Old Class C Certificates are registered, if different from that
of the withdrawing holder. If certificates for Old Class C Certificates
have been delivered or otherwise identified to the Exchange Agent, then,
prior to the release of such certificates, the withdrawing holder must also
submit the serial numbers of the particular certificates to be withdrawn
and a signed notice of withdrawal with signatures guaranteed by an Eligible
Institution unless such holder is an Eligible Institution. If Old Class C
Certificates have been tendered pursuant to the procedure for book-entry
transfer described above, any notice of withdrawal must specify the name
and number of the account at the Book-Entry Transfer Facility to be
credited with the withdrawn Old Class C Certificates and otherwise comply
with the procedures of such facility. All questions as to the validity,
form and eligibility (including time of receipt) of such notices will be
determined by the Company, whose determination will be final and binding on
all parties. Any Old Class C Certificates so withdrawn will be deemed not
to have been validly tendered for exchange for purposes of the Exchange
Offer.
3. SIGNATURES OF THIS LETTER; BOND POWERS AND ENDORSEMENTS; GUARANTEE OF
SIGNATURES.
If this Letter of Transmittal is signed by the registered holder of
the Old Class C Certificates tendered hereby, the signature must correspond
exactly with the name as written on the face of the certificates without
any change whatsoever.
If any tendered Old Class C Certificates are owned of record by two
or more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Old Class C Certificates are registered in different
names on several certificates, it will be necessary to complete, sign and
submit as many separate copies of this Letter of Transmittal as there are
different registrations of certificates.
When this Letter of Transmittal is signed by the registered holder of
the Old Class C Certificates specified herein and tendered hereby, no
endorsements of certificates or separate bond powers are required. If,
however, the New Class C Certificates are to be issued, or any untendered
Old Class C Certificates are to be reissued, to a person other than the
registered holder, then endorsements of any certificates transmitted hereby
or separate bond powers are required. Signatures on such certificates must
be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder of any certificates specified herein, such certificates
must be endorsed or accompanied by appropriate bond powers, in either case
signed exactly as the name of the registered holder appears on the
certificates and the signatures on such certificates must be guaranteed by
an Eligible Institution.
If this Letter of Transmittal or any certificates or bond powers are
signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary
or representative capacity, such persons should so indicate when signing,
and, unless waived by the Company, proper evidence satisfactory to the
Company of their authority to so act must be submitted.
Endorsements on certificates for Old Class C Certificates or
signatures on bond powers required by this Instruction 3 must be guaranteed
by a firm which is a member of a registered national securities exchange or
a member of the National Association of Securities Dealers, Inc., by a
commercial bank or trust company having an office or correspondent in the
United States or by an "eligible guarantor" institution within the meaning
of Rule 17Ad-15 under the Securities Exchange Act of 1934 (an "Eligible
Institution").
Signatures on this Letter of Transmittal need not be guaranteed by an
Eligible Institution, provided the Old Class C Certificates are tendered:
(i) by a registered holder of Old Class C Certificates (which term, for
purposes of the Exchange Offer, includes any participant in the Book-Entry
Transfer Facility system whose name appears on a security position listing
as the holder of such Old Class C Certificates) tendered who has not
completed the box entitled "Special Issuance Instructions" or "Special
Delivery Instructions" on this Letter, or (ii) for the account of an
Eligible Institution.
4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS.
Tendering holders of Old Class C Certificates should indicate in the
applicable box the name and address to which New Class C Certificates
issued pursuant to the Exchange Offer and/or substitute certificates
evidencing Old Class C Certificates not exchanged are to be issued or sent,
if different from the name or address of the person signing this Letter of
Transmittal. In the case of issuance in a different name, the employer
identification or social security number of the person named must also be
indicated. A holder of Old Class C Certificates tendering Old Class C
Certificates by book-entry transfer may request that Old Class C
Certificates not exchanged be credited to such account maintained at the
Book-Entry Transfer Facility as such holder of Old Class C Certificates may
designate hereon. If no such instructions are given, such Old Class C
Certificates not exchanged will be returned to the name or address of the
person signing this Letter of Transmittal.
5. TAXPAYER IDENTIFICATION NUMBER.
Federal income tax law generally requires that a tendering holder
whose Old Class C Certificates are accepted for exchange must provide the
Exchange Agent with (i) such holder's correct Taxpayer Identification
Number ("TIN") on Substitute Form W-9 below or (ii) in the case of certain
exempt foreign persons, the Substitute Form W-8 below. If such tendering
holder is an individual, the TIN is his or her social security number. If a
tendering holder does not provide the Exchange Agent with its current TIN
or an adequate basis for an exemption, such tendering holder may be subject
to a $50 penalty imposed by the Internal Revenue Service (the "IRS") in
addition to backup withholding in an amount equal to 31% of all reportable
payments made after the exchange. If withholding results in an overpayment
of taxes, a refund may be obtained.
Exempt holders of Old Class C Certificates (including, among others,
all corporations and certain foreign individuals) are not subject to these
backup withholding and reporting requirements. Certain foreign persons can
qualify for this exemption by submitting a Form W-8 or Substitute Form W-8
below, signed under penalties of perjury and attesting to such person's
foreign status.
To prevent backup withholding, each tendering holder of Old Class C
Certificates must provide its correct TIN by completing the Substitute Form
W-9 set forth below, certifying that the TIN provided is correct (or that
such holder is awaiting a TIN) and that (i) the holder is exempt from
backup withholding, (ii) the holder has not been notified by the IRS that
such holder is subject to a backup withholding as a result of a failure to
report all interest or dividends or (iii) the IRS has notified the holder
that such holder is no longer subject to backup withholding. If the Old
Class C Certificates are in more than one name or are not in the name of
the actual owner, such holder should consult the W-9 Guidelines for
information on which TIN to report. If such holder does not have a TIN,
such holder should consult the W-9 Guidelines for instructions on applying
for a TIN, check the box in Part 2 of the Substitute Form W-9 and write
"applied for" in lieu of its TIN. Note: Checking this box and writing
"applied for" on the form means that such holder has already applied for a
TIN or that such holder intends to apply for one in the near future. If
such holder does not provide its TIN to the Exchange Agent within 60 days,
backup withholding will begin and continue until such holder furnishes its
TIN to the Exchange Agent.
6. TRANSFER TAXES.
The Company will pay all transfer taxes, if any, applicable to the
transfer of Old Class C Certificates to it or its order pursuant to the
Exchange Offer. If, however, New Class C Certificates and/or substitute Old
Class C Certificates not exchanged are to be delivered to, or are to be
registered or issued in the name of, any person other than the registered
holder of the Old Class C Certificates tendered hereby, or if tendered Old
Class C Certificates are registered in the name of any person other than
the person signing this Letter, or if a transfer tax is imposed for any
reason other than the transfer of Old Class C Certificates to the Company
or its order pursuant to the Exchange Offer, the amount of any such
transfer taxes (whether imposed on the registered holder or any other
persons) will be payable by the tendering holder. If satisfactory evidence
of payment of such taxes or exemption therefrom is not submitted herewith,
the amount of such transfer taxes will be billed directly to such tendering
holder.
Except as provided in this Instruction 6, it is not necessary for
transfer tax stamps to be affixed to the Old Class C Certificates specified
in this Letter.
7. WAIVER OF CONDITIONS.
The Company reserves the absolute right to waive satisfaction of any
or all conditions enumerated in the Prospectus.
8. NO CONDITIONAL TENDERS.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering holders of Old Class C Certificates, by execution
of this Letter of Transmittal, shall waive any right to receive notice of
the acceptance of their Old Class C Certificates for exchange.
Neither the Company, the Exchange Agent nor any other person is
obligated to give notice of any defect or irregularity with respect to any
tender of Old Class C Certificates nor shall any of them incur any
liability for failure to give any such notice.
9. MUTILATED, LOST, STOLEN OR DESTROYED OLD CLASS C CERTIFICATES.
Any holder whose Old Class C Certificates have been mutilated, lost,
stolen or destroyed should contact the Exchange Agent at the address
indicated above for further instructions.
10. IRREGULARITIES.
All questions as to the validity, form, eligibility (including time of
receipt) and withdrawal of the tendered Old Class C Certificates will be
determined by the Company in its sole discretion, which determination will
be final and binding. The Company reserves the absolute right to reject any
and all Old Class C Certificates not properly tendered or any Old Class C
Certificates the acceptance of which would, in the opinion of counsel for
the Company, be unlawful. The Company also reserves the absolute right to
waive any irregularities or conditions of tender as to particular Old Class
C Certificates. The Company's interpretation of the terms and conditions of
the Exchange Offer will be final and binding on all parties. Unless waived,
any defects or irregularities in connection with tenders of Old Class C
Certificates must be cured within such time as the Company shall determine.
Neither the Company, the Exchange Agent nor any other person will be under
any duty to give notification of defects or irregularities with respect to
tenders of Old Class C Certificates, nor will any of them incur any
liability for failure to give such notification. Tenders of Old Class C
Certificates will not be deemed to have been made until such irregularities
have been cured or waived. Any Old Class C Certificates received by the
Exchange Agent that are not properly tendered and as to which the defects
or irregularities have not been cured or waived will be returned without
cost to such holder by the Exchange Agent to the tendering holders of Old
Class C Certificates as soon as practicable following the Expiration Date.
11. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions relating to the procedure for tendering, as well as
requests for additional copies of the Prospectus and this Letter of
Transmittal, may be directed to the Exchange Agent, at the address and
telephone number indicated above.
TO BE COMPLETED BY ALL TENDERING SECURITY HOLDERS:
PAYER'S NAME: STATE STREET BANK AND TRUST COMPANY
<TABLE>
<S> <C> <C>
SUBSTITUTE PART I--Taxpayer Identification Number--For _______________________________
FORM W-9 all accounts, enter Taxpayer Identification Social Security Number
DEPARTMENT OF THE Number in the box at right. (For most
TREASURY individuals, this is your social security OR
INTERNAL REVENUE number. For sole proprietors or resident
SERVICE aliens, see the W-9 Guidelines. For other _______________________________
entities, it is your Employer Identification Employer Identification Number
Number. If you do not have a number, see
Obtaining a Number in the enclosed W-9 (If awaiting TIN, write
PAYER'S REQUEST Guidelines.) Certify by signing and dating "Applied For")
FOR TAXPAYER below.
IDENTIFICATION
NUMBER (TIN) Note: If the account is in more than one
name, see chart in the enclosed W-9
Guidelines to determine which number to
give the payer.
PART II:--For payees exempt from backup
withholding, see the enclosed W-9 Guidelines
and complete as instructed therein.
</TABLE>
Certification--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification
Number (or I am waiting for a number to be issued to me);
(2) I am not subject to backup withholding either because (a) I am exempt
from backup withholding, (b) I have not been notified by the Internal
Revenue Service (the "IRS") that I am subject to backup withholding as
a result of a failure to report all interest or dividends, or (c) the
IRS has notified me that I am no longer subject to backup withholding;
and
(3) Any other information provided on this form is true and correct.
Certification Instructions--You must cross out item (2) above if you have
been notified by the IRS that you are subject to backup withholding because
of underreporting interest or dividends on your tax return. However, if,
after being notified by the IRS that you were subject to backup
withholding, you received another notification from the IRS that you were
no longer subject to backup withholding, do not cross out item (2). (Also
see instructions in the enclosed W-9 Guidelines.)
Signature_______________________________________ Date__________________
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY AMOUNTS PAID TO YOU PURSUANT TO THE EXCHANGE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING (OR
WILL SOON APPLY FOR) A TAXPAYER IDENTIFICATION NUMBER.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (1) I have mailed or delivered
an application to receive a taxpayer identification number to the
appropriate Internal Revenue Service Center or Social Security
Administration Office or (2) I intend to mail or deliver an application in
the near future. I understand that if I do not provide a taxpayer
identification number by the time of the exchange, 31% of all reportable
payments made to me on account of the New Class C Certificates shall be
retained until I provide a taxpayer identification number to the Exchange
Agent and that, if I do not provide my taxpayer identification number
within 60 days, such retained amounts shall be remitted to the Internal
Revenue Service as backup withholding and 31% of all reportable payments
made to me thereafter will be withheld and remitted to the Internal Revenue
Service until I provide a taxpayer identification number.
SIGNATURE:______________________________________ DATE: ________________
CERTIFICATE OF FOREIGN STATUS
Substitute CERTIFICATION:
Form W-8
Under penalties of perjury, I certify that I
Department of the Treasury am an exempt foreign person because:
Internal Revenue Service
1) I am a nonresident alien individual or a
foreign corporation, partnership, estate,
or trust;
2) I am an individual who has not been, and
plans not to be, present in the United
States for a total of 183 days or more
during the calendar year; and
3) I am neither engaged, nor plan to be
engaged during the year, in a United
States trade or business that has
effectively connected gains from
transactions with a broker or a barter
exchange.
Signature _______________________________ Date _______________________
Print Name _______________________________
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
US AIRWAYS, INC.
FOR TENDER OF
CLASS C PASS THROUGH
CERTIFICATES, SERIES 1998-1
This Notice of Guaranteed Delivery, or one substantially equivalent to
this form, must be used to accept the Exchange Offer (as defined below) of
US Airways, Inc., a Delaware corporation (the "Company"), made pursuant to
the Prospectus, dated __________, 1999 (the "Prospectus"), if certificates
for the outstanding Old Class C Certificates are not immediately available,
or time will not permit all required documents to reach State Street Bank
and Trust Company (the "Exchange Agent") on or prior to 5:00 p.m., New York
City time, on the Expiration Date (as defined below), or if holders cannot
complete the procedure for book-entry transfer on a timely basis. Such form
may be delivered or transmitted by facsimile transmission, mail or hand
delivery to the Exchange Agent as set forth below. In addition in order to
utilize the guaranteed delivery procedure to tender the Old Class C
Certificates pursuant to the Exchange Offer, a completed signed and dated
Letter of Transmittal (or facsimile thereof) must also be received by the
Exchange Agent prior to 5:00 p.m., New York City time, at least within
three New York Stock Exchange trading days after the Expiration Date.
Capitalized terms not defined herein are defined in the Prospectus.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
_______ ___, 1999, UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERED OLD
CLASS C CERTIFICATES MAY BE WITHDRAWN AT ANY TIME ON OR PRIOR TO THE
EXPIRATION DATE.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
STATE STREET BANK AND TRUST COMPANY
BY HAND, REGISTERED MAIL OR OVERNIGHT CARRIER:
State Street Bank and Trust Company
Corporate Trust Department
Two International Place -- 4th Floor
Boston, MA 02110
Attn: Susan Lavey
Phone: (617) 664-5314
BY FACSIMILE:
(617) 664-5290
Attn: Susan Lavey
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER
THAN AS SET FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED
DELIVERY VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO,
SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN
THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
Ladies and Gentlemen:
The undersigned hereby tenders to the Company, upon the terms and
subject to the conditions set forth in the Prospectus and the Letter of
Transmittal (which together constitute the "Exchange Offer"), receipt of
which are hereby acknowledged, the aggregate principal amount of Old Class
C Certificates set forth below pursuant to the guaranteed delivery
procedure described in "The Exchange Offer Guaranteed Delivery Procedures"
section in the Prospectus and Instruction 1 of the Letter of Transmittal.
Name(s) of Registered Holder(s):__________________________________________
(Please Print or Type)
Principal Amount of Old Certificate No(s). (if available):
Certificates Tendered:*
$____________________ ____________________
$____________________ ____________________
$____________________ ____________________
* Must be in integral multiples of $1,000.
If Old Class C Certificates will be delivered by book-entity transfer
to The Depository Trust Company ("DTC"), provide the DTC account number.
DTC Account Number:________________________________________
All authority herein conferred or agreed to be conferred shall survive
the death or incapacity of the undersigned and every obligation of the
undersigned hereunder shall be binding upon the heirs, executors,
administrators, personal representatives, trustees in bankruptcy, legal
representatives, successors and assigns of the undersigned.
PLEASE SIGN HERE
Must be signed by the holder(s) of Old Class C Certificates as their
name(s) appear(s) on certificates for Old Class C Certificates or on a
security position listing, or by person(s) authorized to become registered
holder(s) by endorsement and documents transmitted with this Notice of
Guaranteed Delivery.
Signature(s) of Holder(s) or ________________________ Date ____________
Authorized Signatory
Area Code and Telephone Number:___________________________________________
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must set forth his or her full title
below and, unless waived by the Company, provide proper evidence
satisfactory to the Company of such person's authority to so act.
Please print name(s) and address(es)
Name(s) of Holder(s) ______________________________________
Title/Capacity: ______________________________________
Address(es): ______________________________________
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or a correspondent in the
United States or an "eligible guarantor institution" within the meaning of
Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, hereby
guarantees that the undersigned will deliver to the Exchange Agent the
certificates representing the Old Class C Certificates being tendered
hereby in proper form for transfer (or a confirmation of book-entry
transfer of such Old Class C Certificates into the Exchange Agent's account
at the book-entry transfer facility of DTC) with delivery of a properly
completed and duly executed Letter of Transmittal (or facsimile thereof),
with any required signature guarantees, or an Agent's Message (as defined
in "The Exchange Offer Procedures for Tendering" in the Prospectus), and
any other required documents, all within three New York Stock Exchange
trading days after the Expiration Date.
Name of Firm ___________________________ _______________________________
(Authorized Signature)
Address ________________________________ Name __________________________
Please Print or Type
Zip Code _______________________________ Title _________________________
Dated __________________________________ Telephone Number ______________
The institution that completes this form must communicate the
guarantee to the Exchange Agent and must deliver the certificates
representing any Old Class C Certificates (or a confirmation of book-entry
transfer of such Old Class C Certificates into the Exchange Agent's account
at DTC) and the Letter of Transmittal (or an Agent's Message in lieu
thereof) to the Exchange Agent within the time period shown herein. Failure
to do so could result in a financial loss to such institution.
NOTE: DO NOT SEND CERTIFICATES REPRESENTING OLD CLASS C CERTIFICATES
WITH THIS FORM. CERTIFICATES REPRESENTING OLD CLASS C CERTIFICATES SHOULD
ONLY BE SENT WITH YOUR LETTER OF TRANSMITTAL.
