Exhibit 4.3
________________________________________________________________________________
PASS THROUGH TRUST AGREEMENT
Dated as of September 27, 2000
between
MIDWAY AIRLINES CORPORATION
and
ALLFIRST BANK
as Trustee
Midway Airlines 2000-1B Pass Through Trust
10.07% 2000-1B Initial Pass Through Certificates
10.07% ▇▇▇▇-▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ Through Certificates
________________________________________________________________________________
TABLE OF CONTENTS
ARTICLE I DEFINITIONS....................................................... 3
Section 1.01. Definitions................................................ 3
Section 1.02. Compliance Certificates and Opinions....................... 14
Section 1.03. Form of Documents Delivered to Trustee..................... 14
Section 1.04. Acts of Certificateholders................................. 15
ARTICLE II ORIGINAL ISSUANCE OF CERTIFICATES................................. 16
Section 2.01. Delivery of Documents; Delivery Date....................... 16
Section 2.02. Withdrawal of Deposits..................................... 17
Section 2.03. The Trustee................................................ 18
Section 2.04. Acceptance by Trustee...................................... 18
Section 2.05. Limitation of Powers....................................... 18
ARTICLE III THE CERTIFICATES.................................................. 18
Section 3.01. Title, Form, Denomination and Execution of Certificates.... 18
Section 3.02. Restrictive Legends........................................ 20
Section 3.03. Authentication of Certificates............................. 22
Section 3.04. Transfer and Exchange...................................... 22
Section 3.05. Book-Entry Provisions for U.S. Global Certificate
and Offshore Global Certificates........................... 23
Section 3.06. Special Transfer Provisions................................ 24
Section 3.07. Mutilated, Destroyed, Lost or Stolen Certificates.......... 27
Section 3.08. Persons Deemed Owners...................................... 28
Section 3.09. Cancellation............................................... 28
Section 3.10. Limitation of Liability for Payments....................... 28
Section 3.11. Temporary Certificates..................................... 28
Section 3.12. ERISA Restrictive Legend................................... 28
ARTICLE IV DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS................... 29
Section 4.01. Certificate Account and Special Payments Account........... 29
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....................................................... 33
Section 5.01. Maintenance of Corporate Existence......................... 33
Section 5.02. Consolidation, Merger, Etc................................. 33
ARTICLE VI DEFAULT........................................................... 34
Section 6.01. Events of Default.......................................... 34
Section 6.02. Incidents of Sale of Equipment Notes....................... 36
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Section 6.03. Judicial Proceedings Instituted by Trustee;
Trustee May Bring Suit.......................................... 36
Section 6.04. Control by Certificateholders................................... 37
Section 6.05. Waiver of Past Defaults......................................... 37
Section 6.06. Right of Certificateholders to Receive Payments Not to
Be Impaired..................................................... 38
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.............................................. 39
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........................................... 41
Section 7.06. Money Held in Trust............................................. 41
Section 7.07. Compensation and Reimbursement.................................. 41
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..... 45
Section 7.12. Maintenance of Agencies......................................... 45
Section 7.13. Money for Certificate Payments to Be Held in Trust.............. 46
Section 7.14. Registration of Equipment Notes in Name of Subordination
Agent........................................................... 47
Section 7.15. Representations and Warranties of Trustee....................... 47
Section 7.16. Withholding Taxes; Information Reporting........................ 48
Section 7.17. Trustee's Liens................................................. 48
Section 7.18. Preferential Collection of Claims............................... 48
ARTICLE VIII CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE......................... 49
Section 8.01. The Company to Furnish Trustee with Names and
Addresses of Certificateholders................................. 49
Section 8.02. Preservation of Information; Communications to
Certificateholders.............................................. 49
Section 8.03. Reports by Trustee.............................................. 49
Section 8.04. Reports by the Company.......................................... 49
ARTICLE IX SUPPLEMENTAL AGREEMENTS.................................................. 50
Section 9.01. Supplemental Agreements Without Consent of
Certificateholders.............................................. 50
Section 9.02. Supplemental Agreements with Consent of Certificateholders...... 51
Section 9.03. Documents Affecting Immunity or Indemnity....................... 52
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Section 9.04. Execution of Supplemental Agreements....................... 52
Section 9.05. Effect of Supplemental Agreements.......................... 52
Section 9.06. Conformity with Trust Indenture Act........................ 53
Section 9.07. Reference in Certificates to Supplemental Agreements....... 53
ARTICLE X AMENDMENTS TO INDENTURES AND FINANCING
DOCUMENTS.......................................................... 53
Section 10.01. Amendments and Supplement to Indentures and Other Note
Documents.................................................. 53
ARTICLE XI TERMINATION OF TRUST............................................... 54
Section 11.01. Termination of the Trust................................... 54
ARTICLE XII MISCELLANEOUS PROVISIONS........................................... 55
Section 12.01. Limitation on Rights of Certificateholders................. 55
Section 12.02. Certificates Nonassessable and Fully Paid.................. 55
Section 12.03. Notices.................................................... 55
Section 12.04. Governing Law.............................................. 56
Section 12.05. Severability of Provisions................................. 56
Section 12.06. Effect of Headings and Table of Contents................... 57
Section 12.07. Successors and Assigns..................................... 57
Section 12.08. Benefits of Agreement...................................... 57
Section 12.09. Legal Holidays............................................. 57
Section 12.10. Counterparts............................................... 57
Section 12.11. Communication by Certificateholders with Other
Certificateholders......................................... 57
Section 12.12. Intention of Parties....................................... 57
Section 12.13. Trust Indenture Act Controls............................... 57
EXHIBIT LIST
Exhibit A Form of Certificate
Exhibit B Form of Certificate for Unlegended Certificates
Exhibit C Form of Certificate to be Delivered in connection with
Transfers Pursuant to Regulation S
Exhibit D Form of Certificate to be Delivered in connection with
Transfers to Non-QIB Accredited Investors
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PASS THROUGH TRUST AGREEMENT
This PASS THROUGH TRUST AGREEMENT, dated as of September 27,
2000, between MIDWAY AIRLINES CORPORATION, a Delaware corporation (the
"Company"), and ALLFIRST BANK, a Maryland state-chartered commercial bank, as
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Trustee, is made with respect to the formation of Midway Airlines 2000-1B Pass
Through Trust and the issuance of 10.07% Midway Airlines 2000-1B Pass Through
Certificates representing fractional undivided interests in the Trust.
WITNESSETH:
WHEREAS, the Company has obtained commitments from The Boeing
Company for the delivery of certain Aircraft;
WHEREAS, the Company intends to finance the acquisition of
each such Aircraft either (i) through separate leveraged lease transactions, in
which case the Company will lease such Aircraft (collectively, the "Leased
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Aircraft") or (ii) through separate secured loan transactions, in which case the
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Company will own such Aircraft (collectively, the "Owned Aircraft");
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WHEREAS, in the case of each Leased Aircraft, each Owner
Trustee, acting on behalf of the corresponding Owner Participant, will issue
pursuant to an Indenture, on a non-recourse basis, Equipment Notes in order to
finance a portion of its purchase price of such Leased Aircraft;
WHEREAS, in the case of each Owned Aircraft, the Company will
issue pursuant to an Indenture, on a recourse basis, Equipment Notes to finance
a portion of the purchase price of such Owned Aircraft;
WHEREAS, the Trustee, upon execution and delivery of this
Agreement, hereby declares the creation of this Trust (the "2000-1B Trust") for
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the benefit of the Certificateholders, and the initial Certificateholders, as
the grantors of the 2000-1B Trust, by their respective acceptances of the
Certificates, join in the creation of this 2000-1B Trust with the Trustee;
WHEREAS, all Certificates to be issued by the Trust will
evidence fractional undivided interests in the Trust and will convey no rights,
benefits or interests in respect of any property other than the Trust Property
except for those Certificates to which an Escrow Receipt has been affixed;
WHEREAS, the Escrow Agent and the Placement Agents have
contemporaneously herewith entered into an Escrow Agreement with the Trustee and
the Escrow Paying Agent pursuant to which the Placement Agents have delivered to
the Escrow Agent the proceeds from the sale of the
Certificates and have irrevocably instructed the Escrow Agent to withdraw and
pay funds from such proceeds upon request and proper certification by the
Trustee to purchase Equipment Notes as the Aircraft are delivered by The Boeing
Company from time to time prior to the Delivery Period Termination Date;
WHEREAS, the Escrow Agent on behalf of the Certificateholders
has contemporaneously herewith entered into a Deposit Agreement with the
Depositary under which the Deposits referred to therein will be made and from
which it will withdraw funds to allow the Trustee to purchase Equipment Notes
from time to time prior to the Delivery Period Termination Date;
WHEREAS, pursuant to the terms and conditions of this
Agreement and the Note Purchase Agreement, upon or shortly following the
delivery of an Aircraft, the Trustee on behalf of the 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
Certificates issued hereunder and shall hold such Equipment Notes in trust for
the benefit of the Certificateholders;
WHEREAS, all of the conditions and requirements necessary to
make this Agreement, when duly executed and delivered, a valid, binding and
legal instrument, enforceable in accordance with its terms and for the purposes
herein expressed, have been done, performed and fulfilled, and the execution and
delivery of this Agreement in the form and with the terms hereof have been in
all respects duly authorized;
WHEREAS, to facilitate the sale of Equipment Notes to, and the
purchase of Equipment Notes by, the Trustee on behalf of the 2000-1B Trust, 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
pursuant hereto and as the "obligor" (as such term is defined in and solely for
purposes of the Trust Indenture Act of 1939, as amended), has duly authorized
the execution and delivery of this Agreement with respect to all such
Certificates and is undertaking to perform certain administrative and
ministerial duties hereunder and is also undertaking to pay the fees and
expenses of the Trustee; and
WHEREAS, upon issuance of the Exchange Certificates, if any,
or the effectiveness of the Shelf Registration Statement, this Agreement, as
amended or supplemented from time to time, will be subject to the provisions of
the Trust Indenture Act of 1939, and shall, to the extent applicable, be
governed by such provisions;
NOW, THEREFORE, in consideration of the mutual agreements
herein contained, and valuable consideration the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:
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ARTICLE I
DEFINITIONS
Section 1.01. Definitions. For all purposes of this Agreement,
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except as otherwise expressly provided or unless the context otherwise requires:
(1) the terms used herein that are defined in this Article
have the meanings assigned to them in this Article, and include the
plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference herein have the meanings
assigned to them therein;
(3) all references in this Agreement to designated "Articles",
"Sections", "Subsections" and other subdivisions are to the designated
Articles, Sections, Subsections and other subdivisions of this
Agreement;
(4) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to
any particular Article, Section, Subsection or other subdivision; and
(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".
Act: With respect to any Certificateholder has the meaning
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specified in Section 1.04.
Affiliate: Means, with respect to any specified Person, any
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other Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such Person. For purposes
of this definition, "control", when used with respect to any specified
Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agent Members: Has the meaning specified in Section 3.05(a).
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Aircraft: Means each of the New Aircraft in respect of which
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a Participation Agreement is entered into in accordance with the Note
Purchase Agreement.
Applicable Delivery Date: Has the meaning specified in
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Section 2.01(b).
Applicable Participation Agreement: Has the meaning
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specified in Section 2.01(b).
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Authorized Agent: Means any Paying Agent or Registrar for
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the Certificates.
Avoidable Tax: Means a state or local tax (i) upon (w) the
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Trust, (x) the Trust Property, (y) Certificateholders or (z) the
Trustee for which the Trustee is entitled to seek reimbursement from
the Trust Property, and (ii) which would be avoided if the Trustee were
located in another state, or jurisdiction within a state, within the
United States. A tax shall not be an Avoidable Tax if the Company or
any Owner Trustee shall agree to pay, and shall pay, such tax.
Book-Entry Certificates: With respect to the Certificates,
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means a beneficial interest in the Certificates, ownership and
transfers of which shall be made through book entries as described in
Section 3.04.
Business Day: Means any day other than a Saturday, a Sunday or
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a day on which commercial banks are required or authorized to close in
Baltimore, Maryland, New York, New York, Charlotte, North Carolina or,
so long as any Certificate is outstanding, the city and state in which
the Trustee or any Loan Trustee maintains its Corporate Trust Office or
receives and disburses funds.
Certificate: Means any one of the Initial Certificates or
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Exchange Certificates and any such Certificates issued in exchange
therefor or replacement thereof, executed and authenticated by the
Trustee.
Certificate Account: Means the account or accounts created
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and maintained pursuant to Section 4.01(a).
Certificateholder or Holder: Means the Person in whose name
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a Certificate is registered in the Register.
Clearing Agency: Means an organization registered as a
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"clearing agency" pursuant to Section 17A of the Securities Exchange
Act of 1934, as amended.
Clearing Agency Participant: Means a broker, dealer, bank,
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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.
Clearstream: Means Clearstream Banking, societe anonyme,
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and any successor thereto.
Code: Means the United States Internal Revenue Code of 1986,
----
as amended.
Company: Means Midway Airlines Corporation, a Delaware
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corporation, or its successor in interest.
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Controlling Party: Means the party entitled to act as such
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pursuant to the terms of the Intercreditor Agreement.
Corporate Trust Office: With respect to the Trustee or any
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Loan Trustee, means 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 the earlier of (a) the Delivery Period
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Termination Date and (b) the date on which a Triggering Event occurs.
Delivery Date: Has the meaning specified in the Note Purchase
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Agreement.
Delivery Notice: Has the meaning specified in the Note
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Purchase Agreement.
Delivery Period Termination Date: Means November 30, 2001
--------------------------------
(provided that, if a labor strike occurs at the Manufacturer prior to
such date, such date shall be extended by adding thereto the number of
days that such strike has continued in effect).
Deposits: Has the meaning specified in the Deposit Agreement.
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Deposit Agreement: Means the Deposit Agreement dated as of
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September 27, 2000 relating to the Certificates between the Depositary
and the Escrow Agent, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms.
Depositary: Means Allfirst Bank.
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DTC: Means The Depository Trust Company, its nominees and
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their respective successors.
Direction: Has the meaning specified in Section 1.04(c).
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Distribution Date: Means each Regular Distribution Date or
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Special Distribution Date.
Equipment Notes: Means the Equipment Notes issued pursuant
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to the Indentures.
ERISA: Means the Employee Retirement Income Security Act of
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1974, as amended.
Escrow Agent: Means, initially, First Union Trust Company,
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National Association, and any replacement or successor therefor
appointed in accordance with the Escrow Agreement.
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Escrow Agreement: Means the Escrow and Paying Agent Agreement
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dated as of the date hereof relating to the Certificates, among the
Escrow Agent, the Escrow Paying Agent, the Trustee and the Placement
Agents, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with its terms.
Escrow Paying Agent: Means the Person acting as paying agent
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under the Escrow Agreement.
Escrow Receipt: Means the receipt substantially in the form
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annexed to the Escrow Agreement representing a fractional undivided
interest in the funds held in escrow thereunder.
Euroclear: Means ▇▇▇▇▇▇ Guaranty Trust Company of New York,
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Brussels office,in its capacity as operator of the Euroclear System,
and any successor thereto.
Exchange Certificates: Means the pass through certificates
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substantially in the form of Exhibit A hereto issued in exchange for
the Initial Certificates pursuant to the Registration Rights Agreement
and authenticated hereunder.
Exchange Offer: Means the exchange offer which may be made
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pursuant to the Registration Rights Agreement to exchange Initial
Certificates for Exchange Certificates.
Exchange Offer Registration Statement: Means the registration
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statement that, pursuant to the Registration Rights Agreement, is filed
by the Company with the SEC with respect to the exchange of Initial
Certificates for Exchange Certificates.
Event of Default: Means the occurrence of an Indenture Default
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under any Indenture pursuant to which Equipment Notes held by the Trust
were issued.
Final Withdrawal: Has the meaning specified in the Escrow
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Agreement.
Final Withdrawal Date: Has the meaning specified in the
---------------------
Escrow Agreement.
Final Withdrawal Notice: Has the meaning specified in
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Section 2.02.
Fractional Undivided Interest: Means the fractional
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undivided interest in the Trust that is evidenced by a Certificate.
Global Certificates: Has the meaning assigned to such term
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in Section 3.01.
Indenture: Means each of the separate trust indenture and
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security agreements relating to the Aircraft, each as specified or
described in a Delivery Notice delivered pursuant to the Note Purchase
Agreement or the related Participation Agreement in each case as the
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same may be amended, supplemented or otherwise modified from time to
time in accordance with its terms.
Indenture Default: With respect to any Indenture, means any
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Indenture Event of Default (as such term is defined in such Indenture)
thereunder.
Initial Certificates: Means the certificates issued and
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authenticated hereunder substantially in the form of Exhibit A hereto
other than the Exchange Certificates.
Initial Regular Distribution Date: Means the first Regular
---------------------------------
Distribution Date on which a Scheduled Payment is to be made.
Institutional Accredited Investor: Means an institutional
---------------------------------
investor that is an "accredited investor" within the meaning set forth
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act.
Intercreditor Agreement: Means the Intercreditor Agreement
-----------------------
dated September 27, 2000 among the Trustee, the Other Trustees, the
Liquidity Provider, the liquidity providers, if any, relating to the
Certificates issued under (and as defined in) the Other Pass Through
Trust Agreements, and Allfirst Bank, as Subordination Agent thereunder,
as amended, supplemented or otherwise modified from time to time in
accordance with its terms.
Issuance Date: Means the initial date of issuance of the
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Initial Certificates.
Lease: Means, with respect to each Leased Aircraft, the lease
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between an Owner Trustee, as the lessor, and the Company, as the
lessee, referred to in the related Indenture, as each such lease may be
amended or supplemented in accordance with its respective terms; and
Leases means all such leases.
Leased Aircraft: Has the meaning given to such term in the
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recitals hereto.
Letter of Representations: Means the agreement dated the
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Issuance Date among the Company, the Trustee and the initial Clearing
Agency.
Liquidity Facility: Means the Revolving Credit Agreement dated
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the date hereof relating to the Certificates, between the Liquidity
Provider and the Subordination Agent, as amended, replaced,
supplemented or otherwise modified from time to time in accordance with
its terms and the terms of the Intercreditor Agreement.
Liquidity Provider: Means, initially, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Capital Services Inc., and any replacement or successor therefor
appointed in accordance with the Liquidity Facility and the
Intercreditor Agreement.
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Loan Trustee: With respect to any Equipment Note or the
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Indenture applicable thereto, means 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
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all of the Loan Trustees under the Indentures.
New Aircraft: Has the meaning specified in the Note
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Purchase Agreement.
Non-U.S. Person: Means a Person that is not a U.S. Person, as
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defined in Regulation S.
Note Documents: With respect to any Equipment Note, means (i)
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the Indenture and the Participation Agreement relating to such
Equipment Note, and (ii) in the case of any Equipment Note related to a
Leased Aircraft, also includes the Lease relating to such Leased
Aircraft.
Note Purchase Agreement. Means the Note Purchase Agreement
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dated as of September 27, 2000 among the Trustee, the Other Trustees,
the Company, the Escrow Agent, the Escrow Paying Agent and the
Subordination Agent, providing for, among other things, the purchase of
Equipment Notes by the Trustee on behalf of the Trust, as the same may
be amended, supplemented or otherwise modified from time to time, in
accordance with its terms.
Notice of Purchase Withdrawal: Has the meaning specified in
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the Deposit Agreement.
Officer's Certificate: Means a certificate signed, (a) in the
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case of the Company, by (i) the President or any Executive Vice
President or Senior Vice President of the Company, signing alone or
(ii) any Vice President of the Company signing together with the
Secretary, the Assistant Secretary, the Treasurer or any Assistant
Treasurer of the Company or (b) in the case of the Trustee or an Owner
Trustee or a Loan Trustee, a Responsible Officer of the Trustee or such
Owner Trustee or such Loan Trustee, as the case may be.
Offshore Certificates Exchange Date: Has the meaning specified
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in Section 3.01.
Offshore Global Certificates: Has the meaning assigned to such
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term in Section 3.01.
Offshore Physical Certificates: Has the meaning assigned to
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such term in Section 3.01.
Opinion of Counsel: Means a written opinion of legal counsel
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who (a) in the case of counsel for the Company may be (i) a senior
attorney in rank of the officers of the Company a principal duty of
which is furnishing advice as to legal matters or (ii) 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
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of them whether or not such counsel is an employee of any of
them, and who shall be reasonably acceptable to the Trustee.
Other Pass Through Trust Agreement: Means each of the two
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other Midway Airlines 2000-1 Pass Through Trust Agreements relating to,
respectively, Midway Airlines 2000-1A Pass Through Trust and Midway
Airlines 2000-1C Pass Through Trust, each dated the date hereof; and
Other Pass Through Trust Agreements means all such agreements..
Other Trust: Means each of the Midway Airlines Pass Through
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Trust 2000-1A and Midway Airlines 2000-1C Pass Through Trust, each
created on the date hereof; and Other Trusts means all such trusts.
Other Trustee: Means the trustee under each of the Other Pass
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Through Trust Agreement, and any successor or other trustee appointed
as provided therein; and Other Trustees means all such trustees.
Outstanding: With respect to Certificates, means, as of the
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date of determination, all Certificates theretofore authenticated and
delivered under this Agreement, except:
(i) Certificates theretofore cancelled by the
Registrar or delivered to the Trustee or the Registrar for
cancellation;
(ii) All of the Certificates if money in the full
amount required to make the final distribution with respect
thereto pursuant to Section 11.01 hereof has been theretofore
deposited with the Trustee in trust for the Holders of such
Certificates as provided in Section 4.01 pending distribution
of such money to such Certificateholders pursuant to such
final distribution payment; and
(iii) Certificates in exchange for or in lieu of
which other Certificates have been authenticated and delivered
pursuant to this Agreement.
Owned Aircraft: Has the meaning given to such term in the
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recitals hereto.
Owner Participant: With respect to any Equipment Note relating
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to a Leased Aircraft, means the "Owner Participant" as referred to in
the Indenture pursuant to which such Equipment Note is issued and any
permitted successor or assign of such Owner Participant; and Owner
Participants at any time of determination means all of the Owner
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Participants thus referred to in the Indentures.
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Owner Trustee: With respect to any Equipment Note relating to
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a Leased Aircraft, means the "Owner Trustee", as referred to in the
Indenture pursuant to which such Equipment Note is issued, not in its
individual capacity but solely as trustee; and Owner Trustees means all
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of the Owner Trustees party to any of the Indentures.
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Participation Agreement: Means each Participation Agreement to
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be entered into by the Trustee pursuant to the Note Purchase Agreement,
as the same may be amended, supplemented or otherwise modified in
accordance with its terms.
Paying Agent: Means the paying agent maintained and appointed
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for the Certificates pursuant to Section 7.12.
Permanent Offshore Global Certificates: Has the meaning
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specified in Section 3.01.
Permitted Investments: Means obligations of the United States
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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 or such lesser time as is
necessary for payment of any Special Payments on a Special Distribution
Date or any mutual fund the portfolio of which is limited to such
obligations, including any proprietary mutual fund of Allfirst Bank for
which such bank or an affiliate is investment advisor or to which such
bank provides other services and receives reasonable compensation for
such services.
Person: Means any person, including any individual,
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corporation, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, or government or any
agency or political subdivision thereof.
Physical Certificates: Has the meaning specified in Section
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3.01.
Placement Agents: Means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and
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Seabury Securities LLC.
Placement Agreement: Means the Placement Agreement dated
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September 22, 2000 among the Company and the Placement Agents.
Plan Transferee: Means any Plan or any entity that is using
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the assets of any Plan to purchase or hold its interest in a
Certificate. For purposes of this definition, a "Plan" means any
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employee benefit plan subject to ERISA as well as any plan that is not
subject to ERISA but which is subject to Section 4975 of the Internal
Revenue Code of 1986, as amended.
Pool Balance: Means, as of any date, (i) the original
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aggregate face amount of the Certificates less (ii) the aggregate
amount of all payments made in respect of such Certificates or in
respect of Deposits other than payments made in respect of interest or
premium thereon or reimbursement of any costs or expenses incurred in
connection therewith. The Pool Balance as of any Distribution Date
shall be computed after giving effect to any special distribution with
respect to unused Deposits, payment of principal of the Equipment Notes
or payment with respect to other Trust Property and the distribution
thereof to be made on such Distribution Date.
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Pool Factor: Means, as of any date, the quotient (rounded to
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the seventh decimal place) computed by dividing (i) the Pool Balance as
at such date by (ii) the original aggregate face amount of the
Certificates. The Pool Factor as of any Distribution Date shall be
computed after giving effect to any special distribution with respect
to unused Deposits, payment of principal, if any, on the Equipment
Notes or other Trust Property and the distribution thereof to be made
on such Distribution Date.
Private Placement Legend: Has the meaning specified in Section
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3.02.
QIB: Means a qualified institutional buyer as defined in Rule
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144A.
Record Date: Means (i) for Scheduled Payments to be
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distributed on any Regular Distribution Date, other than the final
distribution, the 15th day (whether or not a Business Day) preceding
such Regular Distribution Date, and (ii) for Special Payments to be
distributed on any Special Distribution Date, other than the final
distribution, the 15th day (whether or not a Business Day) preceding
such Special Distribution Date.
Register and Registrar: Mean the register maintained and the
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registrar appointed pursuant to Sections 3.04 and 7.12.
Registration Rights Agreement: Means the Registration Rights
-----------------------------
Agreement, dated as of September 27, 2000, among the Placement Agents,
the Trustee, the Other Trustees and the Company, as amended,
supplemented or otherwise modified from time to time in accordance with
its terms.
Regular Distribution Date: With respect to distributions of
-------------------------
Scheduled Payments in respect of the Certificates, means each April 1
and October 1, until payment of all the Scheduled Payments to be made
under the Equipment Notes held in the Trust have been made; provided,
--------
however, that, if any such day shall not be a Business Day, the related
-------
distribution shall be made on the next succeeding Business Day without
additional interest.
Regulation S: Means Regulation S under the Securities Act or
------------
any successor regulation thereto.
Request: Means a request by the Company setting forth the
-------
subject matter of the request accompanied by an Officer's Certificate
and an Opinion of Counsel as provided in Section 1.02 of this
Agreement.
Responsible Officer: With respect to the Trustee, any Loan
-------------------
Trustee and any Owner Trustee, means any officer in the Corporate Trust
Division 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.
-11-
Rule 144A: Means Rule 144A under the Securities Act and any
---------
successor regulation thereto.
Scheduled Payment: With respect to any Equipment Note, means
-----------------
any payment of principal and interest on such Equipment Note (other
than any such payment which is not in fact received by the Trustee or
any Subordination Agent within five days of the date on which such
payment is scheduled to be made) or any payment of interest on the
Certificates with funds drawn under the Liquidity Facility due from the
obligor thereon which payment represents the installment of principal
at the stated maturity of such installment of principal on such
Equipment Note, the payment of regularly scheduled interest accrued on
the unpaid principal amount of such Equipment Note, or both; provided
--------
that any payment of principal, premium, if any, or interest resulting
from the redemption or purchase of any Equipment Note shall not
constitute a Scheduled Payment.
SEC: Means the Securities and Exchange Commission, as from
---
time to time constituted or created under the Securities Exchange Act
of 1934, as amended, or, if at any time after the execution of this
instrument such Commission is not existing and performing the duties
now assigned to it under the Trust Indenture Act, then the body
performing such duties on such date.
Securities Act: Means the United States Securities Act of
--------------
1933, as amended from time to time, or any successor thereto.
Shelf Registration Statement: Means the shelf registration
----------------------------
statement which may be required to be filed by the Company with the SEC
pursuant to any Registration Rights Agreement, other than an Exchange
Offer Registration Statement.
Special Distribution Date: Means each date on which a Special
-------------------------
Payment is to be distributed as specified in this Agreement; provided,
--------
however, that, if any such day shall not be a Business Day, the related
-------
distribution shall be made on the next succeeding Business Day without
additional interest.
Special Payment: Means any payment (other than a Scheduled
---------------
Payment) in respect of, or any proceeds of, any Equipment Note or
Indenture Estate (as defined in each Indenture) or Special Redemption
Premium.
Special Payments Account: Means the account or accounts
------------------------
created and maintained pursuant to Section 4.01(b).
Special Redemption Premium: Means the premium payable by the
--------------------------
Company in respect of the Final Withdrawal pursuant to the Note
Purchase Agreement.
Specified Investments: Means (i) obligations of, or guaranteed
---------------------
by, the United States Government or agencies thereof, (ii) open market
commercial paper of any corporation
-12-
incorporated under the laws of the United States of America or any
State thereof rated at least P-2 or its equivalent by ▇▇▇▇▇'▇ Investors
Service, Inc. or at least A-2 or its equivalent by Standard & Poor's
Ratings Group, (iii) certificates of deposit issued by commercial banks
organized under the laws of the United States or of any political
subdivision thereof having a combined capital and surplus in excess of
$500,000,000 which banks or their holding companies have a rating of A
or its equivalent by ▇▇▇▇▇'▇ Investors Service, Inc. or Standard &
Poor's Ratings Group; 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 (iii) or
any subsidiary thereof, (v) repurchase agreements with any financial
institution having combined capital and surplus of at least
$500,000,000 with any of the obligations described in clauses (i)
through (iv) as collateral and (vi) any mutual fund the portfolio of
which is limited to investments of the types specified in the preceding
clauses (i) through (v), including any proprietary mutual fund of
Allfirst Bank for which such bank or an affiliate is investment advisor
or to which such bank provides other services and receives reasonable
compensation for such services; provided further that if all of the
-------- -------
above investments are unavailable, the entire amounts to be invested
may be used to purchase Federal Funds from an entity described in
clause (iii) above.
Subordination Agent: Has the meaning specified in the
-------------------
Intercreditor Agreement.
Temporary Offshore Global Certificates: Has the meaning
--------------------------------------
specified in Section 3.01.
Transfer Date: Has the meaning specified in Section 11.01.
-------------
Triggering Event: Has the meaning assigned to such term in the
----------------
Intercreditor Agreement.
Trust: Means the trust created by this Agreement, the estate
-----
of which consists of the Trust Property.
Trust Indenture Act: Except as otherwise provided in Section
-------------------
9.06, means the United States Trust Indenture Act of 1939 as in force
at the date hereof.
Trust Property: Means (i) subject to the Intercreditor
--------------
Agreement, the Equipment Notes held as the property of the Trust, all
monies at any time paid thereon and all monies due and to become due
thereunder, (ii) funds from time to time deposited in the Certificate
Account and the Special Payments Account and, subject to the
Intercreditor Agreement, any proceeds from the sale by the Trustee
pursuant to Section 6.02 of any Equipment Note and (iii) all rights of
the Trust and the Trustee, on behalf of the Trust, under the
Intercreditor Agreement, the Escrow Agreement, the Note Purchase
Agreement and the Liquidity Facilities, including, without limitation,
all rights to receive certain payments thereunder, and all monies paid
to the Trustee on behalf of the Trust pursuant to the Intercreditor
Agreement
-13-
or the Liquidity Facilities, provided that rights with respect to the
--------
Deposits or under the Escrow Agreement, except for the right to direct
withdrawals for the purchase of Equipment Notes to be held herein, will
not constitute Trust Property.
Trustee: Means Allfirst Bank, or its successor in interest,
-------
and any successor or other trustee appointed as provided herein.
Trustee's Lien: Has the meaning specified in Section 7.17.
--------------
U.S. Global Certificate: Has the meaning specified in Section
-----------------------
3.01.
U.S. Physical Certificates: Has the meaning specified in
--------------------------
Section 3.01.
Section 1.02. Compliance Certificates and Opinions. Upon any
------------------------------------
application or request by the Company, any Owner Trustee or any Loan Trustee to
the Trustee to take any action under any provision of this Agreement, the
Company, such Owner Trustee or such Loan Trustee, as the case may be, shall
furnish to the Trustee (i) an Officer's Certificate stating that, in the opinion
of the signers, all conditions precedent, if any, provided for in this Agreement
relating to the proposed action have been complied with and (ii) an Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Agreement relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement (other than a certificate
provided pursuant to Section 8.04(d)) shall include:
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions in
this Agreement relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.03. Form of Documents Delivered to Trustee. In any case
--------------------------------------
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary
-14-
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.
Any Opinion of Counsel stated to be based on the opinion of
other counsel shall be accompanied by a copy of such other opinion.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Agreement, they may, but need not, be consolidated
and form one instrument.
Section 1.04. Acts of Certificateholders. (a) Any direction, consent,
--------------------------
waiver or other action provided by this Agreement to be given or taken by
Certificateholders 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, where it is hereby expressly
required pursuant to this Agreement, to the Company or any Loan Trustee. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Certificateholders
---
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Trustee, the Company
and any Loan Trustee, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the certificate of any notary public
or other officer of any jurisdiction authorized to take acknowledgments of deeds
or administer oaths that the Person executing such instrument acknowledged to
him the execution thereof, or by an affidavit of a witness to such execution
sworn to before any such notary or such other officer and where such execution
is by an officer of a corporation or association or a member of a partnership,
on behalf of such corporation, association or partnership, such certificate or
affidavit shall also constitute sufficient proof of his authority. The fact and
date of the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other reasonable manner
which the Trustee deems sufficient.
(c) In determining whether the Certificateholders of the
requisite Fractional Undivided Interests of Certificates Outstanding have given
any direction, consent or waiver (a "Direction") under this Agreement,
---------
Certificates owned by the Company, any Owner Trustee, any Owner Participant or
any Affiliate of any such Person 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 in fact knows to be so owned shall be so
disregarded. Notwithstanding the foregoing, (i) if any such Person owns 100% of
the Certificates Outstanding, such Certificates shall not be so disregarded as
aforesaid, and
-15-
(ii) if any amount of Certificates so owned by any such Person have been pledged
in good faith, such Certificates shall not be disregarded as aforesaid if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Certificates and that the pledgee is not the Company,
any Owner Trustee, any Owner Participant or any Affiliate of any such Person.
(d) For all purposes of this Agreement, all Initial
Certificates and all Exchange Certificates shall vote and take all other actions
of Certificateholders together as one series of Certificates.
(e) The Company may at its option, by delivery of an Officer's
Certificate to the Trustee, set a record date to determine the
Certificateholders entitled to give any consent, request, demand, authorization,
direction, notice, waiver or other Act. Such record date shall be the record
date specified in such Officer's Certificate, which shall be a date not more
than 30 days prior to the first solicitation of Certificateholders in connection
therewith. If such a record date is fixed, such consent, request, demand,
authorization, direction, notice, waiver or other Act may be given before or
after such record date, but only the Certificateholders of record at the close
of business on such record date shall be deemed to be Certificateholders for the
purposes of determining whether Certificateholders of the requisite proportion
of Outstanding Certificates have authorized or agreed or consented to such
consent, request, demand, authorization, direction, notice, waiver or other Act,
and for that purpose the Outstanding Certificates shall be computed as of such
record date; provided that no such consent, request, demand, authorization,
--------
direction, notice, waiver or other Act 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.
(f) Any direction, consent, waiver or other action by the
Certificateholder of any Certificate shall bind the Certificateholder of every
Certificate issued upon the transfer thereof or in exchange therefor or in lieu
thereof, whether or not notation of such action is made upon such Certificate.
(g) Except as otherwise provided in Section 1.04(c),
Certificates owned by or pledged to any Person shall have an equal and
proportionate benefit under the provisions of this Agreement, without
preference, priority, or distinction as among all of the Certificates.
ARTICLE II
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Delivery of Documents; Delivery Date. (a) The Trustee is
------------------------------------
hereby directed (i) to execute and deliver the Intercreditor Agreement, the
Escrow Agreement and the Note Purchase Agreement on or prior to the Issuance
Date, each in the form delivered to the Trustee by the Company and (ii) subject
to the respective terms thereof, to perform its obligations thereunder. Upon
request of the Company and the satisfaction or waiver of the closing conditions
specified in the Placement Agreement, the Trustee shall execute, deliver,
authenticate, issue and sell Certificates
-16-
in authorized denominations equalling in the aggregate the amount set forth,
with respect to the Trust, in Schedule I to the Placement Agreement evidencing
the entire ownership interest in the Trust, which amount equals the maximum
aggregate principal amount of Equipment Notes which may be purchased by the
Trustee pursuant to the Note Purchase Agreement. Except as provided in Sections
3.04, 3.05, 3.07 and 3.11, the Trustee shall not execute, authenticate or
deliver Certificates in excess of the aggregate amount specified in this
paragraph.
(b) On or after the Issuance Date, the Company may deliver
from time to time to the Trustee a Delivery Notice relating to one or more
Equipment Notes. After receipt of a Delivery Notice and in any case no later
than one Business Day prior to a Delivery Date as to which such Delivery Notices
relates (the "Applicable Delivery Date"), the Trustee shall (as and when
------------------------
specified in the Delivery Notice) instruct the Escrow Agent to provide a Notice
of Purchase Withdrawal to the Depositary requesting (A) the withdrawal of one or
more Deposits on the Applicable Delivery Date in accordance with and to the
extent permitted by the terms of the Escrow Agreement and the Deposit Agreement
and (B) the payment of all, or a portion, of such Deposit or Deposits in an
amount equal in the aggregate to the purchase price of such Equipment Notes to
or on behalf of the Owner Trustee or the Company, as the case may be, issuing
such Equipment Notes, all as shall be described in the Delivery Notice. The
Trustee shall (as and when specified in such Delivery Notice), subject to the
conditions set forth in Section 2 of the Note Purchase Agreement, enter into and
perform its obligations under the Participation Agreement specified in such
Delivery Notice (the "Applicable Participation Agreement") and cause such
----------------------------------
certificates, documents and legal opinions relating to the Trustee to be duly
delivered as required by the Applicable Participation Agreement. If at any time
prior to the Applicable Delivery Date, the Trustee receives a notice of
postponement pursuant to Section 1(e) or 1(f) of the Note Purchase Agreement,
then the Trustee shall give the Depositary (with a copy to the Escrow Agent) a
notice of cancellation of such Notice of Purchase Withdrawal relating to such
Deposit or Deposits on such Applicable Delivery Date. Upon satisfaction of the
conditions specified in the Note Purchase Agreement and the Applicable
Participation Agreement, the Trustee shall purchase the applicable Equipment
Notes with the proceeds of the withdrawals of one or more Deposits made on the
Applicable Delivery Date in accordance with the terms of the Deposit Agreement
and the Escrow Agreement. The purchase price of such Equipment Notes shall equal
the principal amount of such Equipment Notes. Amounts withdrawn from such
Deposit or Deposits in excess of the purchase price of the Equipment Notes or to
the extent not applied on the Applicable Delivery Date to the purchase price of
the Equipment Notes, shall be re-deposited by the Trustee with the Depositary on
the Applicable Delivery Date in accordance with the terms of the Deposit
Agreement.
Section 2.02. Withdrawal of Deposits. If any Deposits remain
----------------------
outstanding on the Business Day next succeeding the Cut-off Date, (i) the
Trustee shall give the Escrow Agent notice that the Trustee's obligation to
purchase Equipment Notes under the Note Purchase Agreement has terminated and
instruct the Escrow Agent to provide a notice of Final Withdrawal to the
Depositary substantially in the form of Exhibit B to the Deposit Agreement (the
"Final Withdrawal Notice") and (ii) the Trustee will make a demand upon the
-----------------------
Company under the Note Purchase Agreement for an amount equal to the Special
Redemption Premium, such payment to be made on the Final Withdrawal Date.
-17-
Section 2.03. The Trustee. Subject to Section 7.15, the Trustee shall
-----------
not be responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Agreement, the Deposit Agreement or the Escrow Agreement or
the due execution hereof or thereof by the Company or the other parties thereto
(other than the Trustee), or for or in respect of the recitals and statements
contained herein or therein, all of which recitals and statements are made
solely by the Company.
Section 2.04. Acceptance by Trustee. The Trustee, upon the execution
---------------------
and delivery of this Agreement, acknowledges its acceptance of all right, title
and interest in and to the Trust Property acquired pursuant to Section 2.01
hereof and the Note Purchase Agreement and declares that the Trustee holds and
will hold such right, title and interest, together with all other property
constituting the Trust Property, for the benefit of all then present and future
Certificateholders, upon the trusts herein set forth. Subject to Section 7.14,
the Trustee shall take all actions reasonably necessary to effect the
registration of all such Equipment Notes in the name of the Subordination Agent.
By its payment for and acceptance of each Certificate issued to it under this
Agreement, each initial Certificateholder as grantor of the Trust thereby joins
in the creation and declaration of the Trust.
Section 2.05. Limitation of Powers. The Trust is constituted solely for
--------------------
the purpose of making the investment in the Equipment Notes, and, except as set
forth herein, the Trustee shall not be authorized or empowered to acquire any
other investments or engage in any other activities and, in particular, the
Trustee shall not be authorized or empowered to do anything that would cause
such Trust to fail to qualify as a "grantor trust" for federal income tax
purposes (including as subject to this restriction, acquiring any Aircraft (as
defined in the respective Indentures) by bidding such Equipment Notes or
otherwise, or taking any action with respect to any such Aircraft once
acquired).
ARTICLE III
THE CERTIFICATES
Section 3.01. Title, Form, Denomination and Execution of Certificates.
-------------------------------------------------------
(a) The Initial Certificates shall be known as the "10.07% 2000-1B Initial Pass
---------------------------
Through Certificates" and the Exchange Certificates shall be known as the
--------------------
"10.07% ▇▇▇▇-▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ Through Certificates", in each case, of the Trust.
-------------------------------------------------
Each Certificate will represent a fractional undivided interest in the Trust and
shall be substantially in the form set forth as Exhibit A hereto, with such
appropriate insertions, omissions, substitutions and other variations as are
required or 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 or as may,
consistently herewith, be determined by the officers executing such
Certificates, as evidenced by their execution of the Certificates. Any portion
of the text of any Certificate may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Certificate. At the Escrow
Agent's request under the Escrow Agreement, the Trustee shall affix the
corresponding Escrow Receipt to each Certificate. In any event, any transfer or
exchange of any Certificate shall also effect a transfer or exchange of the
related Escrow Receipt. Prior to the Final
-18-
Withdrawal Date, no transfer or exchange of any Certificate shall be permitted
unless the corresponding Escrow Receipt is attached thereto and also is so
transferred or exchanged. By acceptance of any Certificate to which an Escrow
Receipt is attached, each Holder of such a Certificate acknowledges and accepts
the restrictions on transfer of the Escrow Receipt set forth herein and in the
Escrow Agreement.
(b) The Initial Certificates shall be issued only in fully
registered form without coupons and only in denominations of $100,000 or
integral multiples of $1,000 in excess thereof, except that one Certificate may
be issued in a denomination of less than $100,000. The Exchange Certificates
will be issued in denominations of $1,000 or integral multiples thereof. Each
Certificate shall be dated the date of its authentication. The aggregate
Fractional Undivided Interest of Certificates shall not at any time exceed
$51,110,000.
(c) Initial Certificates offered and sold in reliance on Rule
144A shall be issued initially in the form of a single permanent global
Certificate in registered form, substantially in the form set forth as Exhibit A
hereto (the "U.S. Global Certificate"), duly executed and authenticated by the
-----------------------
Trustee as hereinafter provided. The U.S. Global Certificate will be registered
in the name of a nominee for DTC and deposited with the Trustee, as custodian
for DTC. The aggregate principal amount of the U.S. Global Certificate may from
time to time be increased or decreased by adjustments made on the records of the
Depositary or its nominee, or of the Trustee, as custodian for DTC or its
nominee, as hereinafter provided.
(d) Initial Certificates offered and sold in offshore
transactions in reliance on Regulation S shall be issued initially in the form
of a single temporary global Certificate in registered form, substantially in
the form set forth as Exhibit A hereto (the "Temporary Offshore Global
-------------------------
Certificate") duly executed and authenticated by the Trustee as hereinafter
-----------
provided. The Temporary Offshore Global Certificate will be registered in the
name of a nominee of DTC for credit to the account of the Agent Members acting
as depositaries for Euroclear and Clearstream and deposited with the Trustee as
custodian for DTC. At any time on or after November 6, 2000 (the "Offshore
--------
Certificates Exchange Date"), upon receipt by the Trustee of a certificate
--------------------------
substantially in the form of Exhibit B hereto, a single permanent global
Certificate in registered form substantially in the form set forth in Exhibit A
(the "Permanent Offshore Global Certificate"; and together with the Temporary
-------------------------------------
Offshore Global Certificate, the "Offshore Global Certificates"), duly executed
----------------------------
and authenticated by the Trustee as hereinafter provided, shall be registered in
the name of a nominee for DTC and deposited with the Trustee, as custodian for
DTC, and the Registrar shall reflect on its books and records the date of such
transfer and a decrease in the principal amount of any Temporary Offshore Global
Certificate in an amount equal to the principal amount of the beneficial
interest in such Temporary Offshore Global Certificate transferred. The U.S.
Global Certificate and the Offshore Global Certificates are sometimes referred
to as the "Global Certificates".
-------------------
(e) Initial Certificates offered and sold to Institutional
Accredited Investors shall be issued in the form of permanent certificated
Certificates in registered form in substantially the form set forth as Exhibit A
hereto (the "U.S. Physical Certificates"). Certificates issued pursuant to
--------------------------
Section 3.05(b) in exchange for interests in any Offshore Global Certificate
shall be in the form
-19-
of permanent certificated Certificates in registered form substantially in the
form set forth in Exhibit A (the "Offshore Physical Certificates"). The Offshore
------------------------------
Physical Certificates and U.S. Physical Certificates are sometimes collectively
herein referred to as the "Physical Certificates".
---------------------
(f) The Exchange Certificates shall be issued in the form of
one or more global Certificates substantially in the form of Exhibit A hereto
(each, a "Global Exchange Certificate"), except that the Private Placement
---------------------------
Legend (hereinafter defined) shall be omitted. Such Global Exchange Certificates
shall be in registered form and be registered in the name of DTC and deposited
with the Trustee, at its Corporate Trust Office, as custodian DTC. The aggregate
principal amount of any Global Exchange Certificate may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for DTC for such Global Exchange Certificate, which adjustments shall
be conclusive as to the aggregate principal amount of any such Global Exchange
Certificates. Subject to clause (i) of the first sentence of this Section
3.01(f), the terms hereof applicable to Global Certificates shall apply to the
Global Exchange Certificates, mutatis mutandis.
(g) The definitive Certificates shall be in registered form
and shall be typed, printed, lithographed or engraved or produced by any
combination of these methods or may be produced in any other manner, all as
determined by the officers executing such Certificates, as evidenced by their
execution of such Certificates.
Section 3.02. Restrictive Legends. (a) Subject to Section 3.06, each
-------------------
Global Certificate (other than the Permanent Offshore Global Certificate) and
each U.S. Physical Certificate shall bear the following legend (the "Private
-------
Placement Legend") on the face thereof:
----------------
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY PERSONS
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT), (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN
RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES
ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S.
PERSON AND IS ACQUIRING THIS CERTIFICATE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT; (2) AGREES THAT
IT WILL NOT, PRIOR TO EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO
SALES OF THE CERTIFICATES UNDER RULE 144(K) UNDER THE SECURITIES ACT
(OR ANY SUCCESSOR PROVISION) RESELL OR OTHERWISE TRANSFER THIS
CERTIFICATE EXCEPT (A) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (B) INSIDE THE UNITED STATES
TO AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING $100,000 OR MORE
AGGREGATE
-20-
PRINCIPAL AMOUNT OF SUCH CERTIFICATE, THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO THE TRUSTEE AND MIDWAY AIRLINES CORPORATION ("MIDWAY") A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS CERTIFICATE (THE FORM
OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE OR MIDWAY), (C)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), (E) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER) OR (F) TO MIDWAY OR ANY
SUBSIDIARY THEREOF; (3) PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 2(E) ABOVE), IT WILL FURNISH TO THE TRUSTEE SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE TRUSTEE MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT
TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (4) AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THIS CERTIFICATE IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH
ANY TRANSFER OF THIS CERTIFICATE PRIOR TO THE EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THE CERTIFICATES UNDER RULE 144(K) UNDER
THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK
THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE
MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF
THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR IS A
PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE TRUSTEE AND MIDWAY, SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE
TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF
THE TRANSFER OF THE CERTIFICATES PURSUANT TO CLAUSE 2(E) ABOVE OR UPON
ANY TRANSFER OF THE CERTIFICATES UNDER RULE 144(K) UNDER THE SECURITIES
ACT (OR ANY SUCCESSOR PROVISION). AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN
TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE PASS THROUGH
TRUST AGREEMENT CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS CERTIFICATE IN VIOLATION OF THE FOREGOING
RESTRICTIONS.
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(b) Each Global Certificate shall also bear the following
legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
---
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IN EXCHANGE FOR THIS CERTIFICATE IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
CERTIFICATE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTIONS 3.05 AND 3.06 OF THE PASS THROUGH
TRUST AGREEMENT REFERRED TO HEREIN.
Section 3.03. Authentication of Certificates. (a) The Trustee shall
------------------------------
duly execute, authenticate and deliver Certificates in authorized denominations
equalling in the aggregate the aggregate principal amount of the Equipment Notes
to be purchased by the Trustee pursuant to the Participation Agreements and
evidencing the entire ownership of the Trust.
(b) No Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose, unless there appears on
such Certificate a certificate of authentication substantially in the form
provided for herein executed by the Trustee by the manual signature of one of
its authorized signatories, and such certificate upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder.
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 of this Agreement a register (the "Register") for the
--------
Certificates in which, subject to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of the Certificates
and of transfers and exchanges of the Certificates as herein provided. The
Trustee shall initially be the registrar (the "Registrar") for the purpose of
---------
registering the Certificates and transfers and exchanges of the Certificates as
herein provided. A Certificateholder may transfer or exchange a Certificate by
written application to the Registrar stating the name of the proposed transferee
and otherwise complying with the terms of this Agreement, including providing a
written certificate or other evidence of compliance with any restrictions on
transfer; provided that no exchanges of Initial Certificates for Exchange
--------
Certificates shall occur until an Exchange Offer Registration Statement shall
have been
-22-
declared effective by the SEC (notice of which shall be provided to the Trustee
by the Company). No such transfer shall be effected until, and such transferee
shall succeed to the rights of a Certificateholder only upon, final acceptance
and registration of the transfer by the Registrar in the Register. Prior to the
registration of any transfer by a Certificateholder as provided herein, the
Trustee shall treat the person in whose name the Certificate is registered as
the owner thereof for all purposes, and the Trustee shall not be affected by
notice to the contrary. Furthermore, DTC shall, by acceptance of a Global
Certificate, agree that transfers of beneficial interests in such Global
Certificate may be effected only through a book-entry system maintained by the
Depositary (or its agent), and that ownership of a beneficial interest in the
Certificate shall be required to be reflected in a book entry. When Certificates
are presented to the Registrar with a request to register the transfer or to
exchange them for an equal face amount of Certificates of other authorized
denominations, the Registrar shall register the transfer or make the exchange as
requested if its requirements for such transactions are met. To permit
registrations of transfers and exchanges in accordance with the terms,
conditions and restrictions hereof, the Trustee shall execute and authenticate
Certificates at the Registrar's request. No service charge shall be made for any
registration of transfer or exchange of the Certificates, but the Trustee may
require payment by the transferor of a sum sufficient to cover any transfer tax
or similar governmental charge payable in connection therewith.
Section 3.05. Book-Entry Provisions for U.S. Global Certificate and
-----------------------------------------------------
Offshore Global Certificates. (a) Members of, or participants in, DTC ("Agent
---------------------------- -----
Members") shall have no rights under this Agreement with respect to any Global
-------
Certificate held on their behalf by DTC, or the Trustee as its custodian, and
DTC may be treated by the Trustee and any agent of the Trustee as the absolute
owner of such Global Certificate for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Trustee or any agent of the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by DTC or shall impair, as between DTC and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a holder of any Certificate. Upon the issuance of any Global
Certificate, the Registrar or its duly appointed agent shall record a nominee of
DTC as the registered holder of such Global Certificate.
(b) Transfers of any Global Certificate shall be limited to
transfers of such Global Certificate in whole, but not in part, to nominees of
DTC, its successor or such successor's nominees. Beneficial interests in the
U.S. Global Certificate and any Offshore Global Certificate may be transferred
in accordance with the rules and procedures of DTC and the provisions of Section
3.06. Beneficial interests in the U.S. Global Certificate or an Offshore Global
Certificate shall be delivered to all beneficial owners in the form of U.S.
Physical Certificates or Offshore Physical Certificates, as the case may be, if
(i) the Company notifies the Trustee in writing that DTC is unwilling or unable
to discharge properly its responsibilities as DTC for the U.S. Global
Certificate or such Offshore Global Certificate, as the case may be, and the
Company is unable to locate a qualified successor depositary within 90 days of
such notice or (ii) after the occurrence of an Event of Default, beneficial
owners of the U.S. Global Certificate or Offshore Global Certificates evidencing
Fractional Undivided Interests aggregating not less than a majority in interest
in the Trust, by Act of such Certificateholders delivered to the Company and the
Trustee, advise the Company, the Trustee and DTC through its Clearing Agency
Participants in writing that the
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continuation of a book-entry system through DTC is no longer in the best
interests of the Certificateholders, then the Trustee shall notify all owners of
beneficial interests in the U.S. Global Certificate or an Offshore Global
Certificate, through DTC, of the occurrence of any such event and the
availability of definitive Certificates.
(c) Any beneficial interest in one of the Global Certificates
that is transferred to a Person who takes delivery in the form of an interest in
the other Global Certificate will, upon such transfer, cease to be an interest
in such Global Certificate and become an interest in the other Global
Certificate and, accordingly, will thereafter be subject to all transfer
restrictions, if any, and other procedures applicable to beneficial interests in
such other Global Certificate for as long as it remains such an interest.
(d) [Intentionally omitted.]
(e) In connection with the transfer of the entire U.S. Global
Certificate or an entire Offshore Global Certificate to the beneficial owners
thereof pursuant to paragraph (b) of this Section 3.05, such U.S. Global
Certificate or Offshore Global Certificate, as the case may be, shall be deemed
to be surrendered to the Trustee for cancellation, and the Trustee shall
execute, authenticate and deliver, to each beneficial owner identified by DTC in
exchange for its beneficial interest in such U.S. Global Certificate or Offshore
Global Certificate, as the case may be, an equal aggregate principal amount of
U.S. Physical Certificates or Offshore Physical Certificates, as the case may
be, of authorized denominations.
(f) Any U.S. Physical Certificate delivered in exchange for an
interest in the U.S. Global Certificate pursuant to paragraph (b) of this
Section 3.05 shall, except as otherwise provided by paragraph (f) of Section
3.06, bear the Private Placement Legend.
(g) Any Offshore Physical Certificate delivered in exchange
for an interest in an Offshore Global Certificate pursuant to paragraph (b) of
this Section shall, except as otherwise provided by paragraph (f) of Section
3.06, bear the applicable legend regarding transfer restrictions set forth in
Section 3.02(a).
(h) The registered holder of the U.S. Global Certificate or
any Offshore Global Certificate may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Agreement or the Certificates.
Section 3.06. Special Transfer Provisions. Unless and until (i) an
---------------------------
Initial Certificate is sold under an effective Shelf Registration Statement or
(ii) an Initial Certificate is exchanged for an Exchange Certificate pursuant to
an effective Exchange Offer Registration Statement, in each case pursuant to the
terms of the Registration Rights Agreement, the following provisions shall apply
to the Certificates:
-24-
(a) Transfers to Non-QIB Institutional Accredited Investors.
-------------------------------------------------------
The following provisions shall apply with respect to the registration of any
proposed transfer of a Certificate to any Institutional Accredited Investor
which is not a QIB (excluding transfers to or by Non-U.S. Persons):
(i) The Registrar shall register the transfer of any
Certificate, whether or not such Certificate bears the Private
Placement Legend, if (x) the requested transfer is after the time
period referred to in Rule 144(k) under the Securities Act as in effect
with respect to such transfer or (y) the proposed transferee has
delivered to the Registrar a letter substantially in the form of
Exhibit D hereto and the aggregate principal amount of the Certificates
being transferred is at least $100,000.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Certificate, upon receipt by the
Registrar of (x) the documents, if any, required by paragraph (i) and
(y) instructions given in accordance with DTC's and the Registrar's
procedures, the Registrar shall reflect on its books and records the
date of the transfer and a decrease in the principal amount of such
U.S. Global Certificate in an amount equal to the principal amount of
the beneficial interest in such U.S. Global Certificate to be
transferred, and the Company shall execute, and the Trustee shall
authenticate and deliver to the transferor or at its direction, one or
more U.S. Physical Certificates of like tenor and amount.
(b) Transfers to QIBs. The following provisions shall
-----------------
apply with respect to the registration of any proposed transfer of an Initial
Certificate to a QIB (excluding Non-U.S. Persons):
(i) If the Certificate to be transferred consists of U.S.
Physical Certificates or an interest in any Temporary Offshore Global
Certificate, the Registrar shall register the transfer if such transfer
is being made by a proposed transferor who has checked the box provided
for on the form of Initial Certificate stating, or has otherwise
advised the Trustee and the Registrar in writing, that the sale has
been made in compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided for on the form of
Initial Certificate stating, or has otherwise advised the Trustee and
the Registrar in writing, that it is purchasing the Initial Certificate
for its own account or an account with respect to which it exercises
sole investment discretion and that it, or the Person on whose behalf
it is acting with respect to any such account, is a QIB within the
meaning of Rule 144A, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such
information regarding the Trust and/or the Company as it has requested
pursuant to Rule 144A or has determined not to request such information
and that it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration
provided by Rule 144A.
(ii) Upon receipt by the Registrar of the documents referred
to in clause (i) above and instructions given in accordance with DTC's
and the Registrar's procedures therefor, the Registrar shall reflect on
its books and records the date of such transfer and an increase in the
principal amount of the U.S. Global Certificate in an amount equal to
the principal
-25-
amount of the U.S. Physical Certificates or interests in the Temporary
Offshore Global Certificate, as the case may be, being transferred, and
the Trustee shall cancel such Physical Certificates or decrease the
amount of such Temporary Offshore Global Certificate so transferred.
(c) [Intentionally omitted.]
(d) Transfers of Interests in the Permanent Offshore Global
-------------------------------------------------------
Certificate or Offshore Physical Certificates. The Registrar shall register any
---------------------------------------------
transfer of interests in the Permanent Offshore Global Certificate or Offshore
Physical Certificates without requiring any additional certification.
(e) Transfers to Non-U.S. Persons at Any Time. The
-----------------------------------------
following provisions shall apply with respect to any registration of any
transfer of an Initial Certificate to a Non-U.S. Person:
(i) Prior to the Offshore Certificates Exchange Date, the
Registrar shall register any proposed transfer of an Initial
Certificate to a Non-U.S. Person upon receipt of a certificate
substantially in the form set forth as Exhibit C hereto from the
proposed transferor.
(ii) On and after the Offshore Certificates Exchange Date,
the Registrar shall register any proposed transfer to any Non-U.S.
Person if the Certificate to be transferred is a U.S. Physical
Certificate or an interest in the U.S. Global Certificate, upon receipt
of a certificate substantially in the form of Exhibit C from the
proposed transferor. The Registrar shall promptly send a copy of such
certificate to the Company.
(iii) Upon receipt by the Registrar of (x) the documents, if
any, required by paragraph (ii) and (y) instructions in accordance with
the Depositary's and the Registrar's procedures, the Registrar shall
reflect on its books and records the date of such transfer and a
decrease in the principal amount of such U.S. Global Certificate in an
amount equal to the principal amount of the beneficial interest in such
U.S. Global Certificate to be transferred, and (B) upon receipt by the
Registrar of instructions given in accordance with the Depositary's and
the Registrar's procedures, the Registrar shall reflect on its books
and records the date and an increase in the principal amount of the
Offshore Global Certificate in an amount equal to the principal amount
of the U.S. Physical Certificate or the U.S. Global Certificate, as the
case may be, to be transferred, and the Trustee shall cancel the
Physical Certificate, if any, so transferred or decrease the amount of
such U.S. Global Certificate.
(f) Private Placement Legend. Upon the transfer, exchange or
------------------------
replacement of Certificates not bearing the Private Placement Legend, the
Registrar shall deliver Certificates that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of Certificates bearing the
Private Placement Legend, the Registrar shall deliver only Certificates that
bear the Private Placement Legend unless either (i) the circumstances
contemplated by paragraph (a)(i)(x) or (e)(ii) of this Section 3.06 exist or
(ii) there is delivered to the Registrar an Opinion of
-26-
Counsel to the effect that neither such legend nor the related restrictions on
transfer are required in order to maintain compliance with the provisions of the
Securities Act.
(g) General. By its acceptance of any Certificate bearing the
-------
Private Placement Legend, each Holder of such a Certificate acknowledges the
restrictions on transfer of such Certificate set forth in this Agreement and
agrees that it will transfer such Certificate only as provided in this
Agreement. The Registrar shall not register a transfer of any Certificate unless
such transfer complies with the restrictions on transfer of such Certificate set
forth in this Agreement. In connection with any transfer of Certificates, each
Certificateholder agrees by its acceptance of the Certificates to furnish the
Registrar or the Trustee such certifications, legal opinions or other
information as either of them may reasonably require to confirm that such
transfer is being made pursuant to an exemption from, or a transaction not
subject to, the registration requirements of the Securities Act; provided that
--------
neither the Trustee nor the Registrar shall be required to determine the
sufficiency of any such certifications, legal opinions or other information.
Until such time as no Certificates remain Outstanding, the
Registrar shall retain copies of all letters, notices and other written
communications received pursuant to Section 3.05 or this Section 3.06. The
Trustee, if not the Registrar at such time, shall have the right to inspect and
make copies of all such letters, notices or other written communications at any
reasonable time upon the giving of reasonable written notice to the Registrar.
Section 3.07. Mutilated, Destroyed, Lost or Stolen Certificates. If (a)
-------------------------------------------------
any mutilated Certificate is surrendered to the Registrar or the Registrar
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (b) there is delivered to the Registrar and the Trustee such
security, indemnity or bond, as may be required by them to save each of them
harmless, then, in the absence of notice to the Registrar or the Trustee that
such Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate or
Certificates, in authorized denominations and of like Fractional Undivided
Interest and bearing a number not contemporaneously outstanding.
In connection with the issuance of any new Certificate under
this Section 3.07, 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 3.07
shall constitute conclusive evidence of the appropriate Fractional Undivided
Interest in the 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 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Certificates.
-27-
Section 3.08. 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
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 3.09. Cancellation. All Certificates surrendered for payment or
------------
transfer or exchange shall, if surrendered to the Trustee or any agent of the
Trustee other than the Registrar, be delivered to the Registrar for cancellation
and shall promptly be cancelled by it. No Certificates shall be authenticated in
lieu of or in exchange for any Certificates cancelled as provided in this
Section, except as expressly permitted by this Agreement. All cancelled
Certificates held by the Registrar shall be destroyed and a certification of
their destruction delivered to the Trustee.
Section 3.10. Limitation of Liability for Payments. All payments and
------------------------------------
distributions made to Certificateholders 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 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 to the extent available for distribution to such
Certificateholder as provided in this Agreement.
Section 3.11. Temporary Certificates. Until definitive Certificates are
----------------------
ready for delivery, the Trustee shall authenticate temporary Certificates.
Temporary Certificates shall be substantially in the form of definitive
Certificates but may have insertions, substitutions, omissions and other
variations determined to be appropriate by the officers executing the temporary
Certificates, as evidenced by their execution of such temporary Certificates. If
temporary Certificates are issued, the Trustee will cause definitive
Certificates to be prepared without unreasonable delay. After the preparation of
definitive Certificates, the temporary Certificates shall be exchangeable for
definitive Certificates upon surrender of the 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 authorized denominations. Until so exchanged, the temporary
Certificates shall be entitled to the same benefits under this Agreement as
definitive Certificates.
Section 3.12. ERISA Restrictive Legend. All Certificates issued
------------------------
pursuant to this Agreement shall bear a legend to the following effect (the
"ERISA Legend") unless the Company and the Trustee determine otherwise
------------
consistent with applicable law:
"BY ITS ACQUISITION HEREOF, THE HOLDER REPRESENTS FOR THE
BENEFIT OF THE COMPANY AND EACH OWNER PARTICIPANT THAT (A) IT IS NOT A PLAN
TRANSFEREE (AS DEFINED IN THE PASS THROUGH TRUST AGREEMENT) OR (B) ONE OR MORE
PROHIBITED TRANSACTION STATUTORY OR ADMINISTRATIVE EXEMPTIONS APPLIES SUCH THAT
THE USE OF PLAN ASSETS TO PURCHASE AND HOLD THIS PASS THROUGH CERTIFICATE WILL
NOT CONSTITUTE A NON-EXEMPT
-28-
PROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE. THE PASS
THROUGH TRUST AGREEMENT CONTAINS A PROVISION REQUIRING THE TRUSTEE
TO REFUSE TO REGISTER ANY TRANSFER OF THIS CERTIFICATE IN VIOLATION OF
THE FOREGOING RESTRICTIONS."
By acceptance of any Certificate bearing the ERISA Legend,
each Holder of such a Certificate acknowledges for the benefit of the Company
and each Owner Participant the restrictions on transfer of such Certificate set
forth in this Agreement and agrees that it will transfer such Certificate only
as provided in this Agreement. The Registrar shall not register a transfer of
any Certificate unless such transfer complies with the restrictions on transfer,
if any, of such Certificate set forth in this Agreement.
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 a
Certificate Account as one or more non- interest-bearing accounts. The Trustee
shall hold the Certificate Account in trust for the benefit of the
Certificateholders, 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, the Trustee upon receipt thereof shall immediately deposit the
aggregate amount of such Scheduled Payment into the Certificate Account.
(b) The Trustee shall establish and maintain on behalf of the
Certificateholders a Special Payments Account as one or more accounts, which
shall be non-interest bearing except as provided in Section 4.04. The Trustee
shall hold the Special Payments Account in trust for the benefit of the
Certificateholders 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, the Trustee, upon receipt thereof, shall immediately
deposit the aggregate amount of such Special Payments into the Special Payments
Account.
(c) The Trustee shall present to the Loan Trustee to which an
Equipment Note relates 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 relevant Indenture, on the applicable redemption date under such
Indenture.
Section 4.02. Distributions from Certificate Account and Special
--------------------------------------------------
Payments Account. (a) On each Regular Distribution Date or as soon thereafter as
----------------
the Trustee has confirmed receipt of the payment of the Scheduled Payments due
on such date, the Trustee shall distribute out of the Certificate Account the
entire amount deposited therein pursuant to Section 4.01(a). There shall be so
distributed to each Certificateholder of record on the Record Date with respect
to such Regular
-29-
Distribution Date (other than as provided in Section 11.01 concerning the final
distribution) by check mailed to such Certificateholder, at the address
appearing in the Register, such Certificateholder's pro rata share (based on the
Fractional Undivided Interest in the Trust held by such Certificateholder) of
the total amount in the Certificate Account, except that, with respect to
Certificates registered on the Record Date in the name of the nominee of the
Depositary (initially, such nominee to be Cede & Co.), such distribution shall
be made by wire transfer in immediately available funds to the account
designated by such nominee.
(b) On each Special Distribution Date with respect to any
Special Payment or as soon thereafter as the Trustee has confirmed receipt of
any Special Payments, the Trustee shall distribute out of the Special Payments
Account the entire amount of such Special Payment deposited therein pursuant to
Section 4.01(b). There shall be so distributed to each Certificateholder of
record 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 aggregate Fractional Undivided
Interest in the Trust held by such Certificateholder) of the aggregate amount in
the Special Payments Account on account of such Special Payment, except that,
with respect to Certificates registered on the Record Date in the name of the
nominee of the Depositary (initially, such nominee to be Cede & Co.), such
distribution shall be made by wire transfer in immediately available funds to
the account designated by such nominee.
(c) The Trustee shall, at the expense of the Company, cause
notice of each Special Payment to be mailed to each Certificateholder at his
address as it appears in the Register. In the event of redemption, prepayment or
purchase of Equipment Notes held in the Trust, such notice shall be mailed not
less than 15 days prior to the date any Special Payment is scheduled to be
distributed. In the case of any other Special Payments, such notice shall be
mailed as soon as practicable after the Trustee has confirmed that it has
received funds for such Special Payment (which notice, in the case of a Special
Redemption Premium, shall include a copy of the notice delivered by the Escrow
Paying Agent under Section 2.06 of the Escrow Agreement). 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 for each $1,000 face
amount Certificate (taking into account any payment to be made by the
Company pursuant to Section 2.02) 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, the total amount to be received on such date
for each $1,000 face amount Certificate.
-30-
If the amount of (x) premium, if any, payable upon the redemption, prepayment or
purchase of an Equipment Note or (y) Special Redemption Premium 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 such premium or Special Redemption Premium, as the case may
be, received will also be distributed.
If any redemption of the Equipment Notes held in the Trust is
cancelled, the Trustee, as soon as possible after learning thereof, shall cause
notice thereof to be mailed to each Certificateholder at its address as it
appears on the Register.
Section 4.03. Statements to Certificateholders. (a) On each
--------------------------------
Distribution Date, the Trustee will include with each distribution to
Certificateholders of a Scheduled Payment or Special Payment, as the case may
be, a statement setting forth the information provided below (in the case of a
Special Payment, including any Special Redemption Premium, reflecting in part
the information provided by the Escrow Paying Agent under the Escrow Agreement).
Such statement shall set forth (per $1,000 face amount Certificate as to (ii),
(iii), (iv) and (v) below) the following information:
(i) the aggregate amount of funds distributed on such
Distribution Date under the Agreement and under the Escrow Agreement,
indicating the amount allocable to each source, including any portion
thereof paid by the Liquidity Provider;
(ii) the amount of such distribution under the Agreement
allocable to principal and the amount allocable to premium (including
the Special Redemption Premium), if any;
(iii) the amount of such distribution under the Agreement
allocable to interest;
(iv) the amount of such distribution under the Escrow
Agreement allocable to interest;
(v) the amount of such distribution under the Escrow
Agreement allocable to Deposits; and
(vi) the Pool Balance and the Pool Factor.
With respect to the Certificates registered in the name of a
Clearing Agency or its nominee, on the record date prior to each Distribution
Date, the Trustee will request from the Clearing Agency a securities position
listing setting forth the names of all the Clearing Agency Participants
reflected on the Clearing Agency's books as holding interests in the
Certificates on such record date. On each Distribution Date, the 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 Certificates.
(b) Within a reasonable period of time after the end of each
calendar year but not later than the latest date permitted by law, the Trustee
shall furnish to each Person who at any time
-31-
during such calendar year was a Certificateholder of record a statement
containing the sum of the amounts determined pursuant to clauses (a)(i),
(a)(ii), (a)(iii), (a)(iv) and (a)(v) above with respect to the Trust for such
calendar year or, in the event such Person was a Certificateholder of record
during a portion of such calendar year, for the applicable portion of such year,
and such other items as are readily available to the Trustee and which a
Certificateholder shall reasonably request as necessary for the purpose of such
Certificateholder's preparation of its federal income tax returns. With respect
to Certificates registered in the name of a Clearing Agency or its nominee, such
report and such other items shall be prepared on the basis of information
supplied to the Trustee by the Clearing Agency Participants and shall be
delivered by the Trustee to such Clearing Agency Participants to be available
for forwarding by such Clearing Agency Participants.
(c) Utilizing information provided by Midway, promptly
following (i) the Delivery Period Termination Date, if there has been any change
in the information set forth in clauses (x), (y) and (z) below from that set
forth in page 45 of the Offering Memorandum, and (ii) any early redemption or
purchase of, or any default in the prepayment of principal or interest in
respect of, any of the Equipment Notes held in the Trust, or any Final
Withdrawal, the Trustee shall furnish to Certificateholders of record on such
date a statement setting forth (x) the expected Pool Balances for each
subsequent Regular Distribution Date following the Delivery Period Termination
Date, (y) the related Pool Factors for such Regular Distribution Dates and (z)
the expected principal distribution schedule of the Equipment Notes, in the
aggregate, held as Trust Property at the date of such notice. With respect to
the Certificates registered in the name of a Clearing Agency, on the Delivery
Period Termination Date, the Trustee will request from such Clearing Agency a
securities position listing setting forth the names of all Clearing Agency
Participants reflected on such Clearing Agency's books as holding interests in
the Certificates on such date. The Trust will mail to each such Clearing Agency
Participant the statement described above and will make available additional
copies as requested by such Clearing Agency Participant for forwarding to
holders of interests in the Certificates.
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 to be promptly distributed shall, to the extent practicable, be invested
in Permitted Investments by the Trustee as directed in writing by the Company
pending distribution of such Special Payment pursuant to Section 4.02. Any
investment made pursuant to this Section 4.04 shall be in such Permitted
Investments having maturities not later than the date that such moneys are
required to be used to make the payment required under Section 4.02 on the
applicable Special Distribution Date and the Trustee shall hold any such
Permitted Investments until maturity. The Trustee shall have no liability with
respect to any investment made pursuant to this Section 4.04, other than by
reason of the willful misconduct or gross negligence (or simple negligence in
the handling of funds) of the Trustee. All income and earnings from such
investments shall be distributed on such Special Distribution Date as part of
such Special Payment.
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ARTICLE V
THE COMPANY
Section 5.01. Maintenance of Corporate Existence. The Company, at its
----------------------------------
own cost and expense, will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence, rights and
franchises, except as otherwise specifically permitted in Section 5.02;
provided, however, that the Company shall not be required to preserve any right
-------- -------
or franchise if the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company.
Section 5.02. Consolidation, Merger, Etc. The Company shall not
--------------------------
consolidate with or merge into any other corporation or convey, transfer or
lease substantially all of its assets as an entirety to any Person unless:
(a) the corporation formed by such consolidation or into which
the Company is merged or the Person which 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 Section
40102(a)(15) of Title 49 of the United States Code) and (iii) a United
States certificated air carrier, if and so long as such status is a
condition of entitlement to the benefits of Section 1110 of the
Bankruptcy Reform Act of 1978, as amended (11 U.S.C. (S). 1110), with
respect to the Aircraft;
(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 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 this Agreement, the Other
Pass Through Trust Agreements, the Participation Agreements, and each
other Note Document to be performed or observed by the Company;
(c) immediately after giving effect to such transaction, no
Event of Default (as defined in any Lease or any Indenture relating to
an Owned Aircraft), shall have occurred and be continuing; and
(d) the Company shall have delivered to the Trustee an
Officer's Certificate of the Company and an Opinion of Counsel of the
Company reasonably satisfactory to the Trustee, each stating that such
consolidation, merger, conveyance, transfer or lease and the assumption
agreement mentioned in clause (b) above comply with this Section 5.02
and that all conditions precedent herein provided for relating to such
transaction have been complied with.
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Upon any consolidation or merger, or any conveyance, transfer
or lease of substantially all of the assets of the Company as an entirety in
accordance with this Section 5.02, the successor corporation or Person formed by
such consolidation or into which the Company is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Agreement 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 the
Company or any successor corporation or Person which shall theretofore have
become such in the manner prescribed in this Section 5.02 from its liability in
respect of this Agreement or any Financing Document to which it is a party.
ARTICLE VI
DEFAULT
Section 6.01. Events of Default. (a) Exercise of Remedies. Upon
----------------- --------------------
the occurrence and during the continuation of any Indenture Default under any
Indenture, the Trustee may, to the extent it is the Controlling Party at such
time, direct the exercise of remedies as provided in the Intercreditor
Agreement.
(b) Purchase Rights of Certificateholders.
-------------------------------------
(i) At any time after the occurrence and during the
continuation of a Triggering Event, each Certificateholder shall have
the right to purchase all, but not less than all, of the Class A
Certificates upon ten (10) days' written notice to the Class A Trustee
and each other Certificateholder, provided that (A) if prior to the end
-------- ----
of such ten-day period any other Certificateholder notifies such
purchasing Certificateholder that such other Certificateholder wants to
participate in such purchase, then such other Certificateholder may
join with the purchasing Certificateholder to purchase all, but not
less than all, of the Class A Certificates pro rata based on the
principal amount of the Certificates held by each such
Certificateholder and (B) if prior to the end of such ten-day period
any other Certificateholder fails to notify the purchasing
Certificateholder of such other Certificateholder's desire to
participate in such a purchase, then such other Certificateholder shall
lose its right to purchase the Class A Certificates pursuant to this
Section 6.01(b)(i).
(ii) By its acceptance of its Certificate, each
Certificateholder agrees that at any time after the occurrence and
during the continuation of a Triggering Event, each Class C
Certificateholder shall have the right (which shall not expire upon any
purchase of the Class A Certificates pursuant to clause (b)(i) above)
to purchase all, but not less than all, of the Certificates and the
Class A Certificates upon ten (10) days' written notice to the Trustee,
the Class A Trustee and each other Class C Certificateholder, provided
--------
that (A) if prior to the end of such ten-day period any other Class C
Certificateholder notifies such purchasing Class C Certificateholder
that such other Class C Certificateholder wants to participate in
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such purchase, then such other Class C Certificateholder may join with
the purchasing Class C Certificateholder to purchase all, but not less
than all, of the Certificates and the Class A Certificates pro rata
based on the Fractional Undivided Interest in the Class C Trust held by
each such Class C Certificateholder and (B) if prior to the end of such
ten day period any other Class C Certificateholder fails to notify the
purchasing Class C Certificateholder of such other Class C
Certificateholder's desire to participate in such a purchase, then such
other Class C Certificateholder shall lose its right to purchase the
Certificates and the Class A Certificates pursuant to this Section
6.01(b)(ii).
The purchase price with respect to the Certificates shall be
equal to the Pool Balance of the Certificates, together with accrued and unpaid
interest thereon to the date of such purchase, without premium, but including
any other amounts then due and payable to the Certificateholders under this
Agreement, the Intercreditor Agreement, the Escrow Agreement or any Note
Document or on or in respect of the Certificates; provided, however, that (i) if
-------- -------
such purchase occurs after the record date specified in Section 2.03(b) of the
Escrow Agreement relating to the distribution of unused Deposits and accrued and
unpaid interest thereunder, such purchase price shall be reduced by the
aggregate amount of unused Deposits and interest to be distributed under the
Escrow Agreement (which deducted amounts shall remain distributable to, and may
be retained by the Certificateholder as of such record date) and (ii) if such
purchase occurs after a Record Date, such purchase price shall be reduced by the
amount to be distributed hereunder on the related Distribution date (which
deducted amounts shall remain distributable to, and may be retained by, the
Certificateholder as of such Record Date); provided further that no such
-------- -------
purchase of Certificates shall be effective unless the purchaser shall certify
to the Trustee that contemporaneously with such purchase, such purchaser is
purchasing, pursuant to the terms of this Agreement and the Other Pass Through
Trust Agreements, the Certificates and the Class A Certificates which are senior
to the Class of Certificates (as defined in the Intercreditor Agreement) held by
such purchaser. Each payment of the purchase price of the Certificates shall be
made to an account or accounts designated by the Trustee and each such purchase
shall be subject to the terms of this Section. Each Certificateholder agrees by
its acceptance of its Certificate that it will, subject to Section 3.04 hereof,
upon payment from such Class C Certificateholder(s) of the purchase price set
forth in the first sentence of this paragraph, forthwith sell, assign, transfer
and convey to the purchaser thereof (without recourse, representation or
warranty of any kind except for its own acts), all of the right, title, interest
and obligation of such Certificateholder in, this Agreement, the Escrow
Agreement, the Deposit Agreement, the Intercreditor Agreement, the Liquidity
Facility, the Note Documents and all Certificates and Escrow Receipts held by
such Certificateholder (excluding all right, title and interest under any of the
foregoing to the extent such right, title or interest is with respect to an
obligation not then due and payable as respects any action or inaction or state
of affairs occurring prior to such sale) and the purchaser shall assume all of
such Certificateholder's obligations under this Agreement, the Escrow Agreement,
the Deposit Agreement, the Intercreditor Agreement, the Liquidity Facility and
the Note Documents. The Certificates will be deemed to be purchased on the date
payment of the purchase price is made notwithstanding the failure of the
Certificateholders to deliver any Certificates (whether in the form of Physical
Certificates or beneficial interests in Global Certificates) and, upon such a
purchase, (i) the only rights of the Certificateholders will be to deliver the
Certificates to the purchaser and receive the purchase price for the
Certificates and (ii) if the
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purchaser shall so request, such Certificateholder will comply with all the
provisions of Section 3.04 hereof to enable new Certificates to be issued to the
purchaser in such denominations as it shall request. All charges and expenses in
connection with the issuance of any such new Certificates shall be borne by the
purchaser thereof.
As used in this Section 6.01(b), the terms
"Certificateholder", "Class", "Class A Certificate", "Class A
Certificateholder", "Class A Trust", "Class A Trustee", "Class C Certificate",
"Class C Certificateholder", "Class C Trust" and "Class C Trustee" shall have
the respective meanings assigned to such terms in the Intercreditor Agreement.
Section 6.02. Incidents of Sale of Equipment Notes. Upon any sale of
------------------------------------
all or any part of the Equipment Notes 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, and upon compliance with the terms of sale, may hold,
retain, possess and dispose of such Equipment Notes in their own
absolute right without further accountability.
(2) Receipt of Trustee Shall Discharge Purchaser. The receipt
--------------------------------------------
of the Trustee or of the officer making such sale shall be a sufficient
discharge to any purchaser for his purchase money, and, after paying
such purchase money and receiving such receipt, such purchaser or its
personal representative or assigns shall not be obliged to see to the
application of such purchase money, or be in any way answerable for any
loss, misapplication or non-application thereof.
(3) Application of Moneys Received upon Sale. Any moneys
----------------------------------------
received by the Trustee from the Subordination Agent pursuant to the
Intercreditor Agreement 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, 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 the Intercreditor Agreement and the Financing
Documents (subject to the rights of the applicable Owner Trustee or Owner
Participant to cure any such failure in accordance with Section 8.03 of any
applicable Indenture relating to a Leased Aircraft), 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.
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Section 6.04. Control by Certificateholders. Subject to Section 6.03
-----------------------------
and the Intercreditor Agreement, the Certificateholders holding Certificates
evidencing Fractional Undivided Interests aggregating not less than a majority
in interest in the 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 the Trust or pursuant to the terms of the Intercreditor Agreement, or
exercising any trust or power conferred on the Trustee under this Agreement or
the Intercreditor Agreement, including any right of the Trustee as Controlling
Party under the Intercreditor Agreement or as holder of the Equipment Notes,
provided that
--------
(1) such Direction shall not be in conflict with any rule
of law or with this Agreement and would not involve the Trustee in
personal liability or expense,
(2) the Trustee shall not determine that the action so
directed would be unjustly prejudicial to the Certificateholders 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 the Intercreditor
-----------------------
Agreement, the Certificateholders holding Certificates evidencing Fractional
Undivided Interests aggregating not less than a majority in interest in the
Trust (i) may on behalf of all of the Certificateholders waive any past Event of
Default hereunder and its consequences or (ii) if the Trustee is the Controlling
Party, may direct the Trustee to instruct the applicable Loan Trustee to waive,
any past Indenture Default under any Indenture and its consequences, and thereby
annul any Direction given by such Certificateholders or the Trustee to such Loan
Trustee with respect thereto, except a default:
(1) in the deposit of any Scheduled Payment or Special
Payment under Section 4.01 or in the distribution of any payment under
Section 4.02 on the Certificates, or
(2) in the payment of the principal of (premium, if any) or
interest on the Equipment Notes, or
(3) in respect of a covenant or provision hereof which under
Article IX or X cannot be modified or amended without the consent of
each Certificateholder holding an Outstanding Certificate affected
thereby.
Upon any such waiver, such default shall cease to exist with
respect to the Certificates 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 to the relevant Loan Trustee shall
be annulled with respect thereto; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon. Upon any such waiver, the Trustee shall vote the Equipment Notes issued
under the relevant Indenture to waive the corresponding Indenture Default.
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Section 6.06. Right of Certificateholders to Receive Payments Not to Be
---------------------------------------------------------
Impaired. Anything in this Agreement to the contrary notwithstanding, including,
--------
without limitation, Section 6.07 hereof, but subject to the Intercreditor
Agreement, the right of any Certificateholder to receive distributions of
payments required pursuant to Section 4.02 hereof on the Certificates when due,
or to institute suit for the enforcement of any such payment on or after the
applicable Regular Distribution Date or Special Distribution Date, shall not be
impaired or affected without the consent of such Certificateholder.
Section 6.07. Certificateholders May Not Bring Suit Except Under
--------------------------------------------------
Certain Conditions. A Certificateholder shall not have the right to institute
------------------
any suit, action or proceeding at law or in equity or otherwise with respect to
this Agreement, for the appointment of a receiver or for the enforcement of any
other remedy under this Agreement, unless:
(1) such Certificateholder previously shall have given
written notice to the Trustee of a continuing Event of Default;
(2) Certificateholders holding Certificates evidencing
Fractional Undivided Interests aggregating not less than 25% of the
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
such an action, suit or proceeding for 60 days after receipt of such
notice, request and offer of indemnity; and
(4) no direction inconsistent with such written request shall
have been given to the Trustee during such 60-day period by
Certificateholders holding Certificates evidencing Fractional Undivided
Interests aggregating not less than a majority in interest in the
Trust.
It is understood and intended that no one or more of the
Certificateholders shall have any right in any manner whatsoever hereunder or
under the Certificates to (i) surrender, impair, waive, affect, disturb or
prejudice any property in the Trust Property or the lien of any Indenture on any
property subject thereto, or the rights of the Certificateholders or the holders
of the Equipment Notes, (ii) obtain or seek to obtain priority over or
preference with respect to any other such Certificateholder or (iii) enforce any
right under this Agreement, except in the manner herein provided and for the
equal, ratable and common benefit of all the Certificateholders subject to the
provisions of this Agreement.
Section 6.08. Remedies Cumulative. Every remedy given hereunder to the
-------------------
Trustee or to any of the Certificateholders shall not be exclusive of any other
remedy or remedies, and every such
-38-
remedy shall be cumulative and in addition to every other remedy given hereunder
or now or hereafter given by statute, law, equity or otherwise.
Section 6.09. Undertaking for Costs. In any suit for the enforcement of
---------------------
any right or remedy under this Agreement, or in any suit against the Trustee for
any action taken, suffered or omitted by it as Trustee, a court may require any
party litigant in such suit to file an undertaking to pay the costs of such
suit, and may assess costs against any such party litigant, in the manner and to
the extent provided in the Trust Indenture Act; provided that neither this
--------
Section nor the Trust Indenture Act shall be deemed to authorize any court to
require such an undertaking or to make such an assessment in any suit instituted
by the Company.
ARTICLE VII
THE TRUSTEE
Section 7.01. Certain Duties and Responsibilities. (a) Except during
-----------------------------------
the continuance of an Event of Default, the Trustee undertakes to perform only
such duties 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 has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Agreement, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of its own affairs.
(c) No provision of this Agreement shall be construed to
relieve the Trustee from liability for its own gross negligence (or simple
negligence in the handling of funds) or wilful misconduct, except that
(1) this Subsection shall not be construed to limit the
effect of Subsection (a) of this Section; 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 Trust 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.
Section 7.02. Notice of Defaults. As promptly as practicable after, and
------------------
in any event within 90 days after, the occurrence of any default (as such term
is defined below) hereunder known to the Trustee, the Trustee shall transmit by
mail to the Company, the Owner Trustees, the Owner
-39-
Participants, the Loan Trustees and the Certificateholders in accordance with
Section 313(c) of the Trust Indenture Act, notice of such default hereunder
known to the Trustee, unless such default shall have been cured or waived;
provided, however, that, except in the case of a default in the payment of the
-------- -------
principal, premium, if any, or interest on any Equipment Note or any other Trust
Property, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Trustee in good faith determine
that the withholding of such notice is in the interests of the
Certificateholders. For the purpose of this Section, the term "default" means
-------
any event that is, or after notice or lapse of time or both would become, an
Event of Default.
Section 7.03. Certain Rights of Trustee. Subject to the
-------------------------
provisions of Section 315 of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting
or refraining from acting in reliance upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture or other paper or document believed by
it to be genuine and to have been signed or presented by the proper
party or parties;
(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Request;
(c) whenever in the administration of this Agreement or
the Intercreditor Agreement the Trustee shall deem it desirable that a
matter be proved or established prior to taking, suffering or omitting
any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officer's Certificate of the Company, any Owner Trustee or
any Loan Trustee;
(d) the Trustee may consult with counsel and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement or the
Intercreditor Agreement at the request or direction of any of the
Certificateholders pursuant to this Agreement or the Intercreditor
Agreement, unless such Certificateholders shall have offered to the
Trustee reasonable security or indemnity against the cost, expenses and
liabilities which might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture or other paper or document;
(g) the Trustee may execute any of the trusts or powers
under this Agreement or the Intercreditor Agreement or perform any duties under
this Agreement or the Intercreditor
-40-
Agreement either directly or by or through agents or attorneys, and the Trustee
shall not be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it under this Agreement or the
Intercreditor Agreement;
(h) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Certificateholders holding Certificates
evidencing Fractional Undivided Interests aggregating not less than a
majority in interest in the Trust relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Agreement or the 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, except the certificates
of authentication, shall not be taken as the statements of the Trustee, and the
Trustee assumes no responsibility for their correctness. Subject to Section
7.15, the Trustee makes no representations as to the validity or sufficiency of
this Agreement, any Participation Agreement, the Escrow Agreement, the Deposit
Agreement, any Equipment Notes, the Certificates or any other Note Document,
except that the Trustee hereby represents and warrants that this Agreement has
been, and the Intercreditor Agreement, each Note Document and each Certificate
will be, executed, authenticated and delivered by one of its officers who is
duly authorized to execute, authenticate and deliver such document on its
behalf.
Section 7.05. May Hold Certificates. The Trustee, any Paying Agent,
---------------------
Registrar or any of their Affiliates or any other agent in their respective
individual or any other capacity may become the owner or pledgee of Certificates
and, subject to Sections 310(b) and 311 of the Trust Indenture Act, if
applicable, may otherwise deal with the Company, the Owner Trustees or the Loan
Trustees with the same rights it would have if it were not Trustee, Paying
Agent, Registrar or such other agent.
Section 7.06. Money Held in Trust. Money held by the Trustee or the
-------------------
Paying Agent in trust hereunder need not be segregated from other funds except
to the extent required herein or by law and neither the Trustee nor the Paying
Agent shall have any liability for interest upon any such moneys except as
provided for herein.
Section 7.07. Compensation and Reimbursement. The Company agrees:
------------------------------
(1) to pay, or cause to be paid, to the Trustee from time to
time compensation (as set out in a separate fee agreement between the
Trustee and the Company) for all services rendered by it hereunder
(which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
-41-
(2) except as otherwise expressly provided herein, to
reimburse, or cause to be reimbursed, the Trustee upon its request for
all reasonable out-of-pocket expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of
this Agreement or the Intercreditor Agreement (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its own gross negligence (or simple negligence in the
handling of funds), 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;
(3) to indemnify, or cause to be indemnified, the Trustee for,
and to hold it harmless against, any loss, liability or expense (other
than for or with respect to any tax) incurred without gross negligence
(or simple negligence in the handling of funds), willful misconduct or
bad faith, on its part, arising out of or in connection with the
acceptance or administration of this Trust, including the costs and
expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder, except for any such loss, liability or expense
incurred by reason of the Trustee's breach of its representations and
warranties set forth in Section 7.15. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. The
Company shall defend the claim and the Trustee shall cooperate in the
defense. The Trustee may have separate counsel with the consent of the
Company (which consent shall not be unreasonably withheld) and the
Company will pay the reasonable fees and expenses of such counsel. The
Company need not pay for any settlement made without its consent; and
(4) to indemnify, or cause to be indemnified, the Trustee,
solely in its individual capacity, for, and to hold it harmless
against, any tax (except to the extent the Trustee is reimbursed
therefor pursuant to the next paragraph, provided that no
indemnification shall be available with respect to any tax attributable
to the Trustee's compensation for serving as such) incurred without
gross negligence (or simple negligence in the handling of funds),
willful misconduct or bad faith, on its part, arising out of or in
connection with the acceptance or administration of this Trust,
including any costs and expenses incurred in contesting the imposition
of any such tax. The Trustee, in its individual capacity, shall notify
the Company promptly of any claim for any tax for which it may seek
indemnity. The Trustee shall permit the Company to contest the
imposition of such tax and the Trustee, in its individual capacity,
shall cooperate in the defense. The Trustee, in its individual
capacity, may have separate counsel with the consent of the Company
(which consent shall not be unreasonably withheld) and the Company will
pay the reasonable fees and expenses of such counsel. The Company need
not pay for any taxes paid, in settlement or otherwise, without its
consent.
The Trustee shall be entitled to reimbursement from, and shall
have a lien prior to the Certificates upon, the Trust Property for any tax
incurred without gross negligence (or simple negligence in the handling of
funds), bad faith or willful misconduct, on its part, arising out of or in
-42-
connection with the acceptance or administration of such Trust (other than any
tax attributable to the Trustee's compensation for serving as such), including
any costs and expenses incurred in contesting the imposition of any such tax. 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 circumstances
thereof to all Certificateholders as their names and addresses appear in the
Register.
Section 7.08. Corporate Trustee Required; Eligibility. There shall at
---------------------------------------
all times be a Trustee hereunder which shall be eligible to act as a trustee
under Section 310(a) of the Trust Indenture Act and shall have a combined
capital and surplus of at least $75,000,000 (or a combined capital and surplus
in excess of $5,000,000 and the obligations of which, whether now in existence
or hereafter incurred, are fully and unconditionally guaranteed by a corporation
organized and doing business under the laws of the United States, any state or
territory thereof or of the District of Columbia and having a combined capital
and surplus of at least $75,000,000). If such corporation publishes reports of
conditions at least annually, pursuant to law or to the requirements of federal,
state, territorial or District of Columbia supervising or examining authority,
then for the purposes of this Section 7.08, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of conditions so published.
In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 7.08 to act as Trustee, the
Trustee shall resign immediately as Trustee 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 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 by giving
prior written notice thereof to the Company, the Authorized Agents, the Owner
Trustees and the Loan Trustees. In addition, upon the occurrence of an Event of
Default, in the event the Trustee shall not have received instructions from the
Certificateholders or the Certificateholders with respect to any Other Trust,
the Trustee shall resign. If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Company, the Authorized Agents, the Owner
Trustees, the Loan Trustees and the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the
Certificateholders holding Certificates evidencing Fractional Undivided
Interests aggregating not less than a majority in interest in the Trust
delivered to the Trustee, the Company, the Owner Trustees and the Loan Trustees.
(d) If at any time:
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(1) the Trustee shall fail to comply with Section 310 of the
Trust Indenture Act, if applicable, after written request therefor by
the Company or by any Certificateholder who has been a bona fide
Certificateholder for at least six months; or
(2) the Trustee shall cease to be eligible under Section 7.08
and shall fail to resign after written request therefor by the Company
or by any such Certificateholder; or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any case, (i) the Company may remove the Trustee or (ii) any
Certificateholder 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.
(e) If a Responsible Officer of the Trustee shall obtain
actual knowledge of an Avoidable Tax 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 hereunder unless within such 30-day period the Trustee
shall have received notice that the Company has agreed to pay such tax. The
Company shall promptly appoint a successor Trustee in a jurisdiction where there
are no Avoidable Taxes.
(f) If the Trustee shall resign, be removed or become
incapable of acting as trustee or if a vacancy shall occur in the office of the
Trustee for any cause, the Company shall promptly appoint a successor Trustee.
If, within 90 days after such resignation, removal or incapability, or other
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Certificateholders holding Certificates evidencing Fractional Undivided
Interests aggregating not less than a majority in interest in the Trust
delivered to the Company, the Owner Trustees, the Loan Trustees and the retiring
Trustee, and the Company approves such appointment, which approval shall not be
unreasonably withheld, then the successor Trustee so appointed shall, forthwith
upon its acceptance of such appointment, become the successor Trustee and
supersede the successor Trustee appointed as provided above. If no successor
Trustee shall have been so appointed as provided above and accepted appointment
in the manner hereinafter provided, any Certificateholder who has been a bona
fide Certificateholder 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.
(g) The successor Trustee shall give notice of the resignation
and removal of the Trustee and appointment of the successor Trustee by mailing
written notice of such event by first- class mail, postage prepaid, to the
Certificateholders as their names and addresses appear in the Register. Each
notice shall include the name of such successor Trustee and the address of its
Corporate Trust Office.
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Section 7.10. Acceptance of Appointment by Successor. Every successor
--------------------------------------
Trustee appointed hereunder shall execute and deliver to the Company, the
Authorized Agents, the Owner Trustees and the Loan Trustees and to the retiring
Trustee an instrument accepting such appointment, and thereupon the resignation
or removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee; but, on
request of the Company or the successor Trustee, such retiring Trustee shall
execute and deliver an instrument transferring to such successor Trustee all
such rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all Trust Property held by such
retiring Trustee hereunder, subject nevertheless to its lien, if any, provided
for in Section 7.07 and the retiring Trustee shall thereupon be released from
further liability hereunder. Upon request of any such successor Trustee, the
Company, the retiring Trustee and such successor Trustee shall execute and
deliver any and all instruments containing such provisions as shall be necessary
or desirable to transfer and confirm to, and for more fully and certainly
vesting in, such successor Trustee all such rights, powers and trusts.
No institution shall accept its appointment as a Trustee
hereunder unless at the time of such acceptance such institution shall be
qualified and eligible under this Article VII.
Section 7.11. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business. Any corporation into which the Trustee may be merged or converted or
--------
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
--------
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Certificates shall have been
executed or authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such execution or authentication and deliver the Certificates so
executed or authenticated with the same effect as if such successor Trustee had
itself executed or authenticated such Certificates.
Section 7.12. Maintenance of Agencies. (a) There shall at all times be
-----------------------
maintained an office or agency where Certificates may be presented or
surrendered for registration of transfer or for exchange, and for payment
thereof and where notices and demands to or upon the Trustee in respect of such
Certificates may be served. 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. Each such Authorized Agent
shall be a bank or trust company, shall be a corporation organized and doing
business under the laws of the United States or any state, with a combined
capital and surplus of at least $75,000,000, or a corporation having a combined
capital and surplus in excess of $5,000,000, the obligations of which are
guaranteed by a corporation organized and doing business under the laws of the
United States or any state, with a combined capital and
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surplus of at least $75,000,000, and shall be authorized under such laws to
exercise corporate trust powers, subject to supervision by federal or state
authorities. The Trustee shall initially be the Paying Agent and, as provided in
Section 3.04, Registrar hereunder with respect to the Certificates. Each
Registrar shall furnish to the Trustee, at stated intervals of not more than six
months, and at such other times as the Trustee may request in writing, a copy of
the Register maintained by such Registrar.
(c) Any corporation into which any Authorized Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, consolidation or conversion to which any Authorized
Agent shall be a party, or any corporation succeeding to the corporate trust
business of any Authorized Agent, shall be the successor of such Authorized
Agent hereunder, if such successor corporation is otherwise eligible under this
Section, without the execution or filing of any paper or any further act on the
part of the parties hereto or such Authorized Agent or such successor
corporation.
(d) Any Authorized Agent may at any time resign by giving
written notice of resignation to the Trustee, the Company, the Owner Trustees
and the Loan Trustees. The Company may, and at the request of the Trustee shall,
at any time terminate the agency of any Authorized Agent by giving written
notice of termination to such Authorized Agent and to the Trustee. Upon the
resignation or termination of an Authorized Agent or in case at any time any
such Authorized Agent shall cease to be eligible under this Section (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. The Company shall give written notice of any such
appointment made by it to the Trustee, the Owner Trustees and the Loan Trustees;
and in each case the Trustee shall mail notice of such appointment to all
Certificateholders as their names and addresses appear on the Register.
(e) The Company agrees to pay, or cause to be paid, from time
to time to each Authorized Agent reasonable compensation for its services and to
reimburse it for its reasonable expenses.
Section 7.13. Money for Certificate Payments to Be Held in Trust. All
--------------------------------------------------
moneys deposited with any Paying Agent for the purpose of any payment on
Certificates shall be deposited and held in trust for the benefit of the
Certificateholders entitled to such payment, subject to the provisions of this
Section. Moneys so deposited and held in trust shall constitute a separate trust
fund for the benefit of the Certificateholders with respect to which such money
was deposited.
The Trustee may at any time, for the purpose of obtaining the
satisfaction and discharge of this Agreement or for any other purpose, direct
any Paying Agent to pay to the Trustee all sums held in trust by such Paying
Agent, such sums to be held by the Trustee upon the same trusts as those upon
which such sums were held by such Paying Agent; and, upon such payment by any
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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 Name of Subordination
--------------------------------------------------------
Agent. The Trustee agrees that all Equipment Notes to be purchased by the Trust
-----
shall be issued in the name of the Subordination Agent or its nominee and held
by the Subordination Agent in trust for the benefit of the Certificateholders,
or, if not so held, the Subordination Agent or its nominee shall be reflected as
the owner of such Equipment Notes in the register of the issuer of such
Equipment Notes.
Section 7.15. Representations and Warranties of Trustee. The Trustee
-----------------------------------------
hereby represents and warrants that:
(a) the Trustee is a state-chartered commercial bank
organized and validly existing in good standing under the laws of the
State of Maryland;
(b) the Trustee has full power, authority and legal right to
execute, deliver, and perform this Agreement, the Escrow Agreement, the
Intercreditor Agreement and the Note Purchase Agreement and has taken
all necessary action to authorize the execution, delivery, and
performance by it of this Agreement, the Escrow Agreement, the
Intercreditor Agreement and the Note Purchase Agreement;
(c) the execution, delivery and performance by the Trustee of
this Agreement, the Escrow Agreement, the Intercreditor Agreement and
the Note Purchase Agreement (i) will not violate any provision of
United States law, Maryland law or any order, writ, judgment, or decree
of any court, arbitrator or governmental authority of the United States
or the State of Maryland applicable to the Trustee or any of its
assets, (ii) will not violate any provision of the articles of
association or by-laws of the Trustee, or (iii) will not violate any
provision of, or constitute, with or without notice or lapse of time, a
default under, or result in the creation or imposition of any lien on
any properties included in the Trust Property pursuant to the
provisions of any mortgage, indenture, contract, agreement or other
undertaking to which it is a party, which violation, default or lien
could reasonably be expected to have an adverse effect on the Trustee's
performance or ability to perform its duties hereunder or thereunder or
on the transactions contemplated herein or therein; the execution,
delivery and performance by the Trustee of this Agreement, the Escrow
Agreement, the Intercreditor Agreement and the Note Purchase Agreement
will not require the authorization, consent, or approval of, the giving
of notice to, the filing or registration with, or the taking of any
other action in respect of, any governmental authority or agency of the
United States or the State of the United States where it is located
regulating the banking and corporate trust activities of the Trustee;
and
(d) this Agreement, the Escrow Agreement, the Intercreditor
Agreement and the Note Purchase Agreement have been duly executed and
delivered by the Trustee and constitute the legal, valid, and binding
agreements of the Trustee, enforceable against it in accordance with
their respective terms, provided that enforceability may be limited by
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(i) applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally and (ii)
general principles of equity.
Section 7.16. Withholding Taxes; Information Reporting. (a) The
----------------------------------------
Trustee, as trustee of the 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
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, to withhold such
amounts and timely pay the same to the appropriate authority in the name of and
on behalf of the Certificateholders, 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 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 may be
required to be filed by it under United States law.
(b) The Trustee may satisfy certain of its obligations with
respect to this Agreement by retaining, at the expense of the Company, a firm of
independent public accountants (the "Accountants") which shall (i) be
-----------
responsible for all tax filing requirements and (ii) perform the obligations of
the Trustee in respect of tax filing requirements. The Trustee shall be deemed
to have discharged its tax filing obligations under this Agreement upon its
retention of the Accountants, and, if the Trustee shall have selected in the
Accountants in good faith and without gross negligence, the Trustee shall not
have any liability with respect to the default or misconduct of the Accountants.
(c) The Trustee, at the request (and expense) of the Company,
will make such United States federal income tax elections as may be necessary to
prevent the Trust from being classified for federal income tax purposes as an
association taxable as a corporation.
Section 7.17. Trustee's Liens. The Trustee in its individual capacity
---------------
agrees that it will at its own cost and expense promptly take any action as may
be necessary to duly discharge and satisfy in full any mortgage, pledge, lien,
charge, encumbrance, security interest or claim ("Trustee's Liens") on or with
---------------
respect to the Trust Property which is attributable to the Trustee either (i) in
its individual capacity and which is unrelated to the transactions contemplated
by this Agreement, the Intercreditor Agreement, the Note Purchase Agreement or
the Note Documents, or (ii) as Trustee hereunder or in its individual capacity
and which arises out of acts or omissions which are not contemplated by this
Agreement.
Section 7.18. Preferential Collection of Claims. The Trustee shall
---------------------------------
comply with Section 311(a) of the Trust Indenture Act, excluding any creditor
relationship listed in Section 311(b) of the Trust Indenture Act. If the Trustee
shall resign or be removed as Trustee, it shall be subject to Section 311(a) of
the Trust Indenture Act to the extent provided therein.
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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 or cause to be furnished to the
---------------------
Trustee within 15 days after each Record Date with respect to a Scheduled
Payment, and at such other times as the Trustee may request in writing within 30
days after receipt by the Company of any such request, a list, in such form as
the Trustee may reasonably require, of all information in the possession or
control of the Company as to the names and addresses of the Certificateholders,
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,
-------- -------
no such list need be furnished; and provided further, however, that no such list
-------- ------- -------
need be furnished for so long as a copy of the Register is being furnished to
the Trustee pursuant to Section 7.12.
Section 8.02. Preservation of Information; Communications to
----------------------------------------------
Certificateholders. The Trustee shall preserve, in as current a form as is
------------------
reasonably practicable, the names and addresses of Certificateholders 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 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 the
Certificates, the Trustee shall transmit to the Certificateholders, as provided
in Section 313(c) of the Trust Indenture Act, a brief report dated as of such
May 15, if required by Section 313(a) of the Trust Indenture Act.
Section 8.04. Reports by the Company. The Company shall:
----------------------
(a) file with the Trustee, within 30 days after the Company
is required to file the same with the SEC, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may from time to time by
rules and regulations prescribe) which the Company is required to file
with the SEC pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934, as amended; or, if the Company is not required to
file information, documents or reports pursuant to either of such
sections, then to file with the Trustee and the SEC, in accordance with
rules and regulations prescribed by the SEC, such of the supplementary
and periodic information, documents and reports which may be required
pursuant to section 13 of the Securities Exchange Act of 1934, as
amended, in respect of a security listed and registered on a national
securities exchange as may be prescribed in such rules and regulations;
(b) file with the Trustee and the SEC, in accordance with the
rules and regulations prescribed by the SEC, such additional
information, documents and reports with respect to
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compliance by the Company with the conditions and covenants of the
Company provided for in this Agreement, as may be required by such
rules and regulations, including, in the case of annual reports, if
required by such rules and regulations, certificates or opinions of
independent public accountants;
(c) transmit to all Certificateholders, in the manner and to
the extent provided in Section 313(c) of the Trust Indenture Act such
summaries of any information, documents and reports required to be
filed by the Company pursuant to subsections (a) and (b) of this
Section 8.04 as may be required by rules and regulations prescribed by
the SEC; and
(d) furnish to the Trustee, not less often than annually, a
brief certificate from the principal executive officer, principal
financial officer or principal accounting officer as to his or her
knowledge of the Company's compliance with all conditions and covenants
under this Agreement (it being understood that for purposes of this
paragraph (d), such compliance shall be determined without regard to
any period of grace or requirement of notice provided under this
Agreement).
ARTICLE IX
SUPPLEMENTAL AGREEMENTS
Section 9.01. Supplemental Agreements Without Consent of
------------------------------------------
Certificateholders. Without the consent of the Certificateholders, the Company
------------------
may and the Trustee (subject to Section 9.03) shall, at any time and from time
to time (and at the sole cost and expense of the Company), enter into one or
more agreements supplemental hereto or, if applicable, to the Escrow Agreement,
the Deposit Agreement, the Note Purchase Agreement, the Intercreditor Agreement
or the Liquidity Facility, in form and substance reasonably satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the
Company and the assumption by any such successor of the covenants of
the Company herein contained or in the Note Purchase Agreement;
(2) to add to the covenants of the Company for the benefit of
the Certificateholders, or to surrender any right or power conferred
upon the Company in this Agreement, the Intercreditor Agreement or the
Note Purchase Agreement;
(3) to correct or supplement any provision in this Agreement,
the Escrow Agreement, the Deposit Agreement, the Note Purchase
Agreement, the Intercreditor Agreement or the Liquidity Facility which
may be defective or inconsistent with any other provision of this
Agreement, the Deposit Agreement, the Escrow Agreement, the Note
Purchase Agreement, the Intercreditor Agreement or any Liquidity
Facility, as applicable, or to cure any ambiguity or to modify any
other provisions with respect to matters or questions arising under
this Agreement, the Escrow Agreement, the Note Purchase Agreement, the
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Deposit Agreement, the Intercreditor Agreement or the Liquidity
Facility, provided that any such action shall not materially adversely
--------
affect the interests of the Certificateholders;
(4) as provided in the Intercreditor Agreement, to give
effect to or provide for a Replacement Liquidity Facility;
(5) to comply with any requirement of the Commission, any
applicable law, rules or regulations of any exchange or quotation
system on which the Certificates are listed, or any regulatory body;
(6) to modify, eliminate or add to the provisions of this
Agreement, the Deposit Agreement, the Escrow Agreement, the
Intercreditor Agreement, the Note Purchase Agreement or the Liquidity
Facility to such extent as shall be necessary to qualify or continue
the qualification of this Agreement under the Trust Indenture Act, or
any similar federal statute enacted after the execution of this
Agreement, and to add to this Agreement, the Deposit Agreement, the
Escrow Agreement, the Intercreditor Agreement, the Note Purchase
Agreement or the Liquidity Facility such provisions as may be expressly
permitted by the Trust Indenture Act;
(7) to evidence and provide for the acceptance of appointment
under this Agreement, the Deposit Agreement, the Escrow Agreement, the
Intercreditor Agreement, the Note Purchase Agreement or the Liquidity
Facility by a successor Trustee and to add or change any of the
provisions of this Agreement, the Deposit Agreement, the Escrow
Agreement, the Intercreditor Agreement, the Note Purchase Agreement or
the Liquidity Facility as shall be necessary to provide for or
facilitate the administration of the Trust under this Agreement by more
than one Trustee,
provided that in each case, such modification or supplement does not adversely
affect the status of the Trust as a grantor trust under Subpart E, Part I of
Subchapter J of Chapter 1 of Subtitle A of the Code for U.S. federal income tax
purposes.
Section 9.02. Supplemental Agreements with Consent of
---------------------------------------
Certificateholders. With the consent of the Certificateholders holding
------------------
Certificates evidencing Fractional Undivided Interests aggregating not less than
a majority in interest in the Trust, by Act of said Certificateholders delivered
to the Company and the Trustee, the Company may, and the Trustee (subject to
Section 9.03) shall, at the sole cost and expense of the Company, enter into an
agreement or agreements supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement, the Deposit Agreement, the Escrow Agreement, the Intercreditor
Agreement, the Liquidity Facility or the Note Purchase Agreement to the extent
applicable to such Certificateholders or of modifying in any manner the rights
and obligations of such Certificateholders under this Agreement, the Deposit
Agreement, the Escrow Agreement, the Intercreditor Agreement, the Liquidity
Facility or the Note Purchase Agreement; provided, however, that no such
-------- -------
supplemental agreement shall, without the consent of the Certificateholder of
each Outstanding Certificate affected thereby:
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(1) reduce in any manner the amount of, or delay the timing
of, any receipt by the Trustee (or, with respect to the Deposits, the
Receiptholders) of payments on the Deposits or the Equipment Notes held
in the Trust or distributions that are required to be made herein on
any Certificate, or change any date of payment of any Certificate, or
change the place of payment where, or the coin or currency in which,
any Certificate is payable, or impair the right to institute suit for
the enforcement of any such payment or distribution on or after the
Regular Distribution Date or Special Distribution Date applicable
thereto;
(2) permit the disposition of any Equipment Note included in
the Trust Property except as permitted by this Agreement, or otherwise
deprive such Certificateholder of the benefit of the ownership of the
Equipment Notes in the Trust;
(3) alter the priority of distributions specified in the
Intercreditor Agreement in a manner materially adverse to the interests
of the Certificateholders;
(4) modify any of the provisions of this Section 9.02 or
Section 6.05, except to increase any such percentage or to provide that
certain other provisions of this Agreement cannot be modified or waived
without the consent of the Certificateholder of each Certificate
affected thereby; or
(5) modify any of the provisions relating to the rights of
the Certificateholders in respect of the waiver of Events of Default or
receipt of payment.
It shall not be necessary for any Act of Certificateholders
under this Section to approve the particular form of any proposed supplemental
agreement, but it shall be sufficient if such Act shall approve the substance
thereof.
Section 9.03. Documents Affecting Immunity or Indemnity. If in the
-----------------------------------------
opinion of the Trustee any document required to be executed by it pursuant to
the terms of Section 9.01 or 9.02 affects any interest, right, duty, immunity or
indemnity in favor of the Trustee under this Agreement, the Trustee may in its
discretion decline to execute such document.
Section 9.04. Execution of Supplemental Agreements. In executing, or
------------------------------------
accepting the additional trusts created by, any supplemental agreement permitted
by this Article or the modifications thereby of the trusts created by this
Agreement, the Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental agreement is authorized or permitted by this Agreement.
Section 9.05. Effect of Supplemental Agreements. Upon the execution
---------------------------------
of any agreement supplemental to this Agreement under this Article, this
Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Agreement for all purposes; and every
Certificateholder theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
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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 authenticated and delivered after the execution of any supplemental
agreement pursuant to this Article may bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental agreement; and, in
such case, suitable notation may be made upon Outstanding Certificates after
proper presentation and demand.
ARTICLE X
AMENDMENTS TO INDENTURES AND FINANCING DOCUMENTS
Section 10.01. Amendments and Supplement to Indentures and Other Note
------------------------------------------------------
Documents. In the event that the Trustee, as holder (or beneficial owner through
---------
the Subordination Agent) of any Equipment Note in trust for the benefit of the
Certificateholders or as Controlling Party, receives a request for a consent to
any amendment, modification, waiver or supplement under any Indenture or other
Note Document or other related document, the Trustee shall forthwith send a
notice of such proposed amendment, modification, waiver or supplement to each
Certificateholder registered on the Register as of the date of such notice. The
Trustee shall request from the Certificateholders a Direction as to (a) whether
or not to take or refrain from taking (or to direct the Subordination Agent to
take or refrain from taking) any action which a holder of such Equipment Note or
the Controlling Party has the option to direct, (b) whether or not to give or
execute (or to direct the Subordination Agent to give or execute) any waivers,
consents, amendments, modifications or supplements as a holder of such Equipment
Note or as Controlling Party and (c) how to vote or direct the Subordination
Agent to vote any Equipment Note if a vote has been called for with respect
thereto. Provided such a request for Certificateholder Direction 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 in the
same proportion as that of (x) the aggregate face amount of all Certificates
actually voted in favor of or for giving consent to such action by such
direction of Certificateholders to (y) the aggregate face amount of all
outstanding Certificates of the Trust and (ii) as the Controlling Party, the
Trustee shall vote as directed in such Certificateholder direction by the
Certificateholders evidencing fractional undivided interests aggregating not
less than a majority in interest in the Trust. For purposes of the immediately
preceding sentence, a Certificate shall have been "actually voted" if the Holder
of such Certificate has delivered to the Trustee an instrument evidencing such
Holder's consent to such Direction prior to two Business Days before the Trustee
directs such action or casts such vote or gives such consent. Notwithstanding
the foregoing, but subject to Section 6.04 and the Intercreditor Agreement, the
Trustee may, in its own discretion and at its own direction, consent and notify
the relevant Loan Trustee of such consent (or direct the Subordination Agent to
consent and notify the
-53-
relevant Loan Trustee of such consent) to any amendment, modification, waiver or
supplement under the relevant Indenture or any other Note Document or other
related document, if an Event of Default hereunder shall have occurred and be
continuing, or if such amendment, modification or waiver will not materially
adversely affect the interests of the Certificateholders.
ARTICLE XI
TERMINATION OF TRUST
Section 11.01. Termination of the Trust. The respective obligations and
------------------------
responsibilities of the Company and the Trustee with respect to the Trust shall
terminate upon the distribution to all Certificateholders and the Trustee of all
amounts required to be distributed to them pursuant to this Agreement and the
disposition of all property held as part of the Trust Property; provided,
--------
however, that in no event shall the Trust continue beyond one hundred ten (110)
-------
years following the date of the execution of this Agreement.
In connection with the occurrence of the event set forth in
the paragraph above, notice of any termination, specifying the Regular
Distribution Date (or Special Distribution Date, as the case may be) upon which
the Certificateholders may surrender their Certificates to the Trustee for
payment of the final distribution and cancellation, shall be mailed promptly,
upon notice to the Trustee, by the Trustee to Certificateholders not earlier
than the 60th day and not later than the 20th day next preceding such final
distribution specifying (A) the Regular Distribution Date (or Special
Distribution Date, as the case may be) upon which the proposed final payment of
the Certificates will be made upon presentation and surrender of Certificates at
the office or agency of the Trustee therein specified, (B) the amount of any
such proposed final payment, and (C) that the Record Date otherwise applicable
to such 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 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. Upon presentation and surrender of the Certificates
in accordance with such notice, the Trustee shall cause to be distributed to
Certificateholders such final distribution pursuant to Section 4.02.
In the event that all of the Certificateholders 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 to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. No additional interest shall accrue on the Certificates after the
Regular Distribution Date (or Special Distribution Date, as the case may be)
specified in the first written notice. In the event that any money held by the
Trustee for the payment of distributions on the Certificates shall remain
unclaimed for two years (or such lesser time as the Trustee shall be satisfied,
after sixty days' notice from the Company, is one month prior to the escheat
period provided under applicable law) after the final distribution date with
respect thereto, the Trustee shall pay to each Loan Trustee the appropriate
amount of money
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relating to such Loan Trustee and shall give written notice thereof to the
related Owner Trustees, the Owner Participants and the Company.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Limitation on Rights of Certificateholders. The death or
------------------------------------------
incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise affect the rights, obligations, and liabilities of the parties
hereto or any of them.
Section 12.02. Certificates Nonassessable and Fully Paid. Except as set
-----------------------------------------
forth in the last sentence of this Section 12.02, Certificateholders shall not
be personally liable for obligations of the Trust, the Fractional Undivided
Interests represented by the Certificates shall be nonassessable for any losses
or expenses of the Trust or for any reason whatsoever, and Certificates, upon
authentication thereof by the Trustee pursuant to Section 3.03, are and shall be
deemed fully paid. No Certificateholder shall have any right (except as
expressly provided herein) to vote or in any manner otherwise control the
operation and management of the Trust Property, the Trust, or the obligations of
the parties hereto, nor shall anything set forth herein, or contained in the
terms of the Certificates, be construed so as to constitute the
Certificateholders from time to time as partners or members of an association.
Neither the existence of the Trust nor any provision herein is intended to or
shall limit the liability the Certificateholders would otherwise incur if the
Certificateholders owned Trust Property as co-owners, or incurred any
obligations of the Trust, directly rather than through the Trust.
Section 12.03. Notices. (a) Unless otherwise specifically provided
-------
herein, all notices required under the terms and provisions of this Agreement
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, to:
Midway Airlines Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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if to the Trustee, to:
Allfirst Bank
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Mail Code 101-591
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
(b) The Company or the Trustee, by notice to the other, may
designate additional or different addresses for subsequent notices or
communications.
(c) Any notice or communication to Certificateholders shall
be mailed by first-class mail to the addresses for Certificateholders shown on
the Register kept by the Registrar. Failure so to mail a notice or communication
or any defect in such notice or communication shall not affect its sufficiency
with respect to other Certificateholders.
(d) If a notice or communication is mailed in the manner
provided above within the time prescribed, it is conclusively presumed to have
been duly given, whether or not the addressee receives it.
(e) If the Company mails a notice or communication to the
Certificateholders, it shall mail a copy to the Trustee and to the Paying Agent
at the same time.
(f) Notwithstanding the foregoing, all communications or
notices to the Trustee shall be deemed to be given only when received by a
Responsible Officer of the Trustee.
(g) The Trustee shall promptly furnish the Company with a
copy of any demand, notice or written communication received by the Trustee
hereunder from any Certificateholder, Owner Trustee or Loan Trustee.
Section 12.04. Governing Law. THIS AGREEMENT AND THE CERTIFICATES
-------------
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
Section 12.05. 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 Trust, or of the
Certificates or the rights of the Certificateholders thereof.
-56-
Section 12.06. 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 12.07. Successors and Assigns. All covenants, agreements,
----------------------
representations and warranties in this Agreement by the Trustee and the Company
shall bind and, to the extent permitted hereby, shall inure to the benefit of
and be enforceable by their respective successors and assigns, whether so
expressed or not.
Section 12.08. Benefits of Agreement. Nothing in this Agreement or in
---------------------
the Certificates, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, and the Certificateholders, any
benefit or any legal or equitable right, remedy or claim under this Agreement.
Section 12.09. Legal Holidays. In any case where any Regular
--------------
Distribution Date or Special Distribution Date relating to any Certificate shall
not be a Business Day, then (notwithstanding any other provision of this
Agreement) payment need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on such
Regular Distribution Date or Special Distribution Date, and no interest shall
accrue during the intervening period.
Section 12.10. Counterparts. For the purpose of facilitating the
------------
execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.
Section 12.11. Communication by Certificateholders with Other
----------------------------------------------
Certificateholders. Certificateholders may communicate with other
------------------
Certificateholders with respect to their rights under this Agreement or the
Certificates pursuant to Section 312(b) of the Trust Indenture Act. The Company,
the Trustee and any and all other persons benefitted by this Agreement shall
have the protection afforded by Section 312(c) of the Trust Indenture Act.
Section 12.12. Intention of Parties. The parties hereto intend that the
--------------------
Trust be classified for U.S. federal income tax purposes as a grantor trust
under Subpart E, Part I of Subchapter J of the Internal Revenue Code of 1986, as
amended, and not as a trust or association taxable as a corporation or as a
partnership. Each Certificateholder, by its acceptance of its Certificate or a
beneficial interest therein, agrees to treat the Trust as a grantor trust for
all U.S. federal, state and local income tax purposes. The powers granted and
obligations undertaken pursuant to this Agreement shall be so construed so as to
further such intent.
Section 12.13. Trust Indenture Act Controls. Upon the qualification
----------------------------
of this Agreement under the Trust Indenture Act, this Agreement shall be subject
to the provisions of the Trust Indenture Act and shall, to the extent
applicable, be governed by such provisions. If any provision
-57-
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.
[The remainder of this page is intentionally left blank]
-58-
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.
MIDWAY AIRLINES CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
General Counsel
ALLFIRST BANK, as Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
-59-
Exhibit A
FORM OF CERTIFICATE
REGISTERED
No. ______________
[THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE SECURITIES LAWS, AND ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, ANY PERSONS EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS
AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR
(C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS CERTIFICATE
IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S
UNDER THE SECURITIES ACT; (2) AGREES THAT IT WILL NOT, PRIOR
TO EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF
THE CERTIFICATES UNDER RULE 144(K) UNDER THE SECURITIES ACT
(OR ANY SUCCESSOR PROVISION) RESELL OR OTHERWISE TRANSFER
THIS CERTIFICATE EXCEPT (A) TO A QUALIFIED INSTITUTIONAL
BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
(B) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED
INVESTOR ACQUIRING $100,000 OR MORE AGGREGATE PRINCIPAL
AMOUNT OF SUCH CERTIFICATE, THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO THE TRUSTEE AND MIDWAY AIRLINES CORPORATION
("MIDWAY") A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS
AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF
THIS CERTIFICATE (THE FORM OF WHICH LETTER CAN BE OBTAINED
FROM THE TRUSTEE OR MIDWAY), (C) OUTSIDE THE UNITED STATES IN
AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE), (E) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT
(AND
A-1
WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER)
OR (F) TO MIDWAY OR ANY SUBSIDIARY THEREOF; (3) PRIOR TO SUCH
TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(E)
ABOVE), IT WILL FURNISH TO THE TRUSTEE SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS THE TRUSTEE MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND (4) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS CERTIFICATE IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER
OF THIS CERTIFICATE PRIOR TO THE EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THE CERTIFICATES UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION),
THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND
SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR IS A
PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO THE TRUSTEE AND MIDWAY, SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER
OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON THE
EARLIER OF THE TRANSFER OF THE CERTIFICATES PURSUANT TO
CLAUSE 2(E) ABOVE OR UPON ANY TRANSFER OF THE CERTIFICATES
UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION). AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION",
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO
THEM BY REGULATION S UNDER THE SECURITIES ACT. THE PASS
THROUGH TRUST AGREEMENT CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS
CERTIFICATE IN VIOLATION OF THE FOREGOING RESTRICTIONS.]*
BY ITS ACQUISITION HEREOF, THE HOLDER REPRESENTS FOR THE BENEFIT OF
MIDWAY AIRLINES CORPORATION AND EACH OWNER PARTICIPANT THAT (A) IT IS
NOT A PLAN TRANSFEREE (AS DEFINED IN THE PASS THROUGH TRUST AGREEMENT)
OR (B) ONE OR MORE PROHIBITED TRANSACTION STATUTORY OR ADMINISTRATIVE
EXEMPTIONS APPLIES SUCH THAT THE USE OF PLAN ASSETS TO
______________
* Not to be included on the face of the Permanent Offshore Global Certificate.
A-2
PURCHASE AND HOLD THIS PASS THROUGH CERTIFICATE WILL NOT
CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR
SECTION 4975 OF THE CODE. THE PASS THROUGH TRUST AGREEMENT
CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS CERTIFICATE IN VIOLATION OF THE
FOREGOING RESTRICTIONS.
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE TRUSTEE OR ITS AGENT FOR
---
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IN EXCHANGE FOR THIS CERTIFICATE IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO
A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS
OF PORTIONS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH
IN SECTIONS 3.05 AND 3.06 OF THE PASS THROUGH TRUST AGREEMENT
REFERRED TO HEREIN.]*
_______________
* To be included on the face of each Global Certificate.
A-3
[GLOBAL CERTIFICATE]*
MIDWAY AIRLINES 2000-1B PASS THROUGH TRUST
10.07% Midway Airlines [Initial/Exchange] Pass Through Certificate
Series 2000-1B
Final Expected Distribution Date: April 1, 2014
evidencing a fractional undivided interest in a trust, the property of which
includes certain equipment notes each secured by an Aircraft leased to or owned
by Midway Airlines Corporation.
$____________Initial Fractional Undivided Interest
representing._______% of the Trust per $1,000 face amount
THIS CERTIFIES THAT_________, for value received, is the
registered owner of a $______ (______ dollars) Fractional Undivided Interest in
Midway Airlines 2000-1B Pass Through Trust (the "Trust") created pursuant to a
-----
Pass Through Trust Agreement, dated as of September 27, 2000 (the "Agreement"),
---------
between Allfirst Bank (the "Trustee") and Midway Airlines Corporation, a
-------
corporation incorporated under Delaware law (the "Company"), a summary of
-------
certain of the pertinent provisions of which is set forth below. The initial
Fractional Undivided Interest evidenced hereby may be decreased or increased
from time to time in accordance with the terms of the Agreement, as evidenced in
the records of the Trustee. 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 "10.07% Midway Airlines [Initial/Exchange] Pass Through
Certificates Series 2000-1B" (herein called the "Certificates"). This
------------
Certificate is issued under and is subject to the terms, provisions, and
conditions of the Agreement. By virtue of its acceptance hereof the
Certificateholder of this Certificate assents to and agrees to be bound by the
provisions of the Agreement and the Intercreditor Agreement. The property of the
Trust includes certain Equipment Notes and all rights of the Trust to receive
payments under the Intercreditor Agreement and the Liquidity Facility (the
"Trust Property"). Each issue of the Equipment Notes is secured by, among other
--------------
things, a security interest in the 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 assets or property other than the Trust Property.
Subject to and in accordance with the terms of the Agreement
and the Intercreditor Agreement, from and to the extent of funds then available
to the Trustee, there will be distributed on each April 1 and October 1 (a
"Regular Distribution Date"), commencing on April 1, 2001, to the
-------------------------
________________
* To be included on the face of each Global Certificate.
A-4
Person in whose name this Certificate is registered at the close of business on
the 15th day preceding the Regular Distribution Date, an amount in respect of
the Scheduled Payments on the Equipment Notes due on such Regular Distribution
Date, the receipt of which has been confirmed by the Trustee, equal to the
product of the percentage interest in the Trust evidenced by this Certificate
and an amount equal to the sum of such Scheduled Payments. Subject to and in
accordance with the terms of the Agreement and the Intercreditor Agreement, in
the event that Special Payments on the Equipment Notes are received by the
Trustee, from funds then available to the Trustee, there shall be distributed on
the applicable Special Distribution Date, to the Person in whose name this
Certificate is registered at the close of business on the 15th day preceding the
Special Distribution Date, an amount in respect of such Special Payments on the
Equipment Notes, the receipt of which has been confirmed by the Trustee, equal
to the product of the percentage interest in the Trust evidenced by this
Certificate and an amount equal to the sum of such Special Payments so received.
If a Regular Distribution Date or Special Distribution Date is not a Business
Day, distribution shall be made on the immediately following Business Day with
the same force and effect as if made on such Regular Distribution Date or
Special Distribution Date and no interest shall accrue during the intervening
period. The Trustee shall mail notice of each Special Payment and the Special
Distribution Date therefor to the Certificateholder of this Certificate.
Except as otherwise provided in the Agreement and
notwithstanding the above, the final distribution on this Certificate will be
made after notice mailed by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
of the Trustee specified in such notice.
THE AGREEMENT AND, UNTIL THE TRANSFER, THIS CERTIFICATE SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Reference is hereby made to the further provisions of this
Certificate set forth in the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
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.
[The Certificateholder of this Certificate is entitled to the
benefits of the Registration Rights Agreement, dated as of September 27, 2000,
among the Company, the Trustee and the Placement Agents named therein (the
"Registration Rights Agreement"). In the event that neither the consummation of
the Exchange Offer nor the declaration by the Commission of a Shelf Registration
to be effective (a "Registration Event") occurs on or prior to the 210th day
after the date of the issuance of the Certificates, the interest rate per annum
borne by the Equipment Notes shall be increased by 0.50%, from and including
such 210th day, to but excluding the date on which a Registration Event occurs.
In the event that the Shelf Registration Statement ceases to be effective
A-5
at any time during the period specified by the Registration Rights Agreement for
more than 60 days, whether or not consecutive, during any 12-month period, the
interest rate per annum borne by the Equipment Notes shall be increased by 0.50%
from the 61/st/ day of the applicable 12-month period such Shelf Registration
Statement ceases to be effective until such time as the Shelf Registration
Statement again becomes effective.]*
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: ____________ __, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇-▇▇ ▇▇▇▇ THROUGH TRUST
By: Allfirst Bank, as Trustee
By: __________________________
Name:
Title:
____________
* To be included only on each Initial Certificate.
A-6
[FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Certificates referred
to in the within-mentioned Agreement.
Allfirst Bank,
as Trustee
By: ______________________
Authorized Officer
A-7
[REVERSE OF CERTIFICATE]
The Certificates do not represent a direct obligation of, or
an obligation guaranteed by, or an interest in, the Company or the Trustee or
any of their affiliates. The Certificates are limited in right or payment, all
as more specifically set forth on the face hereof and in the Agreement. All
payments or distributions made to Certificateholders under the Agreement shall
be made only from the Trust Property and only to the extent that the Trustee
shall have sufficient income or proceeds from the Trust Property to make such
payments in accordance with the terms of the Agreement. Each Certificateholder
of this Certificate, by its acceptance hereof, agrees that it will look solely
to the income and proceeds from the Trust Property to the extent available for
distribution to such Certificateholder as provided in the Agreement. This
Certificate does not purport to summarize the Agreement and reference is made to
the Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby. A copy of the Agreement may
be examined during normal business hours at the principal office of the Trustee,
and at such other places, if any, designated by the Trustee, by any
Certificateholder upon request.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Certificateholders under the
Agreement at any time by the Company and the Trustee with the consent of the
Certificateholders holding Certificates evidencing Fractional Undivided
Interests aggregating not less than a majority in interest in the Trust. Any
such consent by the Certificateholder of this Certificate shall be conclusive
and binding on such Certificateholder and upon all future Certificateholders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Certificateholders of
any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein 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, in the Borough of Manhattan, the City
of New York, duly endorsed or accompanied by a written instrument of transfer in
form satisfactory to the Trustee and the Registrar duly executed by the
Certificateholder hereof or such Certificateholder's attorney duly authorized in
writing, and thereupon one or more new Certificates of authorized denominations
evidencing the same aggregate Fractional Undivided Interest in the Trust will be
issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in minimum denominations of $100,000 Fractional Undivided
Interest and integral multiples of $1,000 in excess thereof. As provided in the
Agreement and subject to certain limitations therein set forth, the Certificates
are exchangeable for new Certificates of authorized denominations evidencing the
A-8
same aggregate Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee shall require payment by the Holder of a
sum sufficient to cover any tax or governmental charge payable in connection
therewith.
The Trustee, the Registrar, and any agent of the Trustee or
the Registrar may treat the person in whose name this Certificate is registered
as the owner hereof for all purposes, and neither the Trustee, the Registrar,
nor any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement
and the Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement and the disposition of all property held as part of the Trust
Property.
A-9
FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby
sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
---------------------------------
______________________
______________________
please print or typewrite name and address including zip code of assignee
______________________
the within Certificate and all rights thereunder, hereby irrevocably
constituting and appointing
______________________
attorney to transfer said Certificate on the books of the Trustee with full
power of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL CERTIFICATES
EXCEPT PERMANENT OFFSHORE GLOBAL AND
OFFSHORE PHYSICAL CERTIFICATES]
In connection with any transfer of this Certificate occurring
prior to the date that is the earlier of (i) the date of Registration Event or
(ii) the end of the period referred to in Rule 144(k) of the Securities Act, the
undersigned confirms that without utilizing any general solicitation or general
advertising that:
[Check One]
---------
[_] (a) this Certificate is being transferred in compliance with
the exemption from registration under the Securities Act of
1933, as amended, provided by Rule 144A thereunder.
or
--
[_] (b) this Certificate is being transferred other than in
accordance with (a) above and documents are being furnished
that comply with the conditions of transfer set forth in this
Certificate and the Agreement.
A-10
If neither of the foregoing boxes is checked, the Trustee or other Registrar
shall not be obligated to register this Certificate in the name of any Person
other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in Section 3.06 of the Agreement
shall have been satisfied.
Date:_____________________________ [Name of Transferor]
--------------------
NOTE: The signature
must correspond with
the name as written
upon the face of the
within- mentioned
instrument in every
particular, without
alteration or any
change whatsoever.
Signature Guarantee: _____________________________________
_______________________________
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Certificate for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, as amended, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as the undersigned has requested pursuant to
Rule 144A or has determined not to request such information and that it is aware
that the transferor is relying upon the undersigned's foregoing representations
in order to claim the exemption from registration provided by Rule 144A.
Dated: ___________________________ ____________________
NOTE:To be executed
by an executive
officer.
A-11
Exhibit B
FORM OF CERTIFICATE FOR UNLEGENDED CERTIFICATES
[Date]
[Name and address of Trustee]
Attention: Corporate Trust Department
Re: Midway Airlines 2000-1B Pass Through Trust (the "Trust"),
-----
10.07% Midway Airlines Pass Through Certificates Series
2000-1B (the "Certificates")
---------------------------------------------------------
Dear Sirs:
This letter relates to U.S. $__________ Fractional Undivided
Interest of Certificates represented by a Certificate (the "Legended
--------
Certificate") which bears a legend outlining restrictions upon transfer of such
-----------
Legended Certificate. Pursuant to Section 3.01 of the Pass Through Trust
Agreement relating to the Certificates dated as of September 27, 2000 (the
"Trust Agreement"), between Midway Airlines Corporation ("Midway") and you, we
--------------- ------
hereby certify that we are (or we will hold such securities on behalf of) a
person outside the United States to whom the Certificates could be transferred
in accordance with Rule 904 of Regulation S promulgated under the U.S.
Securities Act of 1933, as amended. Accordingly, you are hereby requested to
exchange the legended certificate for an unlegended certificate representing an
identical principal amount of Certificates, all in the manner provided for in
the Trust Agreement.
You and Midway are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Certificateholder]
By: _______________________
Authorized Signature
B-1
Exhibit C
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS PURSUANT TO REGULATION S
[date]
[Name and address of Trustee]
Attention: Corporate Trust Department
Re: Midway Airlines 2000-1B Pass Through Trust (the "Trust"),
-----
10.07% Midway Airlines Pass Through Certificates Series
2000-1B (the "Certificates")
---------------------------------------------------------
Sirs:
In connection with our proposed sale of $_______ Fractional Undivided Interest
of the Certificates, we confirm that such sale has been effected pursuant to and
in accordance with Regulation S under the Securities Act of 1933, as amended,
and, accordingly, we represent that:
(1) the offer of the Certificates was not made to a person in
the United States;
(2) either (a) at the time the buy order was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the
United States or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we
nor any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act.
C-1
In addition, if the sale is made during a restricted period
and the provisions of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S are
applicable thereto, we confirm that such sale has been made in accordance with
the applicable provisions of Rule 903(c)(3) or Rule 904(c)(1), as the case may
be.
You, Midway Airlines Corporation are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By: _______________________
Authorized Signature
C-2
Exhibit D
FORM OF CERTIFICATE TO BE
DELIVERED IN CONNECTION WITH
TRANSFERS TO NON-QIB ACCREDITED INVESTORS
-----------------------------------------
[date]
[Name and address of Trustee]
Attention: Corporate Trust Department
Re: Midway Airlines 2000-1B Pass Through Trust (the "Trust"),
-----
10.07% Midway Airlines Pass Through Certificates Series
2000-1B (the "Certificates")
---------------------------------------------------------
Dear Sirs:
In connection with our proposed purchase of $_______________ aggregate
principal amount of the Certificates, we confirm that:
1. We understand that any subsequent transfer of the Certificates is
subject to certain restrictions and conditions set forth in the Pass Through
Trust Agreement, dated as of September 27, 2000, between Midway Airlines
Corporation (the "Company") and Allfirst Bank (the "Trustee") relating to the
Certificates, and we agree to be bound by, and not to resell, pledge or
otherwise transfer the Certificates except in compliance with, such restrictions
and conditions and the Securities Act of 1933, as amended (the "Securities
Act").
2. We are purchasing Certificates having an aggregate principal amount
of not less than $100,000 and each account (if any) for which we are purchasing
Certificates is purchasing Certificates having an aggregate principal amount of
not less than $100,000.
3. We understand that the Certificates have not been registered under
the Securities Act, that the Certificates are being sold to us in a transaction
that is exempt from the registration requirements of the Securities Act and that
the Certificates may not be offered or resold except as permitted in the
following sentence. We agree, on our own behalf and on behalf of any accounts
for which we are acting as hereinafter stated, that, if we should sell any
Certificates within the applicable time period referred to in Rule 144(k) of the
Securities Act, we will do so only (A) to the Company or a subsidiary thereof,
(B) in accordance with Rule 144A under the Securities Act to a "qualified
institutional buyer" (as defined therein), (C) inside the United States to an
Institutional Accredited Investor (as defined below) acquiring $100,000 or more
aggregate principal amount of such
D-1
Certificate that, prior to such transfer, furnishes to the Trustee and the
Company a signed letter containing certain representations and agreements
relating to the restrictions on transfer of the Certificates (the form of which
letter can be obtained from the Trustee or the Company), (D) outside the United
States in accordance with Rule 904 of Regulation S under the Securities Act, (E)
pursuant to the exemption from registration provided by Rule 144 under the
Securities Act or (F) pursuant to a registration statement which has been
declared effective under the Securities Act (and which continues to be effective
at the time of such transfer), and we further agree to provide to any person
purchasing any of the Certificates from us a notice advising such purchaser that
resales of the Certificates are restricted as stated herein. We further
understand that the Certificates purchased by us will bear a legend to the
foregoing effect.
4. We understand that, on any proposed resale of any Certificates, we
will be required to furnish to the Company and to the Trustee such
certifications, legal opinions and other information as the Company and the
Trustee may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Certificates
purchased by us will bear a legend to the foregoing effect.
5. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act)
("Institutional Accredited Investor") and have such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of our investment in the Certificates, and we and any accounts for which
we are acting are each able to bear the economic risk of our or their
investments.
6. We are acquiring the Certificates purchased by us for our own
account or for one or more accounts (each of which is an Institutional
Accredited Investor) as to each of which we exercise sole investment discretion.
7. We represent that (1) no ERISA Plan assets have been used to
purchase the Certificates or (2) one or more prohibited transaction statutory or
administrative exemptions applies such that the use of such plan assets to
purchase and hold the Certificates will not constitute a non- exempt prohibited
transaction under ERISA or section 4975 of the Code.
You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
Very truly yours,
[Name of Transferor]
By: _____________________
Authorized Signature
D-2