Registration No. 333 -
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Filed with the Securities and Exchange Commission on June 2, 1999
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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US AIRWAYS, INC.
(Exact name of registrant as specified in its charter)
State of Incorporation: Delaware
2345 Crystal Drive, Arlington, Virginia 22227
(Address of principal executive offices)
(703) 872-7000
(Registrant's telephone number, including area code)
(I.R.S. Employer Identification No.: 53-0218143)
US AIRWAYS GROUP, INC.
(Exact name of registrant as specified in its charter)
State of Incorporation: Delaware
2345 Crystal Drive, Arlington, Virginia 22227
(Address of principal executive offices)
(703) 872-5306
(Registrant's telephone number, including area code)
(I.R.S. Employer Identification No.: 54-1194634)
Thomas A. Mutryn Copies to:
Senior Vice President - Finance and Lawrence M. Nagin
Chief Financial Officer
US Airways, Inc. Executive Vice President
Corporate Affairs
US Airways Group, Inc. and General Counsel
2345 Crystal Drive US Airways, Inc.
Arlington, Virginia 22227 2345 Crystal Drive
(703) 872-7000 Arlington, Virginia 22227
(Name, address, including zip code, and (703) 872-7000
telephone number, including area code,
of agent for service) Seth E. Jacobson
Skadden, Arps, Slate, Meagher &
Flom (Illinois)
333 W. Wacker Dr.
Chicago, Illinois 60606
(312) 407-0700
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the follow-
ing box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933 other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [x]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434 under the Securities Act, please check the following box. [ ]
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Title of Each Proposed Maximum Proposed Maximum Amount of
Class of Securities Amount to be Aggregate Price Aggregate Registration
To be Registered Registered(1) Per Unit (1) Offering Price (2) Fee (3)
- ------------------- ------------- ---------------- ------------------ ------------
<S> <C> <C> <C> <C>
Pass Through
Certificates - - $1,500,000,000 (4) $263,480 (5)
Guaranties of
Pass Through
Certificates - - - - (6)
(1) Omitted pursuant to Rule 457 (o) under the Securities Act of 1933.
(2) Estimated solely for purposes of determining the registration fee pursuant to Rule
457 (o).
(3) Pursuant to Rule 457(o), the registration fee has been calculated on the basis of the
maximum aggregate offering price of the securities listed.
(4) Of the $1,500,000,000 of securities being registered hereunder, pursuant to Rule
429(b) under the Securities Act of 1933, an aggregate of $552,232,000 of securities
are being carried forward from the registrant's prior registration statement on Form
S-3 (SEC File No. 333-64425).
(5) In connection with the prior registration statement, registration fees of
approximately $162,908 previously were paid with respect to the $552,232,000 of
securities being carried forward herewith.
(6) No separate consideration will be received for the guarantees. Pursuant to Rule
457(n) under the Securities Act of 1933, no separate fee for any guarantee is
payable.
Pursuant to Rule 429 under the Securities Act of 1933, the prospectus set forth
herein also relates to securities registered pursuant to the prior registration statement.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT 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.
</TABLE>
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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 June 2, 1999
PROSPECTUS
$1,500,000,000
US AIRWAYS, INC.
US AIRWAYS GROUP, INC.
PASS THROUGH CERTIFICATES
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This prospectus relates to the issuance of pass through certificates by
one or more pass through trusts to be formed by US Airways, Inc. We will de-
scribe the specific terms of any offering of pass through certificates in a
prospectus supplement to this prospectus. You should read this prospectus
and the applicable prospectus supplement carefully before you invest.
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This prospectus may not be used to consummate sales of certificates un-
less accompanied by a prospectus supplement.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary
is a criminal offense.
The date of this prospectus is , 1999.
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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 pro-
spectus lists the page in this prospectus on which we have defined each such
term.
TABLE OF CONTENTS
Forward-Looking Statements 1
Summary 2
The Company 3
Ratio of Earnings to Fixed Charges 4
Use of Proceeds 4
Description of the Certificates 5
Description of the Equipment Notes 19
Certain United States Federal Income Tax Consequences 26
ERISA Considerations 29
Plan of Distribution 29
Selling Certificateholders 30
Legal Opinions 31
Experts 31
Where You Can Find More Information 31
Incorporation of Certain Documents by Reference 32
Index of Terms Appendix I
i
FORWARD-LOOKING STATEMENTS
The statements contained in this prospectus, any prospectus supplement
delivered with this prospectus and the information incorporated by reference
include forward-looking statements within the meaning of the Private Securi-
ties Litigation Reform Act of 1995. The preparation of forward-looking
statements requires the use of estimates of future revenues, expenses, activ-
ity levels and economic and market conditions, many of which are outside of
US Airways' control. These forward-looking statements involve risks, uncer-
tainties and other factors that may cause our actual results to differ mate-
rially from the results we discuss in the forward-looking statements. These
risks, uncertainties and other factors include, but are not limited to:
- general economic and business conditions;
- labor costs;
- aviation fuel costs;
- competitive pressures on pricing -- particularly from lower-cost
competitors;
- weather conditions;
- governmental legislation;
- consumer perceptions of our products; and
- demand for air transportation in the markets in which we operate.
The preparation of forward-looking statements also involves other fac-
tors and assumptions not identified above. The failure of these other fac-
tors and assumptions to be realized may also cause actual results to differ
materially from those discussed. We assume no obligation to update estimates
to reflect actual results, changes in assumptions or changes in other factors
affecting estimates.
SUMMARY
PASS THROUGH CERTIFICATES
The types of securities we may offer and sell from time to time by this
prospectus are pass through certificates ("Certificates"). The Certificates:
- will be issued by one or more trusts formed by US Airways;
- will represent an interest only in the property of the Trust that
issued the specific series of Certificates, and will not represent an
interest in or rights to the property of any other Trust formed to
issue a different series of Certificates;
- will be issued in one or more series;
- will have economic and other terms described in the prospectus
supplement relating to the specific series of Certificates and
delivered with this prospectus; and
- may have one or more types of credit enhancement.
We may offer and sell up to $1,500,000,000 of aggregate initial offering
price of Certificates pursuant to this prospectus and related prospectus sup-
plements. The initial offering price may be denominated in United States
dollars or foreign currencies based on the applicable exchange rate at the
time of sale.
PASS THROUGH TRUSTS
We will form a separate pass through trust (a "Trust") to issue each se-
ries of Certificates. Each Trust will pass through to holders of its Cer-
tificates payments that it receives on the property that it owns. The prop-
erty of each Trust may consist of:
- equipment notes of one or more series; and
- other property described in the applicable prospectus supplement.
Unless stated otherwise in a prospectus supplement, the trustee of each Trust
will be State Street Bank and Trust Company of Connecticut, National Associa-
tion (the "Trustee").
EQUIPMENT NOTES
The equipment notes owned by each Trust may consist of Leased Aircraft
Notes, Owned Aircraft Notes or a combination of these notes (the "Equipment
Notes").
"Leased Aircraft Notes" are issued by an Owner Trustee to finance or re-
finance the Owner Trustee's purchase of an aircraft, including the aircraft's
engines, which the Owner Trustee will in turn lease to us in a leveraged
lease transaction. Leased Aircraft Notes may also be issued to refinance an
aircraft previously financed by us. The Owner Trustee will make payments of
principal and interest on the Leased Aircraft Notes out of the rental pay-
ments we make to the Owner Trustee. Our obligation to pay rent to the Owner
Trustee may be
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guaranteed by our parent corporation, US Airways Group, Inc. ("US Airways
Group"), as described in the applicable prospectus supplement. Holders of
the Leased Aircraft Notes will not have recourse against us or our parent
guarantor, if any, for the payment of principal and interest to be made by
the Owner Trustee on the Leased Aircraft Notes.
"Owned Aircraft Notes" are issued by us so that we may finance or refi-
nance the purchase of an aircraft, including the aircraft's engines, that we
will own ourselves rather than lease from an Owner Trustee. Our obligation
to pay interest and repay principal on the Owned Aircraft Notes may be guar-
anteed by our parent guarantor, as described in the applicable prospectus
supplement. Holders of Owned Aircraft Notes will have recourse against us
and our parent guarantor, if any, for payment of principal and interest on
the Owned Aircraft Notes.
ADDITIONAL INFORMATION
We will describe in a prospectus supplement, which will be delivered
with this prospectus, the specific terms of each series of Certificates that
we may offer and sell from time to time. See "Description of the Certifi-
cates-General."
THE COMPANY
US Airways, Inc. is a certificated air carrier engaged primarily in the
business of transporting passengers, property and mail ("US Airways"). We
are the principal operating subsidiary of US Airways Group, accounting for
approximately 90% of US Airways Group's consolidated operating revenues for
the first three months of 1999.
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). US Airways is comprised of our "mainline" service, includ-
ing international service, and our recently introduced low-cost product
"MetroJet." Overall, the US Airways system includes US Airways together with
our code share partners US Airways Express and US Airways Shuttle. The com-
bined US Airways system served 202 destinations worldwide as of March 1999.
As of March 31, 1999, US Airways had more than 38,000 full-time equivalent
employees.
Our major connecting hubs are located at airports in Charlotte, Phila-
delphia and Pittsburgh. We also have substantial operations at the Balti-
more-Washington International Airport, Boston's Logan International Airport,
New York's LaGuardia Airport and Washington's Ronald Reagan Washington Na-
tional Airport. As of March 1999, measured by departures, we were the larg-
est airline at each of these airports and are the largest air carrier in many
other smaller eastern cities such as Albany, Buffalo, Hartford, Providence,
Richmond, Rochester and Syracuse. We also are the leading airline from the
Northeast United States to Florida. As of March 1999, approximately 84% of
our departures and approximately 56% of our capacity (available seat miles)
were deployed within the United States east of the Mississippi River.
US Airways and US Airways Group both are Delaware corporations, with ex-
ecutive offices located at 2345 Crystal Drive, Arlington, Virginia 22227. US
Airways' telephone number is (703) 872-7000 and US Airways Group's telephone
number is (703) 872-5306.
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RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges
for US Airways and US Airways Group and their consolidated subsidiaries for
the periods indicated:
Three months ended
March 31, Year ended December 31,
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1999 1998 1998 1997 1996 1995 1994
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US Airways 1.8 2.2 2.7 2.2 1.3 1.1 *
US Airways Group 1.5 2.1 2.5 2.1 1.5 1.2 **
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* For the year ended December 31, 1994, US Airways' earnings were not
sufficient to cover its fixed charges. Additional earnings of $721
million would have been required to achieve a ratio of earnings to fixed
charges of 1.0.
** For the year ended December 31, 1994, US Airways Group's earnings were not
sufficient to cover its fixed charges. Additional earnings of $690
million would have been required to achieve a ratio of earnings to fixed
charges of 1.0.
For purposes of calculating the ratios of earnings to fixed charges,
earnings consist of pretax income, fixed charges, capitalized interest and
amortization of previously capitalized interest. Fixed charges consist of
interest expense, amortization of debt issue expense and the portion of
rental expense representative of interest expense.
USE OF PROCEEDS
Except as set forth in the applicable prospectus supplement, the Trustee
for a Trust will use the proceeds from the sale of the Certificates issued by
that Trust to purchase one or more Leased Aircraft Notes or Owned Aircraft
Notes. The issuer of the Leased Aircraft Notes will use the proceeds from
the sale of the Leased Aircraft Notes to finance the purchase of an aircraft,
which we will lease from that issuer. We will use the proceeds from the sale
of Owned Aircraft Notes to a Trust to finance the purchase of an aircraft
which we will own ourselves rather than lease from another person. Leased
Aircraft Notes or Owned Aircraft Notes may also be issued to refinance debt,
lease or other transactions previously entered into to finance the applicable
aircraft.
A Trust may hold Leased Aircraft Notes or Owned Aircraft Notes that are
subordinated in right of payment to other Equipment Notes or other debt re-
lated to the same leased or owned aircraft. In addition, the Trustee on be-
half of one or more Trusts may enter into an intercreditor or subordination
agreement establishing priorities among series of Certificates. Also, the
Certificates of one or more series may be credit enhanced. We will describe
any such credit enhancements in the applicable prospectus supplement.
To the extent that the Trustee does not use the proceeds of any offering
of Certificates to purchase Equipment Notes on the date those Certificates
are issued, it will hold the proceeds for the benefit of the holders of the
Certificates under arrangements that we will describe in the applicable pro-
spectus supplement. If the Trustee does not subsequently use any
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portion of the proceeds to purchase Equipment Notes by the relevant date
specified in the applicable prospectus supplement, it will return that por-
tion of the proceeds to the holders of the Certificates.
In addition, we may offer Certificates subject to delayed aircraft fi-
nancing arrangements, such as causing the proceeds from the sale of Certifi-
cates to be invested with a depositary or causing the proceeds to be held
pursuant to an escrow arrangement until used to purchase Equipment Notes. In
these circumstances, we will describe in the applicable prospectus supplement
how the proceeds of the Certificates will be held or applied during any such
delayed aircraft financing period, including any depositary or escrow ar-
rangement.
DESCRIPTION OF THE CERTIFICATES
The following description is a summary of the terms of the Certificates
that we expect will be common to all series of Certificates. Most of the fi-
nancial terms and other specific terms of any series of Certificates will be
described in a prospectus supplement to be attached to this prospectus.
Since the terms of the specific series of Certificates may differ from the
general information provided below, you should rely on the information in the
prospectus supplement instead of the information in this prospectus if the
information in the prospectus supplement is different from the information
below. To the extent that any provision in any prospectus supplement is in-
consistent with any provision in this summary, the provision of such prospec-
tus supplement will control.
Because the following description is a summary, it does not describe
every aspect of the Certificates, and it is subject to and qualified in its
entirety by reference to all the provisions of the Basic Agreement and the
applicable Trust Supplements. The form of Basic Agreement has been filed as
an exhibit to the registration statement of which this prospectus is a part.
The Trust Supplement relating to each series of Certificates and the forms of
the related note purchase agreement, indentures, leases, trust agreements,
participation agreements, intercreditor agreement and liquidity facility ar-
rangement and other material agreements, as applicable, will be filed as ex-
hibits to a post-effective amendment to the registration statement of which
this prospectus is a part, a Current Report on Form 8-K, a Quarterly Report
on Form 10-Q or an Annual Report on Form 10-K, as applicable, filed by US
Airways or US Airways Group with the Securities and Exchange Commission.
GENERAL
The terms of a Pass Through Trust Agreement (the "Basic Agreement")
among us, our parent guarantor and the Trustee generally will apply to all of
the Trusts formed by us to issue Certificates by this prospectus. We will
create a separate Trust for each series of Certificates by entering into a
separate supplemental trust agreement (the "Trust Supplement") for that
Trust. The Trust Supplement will set forth the additional terms governing
the specific Trust to which it relates and, to the extent inconsistent with
the Basic Agreement, will supersede the Basic Agreement.
Each Certificate will represent a fractional undivided interest in the
Trust created by the Trust Supplement pursuant to which such Certificate was
issued and all payments and distributions will be made only from the property
owned by that Trust. The property of a Trust (the "Trust Property") will in-
clude:
- the Equipment Notes held in such Trust and all monies at any time paid
thereon and all monies due and to become due thereunder, subject to
the effect of any cross-subordination provisions described in the
prospectus supplement for a series of Certificates;
- if so specified in the prospectus supplement related to a series of
Certificates, rights under any escrow arrangement to withdraw the
proceeds of that series of Certificates to either purchase Equipment
Notes or return unused proceeds to the holders of that series of
Certificates;
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- funds from time to time deposited with the Trustee in accounts
relating to such Trust; and
- if so specified in the prospectus supplement related to a series of
Certificates, rights under intercreditor agreements relating to
Cross-subordination arrangements and monies receivable under a
liquidity facility relating to that Trust.
Equipment Notes may be Leased Aircraft Notes or Owned Aircraft Notes.
Leased Aircraft Notes will be issued in connection with the leveraged lease
of an aircraft (a "Leased Aircraft") to US Airways. Except as set forth in
the applicable prospectus supplement, each Leased Aircraft will be leased to
US Airways under a lease (a "Lease") between US Airways and a bank, trust
company or other institution acting not in its individual capacity but solely
as trustee (an "Owner Trustee") of a separate trust for the benefit of one
more beneficial owners (each, an "Owner Participant") of the Leased Aircraft.
The Owner Trustee will issue the Leased Aircraft Notes on a non-recourse ba-
sis under separate trust indentures (the "Leased Aircraft Indentures") be-
tween it and the applicable Loan Trustee to finance or refinance a portion of
the cost to the Owner Trustee of the applicable Leased Aircraft. The Owner
Trustee will obtain a portion of the funding for the Leased Aircraft from the
equity investments of the related Owner Participants and, to the extent set
forth in the applicable prospectus supplement, additional debt secured by
such Leased Aircraft or other sources. The Leased Aircraft also may be sub-
ject to other financing arrangements. No Owner Trustee or Owner Participant,
however, will be personally liable for any principal or interest payable un-
der the related Leased Aircraft Indenture or the Leased Aircraft Notes issued
thereunder. The rents and other amounts payable by US Airways under the
Lease relating to any Leased Aircraft will be in amounts sufficient to pay
when due all scheduled principal and interest payments on the Leased Aircraft
Notes issued under the Leased Aircraft Indenture in respect of such Leased
Aircraft. Payments or rent under the leases may be guaranteed by US Airways
Group.
US Airways will issue Owned Aircraft Notes under separate trust inden-
tures (the "Owned Aircraft Indentures" and together with the Leased Aircraft
Indentures, the "Indentures") between US Airways and a bank, trust company or
other institution or person specified in the related prospectus supplement,
as trustee thereunder (in such capacity, herein referred to as the "Loan
Trustee"). The Owned Aircraft Notes will be issued in connection with the
financing or refinancing of all or a portion of the equipment cost of an air-
craft, including engines (each, an "Owned Aircraft," and together with the
Leased Aircraft, the "Aircraft") and will be recourse obligations of US Air-
ways. Payments of principal and interest under the Owned Aircraft Notes may
be guaranteed by US Airways Group. The Owned Aircraft may secure additional
debt or be subject to other financing arrangements.
The Equipment Notes issued under an Indenture may be held in more than
one Trust, and one Trust may hold Equipment Notes issued under more than one
Indenture (the Indenture pursuant to which any particular Equipment Notes are
issued is referred to as a "Related Indenture"). Unless otherwise provided
in a prospectus supplement, only Equipment Notes having the same priority of
payment (the Equipment Notes having the same priority, a "Class") as compared
to other Equipment Notes issued under the Related Indenture may be held in
the same Trust.
Unless otherwise stated in the applicable prospectus supplement, each
Certificate will be issued in minimum denominations of $1,000 or any integral
multiple thereof, except that one Certificate of each series may be issued in
a different denomination. The Certificates do not represent an interest in
or obligation of US Airways, US Airways Group, the Trustee, any of the Owner
Trustees or Loan Trustees, in their individual capacities, any Owner Partici-
pant, or any affiliate of any such persons. Each Certificateholder by its
acceptance of a Certificate will be deemed to agree to look solely to the in-
come and proceeds from the Trust Property as provided in the Basic Agreement
and the applicable Trust Supplement.
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Interest will be passed through to the registered holders of Certifi-
cates of a Trust at the rate per annum payable on the Equipment Notes held in
that Trust, as set forth on the cover page of the applicable prospectus sup-
plement, subject to the effect of any cross-subordination provisions de-
scribed in the prospectus supplement for a series of Certificates.
Reference is made to the prospectus supplement that accompanies this
prospectus for a description of the specific series of Certificates being of-
fered thereby, including:
(1) the specific designation, title and amount of the Certificates;
(2) the initial public offering price, amounts payable with respect to
and distribution dates applicable to the Certificates;
(3) the currency or currencies (including currency units) in which the
Certificates may be denominated;
(4) the specific form of the Certificates, including whether or not the
Certificates are to be issued in accordance with a book-entry
system;
(5) a description of the Equipment Notes to be purchased by the Trust
issuing that series of Certificates, including (a) the period or
periods within which, the price or prices at which, and the terms
and conditions upon which the Equipment Notes may or must be
redeemed or defeased in whole or in part, by US Airways or, with
respect to Leased Aircraft Notes, the Owner Trustee, (b) the
payment priority of the Equipment Notes in relation to any other
Equipment Notes issued with respect to the related aircraft and
(c) any intercreditor or other rights or limitations between or
among the holders of Equipment Notes of different priorities issued
with respect to the same aircraft;
(6) a description of the related aircraft;
(7) a description of the related note purchase agreement and Related
Indentures, including a description of the events of default under
the Related Indentures, the remedies exercisable upon the
occurrence of such events of default and any limitations on the
exercise of such remedies with respect to the Equipment Notes;
(8) if the Certificates relate to Leased Aircraft, a description of the
related Leases, trust agreements and participation agreements,
including (a) the names of the related Owner Trustees, (b) a
description of the events of default under the related Leases, the
remedies exercisable upon the occurrence of such events of default
and any limitations on the exercise of such remedies with respect
to the Leased Aircraft Notes, and (c) the rights of the related
Owner Trustee, if any, and/or Owner Participant, if any, to cure
failures of US Airways to pay rent under the related Lease;
(9) the extent, if any, to which the provisions of the operative
documents applicable to the Equipment Notes may be amended by the
parties thereto without the consent of the holders of, or only upon
the consent of the holders of a specified percentage of aggregate
principal amount of, the Equipment Notes;
(10) cross-default or cross-collateralization provisions in the Related
Indentures, if any;
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(11) a description of any intercreditor, subordination or similar
provisions among the holders of Certificates, including any
cross-subordination provisions and provisions relating to control
of remedies, among the holders of Certificates issued by separate
Trusts;
(12) a description of any deposit or escrow agreement, any liquidity or
revolving credit facility or other similar arrangement providing
for the deposit of funds or collateralization, credit support or
liquidity enhancements for any series of Certificates;
(13) any guarantee of our obligation to make rental payments with
respect to a Leased Aircraft or to make principal and interest
payments with respect to Owned Aircraft Notes;
(14) any arrangements for the investment or other use of proceeds of the
Certificates prior to the purchase of the Equipment Notes;
(15) the names of the underwriters, dealers or agents, if any, through
or to which we will sell the Certificates, the compensation, if
any, of such underwriters, dealers or agents and the net proceeds
from the offering of the Certificates;
(16) the United States federal income tax considerations applicable to
the Certificates; and
(17) any other special terms pertaining to the Certificates.
If any Certificates are denominated in one or more foreign currencies or
currency units, the restrictions, certain United States federal income tax
considerations, specific terms and other information with respect to such
Certificates and such foreign currency or currency units will be set forth in
the applicable prospectus supplement.
BOOK-ENTRY REGISTRATION
General
Unless otherwise specified in the applicable prospectus supplement, the
Certificates will be subject to the provisions described below.
Upon issuance, each series of Certificates will be represented by one or
more fully registered global certificates. Unless otherwise provided in a
prospectus supplement, each global certificate will be deposited with, or on
behalf of, The Depository Trust Company ("DTC") and registered in the name of
Cede & Co. ("Cede"), the nominee of DTC. No person acquiring an interest in
such Certificates ("Certificate Owner") will be entitled to receive a cer-
tificate 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 below, all
references in this prospectus and any prospectus supplement to actions by
Certificateholders will refer to actions taken by DTC upon instructions from
DTC Participants, and all references herein to distributions, notices, re-
ports and statements to Certificateholders will refer, as the case may be, to
distributions, notices, reports and statements to DTC or Cede, as the regis-
tered 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 Securities Exchange Act of 1934. DTC
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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 certifi-
cates. 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 Stock Exchange,
Inc., the American Stock Exchange, Inc., and the National Association of Se-
curities Dealers, Inc. Indirect access to the DTC system also is available
to banks, brokers, dealers, trust companies and other entities that clear
through or maintain a custodial relationship with a DTC Participant either
directly or indirectly ("Indirect Participants").
Under the rules, regulations and procedures creating and affecting DTC
and its operations (the "Rules"), DTC is required to make book-entry trans-
fers 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. 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 payments with respect to the Certificates 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 cred-
ited with ownership of the Certificates in amounts proportionate to the prin-
cipal amount of the applicable DTC Participant's holdings of beneficial in-
terests in the Certificates, as shown on the records of DTC or its nominee.
US Airways also expects that DTC Participants will thereafter forward pay-
ments to Indirect Participants or Certificate Owners, as the case may be, in
accordance with standing instructions and customary industry practices. DTC
Participants will be responsible for forwarding distributions to the Certifi-
cate Owners. Accordingly, although Certificate Owners will not possess the
Certificates, the Rules provide a mechanism by which Certificate Owners will
receive payments on the Certificates and will be able to transfer their in-
terests.
Unless and until the Definitive Certificates are issued under the lim-
ited circumstances described below, the only Certificateholder will be Cede,
as nominee of DTC. Certificate Owners will not be recognized by the Trustee
as Certificateholders, under the Basic Agreement, and Certificate Owners will
be permitted to exercise the rights of Certificateholders only indirectly
through DTC and DTC Participants. 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 ac-
counts with DTC the Certificates are credited. Additionally, DTC has advised
US Airways that in the event any action requires approval by Certificatehold-
ers 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. Conveyance of notices and other
communications by DTC to DTC Participants and by DTC Participants to Indirect
Participants and to Certificate Owners 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 SEC.
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.
None of US Airways, US Airways Group or the Trustee will have any li-
ability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in the Certificates held by Cede, as nomi-
nee for DTC, for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests or for the performance by
9
DTC, any DTC Participant or any Indirect Participant of their respective ob-
ligations under the rules and procedures governing their obligations.
The applicable prospectus supplement will specify any additional book-
entry registration procedures applicable to Certificates denominated in a
currency other than United States dollars.
The information contained in this prospectus concerning DTC and its book
entry system has been obtained from sources US Airways believes to be reli-
able, 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 mar-
ket trading activity in the Certificates will therefore be required by DTC to
settle in immediately available funds. No assurance can be given as to the
effect, if any, of settlement in same-day funds on trading activity in the
Certificates.
Definitive Certificates
Certificates will be issued in certificated form ("Definitive Certifi-
cates") to Certificate Owners or their nominees, rather than to DTC or its
nominee, only if:
- US Airways advises the Trustee in writing that DTC is no longer
willing or able to discharge properly its responsibilities as
depository with respect to such Certificates and US Airways or the
Trustee is unable to locate a qualified successor;
- US Airways, at its option, elects to terminate the book-entry system
through DTC; or
- after the occurrence of certain events of default or other events
specified in the related prospectus supplement, Certificate Owners
with fractional undivided interests aggregating not less than a
majority in interest in such Trust advise the Trustee, US Airways and
DTC through DTC Participants in writing that the continuation of a
Book-entry system through DTC Participants (or a successor thereto) is
no longer in the Certificate Owners' best interest.
Upon the occurrence of any event described in the immediately preceding sen-
tence, the Trustee will be required to notify all Certificate Owners through
DTC of the availability of Definitive Certificates. Upon surrender by DTC of
the certificates representing the Certificates and receipt of instructions
for re-registration, the Trustee will reissue the Certificates as Definitive
Certificates to Certificate Owners.
Distributions of principal, premium, if any, and interest with respect
to Certificates will thereafter be made by the Trustee directly in accordance
with the procedures set forth in the Basic Agreement and the applicable Trust
Supplements, to holders in whose names the Definitive Certificates were reg-
istered at the close of business on the applicable record date. Such dis-
tributions will be made by check mailed to the address of such holder as it
appears on the register maintained by the Trustee.
10
The final payment on any Certificate, however, will be made only upon presen-
tation and surrender of such Certificate at the office or agency specified in
the notice of final distribution to Certificateholders.
Definitive Certificates will be freely transferable and exchangeable at
the office of the Trustee upon compliance with the requirements set forth in
the Basic Agreement and the applicable Trust Supplements. No service charge
will be imposed for any registration of transfer or exchange, but payment of
a sum sufficient to cover any tax or other governmental charge will be re-
quired.
PAYMENTS AND DISTRIBUTIONS
US Airways will make scheduled rental payments for each Leased Aircraft
under the related Lease. These scheduled rental payments will be assigned
under the applicable Indenture by the related Owner Trustee to the Loan Trus-
tee to provide the funds necessary to make the corresponding scheduled pay-
ments of principal and interest due from the Owner Trustee on the Leased Air-
craft Notes issued by such Owner Trustee. The Loan Trustee will distribute
such payments to the Trustee for each Trust that holds such Leased Aircraft
Notes. After the Loan Trustee has made such principal and interest payments
to the Trustee for each of the Trusts on the Leased Aircraft Notes held in
such Trust, the Loan Trustee will, except under certain circumstances, pay
the remaining balance, if any, to the Owner Trustee for the benefit of the
related Owner Participant.
US Airways will make scheduled payments of principal of, and interest
on, the unpaid amount of the Owned Aircraft Notes to the Loan Trustee under
the Related Indenture, and the Loan Trustee will distribute such principal
and interest payments to the Trustee for each Trust that holds such Owned
Aircraft Notes.
Each Certificateholder of each Trust will be entitled to receive a pro
rata share of any distribution in respect of payments of principal and inter-
est made on the Equipment Notes held in the Trust, subject to the effect of
any cross-subordination provisions set forth in the prospectus supplement for
a series of Certificates. Payments of principal of, and interest on, the
Equipment Notes held in each Trust will be scheduled to be received by the
Trustee on the dates specified in the applicable prospectus supplement (such
scheduled payments of interest and principal on the Equipment Notes to the
Trustee are herein referred to as "Scheduled Payments", and the dates speci-
fied in the applicable prospectus supplement for distribution of Scheduled
Payments to the Trustee are herein referred to as "Regular Distribution
Dates"). Payments of principal, premium, if any, and interest with respect
to the Equipment Notes held in each Trust will be distributed by the Trustee,
upon receipt, to Certificateholders of such Trust on the dates and in the
currency specified in the applicable prospectus supplement, except in certain
cases when some or all of such Equipment Notes are in default as described in
the applicable prospectus supplement, subject to the effect of any
cross-subordination provisions set forth in the prospectus supplement for a
series of Certificates.
Payments of principal, premium, if any, and interest received by the
Trustee on account of the early redemption, if any, of the Equipment Notes
relating to one or more aircraft held in a Trust, and payments, other than
Scheduled Payments received on a Regular Distribution Date or within five
days thereafter, received by the Trustee following default in respect of
Equipment Notes held in a Trust relating to one or more aircraft ("Special
Payments") will be distributed on the date determined as described in the ap-
plicable prospectus supplement (a "Special Distribution Date") except that,
if specified in the applicable prospectus supplement, payments received by
the Trustee following default in respect of the Equipment Notes on a Regular
Distribution Date as a result of a drawing under any liquidity facility, as
described in the applicable prospectus supplement (each a "Liquidity Facil-
ity"), provided for the benefit of the specified Certificateholders will be
distributed on such Regular Distribution Date to such Certificateholders.
The Trustee will mail notice to the Certificateholders of record of the ap-
plicable Trust stating any such anticipated Special Distribution Date.
11
If any Regular Distribution Date or Special Distribution Date is not a
business day, distributions scheduled to be made on such Regular Distribution
Date or Special Distribution Date may be made on the next succeeding business
day without additional interest.
POOL FACTORS
Unless otherwise described in the applicable prospectus supplement, the
"Pool Balance" for each Trust or for the Certificates issued by any Trust in-
dicates, as of any date, the original aggregate face amount of the Certifi-
cates of such Trust less the aggregate amount of all payments made in respect
of the Certificates of such Trust other than payments made in respect of in-
terest or premium thereon or reimbursement of any related costs and expenses.
The Pool Balance for each Trust as of any Regular Distribution Date or Spe-
cial Distribution Date will be computed after giving effect to the payment of
principal, if any, on the Equipment Notes or other Trust Property held in
such Trust and the distribution thereof to be made on that date.
Unless otherwise described in the applicable prospectus supplement, the
"Pool Factor" for each Trust as of any Regular Distribution Date or Special
Distribution Date is the quotient (rounded to the seventh decimal place) com-
puted by dividing (a) the Pool Balance by (b) the aggregate original face
amount of the Certificates of such Trust. The Pool Factor for each Trust as
of any Regular Distribution Date or Special Distribution Date will be com-
puted after giving effect to the payment of principal, if any, on the Equip-
ment Notes or other Trust Property held in such Trust and distribution
thereof to be made on that date. The Pool Factor for each Trust initially
will be 1.0000000; thereafter, the Pool Factor for each Trust will decline as
described herein to reflect reductions in the Pool Balance of such Trust.
The amount of a Certificateholder's pro rata share of the Pool Balance of a
Trust can be determined by multiplying the original denomination of the
holder's Certificate of such Trust by the Pool Factor for such Trust as of
the applicable Regular Distribution Date or Special Distribution Date. The
Pool Factor and the Pool Balance for each Trust will be mailed to Certifi-
cateholders of such Trust on each Regular Distribution Date and Special Dis-
tribution Date.
Unless there has been an early redemption, a purchase of an issue of
Equipment Notes by the related Owner Trustee after an Indenture Default, a
default in the payment of principal in respect of one or more issues of the
Equipment Notes held in a Trust or certain actions have been taken following
a default thereon, as described in the applicable prospectus supplement, the
Pool Factor for the Trusts will decline in proportion to the scheduled repay-
ments of principal on the Equipment Notes held in such Trust as described in
the applicable prospectus supplement. In the event of such redemption, pur-
chase or default, the Pool Factor and the Pool Balance of each Trust so af-
fected will be recomputed after giving effect thereto and notice thereof will
be mailed to the Certificateholders of such Trust. Each Trust will have a
separate Pool Factor.
REPORTS TO CERTIFICATEHOLDERS
On each Regular Distribution Date and Special Distribution Date, the
Trustee will include with each distribution of a Scheduled Payment or Special
Payment to Certificateholders of the related Trust a statement, giving effect
to such distribution to be made on such Regular Distribution Date or Special
Distribution Date, setting forth the following information (per $1,000 aggre-
gate principal amount of Certificates for such Trust, as to (1) and (2) be-
low):
(1) the amount of such distribution allocable to principal and the
amount allocable to premium, if any;
(2) the amount of such distribution allocable to interest;
(3) the Pool Balance and the Pool Factor for such Trust; and
(4) such additional or different information as may be described in the
applicable prospectus supplement.
12
As long as the Certificates are registered in the name of DTC or its
nominee, on the record date prior to each Regular Distribution Date and Spe-
cial Distribution Date, the Trustee will request from DTC a securities posi-
tion listing containing the names of all DTC Participants reflected on DTC's
books as holding interests in the Certificates on such record date. On each
Regular Distribution Date and Special Distribution Date, the applicable Trus-
tee will mail to each such DTC Participant the statement described above and
will make available additional copies as requested by such DTC Participant
for forwarding to Certificate Owners.
In addition, after the end of each calendar year, the Trustee will pre-
pare for each Certificateholder of each Trust at any time during the preced-
ing calendar year a report containing the sum of the amounts determined pur-
suant to clauses (1) and (2) above with respect to the Trust for such calen-
dar year or, in the event such person was a Certificateholder during only a
portion of such calendar year, for the applicable portion of such calendar
year, and such other items as are readily available to the Trustee and which
a Certificateholder will reasonably request as necessary for the purpose of
such Certificateholder's preparation of its federal income tax returns. Such
report and such other items will be prepared on the basis of information sup-
plied to the Trustee by the DTC Participants and will be delivered by the
Trustee to such DTC Participants to be available for forwarding by such DTC
Participants to Certificate Owners in the manner described above.
If the Certificates are issued in the form of Definitive Certificates,
the Trustee will prepare and deliver the information described above to each
Certificateholder of record of each Trust as the name and period of ownership
of such Certificateholder appears on the records of the registrar of the Cer-
tificates.
VOTING OF EQUIPMENT NOTES
Subject to the effect of any cross-subordination provisions set forth in
the related prospectus supplement, the Trustee, as holder of the Equipment
Notes held in each Trust, has the right to vote and give consents and waivers
with respect to such Equipment Notes under the Related Indentures. The Basic
Agreement and related Trust Supplement will set forth:
- the circumstances in which the Trustee may direct any action or cast
any vote as the holder of the Equipment Notes held in the applicable
Trust at its own discretion;
- the circumstances in which the Trustee will seek instructions from the
Certificateholders of such Trust; and
- if applicable, the percentage of Certificateholders required to direct
the Trustee to take any such action.
If specified in the related prospectus supplement, the right of a Trustee to
vote and give consents and waivers with respect to the Equipment Notes held
in the related Trust may, in the circumstances set forth in an intercreditor
agreement to be executed by such Trustee, be exercisable by another person
specified in the applicable prospectus supplement. If a Liquidity Facility
is used to make any payments to Certificateholders, the provider of the Li-
quidity Facility may be entitled to certain rights to vote or give consents
and waivers with respect to the Equipment Notes as described in the applica-
ble prospectus supplement.
EVENTS OF DEFAULT AND CERTAIN RIGHTS UPON AN EVENT OF DEFAULT
The prospectus supplement will specify the events of default under the
Basic Agreement (an "Event of Default") and the Related Indentures (an "In-
denture Default"). The Indenture Defaults in the case of Leased Aircraft In-
dentures will include events of default under the related Leases (a "Lease
Event of Default").
13
Unless otherwise provided in a prospectus supplement, all of the Equip-
ment Notes issued under the same Indenture will relate to a specific aircraft
and there will be no cross-collateralization or cross-default provisions in
the Indentures. As a result, events resulting in an Indenture Default under
any particular Indenture will not necessarily result in an Indenture Default
occurring under any other Indenture. If an Indenture Default occurs in fewer
than all of the Indentures, payments of principal and interest on the Equip-
ment Notes issued pursuant to Indentures with respect to which an Indenture
Default has not occurred will continue to be made as originally scheduled.
These cross-subordination agreements, if any, will be described in the pro-
spectus supplement for the affected series of Certificates.
The ability of the applicable Owner Trustee or Owner Participant under a
Leased Aircraft Indenture to cure Indenture Defaults, including an Indenture
Default that results from the occurrence of a Lease Event of Default under
the related Lease, will be described in the prospectus supplement. Unless
otherwise provided in a prospectus supplement, with respect to any Certifi-
cates entitled to the benefits of a Liquidity Facility, a drawing under any
such Liquidity Facility for the purpose of making a payment of interest as a
result of the failure by US Airways to have made a corresponding payment will
not cure an Indenture Default related to such failure by US Airways.
If the Equipment Notes outstanding under an Indenture are held by more
than one Trust, then the ability of the Certificateholders issued with re-
spect to any one Trust to cause the Loan Trustee with respect to any Equip-
ment Notes held in such Trust to accelerate the Equipment Notes under the ap-
plicable Indenture or to direct the exercise of remedies by the Loan Trustee
under the applicable Indenture will depend, in part, upon the proportion of
the aggregate principal amount of the Equipment Notes outstanding under such
Indenture and held in such Trust to the aggregate principal amount of all
Equipment Notes outstanding under such Indenture. In addition, if cross-
subordination provisions are applicable to any series of Certificates, then
the ability of the Certificateholders of any one Trust holding Equipment
Notes issued under an Indenture to cause the Loan Trustee with respect to any
Equipment Notes held in such Trust to accelerate the Equipment Notes under
such Indenture or to direct the exercise of remedies by the Loan Trustee un-
der such Indenture will depend, in part, upon the Class of Equipment Notes
held in such Trust.
If the Equipment Notes outstanding under an Indenture are held by more
than one Trust, then each Trust will hold Equipment Notes with different
terms from the Equipment Notes held in the other Trusts. In these circum-
stances, the Certificateholders of each Trust may have divergent or conflict-
ing interests from those of the Certificateholders of the other Trusts hold-
ing Equipment Notes issued under the same Indenture. As long as the same in-
stitution acts as Trustee of each Trust, in the absence of instructions from
the Certificateholders of any such Trust, the Trustee for such Trust could
for the same reason be faced with a potential conflict of interest upon an
Indenture Default. In such event, the Trustee will resign as Trustee of one
or all such Trusts, and a successor trustee will be appointed in accordance
with the terms of the Basic Agreement.
The prospectus supplement for a series of Certificates will specify
whether and under what circumstances the Trustee may or will sell for cash to
any person all or part of the Equipment Notes held in the related Trust. The
right to make any such sale may be exercisable by a person other than the
Trustee in the event that the applicable series of Certificates are subject
to any intercreditor, subordination or similar arrangements, and the proceeds
from any such sale will be distributed as contemplated by such arrangements.
Subject to these arrangements, any proceeds received by the Trustee upon any
such sale will be deposited in an account established by the Trustee for the
benefit of the Certificateholders of such Trust for the deposit of such Spe-
cial Payments (the "Special Payments Account") and will be distributed to the
Certificateholders of such Trust on a Special Distribution Date. The market
for Equipment Notes in default may be very limited, and there can be no as-
surance that they could be sold for a reasonable price. In addition, as long
as the same institution acts as Trustee of multiple Trusts, it may be faced
with a conflict in deciding from which Trust to sell Equipment Notes to
available buyers. If the Trustee sells any such Equipment Notes with respect
to which an Indenture Default exists for less than their outstanding princi-
pal amount, the Certificateholders of such Trust will receive a smaller
amount of principal distributions than anticipated and will not have any
claim for the shortfall against US Airways, US Airways Group, any Owner Trus-
tee, any Owner Participant or the Trustee.
14
Neither the Trustee nor the Certificateholders of such Trust could take any
action with respect to any remaining Equipment Notes held in such Trust so
long as no Indenture Defaults exist with respect thereto.
Subject to any intercreditor, subordination or similar arrangements, any
amount, other than Scheduled Payments received on a Regular Distribution
Date, distributed to the Trustee of any Trust by the Loan Trustee under any
Indenture on account of the Equipment Notes held in such Trust following an
Indenture Default under such Indenture will be deposited in the Special Pay-
ments Account for such Trust and will be distributed to the Certificatehold-
ers of such Trust on a Special Distribution Date. In addition, if an Inden-
ture provides that the applicable Owner Trustee or Owner Participant may, un-
der circumstances specified in such Indenture, redeem or purchase the out-
standing Equipment Notes issued under the applicable Indenture, the price
paid by such Owner Trustee or Owner Participant to the Trustee of any Trust
for the Equipment Notes issued under such Indenture and held in such Trust
will be deposited in the Special Payments Account for such Trust and will,
subject to any intercreditor, subordination or similar arrangements, be dis-
tributed to the Certificateholders of such Trust on a Special Distribution
Date.
Any funds representing payments received with respect to any Equipment
Notes held in a Trust which are in default, or the proceeds from the sale by
the Trustee of any such Equipment Notes, held by the Trustee in the Special
Payments Account for such Trust will, to the extent practicable, be invested
and reinvested by the Trustee in Permitted Investments pending the distribu-
tion of such funds on a Special Distribution Date. "Permitted Investments"
will be specified in the related prospectus supplement.
The Basic Agreement provides that the Trustee of each Trust will, within
90 days after the occurrence of a default in respect of such Trust, give to
the Certificateholders of such Trust notice, transmitted by mail, of all un-
cured or unwaived defaults with respect to such Trust known to it, provided
that, except in the case of default in the payment of principal, premium, if
any, or interest on any of the Equipment Notes held in such Trust, the Trus-
tee will be protected in withholding such notice if it in good faith deter-
mines that the withholding of such notice is in the interests of such Certi-
ficateholders. The term "default" as used in this paragraph only means the
occurrence of an Indenture Default with respect to Equipment Notes held in a
Trust as described above, except that in determining whether any such Inden-
ture Default has occurred, any related grace period or notice will be disre-
garded.
The Basic Agreement contains a provision entitling the Trustee of each
Trust, subject to the duty of the Trustee during a default to act with the
required standard of care, to be offered reasonable security or indemnity by
the Certificateholders of such Trust before proceeding to exercise any right
or power under the Basic Agreement at the request of such Certificateholders.
The prospectus supplement for a series of Certificates will specify the
percentage of Certificateholders entitled to waive, or to instruct the Trus-
tee to waive, any past Event of Default with respect to such Trust and its
consequences. The prospectus supplement for a series of Certificates also
will specify the percentage of Certificateholders (and whether of such Trust
or of any other Trust holding Equipment Notes issued under Related Inden-
tures) entitled to waive, or to instruct the Trustee or the Loan Trustee to
waive, any past Indenture Default under any Related Indenture and thereby an-
nul any direction given with respect to that Indenture Default.
MERGER, CONSOLIDATION AND TRANSFER OF ASSETS
US Airways will be prohibited from consolidating with or merging into
any other corporation or transferring substantially all of its assets as an
entirety to any other corporation unless
(a) the surviving, successor or transferee corporation:
15
- is validly existing under the laws of the United States or any
state thereof;
- is a citizen of the United States (as defined in Title 49 of the
United States Code relating to aviation (the "Transportation
Code")) holding an air carrier operating certificate issued by
the Secretary of Transportation pursuant to Chapter 447 of Title
49, United States Code, if, and so long as, such status is a
condition of entitlement to the benefits of Section 1110 of the
Bankruptcy Code; and
- expressly assumes all of the obligations of US Airways contained
in the Basic Agreement and any Trust Supplement, the note
purchase agreement, any Owned Aircraft Indentures and, with
respect to the Leased Aircraft, the applicable participation
agreements and Leases, and any other operative documents; and
(b) US Airways has delivered a certificate and an opinion or opinions
of counsel indicating that such transaction, in effect, complies
with such conditions.
MODIFICATIONS OF THE BASIC AGREEMENT
The Basic Agreement contains provisions permitting US Airways, US Air-
ways Group and the Trustee of each Trust to enter into a supplemental trust
agreement, without the consent of the holders of any of the Certificates of
such Trust, including among other things:
(1) to provide for the formation of such Trust and the issuance of a
series of Certificates and to set forth the terms of the
Certificates;
(2) to evidence the succession of another corporation or entity to
US Airways or US Airways Group and the assumption by such
corporation or entity of US Airways' or US Airways Group's
obligations under the Basic Agreement and the applicable Trust
Supplement;
(3) to add to the covenants of US Airways or US Airways Group for the
benefit of holders of such Certificates, or to surrender any right
or power in the Basic Agreement and the applicable Trust
Supplement conferred upon US Airways or US Airways Group;
(4) to cure any ambiguity or correct or supplement any defective or
inconsistent provision of the Basic Agreement or the applicable
Trust Supplement or to make any other provisions with respect to
matters or questions arising thereunder, provided such action will
not materially adversely affect the interests of the holders of
such Certificates, or to cure any ambiguity or correct any mistake
or (without limitation of the foregoing), to give effect or provide
for replacement liquidity facilities, if applicable to such
Certificates;
(5) to comply with any requirement of the SEC, any applicable law,
rules or regulations of any exchange or quotation system on which
any Certificates may be listed or of any regulatory body;
(6) to modify, eliminate or add to the provisions of the Basic
Agreement and the applicable Trust Supplement to the extent as will
be necessary to continue the qualification of the Basic Agreement
and the applicable Trust Supplement (including any supplemental
agreement) under the Trust Indenture Act of 1939, and to add to the
Basic Agreement and the applicable Trust Supplement
16
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 of the Basic Agreement or any corresponding provision in any
similar Federal statute hereafter enacted;
(7) to provide for a successor Trustee or to add to or change any
provision of the Basic Agreement and the applicable Trust
Supplement as necessary to facilitate the administration of the
Trusts thereunder by more than one Trustee;
(8) to provide certain information to the Trustee as required in the
Basic Agreement;
(9) to release US Airways Group from the Basic Agreement, but only if
US Airways Group has not executed a guarantee in respect of any
Lease or Equipment Note; and
(10) to make any other amendments or modifications to the Basic
Agreement provided, however, that such amendments or modifications
shall apply to Certificates of any series to be thereafter issued;
provided, in the case of clauses (1) through (10) above, that no such supple-
mental trust agreement will adversely affect the status of any Trust as a
grantor trust for United States federal income tax purposes.
The Basic Agreement also contains provisions permitting US Airways, US
Airways Group and the Trustee of each Trust, with the consent of the Certifi-
cateholders of such Trust evidencing fractional undivided interests aggregat-
ing not less than a majority in interest of such Trust, and, with respect to
any Leased Aircraft, with the consent of the applicable Owner Trustee (such
consent not to be unreasonably withheld), to execute supplemental trust
agreements adding any provisions to or changing or eliminating any of the
provisions of the Basic Agreement, and the applicable Trust Supplement to the
extent relating to such Trust, and the applicable Trust Supplement, or modi-
fying the rights of the Certificateholders, except that no such supplemental
trust agreement may, without the consent of each Certificateholder so af-
fected 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 in respect of any Certificate related
to such Trust, or change the date or place of any payment in
respect of any Certificate, or make distributions payable in coin
or currency other than that provided for in such Certificates, or
impair the right of any Certificateholder of such Trust to
institute suit for the enforcement of any such payment when due;
(2) permit the disposition of any Equipment Note held in such Trust,
except as provided in the Basic Agreement or the applicable Trust
Supplement, or otherwise deprive any Certificateholder of the
benefit of the ownership of the applicable Equipment Notes;
(3) reduce the percentage of the aggregate fractional undivided
interests of the Trust provided for in the applicable Trust
Supplement, the consent of the holders of which is required for any
such supplemental trust agreement or for any waiver provided for in
the Basic Agreement or such Trust Supplement;
(4) 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 such percentage or to
provide that
17
certain other provisions of the Basic Agreement and any applicable
Trust Supplement cannot be waived or modified without the consent
of all applicable Certificateholders;
(5) alter the priority of distributions specified in any applicable
intercreditor agreement, in a manner materially adverse to the
interests of the Certificateholders of such Trust; or
(6) adversely affect the status of any Trust as a grantor trust for
United States federal income tax purposes.
MODIFICATION OF INDENTURE AND RELATED AGREEMENTS
The prospectus supplement will specify the Trustee's obligations in the
event that the Trustee, as the holder of any Equipment Notes held in a Trust,
receives a request for its consent to any amendment, modification or waiver
under the Indenture or other documents relating to such Equipment Notes (in-
cluding any Lease with respect to Leased Aircraft Notes) or any Liquidity Fa-
cility.
CROSS-SUBORDINATION ISSUES
The Equipment Notes issued under an Indenture may be held in more than
one Trust, and one Trust may hold Equipment Notes issued under more than one
Related Indenture. Unless otherwise provided in a prospectus supplement,
only Equipment Notes of the same Class may be held in the same Trust. In
such event, payments made on account of a subordinate class of Certificates
issued under a prospectus supplement may, under circumstances described in
such prospectus supplement, be subordinated to the prior payment of all
amounts owing to Certificateholders of a Trust which holds senior Equipment
Notes issued under any Related Indentures. The prospectus supplement related
to an issuance of Certificates will describe any such cross-subordination
provisions and any related terms, including the percentage of Certificate-
holders under any Trust which are permitted to (a) grant waivers of defaults
under any Related Indenture, (b) consent to the amendment or modification of
any Related Indenture or (c) direct the exercise of remedial actions under
any Related Indenture.
TERMINATION OF THE TRUSTS
The obligations of US Airways, US Airways Group, if any, and the Trustee
with respect to a Trust will terminate upon the distribution to Certificate-
holders of such Trust of all amounts required to be distributed to them pur-
suant to the Basic Agreement and the applicable Trust Supplement and the dis-
position of all property held in such Trust. The Trustee will send to each
Certificateholder of record of such Trust notice of the termination of such
Trust, the amount of the proposed final payment and the proposed date for the
distribution of such final payment for such Trust. The final distribution to
any Certificateholder of such Trust will be made only upon surrender of such
Certificateholder's Certificates at the office or agency of the Trustee
specified in such notice of termination.
DELAYED PURCHASE OF EQUIPMENT NOTES
In the event that, on the issuance date of any Certificates, all of the
proceeds from the sale of such Certificates are not used to purchase the
Equipment Notes contemplated to be held in the related Trust, such Equipment
Notes may be purchased by the Trustee at any time on or prior to the date
specified in the applicable prospectus supplement. In such event, the pro-
ceeds from the sale of such Certificates not used to purchase Equipment Notes
on the issuance date will be held under an arrangement described in the ap-
plicable prospectus supplement pending the purchase of the Equipment Notes
not so purchased. The arrangements with respect to the payment of interest
on funds so held will be described in the applicable prospectus
18
supplement. If any such proceeds are not subsequently utilized to purchase
Equipment Notes by the relevant date specified in the applicable prospectus
supplement, such proceeds will be returned to the holders of such Certifi-
cates.
LIQUIDITY FACILITY
The related prospectus supplement may provide that one or more payments
of interest on the Certificates of one or more series will be supported by a
Liquidity Facility issued by an institution identified in the related pro-
spectus supplement. The provider of a Liquidity Facility may have a claim
senior to the Certificateholders as specified in the related prospectus sup-
plement. The prospectus supplement will also specify the circumstances under
which a liquidity provider will be entitled to direct the exercise of reme-
dies under any Indenture.
THE TRUSTEE
Unless otherwise provided in the prospectus supplement for any series of
Certificates, the Trustee for each series of Certificates will be State
Street Bank and Trust Company of Connecticut, National Association. With
certain exceptions, the Trustee makes no representations as to the validity
or sufficiency of the Basic Agreement, the Trust Supplements, the Certifi-
cates, the Equipment Notes, the Indentures, the Leases or other related docu-
ments. The Trustee will not be liable with respect to any series of Certifi-
cates for any action taken or omitted to be taken by it in good faith in ac-
cordance with the direction of the holders of a majority in face amount of
outstanding Certificates of such series issued under the Basic Agreement.
Subject to such provisions, such Trustee will be under no obligation to exer-
cise any of its rights or powers under the Basic Agreement at the request of
any holders of Certificates issued thereunder unless they will have offered
to the Trustee indemnity satisfactory to it. The Basic Agreement provides
that the Trustee in its individual or any other capacity may acquire and hold
Certificates issued thereunder and may, in accordance with the Basic Agree-
ment, otherwise deal with US Airways and, with respect to the Leased Air-
craft, with any Owner Trustee with the same rights it would have if it were
not the Trustee.
The Trustee may resign with respect to any or all of the Trusts at any
time, in which event US Airways will be obligated to appoint a successor
trustee. If the Trustee ceases to be eligible to continue as Trustee with
respect to a Trust or becomes incapable of acting as Trustee or becomes in-
solvent, US Airways may remove such Trustee, or any Certificateholder of such
Trust for at least six months may, on behalf of himself and all others simi-
larly situated, petition any court of competent jurisdiction for the removal
of such Trustee and the appointment of a successor trustee. Any resignation
or removal of the Trustee with respect to a Trust and appointment of a suc-
cessor trustee for such Trust does not become effective until acceptance of
the appointment by the successor trustee. Pursuant to such resignation and
successor trustee provisions, it is possible that a different trustee could
be appointed to act as the successor trustee with respect to each Trust. All
references in this prospectus to the Trustee should be read to take into ac-
count the possibility that the Trusts could have different successor trustees
in the event of such a resignation or removal.
The Basic Agreement provides that US Airways will pay the Trustee's fees
and expenses and indemnify the Trustee against certain liabilities.
DESCRIPTION OF THE EQUIPMENT NOTES
The statements made under this caption are summaries of terms that we
expect will be common to all Equipment Notes. Where no distinction is made
between the Leased Aircraft Notes and the Owned Aircraft Notes or between
their respective Indentures, such statements refer to any Equipment Notes and
any Indenture. Most of the financial terms and other specific terms of any
series of Equipment Notes will be described in a prospectus supplement to be
attached to this prospectus. Since the terms of the specific Equipment Notes
may differ from the general information provided below, you should rely on
19
the information in the prospectus supplement instead of the information in
this prospectus if the information in the prospectus supplement is different
from the information below.
Because the following information is summary, it does not describe every
aspect of the Equipment Notes, and it is subject to and qualified in its en-
tirety by reference to all the provisions of the applicable Equipment Notes,
Indentures, Leases, note purchase agreements, trust agreements, participation
agreements, intercreditor and subordination agreements, liquidity facility
arrangements and other agreements and arrangements relating to any series of
Equipment Notes.
Additional provisions with respect to the Equipment Notes and the asso-
ciated aircraft financing transactions will be described in the applicable
prospectus supplement. To the extent that any provision in any prospectus
supplement is inconsistent with any provision in this summary, the provision
of such prospectus supplement will control.
GENERAL
The Equipment Notes will be issued under Indentures between (a) in the
case of Leased Aircraft Notes, the related Loan Trustee and the Owner Trustee
of a trust for the benefit of the Owner Participant who is the beneficial
owner of such Leased Aircraft or (b) in the case of Owned Aircraft Notes, the
related Loan Trustee and US Airways.
The Leased Aircraft Notes will be nonrecourse obligations of the Owner
Trustee. All of the Leased Aircraft Notes issued under the same Indenture
will relate to and will be secured by one or more specific Leased Aircraft
and, unless otherwise specified in the applicable prospectus supplement, will
not be secured by any other aircraft. In each case, the Owner Trustee will
lease the related Leased Aircraft to US Airways pursuant to a separate Lease
between such Owner Trustee and US Airways.
US Airways' obligations under each Indenture relating to an Owned Air-
craft and under the related Owned Aircraft Notes will be direct obligations
of US Airways. All of the Owned Aircraft Notes issued under the same Inden-
ture will relate to, and will be secured by, one or more specific Owned Air-
craft and, unless otherwise specified in the applicable prospectus supple-
ment, will not be secured by any other aircraft.
If specified in a prospectus supplement, US Airways will have the right
(a) to arrange a sale and leaseback of one or more Owned Aircraft referred to
in such prospectus supplement and the assumption, on a non-recourse basis, of
the related Owned Aircraft Notes by an Owner Trustee or (b) to substitute
other aircraft, cash or U.S. governmental securities or a combination thereof
in place of the Owned Aircraft securing the related Owned Aircraft Notes.
The terms and conditions of any such sale and leaseback or substitution will
be described in the applicable prospectus supplement.
PRINCIPAL AND INTEREST PAYMENTS
Interest received by the Trustee on the Equipment Notes held in each
Trust will be passed through to the Certificateholders of such Trust on the
dates and at the rate per annum set forth in the applicable prospectus sup-
plement until the final distribution for such Trust. Scheduled principal
payments received by the Trustee 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 in the applicable prospectus supplement until
the final distribution date for such Trust. Payments on the Equipment Notes,
and any distributions to Certificateholders, may be subject to the terms of
any intercreditor, subordination or similar agreement or arrangement. If the
Liquidity Facility is used to make payments to Certificateholders, the pro-
vider of the Liquidity Facility may be entitled to all or a portion of such
payments on the Equipment Notes, as described in the applicable prospectus
supplement.
20
If any date scheduled for any payment of principal, premium, if any, or
interest with respect to the Equipment Notes is not a business day, such pay-
ment will be made on the next succeeding business day without any additional
interest unless otherwise provided in the applicable prospectus supplement.
REDEMPTION
The applicable prospectus supplement will describe the circumstances,
whether voluntary or involuntary, under which the Equipment Notes may be re-
deemed or purchased prior to their stated maturity date, in whole or in part,
the premium, if any, applicable upon certain redemptions or purchases and
other terms applying to the redemptions or purchases of such Equipment
Notes.
SECURITY
The Leased Aircraft Notes will be secured by:
- an assignment by the related Owner Trustee to the related Loan Trustee
of such Owner Trustee's rights (except for certain rights, including
those described below) under the Lease or Leases with respect to the
related Leased Aircraft, including the right to receive payments of
rent under the applicable Lease; and
- a mortgage granted to such Loan Trustee in such aircraft, subject to
the rights of US Airways under such Lease or Leases and other
property rights, if any, described in the applicable prospectus
supplement. Under the terms of each Lease, US Airways' obligations in
respect of each Leased Aircraft will be those of a lessee under a net
lease.
Accordingly, US Airways will be obligated, among other things and at its ex-
pense, to cause each Leased Aircraft to be duly registered, to pay all costs
of operating such aircraft and to maintain, service, repair and overhaul (or
cause to be maintained, serviced, repaired and overhauled) such aircraft.
With respect to the Leased Aircraft, the assignment by the related Owner
Trustee to the related Loan Trustee of its rights under the related Lease
will exclude, among other things:
- rights of such Owner Trustee and the related Owner Participant
relating to indemnification by US Airways for certain matters;
- insurance proceeds payable to such Owner Trustee in its individual
capacity and to such Owner Participant under liability insurance
maintained by US Airways pursuant to such Lease or by such Owner
Trustee or such Owner Participant;
- insurance proceeds payable to such Owner Trustee in its individual
capacity or to such Owner Participant under certain casualty insurance
maintained by such Owner Trustee or such Owner Participant pursuant to
such Lease; and
- any rights of such Owner Participant or such Owner Trustee to enforce
payment of the foregoing amounts and their respective rights to the
proceeds of the foregoing.
21
Further, unless and until an Indenture Default with respect to a Leased Air-
craft has occurred and is continuing, the related Loan Trustee may exercise
only limited rights of the related Owner Trustee under the related Lease.
The Owned Aircraft Notes will be secured by a mortgage granted to the
related Loan Trustee of all of US Airways' right, title and interest in and
to such Owned Aircraft. Under the terms of each Owned Aircraft Indenture, US
Airways will be obligated, among other things and at its expense, to cause
each Owned Aircraft to be duly registered, to pay all costs of operating such
aircraft and to maintain, service, repair and overhaul (or cause to be main-
tained, serviced, repaired and overhauled) such aircraft.
The prospectus supplement will describe the required insurance coverage
with respect to the related aircraft.
US Airways will be required, except under certain circumstances, to keep
each aircraft registered under the Transportation Code, and to record the In-
denture and the Lease, if applicable, among other documents, with respect to
each aircraft under the Transportation Code. Such recordation of the Inden-
ture, the Lease, if applicable, and other documents with respect to each air-
craft will give the related Loan Trustee a perfected security interest in the
related aircraft whenever it is located in the United States or any of its
territories and possessions. The Convention on the International Recognition
of Rights in aircraft (the "Convention") provides that such security will
also be recognized, with certain limited exceptions, in those jurisdictions
that have ratified or adhere to the Convention. US Airways will have the
right, subject to certain conditions, at its own expense to register each
aircraft in countries other than the United States. Each aircraft may also
be operated by US Airways or under lease, sublease or interchange arrange-
ments in countries that are not parties to the Convention. The extent to
which the related Loan Trustee's security interest would be recognized in an
aircraft located in a country that is not a party to the Convention, and the
extent to which such security interest would be recognized in a jurisdiction
adhering to the Convention if the aircraft is registered in a jurisdiction
not a party to the Convention, is uncertain. Moreover, in the case of an In-
denture Default, the ability of the related Loan Trustee to realize upon its
security interest in an aircraft could be adversely affected as a legal or
practical matter if such aircraft were registered or located outside the
United States.
Unless otherwise specified in the applicable prospectus supplement, the
Equipment Notes will not be cross-collateralized and consequently the Equip-
ment Notes issued in respect of any one aircraft will not be secured by any
other aircraft or, in the case of Leased Aircraft Notes, the Lease related to
any other aircraft.
Funds, if any, held from time to time by the Loan Trustee with respect
to any aircraft, prior to their distribution, will be invested and rein-
vested by such Loan Trustee. Such investment and reinvestment will be at the
direction of US Airways (except, with respect to a Leased Aircraft, in the
case of a Lease Event of Default under the applicable Lease or, with respect
to an Owned Aircraft, in the case of an Indenture Default under the applica-
ble Indenture), in certain investments described in the applicable Indenture.
The net amount of any loss resulting from any such investments will be paid
by US Airways.
Section 1110 of the U.S. Bankruptcy Code provides in relevant part that,
unless certain events occur after the commencement of the Chapter 11 case,
the right of lessors, conditional vendors and holders of security interests
with respect to equipment (as defined in Section 1110 of the U.S. Bankruptcy
Code) to take possession of such equipment in compliance with the provisions
of a lease, conditional sale contract or security agreement, as the case may
be, is not affected by:
(a) the automatic stay provision of the U.S. Bankruptcy Code, which
provision enjoins repossessions by creditors for the duration of
the reorganization period;
(b) the provision of the U.S. Bankruptcy Code allowing the trustee in
reorganization to use property of the debtor during the
reorganization period;
22
(c) Section 1129 of the U.S. Bankruptcy Code (which governs the
confirmation of plans of reorganization in Chapter 11 cases); or
(d) any power of the bankruptcy court to enjoin a repossession.
Specifically, Section 1110 provides in relevant part that the right of a
lessor, conditional vendor or holder of a security interest to take posses-
sion of an aircraft in the event of an event of default may not be exercised
for 60 days following the date of commencement of the reorganization proceed-
ings (unless specifically permitted by the bankruptcy court) and may not be
exercised at all if, within such 60-day period (or such longer period con-
sented to by the lessor, conditional vendor or holder of a security inter-
est), the trustee in reorganization agrees to perform the debtor's obliga-
tions that become due on or after such date and cures all existing defaults
(other than defaults resulting solely from the financial condition, bank-
ruptcy, insolvency or reorganization of the debtor), "Equipment" is defined
in Section 1110 of the U.S. Bankruptcy Code, in part, as an aircraft, air-
craft engine, propeller, appliance, or spare part (as defined in Section
40102 of Title 49 of the U.S. Code) that is subject to a security interest
granted by, leased to, or conditionally sold to a debtor that is a citizen of
the United States (as defined in Section 40102 of Title 49 of the U.S. Code)
holding an air carrier operating certificate issued by the Secretary of
Transportation pursuant to chapter 447 of Title 49 of the U.S. Code for air-
craft capable of carrying 10 or more individuals or 6,000 pounds or more of
cargo (subject to certain limitations in the case of equipment first placed
in service on or prior to October 22, 1994).
In connection with any issuance of Certificates under this prospectus
and the applicable prospectus supplement, it is a condition to the Trustee's
obligation to purchase Equipment Notes with respect to each aircraft that
outside counsel to US Airways provide its opinion to such Trustee that (a) if
such aircraft is a Leased Aircraft, the Owner Trustee, as lessor under the
Lease for such aircraft, and the Loan Trustee, as assignee of such Owner
Trustee's rights under such Lease pursuant to the applicable Indenture, will
be entitled to the benefits of Section 1110 of the U.S. Bankruptcy Code with
respect to the airframe and engines comprising such aircraft or (b) if such
aircraft is an Owned Aircraft, the Loan Trustee will be entitled to the bene-
fits of Section 1110 with respect to the airframe and engines comprising such
Owned Aircraft, in each case as long as US Airways continues to be a citizen
of the United States as defined in Section 40102 of Title 49 of the U.S. Code
holding an air carrier operating certificate issued by the Secretary of
Transportation pursuant to Chapter 447 of Title 49 of the U.S. Code for air-
craft capable of carrying 10 or more individuals or 6,000 pounds or more of
cargo. Such opinion will not address the possible replacement of an aircraft
after an "Event of Loss" (as defined in the applicable Indenture) in the fu-
ture.
RANKING OF EQUIPMENT NOTES
Some of the Equipment Notes related to one or more aircraft, as de-
scribed in the related prospectus supplement, may be subordinated and junior
in right of payment to other Equipment Notes related to the same aircraft.
The terms of such subordination, if any, will be described in the related
prospectus supplement.
PAYMENTS AND LIMITATION OF LIABILITY
Each Leased Aircraft will be leased by the related Owner Trustee to US
Airways for a term commencing on the delivery date of such aircraft to such
Owner Trustee and expiring on a date not earlier than the latest maturity
date of the related Leased Aircraft Notes, unless previously terminated as
permitted by the terms of the related Lease. The basic rent and certain
other payments under each such Lease will be payable by US Airways and will
be assigned by the related Owner Trustee under the applicable Indenture to
the related Loan Trustee to provide the funds necessary to pay scheduled
principal of, premium, if any, and interest due from such Owner Trustee on
the Leased Aircraft Notes issued under such Indenture. In certain cases, the
basic rent payments under a Lease may be adjusted, but each Lease will pro-
vide that under no circumstances will rent payments by US Airways be less
than the scheduled payments on the related Leased Aircraft Notes. The bal-
ance of any basic rent payment under each Lease, after payment of amounts due
on the Leased Aircraft Notes issued under the Indenture corresponding to such
23
Lease, will be paid over to the applicable Owner Trustee. US Airways' obli-
gations to pay rent and to cause other payments to be made under each Lease
will be general unsecured obligations of US Airways.
Except in circumstances in which US Airways' purchases a Leased Aircraft
and assumes the Leased Aircraft Notes related thereto, the Leased Aircraft
Notes will not be obligations of, or guaranteed by, US Airways. None of the
Owner Trustees, the Owner Participants or the Loan Trustees will be person-
ally liable to any holder of such Leased Aircraft Notes for amounts payable
under such Leased Aircraft Notes, or, except as provided in the Indentures
relating thereto in the case of the Owner Trustees and the Loan Trustees, for
any liability under such Indentures. Except when US Airways has assumed any
Leased Aircraft Notes, all amounts payable under any Leased Aircraft Notes
(other than payments made in connection with an optional redemption or pur-
chase by the related Owner Trustee or the related Owner Participant) will be
made only from (a) the assets subject to the lien of the applicable Indenture
with respect to such aircraft or the income and proceeds received by the re-
lated Loan Trustee from that aircraft (including rent payable by US Airways
under the related Lease) or (b) if so provided in the related prospectus sup-
plement, the applicable Liquidity Facility.
Except as otherwise provided in the applicable Indenture, no Owner Trus-
tee will be personally liable for any amount payable or for any statements,
representations, warranties, agreements or obligations under any such Inden-
ture or under any Leased Aircraft Notes except for its own willful misconduct
or gross negligence. In general, none of the Owner Participants will have
any duty or responsibility under the Leased Aircraft Indentures or under such
Leased Aircraft Notes to the related Loan Trustee or to any holder of any
such Leased Aircraft Note.
US Airways' obligations under each Owned Aircraft Indenture and under
the Owned Aircraft Notes will be secured obligations of US Airways.
DEFEASANCE OF THE INDENTURES AND THE EQUIPMENT NOTES IN CERTAIN CIRCUMSTANCES
Unless otherwise specified in the applicable prospectus supplement, an
Indenture may provide that the obligations of the related Loan Trustee, the
related Owner Trustee or US Airways, as the case may be, under the applicable
Indenture will be deemed to have been discharged and paid in full on the 91st
day after the date that money or certain United States government securities,
in an aggregate amount sufficient to pay when due (including as a consequence
of redemption in respect of which notice is given on or prior to the date of
such deposit) principal, premium and interest with respect to all Equipment
Notes issued under such Indenture, are irrevocably deposited with the related
Loan Trustee. Such discharge may occur only if, among other things, there
has been published by the Internal Revenue Service a ruling to the effect
that holders of such Equipment Notes will not recognize income, gain or loss
for federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to federal income tax on the same amount and in
the same manner and at the same time as would have been the case if such de-
posit, defeasance and discharge had not occurred. Certain obligations, in-
cluding the obligations to register the transfer or exchange of Equipment
Notes, to replace stolen, lost, destroyed or mutilated Equipment Notes and to
maintain paying agencies and hold money for payment in trust may not be de-
feased.
Upon such defeasance, or upon payment in full of the principal of, pre-
mium, if any, and interest on all Equipment Notes issued under any Indenture
on the maturity date therefor or deposit with the applicable Loan Trustee of
money sufficient therefor no earlier than one year prior to the date of such
maturity, the holders of such Equipment Notes will have no beneficial inter-
est in or other rights with respect to the related aircraft or other assets
subject to the lien of such Indenture and such lien will terminate.
24
ASSUMPTION OF OBLIGATIONS BY US AIRWAYS
Unless otherwise specified in the applicable prospectus supplement with
respect to Leased Aircraft, upon the exercise by US Airways of any of the
purchase options it may have under the related Lease prior to the end of the
term of such Lease, US Airways may assume on a full recourse basis all of the
obligations of the Owner Trustee (other than its obligations in its individ-
ual capacity) under the Indenture with respect to such aircraft, including
the obligations to make payments in respect of the related Leased Aircraft
Notes. In such event, certain relevant provisions of the related Lease, in-
cluding (among others) provisions relating to maintenance, possession and use
of the related aircraft, liens, insurance and events of default will be in-
corporated into such Indenture, and the Leased Aircraft Notes issued under
such Indenture will not be redeemed and will continue to be secured by such
aircraft. Such assumption may occur only if, among other things, US Airways
has provided an opinion of counsel to the effect that: (a) the Loan Trustee
will be entitled to the benefits of Section 1110 of the U.S. Bankruptcy Code,
provided that such opinion need only be given if immediately prior to such
assumption the Owner Trustee would have been entitled to the benefits of Sec-
tion 1110 and (b) 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.
PARENT GUARANTEE
US Airways Group, our parent corporation, may guarantee (a) with respect
to Leased Aircraft Notes, the full and prompt payment of all amounts payable
by us under the related Lease, and (b) with respect to Owned Aircraft Notes,
the full and prompt payment by us of principal of, premium, if any, and in-
terest. Any such guarantee will be described in the prospectus supplement
relating to the series of Certificates issued by a Trust that owns such
Leased Aircraft Notes or Owned Aircraft Notes. Unless otherwise stated in
the applicable prospectus supplement, we anticipate that this guarantee:
- will be unconditional;
- will be enforceable without any need first to enforce any Lease or
Owned Aircraft Note against US Airways; and
- will be an unsecured obligation of US Airways Group.
INTERCREDITOR ISSUES
Equipment Notes may be issued in different classes, which means that the
Equipment Notes may have different payment priorities even though they are
issued by the same borrower, relate to the same aircraft and are issued under
the same Indenture. In such event, the related prospectus supplement will
describe the priority of distributions among such Equipment Notes, the abil-
ity of any class to exercise and/or enforce any or all remedies with respect
to the related aircraft (and, if the Equipment Notes are Leased Aircraft
Notes, the related Lease) and certain other intercreditor terms and provi-
sions.
OWNER PARTICIPANT; REVISIONS TO AGREEMENTS
If specified in the applicable prospectus supplement, at the time Cer-
tificates are issued, US Airways may still be seeking Owner Participants with
respect to the trusts relating to certain of the aircraft. Such prospective
Owner Participants may request revisions to the forms of participation agree-
ment, lease, trust agreement and indenture so that the terms of such agree-
ments applicable to these aircraft may differ from the description of such
agreements contained in the applicable prospectus supplement.
25
Notwithstanding the foregoing, the terms of such agreements will be re-
quired to (a) contain certain mandatory document terms and (b) not vary cer-
tain mandatory economic terms. In addition, US Airways will be obligated (a)
to certify to the Trustee that any such modifications will not materially and
adversely affect the Certificateholders and (b) if the documents are modified
in any material respect, to obtain written confirmation from each rating
agency that the use of modified versions of such agreements will not result
in a withdrawal, suspension or downgrading of the rating of any Class of Cer-
tificates.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
GENERAL
Unless otherwise indicated in the applicable prospectus supplement, the
following summary describes the principal U.S. federal income tax conse-
quences to Certificateholders of the purchase, ownership and disposition of
the Certificates offered by this prospectus and in the opinion of Skadden,
Arps, Slate, Meagher & Flom LLP, special tax counsel to US Airways ("Tax
Counsel"), is accurate in all material respects with respect to the matters
discussed in this prospectus. Except as otherwise specified, the summary is
addressed to the initial beneficial owners of Certificates ("U.S. Certifi-
cateholders") that are citizens or residents of the United States, corpora-
tions, partnerships or other entities created or organized in or under the
laws of the United States or any state therein, or estates, the income of
which is subject to U.S. federal income taxation regardless of its source, or
trusts if a court within the U.S. is able to exercise primary jurisdiction
over the administration of the trust and one or more U.S. persons have the
authority to control all substantial decisions of the trust that will hold
the Certificates as capital assets. This summary does not address the tax
treatment of U.S. Certificateholders that may be subject to special tax
rules, such as banks, insurance companies, dealers in securities or commodi-
ties, tax-exempt entities, holders that will hold Certificates as part of a
straddle or holders that have a functional currency other than the U.S. dol-
lar, nor does it address the tax treatment of U.S. Certificateholders that do
not acquire Certificates at the initial offering price as part of the initial
offering. This summary does not purport to be a comprehensive description of
all of the tax considerations that may be relevant to a decision to purchase
Certificates and does not describe any tax consequences arising under the
laws of any state, locality or taxing jurisdiction other than the United
States.
The summary is based upon the tax laws and practice of the United States
as in effect on the date of this prospectus, as well as relevant judicial and
administrative interpretations (in final or proposed form) available on or
before such date. All of the foregoing are subject to change, which change
could apply retroactively. Prospective investors should note that no rulings
have been sought from the Internal Revenue Service with respect to the fed-
eral income tax consequences, discussed below, and no assurances can be given
that the IRS will not take contrary positions. The Trusts are not indemni-
fied for any federal income taxes that may be imposed upon them, and the im-
position of any such taxes on a Trust could result in a reduction in the
amounts available for distribution to the Certificateholders of such Trust.
Prospective investors should consult their own tax advisors with respect to
the federal, state, local and foreign tax consequences to them of the pur-
chase, ownership and disposition of the Certificates.
TAX TREATMENT OF THE TRUSTS AND CERTIFICATEHOLDERS
Each Trust will not itself be subject to U.S. federal income taxation.
Each U.S. Certificateholder will be required to report on its federal income
tax return its pro rata share of the entire income from the Equipment Notes
and any other property held in the related Trust, in accordance with the U.S.
Certificateholder's method of accounting. Accordingly, each U.S. Certifi-
cateholder's share of interest paid on the Equipment Notes will be taxable as
ordinary income, as it is paid or accrued, and a U.S. Certificateholder's
share of premium, if any, paid on redemption of an Equipment Note will be
treated as capital gain. In the event that the proceeds from the sale of
Certificates are invested with a depositary or held pursuant to an escrow ar-
rangement prior to the purchase of Equipment Notes by a Trust, the resulting
deposits may be subject to the original issue discount rules, with the result
that a U.S. Certificateholder may be required to include interest income from
such deposit under
26
the accrual method of accounting regardless of its normal method. In the
event that Certificates issued by a Trust are supported by a Liquidity Facil-
ity, any amounts received by the Trust under the Liquidity Facility with re-
spect to unpaid interest will be treated for U.S. federal income tax purposes
as having the same characteristics as the payments they replace.
Each U.S. Certificateholder will be entitled to deduct, consistent with
its method of accounting, its pro rata share of fees and expenses paid or in-
curred by the corresponding Trust as provided in Section 162 or 212 of the
Internal Revenue Code of 1986, as amended, referred to as the Code. Certain
fees and expenses, including fees paid to the Trustee and the provider of the
Liquidity Facility (if applicable), will be borne by parties other than the
Certificateholders. It is possible that such fees and expenses will be
treated as constructively received by the Trust, in which event a U.S. Certi-
ficateholder will be required to include in income and will be entitled to
deduct its pro rata share of such fees and expenses. If a U.S. Certificate-
holder is an individual, estate or trust, the deduction for such holder's
share of such fees or expenses will be allowed only to the extent that all of
such holder's miscellaneous itemized deductions, including such holder's
share of such fees and expenses, exceed 2% of such holder's adjusted gross
income. In addition, in the case of U.S. Certificateholders who are indi-
viduals, certain otherwise allowable itemized deductions will be subject gen-
erally to additional limitations on itemized deductions under applicable pro-
visions of the Code.
EFFECT OF SUBORDINATION OF SUBORDINATED CERTIFICATEHOLDERS
In the event that any Trust (referred to as a "Subordinated Trust" and
the related Certificates being "Subordinated Certificates") is subordinated
in right of payment to any other Trust and the Subordinated Trust receives
less than the full amount of the receipts of interest, principal or premium
paid with respect to the Equipment Notes held by it (any shortfall in such
receipts being the "Shortfall Amounts") because of the subordination of such
Trust, the corresponding owners of beneficial interests in the Subordinated
Certificates (the "Subordinated Certificateholders") would probably be
treated for federal income tax purposes as if they had (a) received as dis-
tributions their full share of such receipts, (b) paid over to the relevant
preferred class of Certificateholders an amount equal to their share of such
Shortfall Amount, and (c) retained the right to reimbursement of such amounts
to the extent of future amounts payable to such Subordinated Certificatehold-
ers with respect to such Shortfall Amount.
Under this analysis, (a) Subordinated Certificateholders incurring a
Shortfall Amount would be required to include as current income any interest
or other income of the corresponding Subordinated Trust that was a component
of the Shortfall Amount, even though such amount was in fact paid to the
relevant preferred class of Certificateholders, (b) a loss would only be al-
lowed to such Subordinated Certificateholders when their right to receive re-
imbursement of such Shortfall Amount becomes worthless (i.e., when it becomes
clear that funds will not be available from any source to reimburse such
loss), and (c) reimbursement of such Shortfall Amount prior to such a claim
of worthlessness would not be taxable income to Subordinated Certificatehold-
ers because such amount was previously included in income. These results
should not significantly affect the inclusion of income for Subordinated Cer-
tificateholders on the accrual method of accounting, but could accelerate in-
clusion of income to Subordinated Certificateholders on the cash method of
accounting by, in effect, placing them on the accrual method.
ORIGINAL ISSUE DISCOUNT
The Equipment Notes may be issued with original issue discount ("OID").
The prospectus supplement will state whether any Equipment Notes to be held
by the related Trust will be issued with OID. Generally, a holder of a debt
instrument issued with OID that is not de minimis must include such OID in
income for federal income tax purposes as it accrues, in advance of the re-
ceipt of the cash attributable to such income, under a method that takes into
account the compounding of interest.
27
SALE OR OTHER DISPOSITION OF THE CERTIFICATES
Upon the sale, exchange or other disposition of a Certificate, a U.S.
Certificateholder generally will recognize capital gain or loss equal to the
difference between the amount realized on the disposition (other than any
amount attributable to accrued interest which will be taxable as ordinary in-
come) and the U.S. Certificateholder's adjusted tax basis in the related
Equipment Notes and any other property held by the corresponding Trust. Any
gain or loss will be long-term capital gain or loss to the extent attribut-
able to property held by the Trust for more than one year. In the case of
individuals, estates, and trusts, the maximum U.S. federal income tax rate on
long-term capital gains generally is 20%. In the event that the proceeds
from the sale of Certificates are invested with a depositary or held pursuant
to an escrow arrangement prior to the purchase of Equipment Notes by a Trust,
any gain with respect to an interest in the resulting deposits likely will be
treated as ordinary income.
FOREIGN CERTIFICATEHOLDERS
Under present U.S. federal income tax law, assuming certain certifica-
tion requirements are satisfied (which include identification of the benefi-
cial owner of a Certificate), and subject to the discussion of backup with-
holding below:
(1) payments of interest (including any OID) on a Certificate to,
or on behalf of, any beneficial owner of a Certificate that is not a U.S.
person (a "Non-U.S. Certificateholder") will not be subject to U.S. federal
income tax or withholding tax provided that (a) such Non-U.S. Certificate-
holder does not actually or constructively own 10% or more of the total com-
bined voting power of all classes of stock of an Owner Participant or US Air-
ways, (b) such Non-U.S. Certificateholder is not (A) a bank receiving inter-
est pursuant to a loan agreement entered into in the ordinary course of its
trade or business, or (B) a controlled foreign corporation for U.S. tax pur-
poses that is related to an Owner Participant or US Airways, and (c) such in-
terest payments are not effectively connected with the conduct of a U.S.
trade or business of such Non- U.S. Certificateholder; and
(2) a Non-U.S. Certificateholder will not be subject to U.S. fed-
eral income tax on any capital gain realized on the sale, exchange, retire-
ment or other disposition of a Certificate, unless (a) such Non-U.S. Certifi-
cateholder is an individual who is present in the United States for 183 days
or more during the taxable year of the sale, exchange, retirement or other
disposition and certain other requirements are met or (b) such gain is effec-
tively connected with the conduct of a U.S. trade or business of such Non-
U.S. Certificateholder.
The certification referred to above may be made on an IRS Form W-8 or
substantially similar substitute form.
INFORMATION REPORTING AND BACKUP WITHHOLDING
In general, information reporting requirements will apply to certain
payments within the United States of principal, interest, OID and premium on
the Certificates, and to payments of the proceeds of certain sales of Cer-
tificates made to U.S. Certificateholders other than certain exempt recipi-
ents (such as corporations). A 31% backup withholding tax may apply to such
payments if the holder fails or has failed to provide an accurate taxpayer
identification number or otherwise establish an exemption or fails to report
in full interest income. With respect to Non-U.S. Certificateholders, pay-
ments made on a Certificate and proceeds from the sale of a Certificate owned
by a Non-U.S. Certificateholder will generally not be subject to such infor-
mation reporting requirements or backup withholding tax if such Non-U.S. Cer-
tificateholder provides the applicable statement as to its non-U.S. status or
otherwise establishes an exemption.
Backup withholding is not an additional tax. Any amounts withheld under
the backup withholding rules will be allowed as a refund or credit against
such holder's U.S. federal income tax liability, if any, provided the re-
quired information is furnished to the IRS.
28
The Treasury Department recently issued final Treasury Regulations (the
"Final Regulations") governing backup withholding and information reporting
requirements. The Final Regulations do not significantly alter the substan-
tive withholding and information reporting requirements discussed herein;
they unify current certification procedures and forms and clarify reliance
standards. The Final Regulations will generally become effective for pay-
ments made after December 31, 2000.
ERISA CONSIDERATIONS
Unless otherwise indicated in the applicable prospectus supplement, the
Certificates may, subject to certain legal restrictions, be purchased and
held by an employee benefit plan (a "Plan") subject to Title I of the Em-
ployee Retirement Income Security Act of 1974, as amended ("ERISA"), or an
individual retirement account or an employee benefit plan subject to section
4975 of the Code. A fiduciary of a Plan must determine that the purchase and
holding of a Certificate is consistent with its fiduciary duties under ERISA
and does not result in a non-exempt prohibited transaction as defined in sec-
tion 406 of ERISA or section 4975 of the Code. Employee benefit plans which
are governmental plans (as defined in section 3(32) of ERISA) and certain
church plans (as defined in section 3(33) of ERISA) are not subject to Title
I of ERISA or section 4975 of the Code. The Certificates may, subject to
certain legal restrictions, be purchased and held by such plans.
PLAN OF DISTRIBUTION
Certificates may be sold to one or more underwriters for public offering
and sale by them to investors or other persons directly or through one or
more dealers or agents. Any such underwriter, dealer or agent involved in
the offer and sale of the Certificates will be named in an applicable pro-
spectus supplement.
The Certificates may be sold from time to time in one or more transac-
tions at a fixed price or prices, which may be changed, at market prices pre-
vailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. Dealer trading may take place in certain of
the Certificates, including Certificates not listed on any securities ex-
change. US Airways does not intend to apply for listing of the Certificates
on a national securities exchange. US Airways also may, from time to time,
authorize underwriters acting as US Airways' agents to offer and sell the
Certificates upon the terms and conditions as will be set forth in any pro-
spectus supplement. In connection with the sale of Certificates, underwrit-
ers may be deemed to have received compensation from US Airways in the form
of underwriting discounts or commissions and may also receive commissions
from purchasers of Certificates for whom they may act as agent. Underwriters
may sell Certificates to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters and/or commissions (which may be changed from time to time) from
the purchasers for whom they may act as agent.
If a dealer is used directly by US Airways in the sale of Certificates
in respect of which this prospectus is delivered, such Certificates will be
sold to the dealer, as principal. The dealer may then resell such Certifi-
cates to the public at varying prices to be determined by such dealer at the
time of resale. Any such dealer and the terms of any such sale will be set
forth in the related prospectus supplement.
Certificates may be offered and sold through agents designated by US
Airways from time to time. Any agent involved in the offer or sale of the
Certificates in respect of which this prospectus is delivered will be named
in, and any commissions payable by US Airways to such agent will be set forth
in, the applicable prospectus supplement. Unless otherwise indicated in the
applicable prospectus supplement, any such agent will be acting on a best ef-
forts basis for the period of its appointment.
29
Offers to purchase Certificates may be solicited directly by US Airways
and sales thereof may be made by US Airways directly to institutional inves-
tors or others who may be deemed to be underwriters within the meaning of the
Securities Act of 1933 with respect to any resale of the Certificates. The
terms of any such sales will be described in the prospectus supplement. Ex-
cept as set forth in the applicable prospectus supplement, no director, offi-
cer or employee of US Airways will solicit or receive a commission in connec-
tion with direct sales by US Airways of the Certificates, although such per-
sons may respond to inquiries by potential purchasers and perform ministerial
and clerical work in connection with any such direct sales.
Any underwriting compensation paid by US Airways to underwriters, deal-
ers or agents in connection with the offering of Certificates, and any dis-
counts, concessions or commissions allowed by underwriters to participating
dealers, will be set forth in an applicable prospectus supplement. Underwrit-
ers, dealers and agents participating in the distribution of the Certificates
may be deemed to be underwriters, and any discounts and commissions received
by them and any profit realized by them on resale of the Certificates may be
deemed to be underwriting discounts and commissions under the Securities Act.
Underwriters, dealers and agents may be entitled, under agreements with US
Airways, to indemnification against and contribution toward certain civil li-
abilities, including liabilities under the Securities Act, and to reimburse-
ment by US Airways for expenses to the extent set forth in those agreements.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, US Airways, US Airways Group and their subsidiaries in
the ordinary course of business.
If so indicated in an applicable prospectus supplement and subject to
existing market conditions, US Airways will authorize dealers acting as US
Airways' agents to solicit offers by certain institutions to purchase Cer-
tificates at the public offering price set forth in such prospectus supple-
ment pursuant to delayed delivery contracts ("Contracts") providing for pay-
ment and delivery on the date or dates stated in such prospectus supplement.
Each Contract will be for an amount not less than, and the aggregate princi-
pal amount of Certificates sold pursuant to Contracts will not be less nor
more than, the respective amounts stated in such prospectus supplement. In-
stitutions with whom Contracts, when authorized, may be made include commer-
cial and savings banks, insurance companies, pension funds, investment compa-
nies, educational and charitable institutions and other institutions, but
will in all cases be subject to the approval of US Airways. Contracts will
not be subject to any conditions except the purchase by an institution of the
Certificates covered by its Contracts will not at the time of delivery be
prohibited under the laws of any jurisdiction in the United States to which
such institution is subject. A commission indicated in the applicable pro-
spectus supplement will be granted to underwriters and agents soliciting pur-
chases of Certificates pursuant to Contracts accepted by US Airways. Agents
and underwriters will have no responsibility in respect of the delivery or
performance of Contracts.
If an underwriter or underwriters are utilized in the sale of any Cer-
tificates, the applicable prospectus supplement will contain a statement as
to the intention, if any, of such underwriters at the date of such prospectus
supplement to make a market in the Certificates. No assurances can be given
that there will be a market for the Certificates.
The place and time of delivery for the Certificates in respect of which
this prospectus is delivered will be set forth in the applicable prospectus
supplement.
SELLING CERTIFICATEHOLDERS
Certificates issued pursuant to this prospectus may be reoffered pursu-
ant to this prospectus by the holders of such Certificates (the "Selling Cer-
tificateholders"), from time to time, in transactions on the open market, in
negotiated transactions, through the writing of options on such Certificates
or through a combination of such methods of sale, at negotiated prices, fixed
prices which may be changed, market prices prevailing at the time of sale or
prices relating to such prevailing market prices. The Selling Certificate-
holders may effect such transactions by selling the Certificates to or
through broker-dealers, and such
30
broker-dealers may receive compensation in the form of discounts, concessions
or commissions from the Selling Certificateholders, the purchasers of Cer-
tificates for whom such broker-dealer may act as agent or to whom they may
sell as principal or both. We will not receive any part of the proceeds from
the resale by the Selling Certificateholders of any Certificates pursuant to
this prospectus. Unless otherwise provided in the applicable prospectus sup-
plement, we will bear all expenses (other than selling discounts and commis-
sions and fees and expenses of the Selling Certificateholders) in connection
with the registration of the Certificates being reoffered by the Selling Cer-
tificateholders.
The identity of the Selling Certificateholders, the number of Certifi-
cates to be sold by the Selling Certificateholders and the price per Certifi-
cate will be determined at the time of the consummation of the particular
transaction. Specific information regarding the transaction, the identity of
the Selling Certificateholders and the number of Certificates to be resold
may be provided at the time of such transaction by means of a supplement or a
post-effective amendment to this prospectus, as applicable.
The Selling Certificateholders and any broker-dealers who act in connec-
tion with the sale of such Certificates may be deemed to be an "underwriter"
within the meaning of Section 2(11) of the Securities Act, and any commis-
sions received by them and profit on any resale of such Certificates as prin-
cipal may be deemed to be underwriting discounts and commissions under the
Securities Act. US Airways intends to make available public information con-
cerning itself in compliance with the Securities Act and the regulations
thereunder, and accordingly, Rule 144 or Rule 145 under the Securities Act
may be available for use by holders of Certificates to effect transfers of
such securities, subject to compliance with the remaining provisions of such
rules.
LEGAL OPINIONS
Unless otherwise indicated in the applicable prospectus supplement,
Skadden, Arps, Slate, Meagher & Flom (Illinois) and its affiliates will ren-
der an opinion with respect to the validity of the securities being offered
by this prospectus. Unless otherwise indicated in the applicable prospectus
supplement, Skadden, Arps, Slate, Meagher & Flom (Illinois) and its affili-
ates will rely on the opinion of counsel for the Trustee as to certain mat-
ters relating to the authorization, execution and delivery of the certifi-
cates by, and the valid and binding effect on, the Trustee.
EXPERTS
The consolidated financial statements of US Airways and its subsidiary
and US Airways Group and its subsidiaries as of December 31, 1998 and 1997,
and for each of the years in the three-year period ended December 31, 1998
which are included in US Airways' and US Airways Group's combined Annual Re-
port on Form 10-K for the year ended December 31, 1998, have been incorpo-
rated by reference herein and in the registration statement in reliance upon
the reports of KPMG LLP, independent certified public accountants, incorpo-
rated by reference herein, and upon the authority of said firm as experts in
accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
US Airways and US Airways Group file annual, quarterly and special re-
ports, proxy statements and other information with the SEC under the Securi-
ties Exchange Act of 1934, as amended. You may read and copy this informa-
tion at the following locations of the SEC:
Judiciary Plaza, Seven World Trade Center Citicorp Center
450 Fifth Street, N.W. Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, New York 10048 Suite 1400
Chicago, Illinois 60661
31
You can also obtain copies of this information by mail from the Public
Reference Room of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. You may obtain information on the operation of the Public
Reference Room by calling the SEC at (800) SEC-0330.
The SEC also maintains an internet world wide web site that contains re-
ports, proxy statements and other information about issuers, like us, who
file electronically with the SEC. The address of that site is
http://www.sec.gov.
You can also inspect reports, proxy statements and other information
about us at the offices of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005.
We and our parent guarantor have filed jointly with the SEC a registra-
tion statement on Form S-3 that registers the securities we are offering.
The registration statement, including the attached exhibits and schedules,
contains additional relevant information about us, our parent guarantor and
the securities offered. The rules and regulations of the SEC allow us to
omit certain information included in the registration statement from this
prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference information into this pro-
spectus. This means that we can disclose important information to you by re-
ferring you to another document filed separately with the SEC. The informa-
tion incorporated by reference is considered to be part of this prospectus,
except for any information that is superseded by information that is included
directly in this document.
32
This prospectus includes by reference the documents listed below that we
and our parent previously have filed with the SEC and that are not included
in or delivered with this document. They contain important information about
our company and its financial condition.
FILING PERIOD
- ----------------------------- ----------------------------
Annual Report on Form 10-K Year ended December 31, 1998
Quarterly Report on Form 10-Q Quarter ended March 31, 1999
Current Reports on Form 8-K Filed January 21, 1999
Filed March 5, 1999
Filed March 30, 1999
Filed April 9, 1999
Filed April 21, 1999
Filed May 18, 1999
We incorporate by reference additional documents that we and our parent
may file with the SEC between the date of this prospectus and the date of the
closing of each offering. These documents include periodic reports, such as
Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Re-
ports on Form 8-K, as well as proxy statements.
You can obtain any of the documents incorporated by reference in this
document from us without charge, excluding any exhibits to those documents
unless the exhibit is specifically incorporated by reference as an exhibit to
this prospectus. You can obtain documents incorporated by reference in this
prospectus by requesting them in writing or by telephone from us at the fol-
lowing address:
Secretary
US Airways, Inc.
2345 Crystal Drive
Arlington, Virginia 22227
(703) 872-7000.
33
APPENDIX I - INDEX OF TERMS
Page
----
Aircraft 6
Basic Agreement 5
Cede 8
Certificate Owner 8
Certificates 2
Class 6
Contracts 30
Convention 22
Definitive Certificates 10
DTC 8
DTC Participants 9
Equipment 23
Equipment Notes 2
ERISA 29
Event of Default 13
Event of Loss 23
Final Regulations 29
Indenture Default 13
Indentures 6
Indirect Participants 9
Lease 6
Leased Aircraft 6
Leased Aircraft Notes 2
Leased Aircraft Indentures 6
Lease Event of Default 13
Liquidity Facility 11
Loan Trustee 6
Non-U.S. Certificateholders 28
OID 27
Owned Aircraft Notes 3
Owned Aircraft Indentures 6
Owner Participant 6
Owner Trustee 6
Permitted Investments 15
Plan 29
Pool Balance 12
Pool Factor 12
Regular Distribution Dates 11
Related Indenture 6
Rules 9
Scheduled Payments 11
Selling Certificateholders 30
Shortfall Amounts 27
I-1
Page
----
Special Distribution Date 11
Special Payments 11
Special Payments Account 14
Subordinated Certificateholders 27
Subordinated Certificates 27
Subordinated Trust 27
Tax Counsel 26
Transportation Code 16
Trust 2
Trustee 2
Trust Property 5
Trust Supplement 5
US Airways 3
US Airways Group 3
U.S. Certificatholders 26
I-2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with this offering, other than un-
derwriting discounts and commissions, are:
Securities and Exchange Commission
registration filing fee $ 263,480
Printing and engraving expenses 600,000*
Trustee fees and expenses 60,000*
Accounting fees and expenses 225,000*
Rating Agency fees 750,000*
Legal fees and expenses 750,000*
---------
Total $2,648,480
=========
* Estimates
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's and US Airways Group's respective Restated Certificate of
Incorporation and By-laws provide that the Company and US Airways Group, will
indemnify their respective directors, officers and employees, and will have
the power to indemnify their respective other agents, to the full extent per-
mitted 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 permitted the Company and US Airways Group,
respectively, to provide on June 29, 1989). As of the date of the Prospec-
tus, 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 cor-
poration as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses (in-
cluding attorneys' fees), judgments, fines and amounts paid in settlement ac-
tually 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 per-
son 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 termina-
tion of any action, suit or proceeding by judgment, order, settlement, con-
viction, 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 di-
rector, 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 ap-
plication 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 author-
ized in the specific case upon a determination that indemnification of the
present or former director, officer, employee or agent is proper in the cir-
cumstances 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 par-
ties to such action, suit or proceeding, even though less than a quorum, or
(2) by a committee or such directors designated by majority vote of such di-
rectors, even though less than a quorum, or (3) if there are no such direc-
tors, or if such directors so direct, by independent legal counsel in a writ-
ten opinion, or (4) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or di-
rector in defending any civil, criminal, administrative, or investigative ac-
tion, suit or proceeding may be paid by the corporation in advance of the fi-
nal disposition of such action, suit or proceeding upon receipt of an under-
taking 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 indem-
nified by the corporation as authorized in this section. Such expenses (in-
cluding attorneys' fees) incurred by former directors and officers or other
employees and agents may be so paid upon such terms and conditions, if any,
as the corporation deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section will not be deemed
exclusive of any other rights to which those seeking indemnification or ad-
vancement 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.
II-2
(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 corpora-
tion (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 an-
other corporation, partnership, joint venture, trust or other enterprise,
will stand in the same position under this section with respect to the re-
sulting 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
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee,
or agent with respect to an employee benefit plan, its participants or bene-
ficiaries; 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 beneficiar-
ies 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 sec-
tion.
(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 direc-
tor, 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 indemnifica-
tion brought under this section or under any bylaw, agreement, vote of stock-
holders or disinterested directors, or otherwise. The Court of Chancery may
summarily determine a corporation's obligation to advance expenses (including
attorneys' fees).
The Company maintains directors' and officers' liability insurance.
ITEM 16. EXHIBITS
Reference is made to the Exhibit Index which immediately precedes the
exhibits filed with this Registration Statement, which is incorporated herein
by reference.
II-3
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising af-
ter the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registra-
tion statement. Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the Calculation
of Registration Fee table in the effective registration statement; and
(iii)To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that the undertakings made in paragraphs (i) and (ii)
above do not apply if the information required by those paragraphs to be in-
cluded in a post-effective amendment is contained in periodic reports filed
with or furnished to the Securities and Exchange Commission by the regis-
trants pursuant to Section 13 or Section 15 of the Securities Exchange Act of
1934, as amended (the "Exchange Act") that are incorporated by reference in
this Registration Statement.
(2) That, for the purpose of determining any liability under the Secu-
rities Act of 1933 each such post-effective amendment will be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the ini-
tial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
The undersigned registrant hereby undertakes that, for purposes of de-
termining 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 Securi-
ties Exchange Act of 1934 (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange Act)
that is incorporated by reference in the registration statement will be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time will be deemed to
be the initial bona fide offering thereof.
II-4
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 Ex-
change 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 reg-
istrant 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.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the regis-
trant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registra-
tion statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Arlington, State of Virginia, on June 2, 1999.
US AIRWAYS GROUP, INC.
By: /s/ Rakesh Gangwal
-------------------------
Rakesh Gangwal, Director, President
and Chief Executive Officer
(Principal Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this regis-
tration statement has been signed by the following persons in the capacities
indicated, on June 2, 1999.
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: /s/ Stephen M. Wolf
-----------------------------
Stephen M. Wolf, Director and Chairman
By: *
-----------------------------
Mathias J. DeVito, Director
By: *
-----------------------------
Peter M. George, Director
By: *
-----------------------------
Robert L. Johnson, Director
By: *
-----------------------------
Robert LeBuhn, Director
By: *
-----------------------------
John G. Medlin, Jr., Director
By: *
-----------------------------
Hanne M. Merriman, Director
By: *
-----------------------------
Thomas H. O'Brien, Director
By: *
-----------------------------
Hilda Ochoa-Brillembourg, Director
By: *
-----------------------------
Richard B. Priory, 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the regis-
trant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registra-
tion statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Arlington, State of Virginia, on June 2, 1999.
US AIRWAYS, INC.
By: /s/ Rakesh Gangwal
-----------------------------
Rakesh Gangwal, Director, President
and Chief Executive Officer
(Principal Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this regis-
tration statement has been signed by the following persons in the capacities
indicated, on June 2, 1999.
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: /s/ Stephen M. Wolf
-----------------------------
Stephen M. Wolf, Director and Chairman
By: *
-----------------------------
Mathias J. DeVito, Director
By: *
-----------------------------
Peter M. George, Director
By: *
-----------------------------
Robert L. Johnson, Director
By: *
-----------------------------
Robert LeBuhn, Director
By: *
-----------------------------
John G. Medlin, Jr., Director
By: *
-----------------------------
Hanne M. Merriman, Director
By: *
-----------------------------
Thomas H. O'Brien, Director
By: *
-----------------------------
Hilda Ochoa-Brillembourg, Director
By: *
-----------------------------
Richard B. Priory, 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.
II-9
EXHIBIT INDEX
Exhibit No. Description of Exhibit
- ----------- ----------------------
4.1 Form of Pass Through Trust Agreement
4.2 Form of Pass Through Certificate (included as part of
Exhibit 4.1)
5 Opinion of Skadden, Arps, Slate, Meagher & Flom (Illinois)
12 Statements re: computations of ratios
23.1 Consent of KPMG LLP
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom (Illinois)
(included in its opinion filed as Exhibit 5)
23.3 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
24 Powers of Attorney
25 Form T-1 Statement of Eligibility of Trustee under the
Trust Indenture Act of Trustee
EXHIBIT 4.1
- ----------------------------------------------------------------------------
PASS THROUGH TRUST AGREEMENT
Dated _______, ____
between
US AIRWAYS, INC.,
US AIRWAYS GROUP, INC.
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION
as Trustee
- ----------------------------------------------------------------------------
TABLE OF CONTENTS
Page
____
DEFINITIONS 2
Section 1.01. Definitions 2
Section 1.02. Compliance Certificates and Opinions 14
Section 1.03. Form of Documents Delivered to Trustee 15
Section 1.04. Directions of Certificateholders 15
ARTICLE II
ORIGINAL ISSUANCE OF CERTIFICATES:
ACQUISITION OF TRUST PROPERTY 17
Section 2.01. Amount Unlimited; Issuable in Series 17
Section 2.02. Acquisition of Equipment Notes 19
Section 2.03. Acceptance by Trustee 21
Section 2.04. Limitation of Powers 22
ARTICLE III
THE CERTIFICATES 22
Section 3.01. Form, Denomination and Execution of Certificates 22
Section 3.02. Authentication of Certificates 23
Section 3.03. Temporary Certificates 23
Section 3.04. Transfer and Exchange 23
Section 3.05. Book-Entry and Definitive Certificates 24
Section 3.06. Mutilated, Destroyed, Lost or Stolen Certificates 27
Section 3.07. Persons Deemed Owners 27
Section 3.08. Cancellation 27
Section 3.09. Limitation of Liability for Payments 28
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS 28
Section 4.01. Certificate Account and Special Payments Account 28
Section 4.02. Distributions from Certificate Account and Special
Payments Account 29
Section 4.03. Statements to Certificateholders 31
Section 4.04. Investment of Special Payment Moneys 32
ARTICLE V
THE COMPANY 32
Section 5.01. Maintenance of Corporate Existence 32
Section 5.02. Consolidation, Merger, Etc. 32
ARTICLE VI
DEFAULT 34
Section 6.01. Indenture Events of Default and Triggering Events 34
Section 6.02. Incidents of Sale of Equipment Note 35
Section 6.03. Judicial Proceedings Instituted by Trustee; Trustee May
Bring Suit 36
Section 6.04. Control by Certificateholders 36
Section 6.05. Waiver of Past Defaults 37
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 38
Section 6.08. Remedies Cumulative 38
Section 6.09. Undertaking for Costs 39
ARTICLE VII
THE TRUSTEE 39
Section 7.01. Certain Duties and Responsibilities 39
Section 7.02. Notice of Defaults 40
Section 7.03. Certain Rights of Trustee 40
Section 7.04. Not Responsible for Recitals or Issuance of
Certificates 41
Section 7.05. May Hold Certificates 42
Section 7.06. Money Held in Trust 42
Section 7.07. Compensation and Reimbursement 42
Section 7.08. Corporate Trustee Required; Eligibility 43
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 46
Section 7.12. Maintenance of Agencies 46
Section 7.13. Money for Certificate Payments to Be Held in Trust 48
ii
Page
----
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 50
Section 7.17. Trustee's Liens 50
Section 7.18. Preferential Collection of Claims 50
ARTICLE VIII
CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE 50
Section 8.01. The Company to Furnish Trustee with Names and
Addresses of Certificateholders 50
Section 8.02. Preservation of Information, Communications to
Certificateholders 51
Section 8.03. Reports by Trustee 51
Section 8.04. Reports by the Company 51
ARTICLE IX
SUPPLEMENTAL AGREEMENTS 52
Section 9.01. Supplemental Agreements Without Consent of
Certificateholders 52
Section 9.02. Supplemental Agreements With Consent of
Certificateholders 54
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 56
Section 9.07. Reference in Certificates to Supplemental
Agreements 56
Section 9.08. Release of Parent. 56
ARTICLE X
AMENDMENTS TO INDENTURE AND NOTE DOCUMENTS 56
Section 10.01. Amendments and Supplements to Indenture and
Other Note Documents 56
ARTICLE XI
TERMINATION OF TRUSTS 57
Section 11.01. Termination of the Trusts 57
iii
Page
----
ARTICLE XII
MISCELLANEOUS PROVISIONS 58
Section 12.01. Limitation on Rights of Certificateholders 58
Section 12.02. Liabilities of Certificateholders 59
Section 12.03. Registration of Equipment Notes in Name of
Subordination Agent 59
Section 12.04. Notices 59
Section 12.05. Governing Law 60
Section 12.06. Severability of Provisions 61
Section 12.07. Trust Indenture Act Controls 61
Section 12.08. Effect of Headings and Table of Contents 61
Section 12.09. Successors and Assigns 61
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 62
Section 12.14. Intention of Parties 62
EXHIBIT A
FORM OF CERTIFICATE A-1
EXHIBIT B
FORM OF GUARANTEED CERTIFICATE B-1
iv
Reconciliation and tie between US Airways Pass Through Trust Agreement, dated
________, ____ 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) 7.13;11.01
(d)(2) 7.13;11.01
(d)(3) 2.01
(e) 1.02
315(b) 7.02
316(a)(last sentence) 1.04(c)
(a)(1)(A) 6.04
(a)(1)(B) 6.05
(b) 6.06
(c) 1.04(d)
317(a)(1) 6.03
(b) 7.13
318(a) 12.07
v
PASS THROUGH TRUST AGREEMENT
This PASS THROUGH TRUST AGREEMENT, dated as of ______, ____ (the
"Basic Agreement"), between US AIRWAYS, INC., a Delaware corporation (the
"Company"), US AIRWAYS GROUP, INC., a Delaware corporation (the "Parent") and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a
national banking association, as Trustee, is made with respect to the forma-
tion 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 de-
fined in Section 1.01) pursuant to which the Trustee shall declare the crea-
tion of a separate Trust for the benefit of the Holders of the series of Cer-
tificates 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 re-
spective 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 Intercredi-
tor 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 under this Agreement,
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 Certifi-
cates issued in respect of such Trust and, subject to the terms of any re-
lated 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 minis-
terial duties under this Agreement and is also undertaking to pay the fees
and expenses of the Trustee;
WHEREAS, the Parent may, from time to time, guaranty the obligations of
the Company (i) under the Equipment Notes issued to finance the Owned Air-
craft, and (ii) payment of all amounts payable under the related Lease en-
tered into for a Leased Aircraft (the "Parent Guaranty");
WHEREAS, if on behalf of any separate Trust created by the Company and
the Trustee pursuant to a Trust Supplement the Trustee acquires any such
guaranteed Equipment Notes, the Parent will become a party to such Trust Sup-
plement;
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 Parent has duly authorized the execu-
tion and delivery of this Basic Agreement and each Trust Supplement to which
it shall be a party, with respect to all such Certificates and is undertaking
to perform certain administrative and ministerial duties under this Agreement
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 con-
tained, 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 re-
quires:
(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
(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 "Arti
cles", "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 un-
der direct or indirect common control with such Person. For the pur-
poses 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 owner-
ship of voting securities or by contract or otherwise, and the terms
"controlling" and "controlled" have meanings correlative to the forego-
ing.
Aircraft: Means one or more aircraft, including engines there-
for, owned by or leased to the Company and securing one or more Equip-
ment Notes.
Authorized Agent: Means, with respect to the Certificates of
any series, any Paying Agent or Registrar for the Certificates of such
series.
3
Basic Agreement: Means this Pass Through Trust Agreement, as
the samemay from time to time be supplemented, amended or modified, but
does not include any Trust Supplement.
Book-Entry Certificates: Means, with respect to the Certifi-
cates of any series, a beneficial interest in the Certificates of such
series, ownership and transfers of which shall be made through book en-
tries 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 com-
mercial 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 main-
tains 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 or
Exhibit B, as applicable, hereto.
Certificate Account: Means, with respect to the Certificates of
any series, the account or accounts created and maintained for such se-
ries pursuant to Section 4.01(a) and the related Trust Supplement.
Certificateholder or Holder: Means, with respect to the Certifi-
cates of any series, the Person in whose name a Certificate of such se-
ries 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.
4
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 pur-
poses 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 establish-
ing 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 Certifi-
cates 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.
5
Indenture: Means, with respect to any Trust, each of the one or
more separate trust indenture and security agreements or trust inden-
ture 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 agree-
ments.
Indenture Event of Default: Means, with respect to any Inden-
ture, 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 ac-
cordance with its terms; and "Leases" means all such Leases.
Letter of Representations: Means, with respect to the Certifi-
cates 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, re-
placed, supplemented or otherwise modified from time to time in accor-
dance with its terms and the terms of any Intercreditor Agreement.
6
Liquidity Provider: Means, with respect to the Certificates of
any series, a bank or other financial institution that agrees to pro-
vide a Liquidity Facility for the benefit of the holders of Certifi-
cates 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 Aircraft is leased to the Company, the related
Lease and, if applicable, the Parent Guaranty relating to such Lease,
and the related Purchase Agreement Assignment, or if the Aircraft is an
Aircraft owned by the Company, including the Parent Guaranty, if appli-
cable, relating to such Equipment Notes.
Note Purchase Agreement: Means, with respect to the Certifi-
cates 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 or the Parent, 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 or the Par-
ent, as applicable, signing alone, or (ii) any Vice President of the
Company or the Parent, as applicable, signing together with the Secre-
tary, the Assistant Secretary, the Treasurer or any Assistant Treasurer
of the Company or the Parent 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 or the Parent may be
(i) a senior attorney of the Company or the Parent one of whose princi-
pal 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
7
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 se-
ries, 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 Sec-
tion 4.01, pending distribution of such money to such Certifi-
cateholders pursuant to payment of such final distribution pay-
ment; 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 pursu-
ant 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.
Parent: Means US Airways Group, Inc., a Delaware corporation,
or its successors in interest.
Parent Guaranty: Has the meaning specified in the Preamble.
8
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 acquisi-
tion 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, corpora-
tion, limited liability company, partnership, joint venture, associa-
tion, 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 pay-
ments 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 Dis-
tribution 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 com-
puted after giving effect to the payment of principal, if any, on the
Equipment Notes or other Trust Property held in the Trust and the dis-
tribution thereof to be made on such Distribution Date.
Postponed Notes: Means, with respect to any Trust or the re-
lated series of Certificates, the Equipment Notes to be held in such
Trust as to which a Postponement Notice shall have been delivered pur-
suant 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
9
purchase of the related Equipment Notes to a date later than the Issu-
ance Date of such series of Certificates, (2) identifying the amount of
the purchase price of each such Equipment Note and the aggregate pur-
chase 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 Cer-
tificateholder, 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 Cer-
tificates on the date specified in any Trust Supplement for such pay-
ment 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 Inter-
creditor 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).
Purchase Agreement Assignment: 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.
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
10
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 Cer-
tificates of any series, the register maintained and the registrar ap-
pointed 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 sub-
ject matter of the request accompanied by an Officer's Certificate and
an Opinion of Counsel as provided in Section 1.02 of this Basic Agree-
ment.
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 Supple-
ment.
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 pay-
ment is scheduled to be made) or (ii) any payment of interest on the
Certificates of any series with funds drawn under the Liquidity Facil-
ity 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 in-
stallment, the payment of regularly scheduled interest accrued on the
unpaid principal amount of such Equipment Note, or both; provided, how-
ever, that any payment of principal, premium, if any, or interest re-
sulting from the redemption or purchase of any Equipment Note shall not
constitute a Scheduled Payment.
11
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 in-
strument 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 Certifi-
cates of any series, each date on which a Special Payment is to be dis-
tributed 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 re-
quired 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 Certifi-
cates of any series, the account or accounts created and maintained for
such series pursuant to Section 4.01(b) and the related Trust Supple-
ment.
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 de-
posit issued by commercial banks organized under the laws of the United
States or of any political subdivision thereof having a combined capi-
tal 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
12
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 de-
scribed in clause (iii) above.
Subordination Agent: Has the meaning specified therefor in any
Intercreditor Agreement.
Substitute Aircraft: Means, with respect to any Trust, any Air-
craft of a type specified in this Agreement and, at the election of the
Company, substituted prior to the applicable Cut-off Date, if any, pur-
suant 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 In-
tercreditor Agreement.
Trust: Means, with respect to the Certificates of any series,
the trust under this Agreement.
Trustee: Means State Street Bank and Trust Company of Connecti-
cut, National Association, a national banking association, or its suc-
cessor in interest, and any successor or other trustee appointed as
provided herein.
Trust Indenture Act: 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 Ac-
count and the related Special Payments Account and, subject to the re-
lated Intercreditor Agreement, any proceeds from the sale by the Trus-
tee 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
13
monies receivable in respect of such rights, and (iv) all monies re-
ceivable under any Liquidity Facility for such Trust.
Trust Supplement: Means an agreement supplemental hereto pursu-
ant 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 Cer-
tificates 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 applica-
tion 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 Cer-
tificates 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 condi-
tions precedent, if any, provided for in this Basic Agreement or this Agree-
ment 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 con-
ditions 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 docu-
ments is specifically required by any provision of this Basic Agreement or
this Agreement relating to such particular application or request, no addi-
tional certificate or opinion need be furnished.
Every Officer's Certificate or Opinion of Counsel with respect to com-
pliance 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 (x) each individual signing such
certificate or (y) each firm or person executing such Opinion of
Counsel 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 opin-
ions contained in such certificate or Opinion of Counsel are
based;
(3) a statement that, in the opinion of each such indi-
vidual or firm, he or it has made such examination or investiga-
tion as is necessary to enable him or it to express an informed
opinion as to whether or not such covenant or condition has been
complied with; and
14
(4) a statement as to whether, in the opinion of each
such individual or firm, 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 opin-
ion 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 appli-
cations, requests, consents, certificates, statements, opinions or other in-
struments 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 pro-
vided 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 Agree-
ment, 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 ap-
pointing 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 acknowledg-
ments 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 part-
nership, such certificate or affidavit shall also constitute sufficient proof
of his
15
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 Out-
standing have given any Direction under this Agreement, Certificates owned
by the Company, the Parent 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 Cer-
tificates shall not be so disregarded, and (ii) if any amount of Certifi-
cates of any series so owned by any such Person have been pledged in good
faith, such Certificates shall not be disregarded if the pledgee estab-
lishes 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,
the Parent 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 Inden-
ture Act, such record date shall be the record date specified in such Offi-
cer's Certificate, which shall be a date not more than 30 days prior to the
first solicitation of Certificateholders of the applicable series in con-
nection 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 determin-
ing 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 com-
puted 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 Direc-
tion 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
16
under the provisions of this Agreement, without preference, priority or dis-
tinction 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 un-
der 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 incorpo-
rated in such title for the Certificates of each series as specified in the
related Trust Supplement. Each Certificate shall bear upon its face the des-
ignation 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 se-
ries of Certificates issued pursuant to this Agreement will evidence frac-
tional undivided interests in the related Trust and, except as may be con-
tained in any Intercreditor Agreement, will have no rights, benefits or in-
terests 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, prior-
ity or distinction on account of the actual time or times of authentication
and delivery, all in accordance with the terms and provisions of this Agree-
ment.
(b) The following matters shall be established with respect to
the Certificates of each series issued under this Agreement by a Trust Sup-
plement executed and delivered by and among the Company, the Parent, if the
Parent is a party to such Trust Supplement, 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);
17
(3) any limit upon the aggregate principal amount of the Cer-
tificates 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 Certifi-
cates of such series;
(6) the Special Distribution Dates applicable to the Certifi-
cates 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 3.01, the denominations
in which the Certificates of such series shall be issuable;
(9) if other than United States dollars, the currency or curren-
cies (including currency units) in which the Certificates of such series
shall be denominated;
(10) the specific form of the Certificates of such series (in-
cluding the interest rate applicable thereto) and whether or not Cer-
tificates 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 Docu-
ments;
(12) provisions with respect to the terms for which the defini-
tions set forth in Article I hereof or the terms of Section 11.01 hereof
permit or require further specification in the related Trust Supplement;
18
(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 such series will be entitled to the benefits of a
guaranty issued by the Parent in connection with certain Leases or Owned
Aircraft Notes;
(17) whether there will be a deposit agreement or other arrange-
ment prior to the delivery of one or more Aircraft and, if so, any terms
appropriate thereto;
(18) the "Responsible Party" for purposes of directing the Trus-
tee to make Specified Investments; and
(19) any other terms of the Certificates of such series (which
terms shall not be inconsistent with the provisions of the Trust Inden-
ture 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 se-
ries.
(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 se-
ries 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 re-
lating 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 obli-
gations 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 contem-
plated to
19
be purchased by the Trustee under the related Note Purchase Agreements and,
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 speci-
fied 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 No-
tice 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 "Es-
crowed 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 invest-
ments are reasonably available for purchase. The Trustee shall make with-
drawals from the Escrow Account only as provided in this Agreement. Upon re-
quest of the Company on one or more occasions and the satisfaction or waiver
of the closing conditions specified in the applicable Note Purchase Agree-
ments 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 Post-
poned 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 applica-
ble 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 Re-
sponsible Party in Specified Investments maturing as provided in the preced-
ing paragraph.
Any earnings on Specified Investments received from time to time by the
Trustee shall be promptly distributed to the Responsible Party. The Respon-
sible Party shall pay to the Trustee for deposit to the relevant Escrow Ac-
count an amount equal to any losses on such Specified Investments as in-
curred. On the Initial Regular Distribution Date in respect of the Certifi-
cates of any series, the Responsible Party will
20
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 Trus-
tee.
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 fol-
lowing 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 in-
cluding, 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 ac-
cordance with the provisions hereof.
If, on such Cut-off Date, an amount equal to less than all of the Es-
crowed Funds (other than Escrowed Funds referred to in the immediately pre-
ceding 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 contem-
plated to be purchased with such unused Escrowed Funds (other than Escrowed
Funds referred to in the immediately preceding paragraph) but not so pur-
chased 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 in-
terest 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 ini-
tial Holder of such
21
series as grantor of such Trust shall thereby join in the creation and decla-
ration 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 pro-
vided for in the related Trust Supplement, and, except as set forth in this
Agreement, 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 ac-
quired).
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
or Exhibit B, as appropriate, 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 with this Agreement, 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 Cer-
tificates 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 Trus-
tee 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
22
time when such signature was affixed, authorized to sign on behalf of the
Trustee shall be valid and binding obligations of the Trustee, notwithstand-
ing that such individual has ceased to be so authorized prior to the authen-
tication 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 ag-
gregate 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 provided
in this Agreement.
(b) No Certificate of any series shall be entitled to any bene-
fit 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 or Exhibit B hereto, as appropriate, 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 Cer-
tificates 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 deter-
mined to be appropriate by the officers executing the temporary Certificates
of such series, as evidenced by their execution of such temporary Certifi-
cates. If temporary Certificates of any series are issued, the Trustee will
cause definitive Certificates of such series to be prepared without unreason-
able 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 Inter-
est. 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
23
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 bene-
fits 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 exe-
cute, authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of like series, in authorized de-
nominations 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 de-
liver the Certificates that the Certificateholder making the exchange is en-
titled to receive. Every Certificate presented or surrendered for registra-
tion of transfer or exchange shall be duly endorsed or accompanied by a writ-
ten instrument of transfer in form satisfactory to the Trustee and the Regis-
trar duly executed by the Certificateholder thereof or its attorney duly
authorized in writing.
No service charge shall be made to a Certificateholder for any registra-
tion 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 Certifi-
cates of any series may be issued in the form of one or more typewritten Cer-
tificates representing the Book-Entry Certificates of such series, to be de-
livered to The Depository Trust Company, the initial Clearing Agency, by, or
on behalf of, the Company. In such case, the Certificates of such series de-
livered 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 repre-
senting such Certificate Owner's interest in the Certificates of such series,
except
24
as provided above and in Subsection (d) below. As to the Certificates of any
series, unless and until definitive, fully registered Certificates (the "De-
finitive 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 Certifi-
cates) as the authorized representatives of the Certificate Own-
ers;
(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 Own-
ers 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 Clear-
ing 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 Certifi-
cateholders 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 Clear-
ing Agency has in fact received any such instructions.
(b) Whenever notice or other communication to the Certificate-
holders of such series is required under this Agreement, unless and until De-
finitive Certificates shall have been issued pursuant to Subsection (d) be-
low, the Trustee shall give all such
25
notices and communications specified in this Agreement to be given to Certi-
ficateholders of such series to the Clearing Agency.
(c) Unless and until Definitive Certificates of a series are is-
sued pursuant to Subsection (d) below, on the Record Date prior to each ap-
plicable 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 Partici-
pants 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 regis-
tration 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. None
of the Company, the Parent, the Registrar, the Paying Agent or the Trustee
shall be liable for any delay in delivery of such instructions and may con-
clusively 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 Certifi-
cates are registered in the Register as Certificateholders under this Agree-
ment. None of the Company, the Parent or 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 Supple-
ment, the Trustee shall enter into the applicable Letter of Representations
with respect to such series of Certificates and fulfill its responsibilities
thereunder.
26
(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 Regis-
trar receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate, and (b) there is delivered to the Registrar and the Trus-
tee 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 Sec-
tion 8-405 of the Uniform Commercial Code in effect in any applicable juris-
diction are met, the Trustee shall execute, authenticate and deliver, in ex-
change for or in lieu of any such mutilated, destroyed, lost or stolen Cer-
tificate, a new Certificate or Certificates of like series, in authorized de-
nominations and of like Fractional Undivided Interest and bearing a number
not contemporaneously outstanding.
In connection with the issuance of any new Certificate under this Sec-
tion 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 Inter-
est 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 replace-
ment 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 can-
cellation 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
27
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 Cer-
tificates 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 accor-
dance 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 pay-
ment 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
Parent, the Trustee, the Loan Trustees, the Owner Trustees or the Owner Par-
ticipants, except as otherwise expressly provided in this Agreement or in the
related Intercreditor Agreement.
Each of the Company and the Parent is a party to this Agreement solely
for purposes of meeting the requirements of the Trust Indenture Act, and
therefore neither the Company nor the Parent shall 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 ac-
counts. 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 Cer-
tificateholders of each series a Special Payments Account as one or more ac-
counts, 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
28
(under an Intercreditor Agreement, if applicable) with respect to the Cer-
tificates of such series, the Trustee, upon receipt thereof, shall immedi-
ately deposit the aggregate amount of such Special Payments in such Special
Payments Account.
(c) The Trustee shall present (or, if applicable, cause the Subor-
dination 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 re-
lated Indenture, on the applicable redemption date under such Indenture.
Section 4.02. Distributions from Certificate Account and Special Pay-
ments Account. (a) On each Regular Distribution Date with respect to a se-
ries of Certificates or as soon thereafter as the Trustee has confirmed re-
ceipt 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 Cer-
tificate 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 distribu-
tion) by check mailed to such Certificateholder, at the address appearing in
the Register, such Certificateholder's pro rata share (based on the Frac-
tional 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 ap-
plicable Special Payment deposited therein pursuant to Section 4.01(b).
There shall be so distributed to each Certificateholder of record of such se-
ries 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).
29
(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 re-
demption 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 oc-
cur 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 mail-
ing 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 Distribu-
tion 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 practica-
ble, as soon as practicable thereafter). In the case of any other Special
Payments, such notice shall be mailed as soon as practicable after the Trus-
tee has confirmed that it has received funds for such Special Payment, stat-
ing 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 practica-
ble 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.
30
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 fol-
lowing information:
(i) the amount of such distribution under this Agreement
allocable to principal and the amount allocable to premium, if
any;
(ii) the amount of such distribution under this Agreement
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 list-
ing 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 Certifi-
cates.
(b) Within a reasonable period of time after the end of each cal-
endar 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 de-
termined pursuant to clauses (a)(i) and (a)(ii) above with respect to the re-
lated Trust for such calendar year or, in the event such Person was a Certi-
ficateholder of record during a portion of such calendar year, for the appli-
cable portion of such year, and such other items as are readily available to
the Trustee and which a Certificateholder shall reasonably request as neces-
sary 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
31
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 practica-
ble, be invested by the Trustee in Permitted Investments selected by the Com-
pany in written instructions to the Trustee pending distribution of such Spe-
cial 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 pur-
suant 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 in-
vestment 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 con-
solidate 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. Section 40102(a)(15), as amended,
and (iii) a United States certificated air carrier, if and so long as such
status is a condition of
32
entitlement to the benefits of Section 1110 of the Bankruptcy Reform Act of
1978, as amended (11 U.S.C. Section 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 se-
ries 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, Deputy General Counsel, Associate Gen-
eral 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 pro-
vided 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 accor-
dance 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 con-
veyance, 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 cor-
poration or Person which shall have become such in the manner prescribed in
this Section 5.02 from
33
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 De-
fault under any Indenture, the Trustee may (i) to the extent it is the Con-
trolling Party at such time (as determined pursuant to the related Inter-
creditor Agreement), direct the exercise of remedies as provided in such re-
lated 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 Certifi-
cates 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 Cer-
tificates 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 Docu-
ment or on or in respect of the Certificates of such series; provided, how-
ever, that if such purchase occurs after a Record Date, such purchase price
shall be reduced by the amount to be distributed under this Agreement 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 Certifi-
cates of a series that are subject to the same Intercreditor Agreement (such
other Agreements, the "Other Agreements"), the Certificates of each such se-
ries 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
34
purchase shall be subject to the terms of this Section 6.01. By acceptance
of its Certificate, each Certificateholder (each, a "Selling Certificate-
holder" 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 Certificate-
holders, agrees that, at any time after the occurrence and during the con-
tinuance of a Triggering Event, it will, upon payment of the purchase price
specified in this Agreement by one or more Purchasing Certificateholders,
forthwith sell, assign, transfer and convey to such Purchasing Certificate-
holder (without recourse, representation or warranty of any kind except for
its own acts), all of the right, title, interest and obligation of such Sell-
ing Certificateholder in this Agreement, any related Intercreditor Agreement,
the related Liquidity Facility, the related Note Documents and all Certifi-
cates 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 re-
lated Intercreditor Agreement, the related Liquidity Facility and the related
Note Documents. The Certificates of such series will be deemed to be pur-
chased 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 Certifi-
cateholders will be to deliver the Certificates to the Purchasing Certifi-
cateholder and receive the purchase price for such Certificates of such se-
ries 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 Certifi-
cates 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, pos-
sess 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
35
purchase money, and, after paying such purchase money and receiving such re-
ceipt, 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 col-
lected 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 Cer-
tificates 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 Agree-
ment, including any right of the Trustee as Controlling Party under such In-
tercreditor 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,
36
(2) the Trustee shall not determine that the action so di-
rected 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 Inter-
creditor Agreement, the Certificateholders holding Certificates of a series
evidencing Fractional Undivided Interests aggregating not less than a major-
ity in interest in the Trust (i) may on behalf of all of the Certificatehold-
ers waive any past Event of Default under this Agreement 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 De-
fault under any related Indenture and its consequences, and thereby annul any
Direction given by such Certificateholders or the Trustee to such Loan Trus-
tee 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 correspond-
ing 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, in-
cluding, without limitation, Section 6.07 hereof, but subject to any related
Intercreditor Agreement, the right of any Certificateholder to receive dis-
tributions of payments required pursuant to Section 4.02 hereof on the appli-
cable Certificates when due, or to
37
institute suit for the enforcement of any such payment on or after the appli-
cable 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 Cer-
tain 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 no-
tice to the Trustee of a continuing Event of Default;
(2) Certificateholders holding Certificates of such series evi-
dencing 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, re-
quest 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 Certificate-
holders of any series shall have any right in any manner whatsoever hereunder
or under the related Trust Supplement or under the Certificates of such se-
ries to (i) surrender, impair, waive, affect, disturb or prejudice any prop-
erty 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 Certificate-
holders 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 provided in this Agreement and for the
equal, ratable and common benefit of all the Certificateholders of such se-
ries subject to the provisions of this Agreement.
Section 6.08. Remedies Cumulative. Every remedy given under this
Agreement 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
38
addition to every other remedy given under this Agreement 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 Trus-
tee 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 or the Parent.
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 un-
dertakes 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 de-
gree 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.
39
Section 7.02. Notice of Defaults. (a) As promptly as practicable af-
ter, 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, how-
ever, 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 pro-
tected 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 se-
ries. 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 De-
fault 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 under this Agree-
ment.
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 re-
fraining 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 Inter-
creditor 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 pre-
scribed) may, in the absence of bad faith on its part, rely upon an Officer's
Certificate of the Company or the Parent, any related Owner Trustee or any
related Loan Trustee;
40
(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 compli-
ance 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, in-
strument, 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 miscon-
duct 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 Di-
rection of the Certificateholders holding Certificates of any series evidenc-
ing Fractional Undivided Interests aggregating not less than a majority in
interest in the related Trust relating to the time, method and place of con-
ducting 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
41
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 Certifi-
cates and, subject to Sections 310(b) and 311 of the Trust Indenture Act, if
applicable, may otherwise deal with the Company, the Parent, any Owner Trus-
tees 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 in this Agreement 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 in this Agreement.
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 under this Agreement
(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 re-
quest for all reasonable out-of-pocket expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this Ba-
sic 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 at-
tributable 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 re-
spect to the Certificates of any series, pursuant to the particular sections
of the Note Purchase Agreement specified in the related Trust Supplement.
42
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 at-
tributable 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 sur-
plus in excess of $5,000,000 and the obligations of which, whether now in ex-
istence 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 supervis-
ing 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 condi-
tions 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 in-
strument of acceptance by a successor Trustee shall not have been delivered
to the Company, the related Owner
43
Trustees and the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent juris-
diction 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 inter-
est 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 ad-
judged a bankrupt or insolvent, or a receiver of the Trustee or of its prop-
erty 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 Certi-
ficateholder 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 Com-
pany shall promptly appoint a successor Trustee of such Trust in a jurisdic-
tion 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)
44
which would be avoided if the Trustee were located in another state, or ju-
risdiction 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 Certificatehold-
ers of the related series holding Certificates of such series evidencing
Fractional Undivided Interests aggregating not less than a majority in inter-
est 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 ap-
pointment, 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 re-
signing Trustee or any Certificateholder who has been a bona fide Certifi-
cateholder 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 res-
ignation 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 accept-
ing such appointment, and thereupon the resignation or removal of the retir-
ing Trustee with respect to such Trusts shall become effective and such suc-
cessor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trus-
tee; but, on request of the Company or the successor Trustee, such retiring
Trustee shall execute and deliver an instrument transferring to such succes-
sor 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,
45
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, pow-
ers 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 Trus-
tee, 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 under this Agreement 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 un-
less 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 Busi-
ness. 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 consolida-
tion to such authenticating Trustee may adopt such execution or authentica-
tion 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 Trus-
tee in respect of such Certificates or this Agreement
46
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 se-
curities 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, the Parent, 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 Author-
ized 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 authori-
ties. 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 result-
ing 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 corpo-
ration.
(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
47
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 re-
lated 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 Cer-
tificates shall be deposited and held in trust for the benefit of the Certi-
ficateholders entitled to such payment, subject to the provisions of this
Section 7.13. Moneys so deposited and held in trust shall constitute a sepa-
rate 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 satisfac-
tion 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. Sub-
ject to the provisions of any Intercreditor Agreement, the Trustee agrees
that all Equipment Notes to be purchased by any Trust and Permitted Invest-
ments, 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:
48
(a) the Trustee is a national banking association organized
and validly existing in good standing under the laws of the State of Con-
necticut.
(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 Inter-
creditor 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 bank-
ing 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 in-
cluded in the Trust Property pursuant to the provisions of any mortgage, in-
denture, contract, agreement or other undertaking to which it is a party,
which violation, default or lien could reasonably be expected to have an ad-
verse 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.
49
Section 7.16 Withholding Taxes; Information Reporting. As to the Cer-
tificates 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 with-
hold 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, encum-
brance, 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 Trus-
tee under this Agreement 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,
50
a list, in such form as the Trustee may reasonably require, of all informa-
tion in the possession or control of the Company as to the names and ad-
dresses 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 fur-
nished to the Trustee pursuant to Section 7.12.
Section 8.02. Preservation of Information, Communications to Certifi-
cateholders. The Trustee shall preserve, in as current a form as is reasona-
bly 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 re-
port 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 regula-
tions 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 na-
tional securities exchange as may be prescribed in such rules and regula-
tions;
(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
51
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 an-
nual 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 summa-
ries 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 Certificate-
holders. Without the consent of the Certificateholders, the Company and the
Parent 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, en-
ter 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 se-
ries of Certificates and other matters contemplated by Section 2.01(b); or
(2) to evidence the succession of another corporation to the Com-
pany or the Parent, if the Parent is a party to such Trust Supplement, and
the assumption by any such successor of the covenants of the Company or the
Parent, herein contained or of the Company's or the Parent's obligations, if
any, under any Intercreditor Agreement, any Note Purchase Agreement or any
Liquidity Facility; or
(3) to add to the covenants of the Company or the Parent, if the
Parent is a party to such Trust Supplement, for the benefit of the Certifi-
cateholders of
52
any series, or to surrender any right or power conferred upon the Company or
the Parent 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 Facil-
ity 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 re-
spect 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 in-
terests 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 Cer-
tificates of any series are listed or of any regulatory body; or
(6) to modify, eliminate or add to the provisions of this Agree-
ment, any Intercreditor Agreement, any Note Purchase Agreement or any Liquid-
ity Facility to such extent as shall be necessary to continue the qualifica-
tion of this Agreement, any Intercreditor Agreement, any Note Purchase Agree-
ment or any Liquidity Facility (including any supplemental agreement) under
the Trust Indenture Act or under any similar Federal statute hereafter en-
acted, 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 pro-
visions referred to in Section 316(a)(2) of the Trust Indenture Act as in ef-
fect at the date as of which this Basic Agreement was executed or any corre-
sponding provision in any similar Federal statute hereafter enacted; or
(7) to evidence and provide for the acceptance of appointment un-
der 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
53
(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, pro-
vided, however, that such amendments or modifications shall apply to Certifi-
cates 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 Sub-
chapter 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 Certificatehold-
ers. With respect to each separate Trust and the series of Certificates re-
lating thereto, with the consent of the Certificateholders holding Certifi-
cates 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, the Parent and
the Trustee, the Company and the Parent 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 (sub-
ject to Section 9.03) shall, enter into an agreement or agreements supplemen-
tal hereto for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement, any Inter-
creditor 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 Cer-
tificate 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 in-
stitute 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
54
deprive such Certificateholder of the benefit of the ownership of the Equip-
ment Notes in such Trust; or
(3) alter the priority of distributions specified in the In-
tercreditor Agreement in a manner materially adverse to the interests of the
Certificateholders of any series; or
(4) reduce the specified percentage of the aggregate Frac-
tional Undivided Interests of such Trust that is required for any such sup-
plemental 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 Sec-
tion 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 sup-
plemental agreement, but it shall be sufficient if such Direction shall ap-
prove 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 docu-
ment.
Section 9.04. Execution of Supplemental Agreements. In executing, or
accepting the additional trusts created by, any supplemental agreement per-
mitted 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
55
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 Ar-
ticle 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 no-
tation may be made upon Outstanding Certificates of such series after proper
presentation and demand.
Section 9.08. Release of Parent. Upon the request of the Parent, and
so long as the Parent has not executed a guaranty in respect of any Lease or
Equipment Note, the Trustee shall execute an agreement supplemental hereto
for the purpose of releasing the Parent from any and all of its obligations
and liabilities under this Agreement and upon the execution of such supple-
mental agreement, the Parent shall cease to be a party to this Agreement.
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 Certifi-
cateholders 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, modifica-
tion, waiver or supplement to each Certificateholder of such series regis-
tered on the Register as of the date of such notice. The Trustee shall re-
quest 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, amend-
ments, modifications or supplements as a holder of (or, with respect to Post-
poned Notes, a prospective purchaser of) such Equipment Note or a Controlling
Party and (c) how to
56
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 Di-
rection of Certificateholders to (B) the aggregate face amount of all Out-
standing 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 evi-
dencing such Holder's consent to such Direction prior to one Business Day be-
fore the Trustee directs such action or casts such vote or gives such con-
sent. Notwithstanding the foregoing, but subject to Section 6.04 and any In-
tercreditor Agreement, the Trustee may, with respect to the Certificates of
any series, in its own discretion and at its own direction, consent and no-
tify the relevant Loan Trustee of such consent (or direct the Subordination
Agent to consent and notify the Loan Trustee of such consent) to any amend-
ment, modification, waiver or supplement under any related Indenture or any
other related Note Document if an Event of Default hereunder shall have oc-
curred and be continuing or if such amendment, modification, waiver or sup-
plement will not materially adversely affect the interests of the Certifi-
cateholders 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, the Parent,
if any, 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 survi-
vor 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.
57
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 Cer-
tificates to the Trustee for payment of the final distribution and cancella-
tion, 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 pro-
posed 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 Certificate-
holders 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 distribu-
tion with respect thereto. No additional interest shall accrue on the Cer-
tificates of such series after any Regular Distribution Date (or Special Dis-
tribution 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 pay-
ment of distributions on the Certificates of such series shall remain un-
claimed 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 pe-
riod 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
58
Agreement or the related Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or com-
mence 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 exis-
tence 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 obliga-
tions 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 nomi-
nee 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 or the Parent:
US Airways, Inc. (for the Company)
US Airways Group, Inc. (for the Parent)
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
59
if to the Trustee:
State Street Bank and Trust Company of Connecticut,
National Association
225 Asylum Street
Hartford, CT 06103
Attention: Corporate/Muni Department
Facsimile: (617) 664-5151
Telephone: (617) 664-5340
(b) The Company, the Parent 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 Certificate-
holders of such series shown on the Register kept by the Registrar and to ad-
dresses filed with the Trustee for Certificate Owners of such series. Fail-
ure so to mail a notice or communication or any defect in such notice or com-
munication shall not affect its sufficiency with respect to other Certifi-
cateholders or Certificate Owners of such series.
(d) If a notice or communication is mailed in the manner pro-
vided 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 or the Parent mails a notice or communica-
tion 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 no-
tices to the Trustee shall be deemed to be given only when received by a Re-
sponsible Officer of the Trustee.
(g) The Trustee shall promptly furnish the Company and the
Parent with a copy of any demand, notice or written communication received by
the Trustee hereunder from any Certificateholder, Owner Trustee or Loan Trus-
tee.
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.
60
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 Certifi-
cateholders 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 appli-
cable, 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, rep-
resentations and warranties in this Agreement by the Trustee, the Parent 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 to this Agreement and their successors under this
Agreement, and the Certificateholders of each series, any benefit or any le-
gal or equitable right, remedy or claim under this Agreement.
Section 12.11. Legal Holidays. In any case where any Regular Distribu-
tion Date or Special Distribution Date relating to any Certificate of any se-
ries shall not be a Business Day with respect to such series, then (notwith-
standing 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 Dis-
tribution Date, and no interest shall accrue during the intervening period.
Section 12.12. Counterparts. For the purpose of facilitating the exe-
cution of this Agreement and for other purposes, this Agreement may be exe-
cuted simultaneously in any number of counterparts, each of which counter-
parts shall be deemed to be an original, and all of which counterparts shall
constitute but one and the same instrument.
61
Section 12.13. Communication by Certificateholders With Other Certifi-
cateholders. Certificateholders of any series may communicate with other
Certificateholders of such series with respect to their rights under this Ba-
sic Agreement, the related Trust Supplement or the Certificates of such se-
ries pursuant to Section 312(b) of the Trust Indenture Act. The Company, the
Parent, the Trustee and any and all other persons benefitted by this Agree-
ment shall have the protection afforded by Section 312(c) of the Trust Inden-
ture Act.
Section 12.14. Intention of Parties. The parties to this Agreement in-
tend 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 cor-
poration or as a partnership. The powers granted and obligations undertaken
pursuant to this Agreement shall be so construed so as to further such in-
tent.
62
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 GROUP, INC.
By: _______________________________
Name:
Title:
US AIRWAYS, INC.
By: _______________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, as
Trustee
By: _______________________________
Name:
Title:
EXHIBIT A
FORM OF CERTIFICATE*
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.**
US AIRWAYS ____________ PASS THROUGH TRUST
Pass Through Certificate, Series __________
Final Regular Distribution Date: _____, ____ evidencing a
fractional undivided interest in a trust, the property of
which includes certain equipment notes each secured by
Aircraft owned by or leased to US Airways, Inc.
Certificate
No._________ $__________ Fractional Undivided Interest representing
._____% of the Trust per $1,000 face amount
THIS CERTIFIES THAT __________________, for value received, is the reg-
istered owner of a $___________ (________ dollars) Fractional Undivided In-
terest in the US Airways Pass Through Trust, Series [___] (the "Trust") cre-
ated by State Street Bank and Trust Company of Connecticut, National Associa-
tion, as trustee (the
_________________________
* To be used in connection with Certificates offered pursuant to a
Trust Supplement to which US Airways Group, Inc. is not a party.
** This legend to appear on Book-Entry Certificates to be deposited with
The Depository Trust Company.
A-1
"Trustee"), pursuant to a Pass Through Trust Agreement dated as of [
], 1999 (the "Basic Agreement"), between the Trustee, US Airways, Inc., a
corporation incorporated under Delaware law (the "Company") and US Airways
Group, Inc., a corporation incorporated under Delaware law (the "Parent"), as
supplemented by Trust Supplement No. _______ thereto dated __________, ____,
between the Trustee and the Company, (collectively, the "Agreement"), a sum-
mary 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 con-
ditions of the Agreement. By virtue of its acceptance hereof, the Certifi-
cateholder of this Certificate assents to and agrees to be bound by the pro-
visions of the Agreement and any related Intercreditor Agreement. The prop-
erty 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 re-
lated Intercreditor Agreement, from funds then available to the Trustee,
there will be distributed on each __________ and ___________ (a "Regular Dis-
tribution Date"), commencing on _________, ____, to the Person in whose name
this Certificate is registered at the close of business on the 15th day pre-
ceding 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 accor-
dance with the terms of the Agreement and any related Intercreditor Agree-
ment, 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 dis-
tributed 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-2
a Business Day, distribution shall be made on the immediately following Busi-
ness Day with the same force and effect as if made on such Regular Distribu-
tion Date or Special Distribution Date and no interest shall accrue during
the intervening period. The Trustee shall mail notice of each Special Pay-
ment 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 other-
wise provided in the Agreement and notwithstanding the above, the final dis-
tribution 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 obliga-
tion guaranteed by, or an interest in, the Company or the Trustee or any af-
filiate 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 Cer-
tificateholder 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 Certificatehold-
ers holding Certificates evidencing Fractional Undivided Interests aggregat-
ing 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 Cer-
tificate and of any Certificate issued upon the transfer hereof or in ex-
change 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 Certi-
ficateholders of any of the Certificates.
A-3
As provided in the Agreement and subject to certain limitations set
forth, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the offices or
agencies maintained by the Trustee in its capacity as Registrar, or by any
successor Registrar duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar, duly executed
by the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of author-
ized denominations evidencing the same aggregate Fractional Undivided Inter-
est 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 Cer-
tificates of authorized denominations evidencing the same aggregate Frac-
tional 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 Regis-
trar may treat the person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Trustee, the Registrar, nor
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to Certificate-
holders of all amounts required to be distributed to them pursuant to the
Agreement and the disposition of all property held as part of the Trust Prop-
erty.
THIS CERTIFICATE AND THE AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES AND CERTIFICATEHOLDERS HEREUNDER AND THEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Unless the certificate of authentication hereon has been executed by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
A-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
US AIRWAYS PASS THROUGH TRUST
By: STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION, as
Trustee
By: _______________________________
Title:_____________________________
Dated: ________________________
A-5
[FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Certificates
referred to in the
within-mentioned Agreement.
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, as Trustee
By: _______________________________
Authorized Officer
A-6
EXHIBIT B
FORM OF GUARANTEED CERTIFICATE*
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.**
US AIRWAYS ____________ PASS THROUGH TRUST
Pass Through Certificate, Series __________
Final Regular Distribution Date: _____, ____
evidencing a fractional undivided interest in a trust,
the property of which includes certain equipment notes
each secured by Aircraft owned by or leased to
US Airways, Inc.
Certificate
No._________ $__________ Fractional Undivided Interest representing
._____% of the Trust per $1,000 face amount
THIS CERTIFIES THAT __________________, for value received, is the reg-
istered owner of a $___________ (________ dollars) Fractional Undivided In-
terest in the US Airways Pass Through Trust, Series [___] (the "Trust") cre-
ated by State Street Bank and Trust Company of Connecticut, National Associa-
tion, as trustee (the
____________________________
* To be used in connection with Certificates offered pursuant to a Trust
Supplement to which US Airways Group, Inc. is a party.
** This legend to appear on Book-Entry Certificates to be deposited with
The Depository Trust Company.
B-1
"Trustee"), pursuant to a Pass Through Trust Agreement dated as of [ ],
1999 (the "Basic Agreement"), between the Trustee, US Airways, Inc., a corpo-
ration incorporated under Delaware law (the "Company") and US Airways Group,
Inc., a corporation incorporated under Delaware law (the "Parent"), as sup-
plemented by Trust Supplement No. _______ thereto dated __________, ____, be-
tween the Trustee, the Company, and the Parent, (collectively, the "Agree-
ment"), 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 "Certifi-
cates"). This Certificate is issued under and is subject to the terms, pro-
visions 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 Li-
quidity 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 re-
lated Intercreditor Agreement, from funds then available to the Trustee,
there will be distributed on each __________ and ___________ (a "Regular Dis-
tribution Date"), commencing on _________, ____, to the Person in whose name
this Certificate is registered at the close of business on the 15th day pre-
ceding 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 accor-
dance with the terms of the Agreement and any related Intercreditor Agree-
ment, 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 dis-
tributed 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
B-2
a Business Day, distribution shall be made on the immediately following Busi-
ness Day with the same force and effect as if made on such Regular Distribu-
tion Date or Special Distribution Date and no interest shall accrue during
the intervening period. The Trustee shall mail notice of each Special Pay-
ment 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 other-
wise provided in the Agreement and notwithstanding the above, the final dis-
tribution 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 obliga-
tion guaranteed by, or an interest in, the Company, the Parent 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 Cer-
tificateholder 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 Certificatehold-
ers holding Certificates evidencing Fractional Undivided Interests aggregat-
ing 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 Cer-
tificate and of any Certificate issued upon the transfer hereof or in ex-
change 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 Certi-
ficateholders of any of the Certificates.
B-3
As provided in the Agreement and subject to certain limitations set
forth, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the offices or
agencies maintained by the Trustee in its capacity as Registrar, or by any
successor Registrar duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar, duly executed
by the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of author-
ized denominations evidencing the same aggregate Fractional Undivided Inter-
est 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 Cer-
tificates of authorized denominations evidencing the same aggregate Frac-
tional 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 Regis-
trar may treat the person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Trustee, the Registrar, nor
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to Certificate-
holders of all amounts required to be distributed to them pursuant to the
Agreement and the disposition of all property held as part of the Trust Prop-
erty.
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.
B-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
US AIRWAYS PASS THROUGH TRUST
By: STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION, as
Trustee
By:________________________________
Title:_____________________________
Dated: _______________________
B-5
[FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Certificates
referred to in the
within-mentioned Agreement.
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, as Trustee
By: _______________________________
Authorized Officer
B-6
EXHIBIT 5
OPINION OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM (ILLINOIS)
June 2, 1999
US Airways, Inc.
US Airways Group, Inc.
2345 Crystal Drive
Arlington, VA 22227
Re: US Airways, Inc. Pass Through Certificates
__________________________________________
Ladies and Gentlemen:
We have acted as special counsel to US Airways Inc., a Delaware
corporation ("US Airways"), and US Airways Group, Inc., a Delaware corpora-
tion ("US Airways Group"), in connection with the registration statement on
Form S-3 (the "Registration Statement") filed by US Airways and US Airways
Group on June 2, 1999 under the Securities Act of 1933, as amended (the
"Act"), relating to (i) pass through certificates ("Pass Through Certifi-
cates") to be issued by one or more trusts (each a "Trust") to be formed by
US Airways and (ii) guarantees (the "Guarantees") of US Airways Group to be
issued in connection with the Pass Through Certificates.
The Trusts are expected to acquire certain equipment notes relating
to aircraft either owned or leased by US Airways. The Pass Through Certifi-
cates and Guarantees are expected to be issued and sold by US Airways and US
Airways Group from time to time pursuant to Rule 415 under the Act for an ag-
gregate initial offering price (together with the aggregate initial offering
price of securities previously registered under US Airways' registration
statement on Form S-3 (File No. 333-64425) which have not yet been sold and
which, pursuant to Rule 429 under the Act, are being carried forward from US
Airways' prior registration statement and being sold under the Basic Prospec-
tus (defined below) included in the Registration Statement) not to exceed
$1,500,000,000 or the equivalent thereof in one or more foreign currencies or
composite currencies. The Pass Through Certificates and the Guarantees will
be issued in one or more series under a pass through trust agreement to be
entered into by US Airways, US Airways Group and State Street Bank and Trust
Company of Connecticut, National Association (the "Trustee"), a form of which
has been filed as an exhibit to the Registration Statement (the "Pass Through
US Airways, Inc.
US Airways Group, Inc.
June 2, 1999
Page 2
Trust Agreement"), as the same may from time to time be supplemented (each a
"Pass Through Trust Supplement"). The Pass Through Certificates and the
Guarantees will be sold or delivered from time to time as set forth in the
Registration Statement, any amendment thereto, the prospectus with respect to
the Pass Through Certificates contained in the Registration Statement (the
"Basic Prospectus") or any supplements thereto (the "Prospectus Supple-
ments").
This opinion is delivered in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Act.
We are admitted to the practice of law in the State of Illinois and
express no opinion herein concerning any law other than the laws of the State
of New York, the General Corporation Law of the State of Delaware and the
laws of the United States of America to the extent specifically referred to
herein. Insofar as the opinions expressed herein relate to or are dependent
upon matters governed by the laws of the State of New York, we have relied
upon the opinion of Skadden, Arps, Slate, Meagher & Flom LLP.
In connection with this opinion, we have examined originals, or
copies certified or otherwise identified to our satisfaction, of (i) the Reg-
istration Statement, (ii) the Basic Prospectus, (iii) a form of the Pass
Through Trust Agreement, (iv) a form of Pass Through Certificate and a speci-
men thereof, (v) the Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939, as amended (the "1939 Act"), on Form T-1 of the
Trustee, (vi) the Amended and Restated Certificate of Incorporation of each
of US Airways and US Airways Group, as currently in effect, (vii) the By-Laws
of each of US Airways and US Airways Group, as currently in effect, and
(viii) resolutions adopted by the Board of Directors of each of US Airways
and US Airways Group on May 19, 1999 relating to the filing of the Registra-
tion Statement. We also have examined originals or copies, certified or oth-
erwise identified to our satisfaction, of such records of US Airways and US
Airways Group and such agreements, certificates of public officials, certifi-
cates of officers and other representatives of US Airways and US Airways
Group and others, and such other documents, certificates and records as we
have deemed necessary or appropriate as a basis for the opinion set forth
herein.
In our examination, we have assumed the legal capacity of natural
persons, the genuineness of all signatures, the authenticity of all documents
submit-
US Airways, Inc.
US Airways Group, Inc.
June 2, 1999
Page 3
ted to us as originals, the conformity to original documents of all documents
submitted to us as certified or photostatic copies and the authenticity of
originals of all such documents. In making our examination of documents exe-
cuted by parties other than US Airways and US Airways Group, 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 execu-
tion and delivery by such parties of such documents, and the validity and
binding effect thereof on such parties; provided, however, that we have not
assumed the validity and binding effect thereof with respect to the Trustee.
As to any facts material to the opinion expressed herein which we did not in-
dependently establish or verify, we have relied upon oral or written state-
ments and representations of officers and other representatives of US Airways
and US Airways Group and others.
In addition, we have assumed that (i) the Registration Statement,
as finally amended (including all necessary post-effective amendments), has
become effective and a Prospectus Supplement supplementing the Basic Prospec-
tus will have been prepared and filed with the Securities and Exchange Com-
mission (the "Commission") describing the respective Pass Through Certifi-
cates, (ii) the Pass Through Trust Agreement shall have been qualified under
the 1939 Act, (iii) all Pass Through Certificates issued will be issued and
sold in compliance with applicable federal and state securities laws and
solely in the manner stated in the Registration Statement, the Basic Prospec-
tus and the appropriate Prospectus Supplement and (iv) a definitive purchase,
underwriting or similar agreement with respect to any Pass Through Certifi-
cates will have been duly authorized and validly executed and delivered by
one or both of US Airways or US Airways Group and the other party thereto.
Based upon the foregoing and subject to the limitations, qualifica-
tions, exceptions and assumptions set forth herein, we are of the opinion
that:
1. With respect to each series of Pass Through Certificates, when (i)
the Pass Through Trust Agreement and the Pass Through Trust Supplement relat-
ing to such series has been duly authorized and validly executed and deliv-
ered by US Airways and the Trustee, (ii) the Board of Directors of US Airways
has taken all necessary corporate action to approve the terms of such series
of Pass Through Certificates and related matters, (iii) the Pass Through Cer-
tificates of such series have been duly executed, authenticated, issued and
delivered in accordance with
US Airways, Inc.
US Airways Group, Inc.
June 2, 1999
Page 4
provisions of the Pass Through Trust Agreement and the related Pass Through
Trust Supplement and (iv) the applicable definitive purchase, underwriting or
similar agreement is approved by the Board of Directors of US Airways, is
duly executed and delivered by the parties thereto and payment of the consid-
eration provided for therein is made, such Pass Through Certificates will be
valid and legally binding obligations of the Trustee as trustee of the Trust.
2. With respect to the Guarantees, when (i) the Pass Through Trust
Agreement and the Pass Through Trust Supplement relating to such series has
been duly authorized and validly executed and delivered by US Airways, US
Airways Group and the Trustee, (ii) the Board of Directors of US Airways
Group has taken all necessary corporate action to approve the terms of such
Guarantees and related matters, (iii) such Guarantees have been duly exe-
cuted, issued and delivered in accordance with the provisions of the Pass
Through Trust Agreement and the related Pass Through Trust Supplement and the
applicable definitive purchase, underwriting or similar agreement is approved
by the Board of Directors of US Airways Group, is duly executed and delivered
by the parties thereto and payment of the consideration provided for therein
is made and (iv) the events described in clauses (i) through (iv) of para-
graph 1 have occurred in respect of the Pass Through Certificates to which
such Guarantees relate, the Guarantees will be valid and legally binding ob-
ligations of US Airways Group.
In rendering the opinion set forth in paragraphs 1 and 2 above, we
have assumed that the execution and delivery by US Airways Group and the
Trustee of the Pass Through Trust Agreement and the related Pass Through
Trust Supplement and the performance of their respective obligations thereun-
der do not and will not violate, conflict with or constitute a default under
(i) any agreement or instrument to which US Airways Group or the Trustee or
any of their respective properties is subject, (ii) any law, rule or regula-
tion which US Airways Group or the Trustee or any of their properties is sub-
ject, (iii) any judicial or regulatory order or decree of any governmental
authority or (iv) any consent, approval, license, authorization, or valida-
tion of, or filing, recording or registration with, any governmental author-
ity.
Our opinion set forth above is subject to the effects of bank-
ruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, gen-
eral equitable principles
US Airways, Inc.
US Airways Group, Inc.
June 2, 1999
Page 5
(whether considered in a proceeding in equity or at law) and an implied cove-
nant 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 refer-
ence to our firm under the heading "Legal Opinions" in the Registration
Statement. In giving this consent, we do not thereby admit that we are in
the category of persons whose consent is required under Section 7 of the Act
or the rules and regulations of the Commission.
Very truly yours,
/s/ Skadden, Arps, Slate, Meagher
& Flom(Illinois)
EXHIBIT 12
<TABLE>
US AIRWAYS, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<CAPTION>
Three months ended
March 31, Year ended December 31,
------------------- -----------------------
1999 1998 1998 1997 1996 1995 1994
---- ---- ---- ---- ---- ---- ----
(in thousands except ratio amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Pre-tax income (loss) $109,223 $168,739 $ 935,844 $ 673,229 $191,043 $ 37,398 $(716,183)
Add (deduct):
Fixed charges:
Interest expense $ 49,957 $ 62,774 $ $223,604 $ 260,029 $283,936 $301,923 $ 285,846
Amortization of debt
issue expense 926 2,003 6,507 2,684 2,844 3,724 4,300
Interest factor in
Noncapitalized
Rentals 76,963 76,548 346,948 320,625 303,383 316,977 364,462
Interest capitalized** (4,031) (2,525) 10,478 (11,582) (8,398) (8,781) (13,760)
Amortization of
previously
capitalized interest 2,466 2,543 10,112 10,269 10,286 10,238 8,802
------- ------- --------- --------- ------- ------- ------
$235,504 $310,082 $1,533,493 $1,255,254 $783,094 $661,479 $(66,533)
------- ------- --------- --------- ------- ------- ------
Fixed charges:
Interest expense $ 49,957 $ 62,774 $ 223,604 $ 260,029 $283,936 $301,923 $285,846
Amortization of debt
issue expense 926 2,003 6,507 2,684 2,844 3,724 4,300
Interest factor in
noncapitalized rentals 76,963 76,548 346,948 320,625 303,383 316,977 364,462
------- ------- --------- --------- ------- ------- -------
$127,846 $141,325 $ 577,059 $ 583,338 $590,163 $622,624 $654,608
------- ------- --------- --------- ------- ------- -------
Ratio of earnings to
fixed charges 1.8 2.2 2.7 2.2 1.3 1.1 *
- --------
*For the year ended December 31, 1994, US Airways' earnings were not sufficient to cover its fixed
charges. Additional earnings of $721 million would have been required to achieve a ratio of earnings
to fixed charges of 1.0.
**During the second quarter of 1998, US Airways wrote-off capitalized interest on equipment purchase
deposits in conjunction with the settlement of litigation between US Airways and the Boeing Company.
</TABLE>
<TABLE>
US AIRWAYS GROUP, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<CAPTION>
Three months ended
March 31, Year ended December 31,
------------------ ------------------------
1999 1998 1998 1997 1996 1995 1994
---- ---- ---- ---- ---- ---- ----
(in thousands except ratio amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Pre-tax income (loss) $ 75,477 $164,756 $ 902,034 $ 672,036 $275,482 $128,272 $(684,923)
Add (deduct):
Fixed charges:
Interest expense $ 49,801 $ 62,795 $ 223,426 $ 256,055 $267,122 $302,593 $ 284,034
Amortization of debt
issuance costs 926 2,043 6,547 3,223 3,355 4,154 7,523
Interest factor in
noncapitalized rentals 85,034 84,342 378,072 353,066 334,952 339,721 384,580
Interest capitalized** (7,853) (4,791) (2,559) (12,648) (8,398) (8,781) (13,760)
Amortization of
previously capitalized
interest 2,466 2,543 10,112 10,269 10,286 10,238 8,802
------- ------- --------- --------- ------- ------- ------
$205,851 $311,688 $1,517,632 $1,282,001 $882,799 $776,197 $(13,744)
------- ------- --------- --------- ------- ------- ------
Fixed charges:
Interest expense $ 49,801 $ 62,795 $ 223,426 $ 256,055 $267,122 $302,593 $284,034
Amortization of debt
issue expense 926 2,043 6,547 3,223 3,355 4,154 7,523
Interest factor in
noncapitalized rentals 85,034 84,342 378,072 353,066 334,952 339,721 384,580
------- ------- --------- --------- ------- ------- -------
$135,761 $149,180 $ 608,045 $ 612,344 $605,429 $646,468 $676,137
Ratio of earnings to ------- ------- --------- --------- ------- ------- -------
fixed charges 1.5 2.1 2.5 2.1 1.5 1.2 *
- --------
*For the year ended December 31, 1994, US Airways Group's earnings were not sufficient to cover its
fixed charges. Additional earnings of $690 million would have been required to achieve a ratio of
earnings to fixed charges of 1.0.
**During the second quarter of 1998, US Airways wrote-off capitalized interest on equipment purchase
deposits in conjunction with the settlement of litigation between US Airways and the Boeing
Company.
</TABLE>
EXHIBIT 23.1
Consent of Independent Auditors
The Board of Directors
US Airways Group, Inc.
US Airways, Inc.:
We consent to the use of our reports dated February 24, 1999 incorporated
herein by reference and to the reference to our firm under the heading "Ex-
perts" in the prospectus.
KPMG LLP
Washington, DC
June 2, 1999
EXHIBIT 23.3
Consent of Skadden, Arps, Slate, Meagher & Flom LLP
The Board of Directors
US Airways Group, Inc.
US Airways, Inc.:
We consent to reference to our firm under the heading "Certain United
States Federal Income Tax Consequences" in the prospectus. In giving this
consent, we do not thereby admit that we are in the category of persons whose
consent is required under Section 7 of the Act or the rules and regulations
of the Commission.
/s/ Skadden, Arps, Slate, Meagher &
Flom LLP
Washington, D.C.
June 2, 1999
EXHIBIT 23.3
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, Peter M. George, Director
of US Airways Group, 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-3 or other appropriate Forms,
including any supplements and amendments thereto, of the Company which shall
be filed with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, with respect to the proposed registration of the
Company's pass through certificates.
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of
May, 1999.
/s/ Peter M. George
_____________________
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, Robert LeBuhn, Director of
US Airways Group, 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-3 or other appropriate Forms, including
any supplements and amendments thereto, of the Company which shall be filed
with the Securities and Exchange Commission under the Securities Act of 1933,
as amended, with respect to the proposed registration of the Company's pass
through certificates.
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of
May, 1999.
/s/ Robert LeBuhn
_________________
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, Thomas H. O'Brien,
Director of US Airways Group, 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-3 or other
appropriate Forms, including any supplements and amendments thereto, of the
Company which shall be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to the proposed
registration of the Company's pass through certificates.
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of
May, 1999.
/s/ Thomas H. O'Brien
_____________________
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, Hanne M. Merriman, Director
of US Airways Group, 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-3 or other appropriate Forms,
including any supplements and amendments thereto, of the Company which shall
be filed with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, with respect to the proposed registration of the
Company's pass through certificates.
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of
May, 1999.
/s/ Hanne M. Merriman
_____________________
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, Mathias J. DeVito, Director
of US Airways Group, 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-3 or other appropriate Forms,
including any supplements and amendments thereto, of the Company which shall
be filed with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, with respect to the proposed registration of the
Company's pass through certificates.
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of
May, 1999.
/s/ Mathias J. DeVito
_____________________
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, John G. Medlin,Jr.,
Director of US Airways Group, 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-3 or other
appropriate Forms, including any supplements and amendments thereto, of the
Company which shall be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to the proposed
registration of the Company's pass through certificates.
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of
May, 1999.
/s/ John G. Medlin, Jr.
_______________________
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, Richard B. Priory, Director
of US Airways Group, 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-3 or other appropriate Forms,
including any supplements and amendments thereto, of the Company which shall
be filed with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, with respect to the proposed registration of the
Company's pass through certificates.
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of
May, 1999.
/s/ Richard B. Priory
_____________________
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, Raymond W. Smith, Director
of US Airways Group, 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-3 or other appropriate Forms,
including any supplements and amendments thereto, of the Company which shall
be filed with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, with respect to the proposed registration of the
Company's pass through certificates.
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of
May, 1999.
/s/ Raymond W. Smith
____________________
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, Hilda Ochoa-Brillembourg,
Director of US Airways Group, 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-3 or other
appropriate Forms, including any supplements and amendments thereto, of the
Company which shall be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to the proposed
registration of the Company's pass through certificates.
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of
May, 1999.
/s/ Hilda Ochoa-Brillembourg
____________________________
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, Robert L. Johnson, Director
of US Airways Group, 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-3 or other appropriate Forms,
including any supplements and amendments thereto, of the Company which shall
be filed with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, with respect to the proposed registration of the
Company's pass through certificates.
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of
May, 1999.
/s/ Robert L. Johnson
_____________________
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-3 or other appropriate Forms, including any
supplements and amendments thereto, of the Company which shall be filed with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, with respect to the proposed registration of the Company's pass
through certificates.
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of
May, 1999.
/s/ Peter M. George
_____________________
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-3 or other appropriate Forms, including any
supplements and amendments thereto, of the Company which shall be filed with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, with respect to the proposed registration of the Company's pass
through certificates.
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of
May, 1999.
/s/ Robert LeBuhn
_________________
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, Thomas H. O'Brien, 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-3 or other appropriate Forms, including any
supplements and amendments thereto, of the Company which shall be filed with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, with respect to the proposed registration of the Company's pass
through certificates.
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of
May, 1999.
/s/ Thomas H. O'Brien
_____________________
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-3 or other appropriate Forms, including any
supplements and amendments thereto, of the Company which shall be filed with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, with respect to the proposed registration of the Company's pass
through certificates.
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of
May, 1999.
/s/ Hanne M. Merriman
_____________________
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, Mathias J. DeVito, Director
of US Airways, Inc. (the "Company"), do hereby appoint Lawrence M. Nagin and
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-3 or other appropriate Forms, including any
supplements and amendments thereto, of the Company which shall be filed with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, with respect to the proposed registration of the Company's pass
through certificates.
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of
May, 1999.
/s/ Mathias J. DeVito
_____________________
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, John G. Medlin, Jr.,
Director of US Airways, Inc. (the "Company"), do hereby appoint Lawrence M.
Nagin and 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-3 or other appropriate Forms,
including any supplements and amendments thereto, of the Company which shall
be filed with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, with respect to the proposed registration of the
Company's pass through certificates.
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of
May, 1999.
/s/ John G. Medlin, Jr.
_______________________
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, Richard B. Priory, 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-3 or other appropriate Forms, including any
supplements and amendments thereto, of the Company which shall be filed with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, with respect to the proposed registration of the Company's pass
through certificates.
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of
May, 1999.
/s/ Richard B. Priory
_____________________
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-3 or other appropriate Forms, including any
supplements and amendments thereto, of the Company which shall be filed with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, with respect to the proposed registration of the Company's pass
through certificates.
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of
May, 1999.
/s/ Raymond W. Smith
____________________
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT I, Hilda Ochoa-Brillembourg,
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-3 or other appropriate Forms,
including any supplements and amendments thereto, of the Company which shall
be filed with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, with respect to the proposed registration of the
Company's pass through certificates.
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of
May, 1999.
/s/ Hilda Ochoa-Brillembourg
____________________________
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-3 or other appropriate Forms, including any
supplements and amendments thereto, of the Company which shall be filed with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, with respect to the proposed registration of the Company's pass
through certificates.
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of
May, 1999.
/s/ Robert L. Johnson
_____________________
EXHIBIT 25
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
----------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2)
---
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
Connecticut 06-1304336
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Asylum Street, Goodwin Square, Hartford, Connecticut 06103
(Address of principal executive offices) (Zip Code)
Maureen Scannell Bateman, Esq. Executive Vice President and General Counsel
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
---------------------
US AIRWAYS, INC.
US AIRWAYS GROUP, INC.
(Exact name of obligor as specified in its charter)
Delaware 54-1194634
53-0218143
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2345 Crystal Drive
Arlington, Virginia 22227
(Address of principal executive offices) (Zip Code)
--------------------
$1,500,000,000 PASS-THROUGH CERTIFICATES
(Title of indenture securities)
GENERAL
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY AUTHORITY TO
WHICH IT IS SUBJECT.
Comptroller of the Currency
Treasury Department of the United States
Washington, D.C.
Board of Governors of the Federal Reserve System
Washington, D.C.
Federal Deposit Insurance Corporation
Washington, D. C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
The obligor is not an affiliate of the trustee or of its
parent, State Street Boston Corporation.
(See note on page 2.)
ITEM 3. THROUGH ITEM 15. NOT APPLICABLE.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF
ELIGIBILITY.
1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS NOW IN
EFFECT.
A copy of the Articles of Association of the trustee as now
in effect incorporated herein by reference to Exhibit T-1.1
filed with Form T-1 Statement, Registration No. 33-40617.
2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO
COMMENCE BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF
ASSOCIATION.
A copy of the Certificate of the Comptroller of the Currency.
3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE
CORPORATE TRUST POWERS, IF SUCH AUTHORIZATION IS NOT CONTAINED
IN THE DOCUMENTS SPECIFIED IN PARAGRAPH (1) or (2), ABOVE.
A copy of the Certification of Fiduciary Powers (included in
Exhibit 2).
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR INSTRUMENTS
CORRESPONDING THERETO.
A copy of the existing by-laws of the trustee incorporated
herein by reference to Exhibit T-1.1 filed with Form T-1
Statement, Registration No. 33-40617.
1
5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4. IF THE OBLIGOR
IS IN DEFAULT.
Not applicable.
6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES REQUIRED
BY SECTION 321 (B) OF THE ACT.
The consent of the trustee required by Section 321(b) of the
Act is annexed hereto as Exhibit 6 and made a part hereof.
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE
PUBLISHED PURSUANT TO LAW OR THE REQUIREMENTS OF ITS
SUPERVISING OR EXAMINING AUTHORITY.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority is annexed hereto as
Exhibit 7 and made a part hereof.
NOTES
In answering any item of this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor or any underwriter for
the obligor, the trustee has relied upon information furnished to it by the
obligor and the underwriters, and the trustee disclaims responsibility for
the accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which
would have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company of Connecticut,
National Association, a national banking association organized and existing
under the laws of the United States, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Boston and The Commonwealth of Massachusetts,
on the 18th day of May, 1999.
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION
By: /s/ Ruth A. Smith
---------------------------
Ruth A. Smith
Vice President
2
EXHIBIT 1 AND 2
(COMPTROLLER OF THE CURRENCY ADMINISTRATOR OF NATIONAL BANKS--LETTERHEAD)
I Eugene A. Ludwig, Comptroller of the Currency, do hereby certify that:
1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et
seq., as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody
and control of all records pertaining to the chartering, regulation and
supervision of all National Banking Associations.
2. "State Street Bank and Trust Company of Connecticut, National
Association", Hartford, Connecticut, (Charter No. 22272), is a National
Banking Association formed under the laws of the United States and is
authorized thereunder to transact the business of banking and exercise
Fiduciary Powers on the date of this Certificate.
IN TESTIMONY WHEREOF, I have
hereunto subscribed my name and
caused my seal of office to be
affixed to these presents at the
Treasury Department, in the City
of Washington and District of
Columbia, this 1st day of
April, 1998.
/s/ Eugene A. Ludwig
------------------------------------------------
Comptroller of the Currency
3
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issuance by US
Airways, Inc. of its $1,500,000,000 Pass-Through Certificates, we hereby
consent that reports of examination by Federal, State, Territorial or
District authorities may be furnished by such authorities to the Securities
and Exchange Commission upon request therefor.
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION
By: /s/ Ruth A. Smith
-------------------------------
Ruth A. Smith
Vice President
Dated: May 18, 1999
4
EXHIBIT 7
Legal Title of Bank: State Street Bank and Trust Company of CT, N.A.
Call Date: 12/31/98
Address: Goodwin Square, 225 Asylum Street, Floor 29
City, State Zip Hartford, CT 06103
FDIC Certificate No.: 33132
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for December 31, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
Schedule RC--Balance Sheet
Thousands of
ASSETS Dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin 7,439
Interest-bearing balances 0
Securities:
Held-to-maturity balances 0
Available-for-sale securities 90
Federal funds sold and securities purchased under agreements to resell 0
Loans and lease financing receivables:
Loans and leases, net of unearned income 0
LESS: Allowance for loan and lease losses 0
LESS: Allocated transfer risk reserve 0
Loans and leases, net of unearned income, allowance, and reserve 0
Trading assets 0
Premises and fixed assets (including capitalized leases) 313
Other real estate owned 0
Investments in unconsolidated subsidiaries and associated companies 0
Customers' liability to this bank on acceptances outstanding 0
Intangible assets 2,077
Other assets 1,198
Total assets 11,117
Losses deferred pursuant to 12 U.S.C 1823(j) 0
Total assets and losses deferred pursuant to 12 U.S.C. 1823(j) 11,117
5
Legal Title of Bank: State Street Bank and Trust Company of CT, N.A.
Call Date: 12/31/98
Address: Goodwin Square, 225 Asylum Street, Floor 29
City, State Zip Hartford, CT 06103
FDIC Certificate No.: 33132
Schedule RC - Continued
LIABILITIES
Deposits:
In domestic offices 0
Noninterest-bearing 0
Interest-bearing 0
In foreign offices, Edge and Agreement subsidiaries, and IBFs 0
Noninterest-bearing 0
Interest-bearing 0
Federal funds purchased and securities sold under agreements to repurchase 0
Demand notes issued to the U.S. Treasury 0
Trading Liabilities 0
Other borrowed money 0
with a remaining maturity of one year or less 0
with a remaining maturity of more than one year through three years 0
with a remaining maturity of more than three years 0
Bank's liability on acceptances executed and outstanding 0
Other liabilities 3,944
Total liabilities 3,944
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock 500
Surplus 2,500
Undivided profits and capital reserves 4,173
Net unrealized holding gains (losses) on available-for-sale securities 0
Cumulative foreign currency translation adjustments 0
Total equity capital 7,173
Losses deferred pursuant to 12 U.S.C. 1823(j) 0
Total equity capital and losses deferred pursuant to 12 U.S.C. 1823(j) 7,173
Total liabilities, equity capital, and losses deferred
pursuant to 12 U.S.C. 1823(j) 11,117
======
6
We, the undersigned directors, attest to the correctness of this statement of
resources and liabilities. We declare that it has been examined by us, and
to the best of our knowledge and belief has been prepared in conformance with
the instructions and is true and correct.
Chris A. Hayes
Deborah A. Robbins
James A. Quale
I, Chris A. Hayes, Senior Vice President, Director and Chairperson of the
Board, of the above named bank do hereby declare that the Report of Condition
is true and correct to the best of my knowledge and belief.
Chris A. Hayes
7
