DISTRIBUTION TRUST AGREEMENT BY AND AMONG FLYI, INC. AND ITS DEBTOR AFFILIATES AND ENA ADVISORS, LLC [DATE], 200__
BY
AND AMONG
FLYI,
INC. AND ITS DEBTOR AFFILIATES
AND
ENA
ADVISORS, LLC
[DATE],
200__
CHI-1578198v2
1.1 Definitions
1.2 Interpretation
ARTICLE
2 ESTABLISHMENT
OF THE DISTRIBUTION TRUST
2.1 Creation
and Purposes of the Distribution Trust
2.2 Identification
of Beneficiaries
2.3 Transfer
of Initial Distribution Trust Assets
2.4 Tax
Treatment
2.5 Distribution
Trustee’s Acceptance
ARTICLE
3 TRUST
ACCOUNTS
3.1 Creation
of the Trust Accounts
3.2 Distribution
Trust Expenses Account
3.3 Priority
Claims Trust Accounts
3.4 Unsecured
Claims Trust Accounts
3.5 Undeliverable
Cash Trust Accounts
3.6 Tax
Treatment
ARTICLE
4 ADMINISTRATION
OF THE DISTRIBUTION TRUST
4.1 Rights,
Powers and Privileges
4.2 Limitation
on Investigations; Delivery of Documents and Related Matters
4.3 No
Personal Liability
4.4 Dissolution
of the Debtors
4.5 Agents
and Professionals
4.6 Authentication
of Documents
4.7 Investment
Guidelines
4.8 Disputed
Claims
4.9 Trade
or
Business
4.10 Court
Approval of Distribution Trustee Actions
ARTICLE
5 DISTRIBUTIONS
FROM THE DISTRIBUTION TRUST
5.1 Method
of
Distributions to Holders of Allowed Claims
5.2 Delivery
of Distributions
5.3 Means
of
Cash Payments
5.4 Timing
and Calculation of Amounts to Be Distributed
5.5 Compensation
and Reimbursement for Services Related to Distributions
5.6 Payments
Limited to Trust Accounts
5.7 Insufficient
Funds
ARTICLE
6 BENEFICIARIES
6.1 Rights
to
Distributions
6.2 Exemption
From Registration
ARTICLE
7 CERTAIN
RIGHTS OF THE DISTRIBUTION TRUSTEE
7.1 Causes
of
Action
7.2 Objections
to Claims
7.3 Establishment
of Litigation Trusts
ARTICLE
8 THIRD
PARTY RIGHTS AND LIMITATION OF LIABILITY
8.1 Parties
Dealing With the Distribution Trustee
8.2 Limitation
of Liability
8.3 Indemnification
ARTICLE
9 SELECTION,
REMOVAL AND COMPENSATION OF THE DISTRIBUTION TRUSTEE
9.1 Initial
Distribution Trustee
9.2 Term
of
Service
9.3 Removal
of the Distribution Trustee
9.4 Resignation
of the Distribution Trustee
9.5 Appointment
of Successor Distribution Trustee
9.6 Powers
and Duties of Successor Distribution Trustee
9.7 Trust
Continuance
9.8 Compensation
and Costs of Administration
ARTICLE
10 MAINTENANCE
OF RECORDS; REPORTING
10.1 Books
and
Records
10.2 Reports
to be Filed with the Bankruptcy Court
10.3 Compliance
with Federal Securities Laws
10.4 Tax
Returns and Payments
ARTICLE
11 DURATION
OF THE DISTRIBUTION TRUST
11.1 Duration
11.2 Termination
Upon Distribution of All Distribution Trust Assets
11.3 Termination
After Five Years
11.4 Other
Termination Procedures
11.5 No
Reversions
ARTICLE
12 MISCELLANEOUS
12.1 Limitation
on Transferability
12.2 Notices
12.3 No
Bond
12.4 Governing
Law; Submission to Jurisdiction; Service of Process
12.5 Successors
and Assigns
12.6 No
Execution
12.7 Amendment
12.8 Severability
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CHI-1578198v2
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This
DISTRIBUTION TRUST AGREEMENT, dated as of ___________, 200__
(this “Agreement”),
is
made by and among the debtors listed on the signature page hereto (collectively,
the “Debtors”),
and
ENA Advisors, LLC, a Utah limited liability company (or any successor trustee,
the “Distribution
Trustee”),
as
Distribution Trustee under the First Amended Joint Plan of Liquidation for
FLYi,
Inc. and its Debtor Affiliates, dated November 21, 2006 (as the same may be
amended or modified and as confirmed by the Confirmation Order, the
“Plan”).
BACKGROUND
A. The
trust
created hereby (the “Distribution
Trust”)
is
created pursuant to, and to effectuate, Section IV.B.3 of the Plan and
constitutes the “Distribution Trust” as contemplated by the Plan.
B. The
Distribution Trustee was jointly selected by the Debtors and the official
committee of unsecured creditors of the Debtors appointed by the United States
Trustee for the District of Delaware pursuant to section 1102 of the Bankruptcy
Code (the “Creditors’
Committee”).
C. Pursuant
to the Plan, the Distribution Trust is established for the purpose of
(i)
liquidating the Distribution Trust Assets, (ii) resolving certain Disputed
Claims, (iii) making distributions to holders of certain Allowed Claims in
accordance with the terms of the Plan, and (iv) otherwise implementing the
Plan
and administering the Debtors’ Estates, all as more specifically set forth in
this Agreement and in accordance with the Plan.
D. The
Distribution Trust is intended to be treated, in part, as a liquidating trust
within the meaning of Treasury Regulations section 301.7701-4(d), for
the
benefit of holders of Allowed Claims entitled to distributions of Pending
Payments, and otherwise as one or more disputed ownership funds within the
meaning of Treasury Regulations section 1.468B-9(b)(1).
AGREEMENT
NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained
herein, the Debtors and the Distribution Trustee agree as follows:
ARTICLE
1
DEFINITIONS
AND INTERPRETATIONS
1.1 Definitions.
Capitalized terms used but not defined in this Agreement have the meanings
ascribed to them in the Plan. The following capitalized terms used in this
Agreement have the meanings ascribed to them in this Section 1.1:
“Agreement”
has the
meaning set forth in the introductory paragraph above.
“Annual
Receipts/Disbursements Report”
means,
with respect to each Estate, an unaudited report Filed with the Bankruptcy
Court
by the Distribution Trustee, on behalf of the Distribution Trust, within 90
days
after the end of each calendar year reflecting: (a) all Distribution Trust
Assets liquidated by the Distribution Trust during such calendar year;
(b) all Distribution Trust Assets held by the Distribution Trust at
the end
of such calendar year; and (c) all Distribution Trust Assets disbursed
during such calendar year, in each case itemized for the individual Trust
Accounts and sub-accounts.
“Bankruptcy
Case”
means
(a) when used with reference to a particular Debtor, the chapter 11 case pending
for that Debtor in the Bankruptcy Court, and (b) when used with reference to
all
Debtors, the chapter 11 cases pending for the Debtors in the Bankruptcy
Court.
“Beneficiaries”
means
creditors and holders of Claims against the Estates.
“Claims
Report”
means,
with respect to each Estate, a report certified by the claims agent for such
Estate setting forth: (a) a listing, as of the Effective Date, of: (i) all
Allowed Administrative Claims against such Estate; (ii) all Allowed Priority
Tax
Claims against such Estate; (iii) all Allowed Claims against such Estate in
each
class of Claims under the Plan; and (iv) all Disputed Claims against such
Estate; and (b) for each Claim so listed: (i) the name, address and federal
taxpayer identification number or social security number (if known) of the
holder thereof as of the Distribution Record Date and (ii) the Face
Amount
thereof, including the amount of unpaid principal and accrued interest (if
known).
“Class
3A Claims”
means
the Claims to be satisfied solely from the FLYi Distribution Trust Assets in
accordance with Section III.B.3 of the Plan.
“Class
3B Claims”
means
the Claims arising under the FLYi Indenture, all of which are to be satisfied
solely from the FLYi Distribution Trust Assets in accordance with Section
III.B.4 of the Plan.
“Class
4 Claims”
means
the Claims to be satisfied solely from the Independence Distribution Trust
Assets in accordance with Section III.B.5 of the Plan.
“Class
5 Claims”
means:
(a) any Claim that would otherwise be classified as a General Unsecured Claim
against FLYi (other than a Class 3B Claim) but for the fact that such Claim
is
Allowed in an amount equal to or less than $1,000 and (b) any Class
3A
Claim with respect to which the holder has elected on its Ballot provided for
voting on the Plan to reduce its Claim to $1,000 and accept treatment in Class
5.
“Class
6 Claims”
means:
(a) Customer Credit Claims that are not Priority Claims pursuant to the order
of
the Bankruptcy Court dated September 22, 2006 and the customer certification
approved by such order and disseminated to the holders of Customer Credit Claims
in connection with the Plan, (b) any Claim that would otherwise be classified
as
a General Unsecured Claim against any Debtor (other than FLYi) but for the
fact
that such Claim is Allowed in an amount equal to or less than $1,000 and (c)
any
Class 4 Claim with respect to which the holder has elected on its Ballot
provided for voting on the Plan to reduce its Claim to $1,000 and accept
treatment in Class 6.
“Convertible
Notes”
means
the $125,000,000 of public convertible senior notes issued by FLYi under the
FLYi Indenture, bearing an interest rate of six percent and convertible into
FLYi common stock upon the occurrence of certain events.
“Creditors’
Committee”
has the
meaning set forth in Background Paragraph B of this Agreement.
“Current
Report”
means a
report Filed with the Bankruptcy Court by the Distribution Trustee, on behalf
of
the Distribution Trust, describing developments affecting the Distribution
Trust
in any material respect (as determined by the Distribution Trustee in its
Permitted Discretion) in reasonable detail.
“Debtors”
has the
meaning set forth in the introductory paragraph of this Agreement.
“Disbursing
Agent”
means
the Distribution Trustee, in its capacity as a disbursing agent pursuant to
the
Plan, or any third party acting as disbursing agent at the direction of the
Distribution Trustee.
“Distribution
Trust Assets”
means
the FLYi Distribution Trust Assets and the Independence Distribution Trust
Assets.
“Distribution
Trust Expenses Account”
means
the segregated trust account to be established and maintained pursuant to
Section IV.E.3 of the Plan to fund the payment of Distribution Trust
Expenses.
“Distribution
Trust Expenses”
means
any and all reasonable fees, costs and expenses incurred by the Distribution
Trust, the Distribution Trustee (or any Disbursing Agent, person, Entity or
professional engaged by the Distribution Trustee) or the Steering Committee
on
or after the Effective Date in connection with any of their duties under the
Plan or this Agreement, including any administrative fees, attorneys’ fees and
expenses, insurance fees, taxes and escrow expenses.
“Distribution
Trust”
has the
meaning set forth in Background Paragraph A of this Agreement.
“Distribution
Trustee”
has the
meaning set forth in the introductory paragraph of this Agreement.
“Face
Amount”
means:
(a)
when
used
in reference to the liquidated amount of any Claim for which a proof of Claim
was Filed on or before the Bar Date (or was otherwise deemed timely Filed under
applicable law), (i) the full stated amount of such Claim, or (ii) such lesser
amount as determined by the Bankruptcy Court; or
(b)
when
used
in reference to any Claim for which a proof of Claim was not Filed on or before
the Bar Date (or was not otherwise deemed timely Filed under applicable law)
or
in reference to the unliquidated amount of any Claim, the greatest of the
following amounts: (i) the amount of the Claim acknowledged by the applicable
Debtor(s) in any objection Filed to such Claim or in the Schedules as an
undisputed, noncontingent and liquidated Claim; (ii) the amount estimated by
the
Bankruptcy Court pursuant to Section 502(c) of the Bankruptcy Code; and (iii)
the amount established by the Distribution Trustee on behalf of the Distribution
Trust following the Effective Date;
provided,
however,
if a
Claim is an Insured Claim, then the Face Amount of such Claim shall equal the
applicable deductible under the relevant insurance policy, minus any
reimbursement obligations of the applicable Debtor(s) to the insurance carrier
for sums expended by the insurance carrier on account of such Claim (including
defense costs) if such amount is less than the amount specified in clause (b)
above; and provided,
further,
that
the Face Amount of any Claim shall not exceed the amount of such Claim, as
determined by a Final Order or a Stipulation of Amount and Nature of
Claim.
“FLYi
Disputed Claims Reserves”
means,
with respect to each of the FLYi Trust Accounts, the reserve of Cash and other
FLYi Distribution Trust Assets retained in such FLYi Trust Account to satisfy
Disputed Claims against the Estate of FLYi, if, as and when they are Allowed,
or, to the extent such Disputed Claims are not Allowed, to satisfy Claims
against the Estate of FLYi that are Allowed in accordance with the terms of
the
Plan.
“FLYi
Distribution Trust Assets”
means
all assets of the Estate of FLYi, which consist solely of any Causes of Action
of FLYi, fifty percent (50%) of the United Claim Settlement Proceeds and any
Cash on hand, government and corporate bonds and other instruments owned by
FLYi.
“FLYi
Indenture”
means
the Indenture, dated as of February 25, 2004, by and between Atlantic Coast
Airlines Holdings, Inc., n/k/a FLYi, as issuer, and U.S. Bank National
Association, as trustee, together with each of its supplemental indentures
and
amendments.
“FLYi
Priority Claims Trust Account”
means
the segregated trust account to be established and maintained by the
Distribution Trustee pursuant to Section IV.E.1 of the Plan for the purpose
of
satisfying Allowed Administrative Claims, Allowed Priority Tax Claims, Allowed
Priority Claims and Allowed Secured Claims against the Estate of FLYi, in each
case, solely from the FLYi Distribution Trust Assets.
“FLYi
Trust Accounts”
means
the FLYi Priority Claims Trust Account, the FLYi Unsecured Claims Trust Account
and the FLYi Undeliverable Cash Trust Account.
“FLYi
Undeliverable Cash Trust Account”
means
the segregated trust account to be established and maintained by the
Distribution Trustee pursuant to Sections IV.E.2 and VI.D.2 of the Plan to
hold
undeliverable Cash for the benefit of holders of Allowed Claims against the
Estate of FLYi solely from the FLYi Distribution Trust Assets.
“FLYi
Unsecured Claims Trust Account”
means
the segregated trust account to be established and maintained by the
Distribution Trustee pursuant to Section IV.E.2 of the Plan for the purpose
of
satisfying (a) Allowed Class 3A Claims (and Class 5 Claims that would
otherwise have been classified as Class 3A Claims) solely from the FLYi
Distribution Trust Assets in accordance with Section III.B.3 of the Plan, and
(b) Allowed Class 3B Claims solely from the FLYi Distribution Trust
Assets
in accordance with Section III.B.4 of the Plan.
“General
Unsecured Claim”
means
any Claim that is not an Administrative Claim, Priority Tax Claim, Priority
Claim, Secured Claim, Intercompany Claim, Penalty Claim or Class 3B
Claim.
“Indemnified
Parties”
means,
collectively, the Distribution Trustee and any directors, officers, employees,
agents, professionals, principals and other representatives thereof and the
members of the Steering Committee.
“Independence
Disputed Claims Reserves”
means,
with respect to each of the Independence Trust Accounts, the reserve of Cash
and
other Independence Distribution Trust Assets retained in such Independence
Trust
Account to satisfy Disputed Claims against the Estates of the Debtors other
than
FLYi, if, as and when they are Allowed, or, to the extent such Disputed Claims
are not Allowed, to satisfy Claims against such Estates that are Allowed in
accordance with the terms of the Plan.
“Independence
Distribution Trust Assets”
means
all assets of the Estates that are not FLYi Distribution Trust
Assets.
“Independence
Priority Claims Trust Account”
means
the segregated trust account to be established and maintained by the
Distribution Trustee pursuant to Section IV.E.1 of the Plan for the purpose
of
satisfying Allowed Administrative Claims, Allowed Priority Tax Claims, Allowed
Priority Claims and Allowed Secured Claims against the Estates of the Debtors
other than FLYi, in each case, solely from the Independence Distribution Trust
Assets.
“Independence
Trust Accounts”
means
the Independence Priority Claims Trust Account, the Independence Unsecured
Claims Trust Account and the Independence Undeliverable Cash Trust
Account.
“Independence
Undeliverable Cash Trust Account”
means
the segregated trust account to be established and maintained by the
Distribution Trustee pursuant to Sections IV.E.2 and VI.D.2 of the Plan to
hold
undeliverable Cash for the benefit of holders of Allowed Claims against the
Estates of the Debtors other than FLYi solely from the Independence Distribution
Trust Assets.
“Independence
Unsecured Claims Trust Account”
means
the segregated trust account to be established and maintained by the
Distribution Trustee pursuant to Section IV.E.2 of the Plan for the purpose
of
satisfying (a) Allowed Class 4 Claims solely from the Independence
Distribution Trust Assets in accordance with Section III.B.5 of the Plan, and
(b) Allowed Class 6 Claims solely from the Independence Distribution
Trust
Assets in accordance with Section III.B.7 of the Plan.
“Pending
Payments”
means
identified amounts of Cash and other Distribution Trust Assets (excluding
undeliverable Cash) held by the Distribution Trust for distribution or
collection and distribution to holders of Allowed Claims in specific amounts
as
of the date the Distribution Trust receives the applicable Distribution Trust
Assets.
“Permitted
Discretion”
means a
determination made in good faith and in the exercise of reasonable business
judgment.
“Permitted
Investments”
means
the following investments so long as they have maturities of 90 days or less:
(a) obligations issued or guaranteed by the United States or by any person
controlled or supervised by or acting as an instrumentality of the United States
pursuant to authority granted by the United States Congress;
(b) obligations issued or guaranteed by any state or political subdivision
thereof rated either AA or higher, or MIG 1 or higher, by ▇▇▇▇▇’▇ Investors
Service, Inc. or its successor or AA or higher, or an equivalent, by Standard
& Poor’s Ratings Services or its successor; (c) commercial or finance
paper which is rated either P-1 or higher or an equivalent by ▇▇▇▇▇’▇ Investors
Service, Inc. or its successor or A-1 or higher or an equivalent by Standard
& Poor’s Ratings Services or its successor; (d) certificates of deposit
or time deposits of banks or trust companies, organized under the laws of the
United States, having a minimum equity of $500,000,000; and (e) money market
funds registered under the Investment Company Act of 1940, as amended, whose
shares are registered under the Securities Act of 1933, as amended, which
invests in securities of the type described in clause (a) above.
“Plan”
has the
meaning set forth in the introductory paragraph of this Agreement.
“Quarterly
Receipts/Disbursements Report”
means
an unaudited report Filed with the Bankruptcy Court by the Distribution Trustee,
on behalf of the Distribution Trust, within 45 days after the end of each of
the
first three calendar quarters of each calendar year reflecting: (a) all
Distribution Trust Assets received by the Distribution Trust during such
calendar quarter; (b) all Distribution Trust Assets held by the
Distribution Trust at the end of such quarter; and (c) all Distribution
Trust Assets disbursed during such calendar quarter, in each case itemized
for
the individual Trust Accounts and sub-accounts.
“Schedules”
means
the schedules of assets and liabilities and the statements of financial affairs
Filed by the Debtors, as required by section 521 of the Bankruptcy Code,
as
the same may have been or may be amended, modified or supplemented.
“Stipulation
of Amount and Nature of Claim”
means a
stipulation or other agreement between the applicable Debtor or the Distribution
Trustee and a holder of a Claim, or an agreed order of the Bankruptcy Court,
establishing the amount and nature of a Claim or Interest.
“Trust
Accounts”
means
the Distribution Trust Expenses Account, the FLYi Trust Accounts, the
Independence Trust Accounts and any other trust account established by the
Debtors or the Distribution Trustee.
“United
States”
or
“U.S.”
means
the United States of America.
1.2 Interpretation.
1.2.1 Certain
References.
Unless
the context otherwise requires: (a) all references in this Agreement
to
Sections or Articles are to Sections or Articles of or to this Agreement; (b)
words in the singular include the plural and vice
versa;
and (c)
the verb “will” will have a mandatory connotation, indicating the parties’
respective obligations hereunder. Whenever the words “include,”“includes” or
“including” are used in this Agreement, they will be deemed to be followed by
the words “without limitation.” All references to “$” or dollar amounts are to
lawful currency of the United States.
1.2.2 Titles
and Headings.
Titles
and headings to Sections and Articles in this Agreement are inserted for
convenience of reference only, and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.
1.2.3 Inconsistencies
with the Plan.
In the
event of any inconsistency between any provision of this Agreement, on the
one
hand, and any provision of the Plan, on the other hand, the provisions of the
Plan will govern and control.
ARTICLE
2
ESTABLISHMENT
OF THE DISTRIBUTION TRUST
2.1 Creation
and Purposes of the Distribution Trust.
The
Debtors and the Distribution Trustee, pursuant to the Plan and in accordance
with the Bankruptcy Code, hereby create a trust, which is the “Distribution
Trust” contemplated by the Plan. The Distribution Trust is established for the
following purposes: (a) collecting, maintaining and administering any
Distribution Trust Assets for the benefit of the Beneficiaries; (b) liquidating
and distributing (including objecting to Claims and determining the proper
recipients and amounts of distributions to be made from the Distribution Trust)
the Distribution Trust Assets for the benefit of the Beneficiaries who are
determined to hold Allowed Claims as expeditiously as reasonably possible;
(c)
pursuing any available Causes of Action; (d) closing the Bankruptcy Cases;
and
(e) otherwise implementing the Plan, all in accordance with the Plan and this
Agreement, and in furtherance thereof, the Distribution Trustee will have the
rights, power, privileges and obligations set forth in ARTICLE
4
and
elsewhere in this Agreement and the Plan. The Distribution Trust has no
objective to, and will not, engage in the conduct of a trade or business and,
subject to Section 11.3,
will
terminate upon the completion of its liquidation and distribution duties.
2.2 Identification
of Beneficiaries.
On the
Effective Date, (a) FLYi will deliver to the Distribution Trustee the Claims
Report with respect to FLYi’s Estate, and (b) Independence will deliver to the
Distribution Trustee the Claims Report with respect to Estates of the Debtors
other than FLYi.
2.3 Transfer
of Initial Distribution Trust Assets.
On the
Effective Date, the Debtors will transfer to the Distribution Trust the
Distribution Trust Assets, whereupon title to such Distribution Trust Assets
will irrevocably vest in the Distribution Trust, free and clear of Claims,
Liens
and Interests.
2.4 Tax
Treatment.
For all
U.S. federal income Tax purposes, the Debtors, the Distribution Trustee and
the
Beneficiaries will treat the transfer of Distribution Trust Assets to the
Distribution Trust pursuant to Section 2.3
as:
(a) to the extent of Pending Payments, a transfer of the Pending
Payments directly from the Debtors to the holders of such Allowed Claims
followed by the transfer of such Pending Payments by the holders of such Allowed
Claims to the Distribution Trust in exchange for the rights to distributions
from the Distribution Trust; and (b) to the extent of amounts that are
not
Pending Payments, as a transfer to one or more disputed ownership funds, as
described in Section 3.6.
Accordingly, the holders of Allowed Claims entitled to distribution of Pending
Payments will be treated for federal income Tax purposes as the grantors and
deemed owners of their respective shares of the Distribution Trust Assets in
the
amounts of the Pending Payments and any earnings thereon.
2.5 Distribution
Trustee’s Acceptance.
The
Distribution Trustee hereby accepts the duties as trustee imposed on it by
this
Agreement and agrees to observe and perform such duties, on and subject to
the
terms and conditions set forth in this Agreement. In connection with and in
furtherance of the purposes of the Distribution Trust, the Distribution Trustee
hereby expressly accepts the transfer of Distribution Trust Assets to the
Distribution Trust pursuant to Section 2.3,
subject
to the provisions of the Plan, and the Distribution Trustee hereby further
expressly agrees to establish and maintain the Trust Accounts and to distribute
the Distribution Trust Assets in accordance with the Plan and this
Agreement.
ARTICLE
3
TRUST
ACCOUNTS
3.1 Creation
of the Trust Accounts.
On or
prior to the Effective Date, the Distribution Trustee will establish in its
own
name with federally insured United States banks each of the Trust
Accounts.
3.2 Distribution
Trust Expenses Account.
3.2.1 Initial
Funding.
On the
Effective Date, following the transfer of Distribution Trust Assets to the
Distribution Trust pursuant to Section 2.3,
the
Distribution Trustee will fund the Distribution Trust Expenses Account with
$7,000,000 in Cash, which will consist of amounts taken ratably from each of
the
FLYi Trust Accounts and each of the Independence Trust Accounts.
3.2.2 Use
of
Funds.
Except
as otherwise ordered by the Bankruptcy Court, the Distribution Trustee, in
its
capacity as Disbursing Agent, will, in its Permitted Discretion, pay
Distribution Trust Expenses from the Distribution Trust Expenses Account,
without the need for further Bankruptcy Court approval. Cash in the Distribution
Trust Expenses Account will also be used to pay Taxes owing in respect of any
amounts included in the Distribution Trust Expenses Account in accordance with
Section 10.4.
3.2.3 Subsequent
Funding.
If, at
any time after the initial funding of the Distribution Trust Expenses Account
as
contemplated by Section 3.2.1,
the
Distribution Trustee determines, in its Permitted Discretion, that the Cash
balance of the Distribution Trust Expenses Account will be insufficient to
make
all payments payable therefrom in accordance with the terms of the Plan and
this
Agreement (including any payments for indemnification pursuant to, and in
accordance with, Section 8.3),
the
Distribution Trustee may transfer amounts ratably from each of the FLYi
Unsecured Claims Trust Account and the Independence Unsecured Claims Account
(to
the extent Cash remains available in either such account) to the Distribution
Trust Expenses Account Cash in an aggregate amount determined by the
Distribution Trustee, in its Permitted Discretion, to be necessary to ensure
that the Cash balance of the Distribution Trust Expenses Account will be
sufficient to make all such payments. To the fullest extent possible, any
transfer pursuant to this Section 3.2.3
will be
accomplished in a manner intended to avoid or minimize any adverse impact on
the
ability to make full distributions of the Allowed amounts of General Unsecured
Claims and the Allowed amounts of Class 3B Claims, each in accordance with
the
terms of the Plan.
3.2.4 Excess
Funds.
If, at
any time after the initial funding of the Distribution Trust Expenses Account
pursuant to Section 3.2.1,
the
Distribution Trustee determines that the Cash balance of the Distribution Trust
Expenses Account is in excess of the amount that will be sufficient to make
all
payments payable therefrom in accordance with the terms of the Plan and this
Agreement, the Distribution Trustee, in its Permitted Discretion, may transfer
such excess Cash ratably to the FLYi Priority Claims Trust Account, the FLYi
Unsecured Claims Trust Account, the Independence Priority Claims Trust Account
and the Independence Unsecured Trust Claims Account.
3.3 Priority
Claims Trust Accounts.
3.3.1 Initial
Funding.
On the
Effective Date, after the initial funding of the Distribution Trust Expenses
Account in accordance with Section 3.2.1,
the
Distribution Trustee will (a) fund the FLYi Priority Claims Trust Account with
$2,695,686 in Cash from the FLYi Distribution Trust Assets, and (b) fund the
Independence Priority Claims Trust Account with $50,797,586 in Cash from the
Independence Distribution Trust Assets.
3.3.2 Use
of
Funds.
(a) FLYi
Priority Claims Trust Account.
Cash in
the FLYi Priority Claims Trust Account will be used by the Distribution Trustee
only to (i) satisfy the Allowed amounts of Administrative Claims, Priority
Tax Claims, Priority Claims and Secured Claims against the Estate of FLYi in
accordance with the terms of the Plan, and (ii) pay Taxes owing in respect
of any amounts included in the FLYi Priority Claims Trust Account in accordance
with Section 10.4.
(b) Independence
Priority Claims Trust Account.
Cash in
the Independence Priority Claims Trust Account will be used by the Distribution
Trustee only to (i) satisfy the Allowed amounts of Administrative Claims,
Priority Tax Claims, Priority Claims and Secured Claims against the Estates
of
the Debtors other than FLYi in accordance with the terms of the Plan, and
(ii) pay Taxes owing in respect of any amounts included in the Independence
Priority Claims Trust Account in accordance with Section 10.4.
3.3.3 Subsequent
Funding.
(a) FLYi
Priority Claims Trust Account.
If, at
any time after the initial funding of the FLYi Priority Claims Trust Account
pursuant to Section 3.3.1,
the
Distribution Trustee determines, in its Permitted Discretion, that the Cash
balance of the FLYi Priority Claims Trust Account is insufficient to make all
payments payable therefrom in accordance with the terms of the Plan and this
Agreement, the Distribution Trustee will transfer from the FLYi Unsecured Claims
Trust Account (to the extent Cash remains available therein) to the FLYi
Priority Claims Trust Account Cash in an amount determined by the Distribution
Trustee, in its Permitted Discretion, to be necessary to ensure that the Cash
balance of the FLYi Priority Claims Trust Account will be sufficient to make
all
such payments. To the fullest extent possible, any transfer pursuant to this
Section 3.3.3
will be
accomplished in a manner intended to avoid or minimize any adverse impact on
the
ability to make distributions of the Allowed amounts of General Unsecured Claims
against the Estate of FLYi and the Allowed amounts of Class 3B Claims, each
in
accordance with the terms of the Plan.
(b) Independence
Priority Claims Trust Account.
If, at
any time after the initial funding of the Independence Priority Claims Trust
Account pursuant to Section 3.3.1,
the
Distribution Trustee determines, in its Permitted Discretion, that the Cash
balance of the Independence Priority Claims Trust Account is insufficient to
make all payments payable therefrom in accordance with the terms of the Plan
and
this Agreement, the Distribution Trustee will transfer from the Independence
Unsecured Claims Trust Account (to the extent Cash remains available therein)
to
the Independence Priority Claims Trust Account Cash in an amount determined
by
the Distribution Trustee, in its Permitted Discretion, to be necessary to ensure
that the Cash balance of the Independence Priority Claims Trust Account will
be
sufficient to make all such payments. To the fullest extent possible, any
transfer pursuant to this Section 3.3.3
will be
accomplished in a manner intended to avoid or minimize any adverse impact on
the
ability to make distributions of the Allowed amounts of General Unsecured Claims
against the Estates of the Debtors other than FLYi in accordance with the terms
of the Plan.
3.3.4 Excess
Funds.
(a) FLYi
Priority Claims Trust Account.
If, at
any time after the initial funding of the FLYi Priority Claims Trust Account
pursuant to Section 3.3.1,
the
Distribution Trustee determines that the Cash balance of the FLYi Priority
Claims Trust Account is in excess of the amount that will be sufficient to
make
all payments payable therefrom in accordance with the terms of the Plan and
this
Agreement, the Distribution Trustee, in its Permitted Discretion, may transfer
such excess Cash to the FLYi Unsecured Claims Trust Account.
(b) Independence
Priority Claims Trust Account.
If, at
any time after the initial funding of the Independence Priority Claims Trust
Account pursuant to Section 3.3.1,
the
Distribution Trustee determines that the Cash balance of the Independence
Priority Claims Trust Account is in excess of the amount that will be sufficient
to make all payments payable therefrom in accordance with the terms of the
Plan
and this Agreement, the Distribution Trustee, in its Permitted Discretion,
may
transfer such excess Cash to the Independence Unsecured Claims Trust
Account.
3.3.5 Disputed
Claims Reserves.
(a) FLYi
Priority Claims Trust Account.
On the
Effective Date, in connection with the initial funding of the FLYi Priority
Claims Trust Account pursuant to Section 3.3.1,
the
Distribution Trustee will designate a portion of such initial funding as FLYi
Disputed Claims Reserves in an amount sufficient to pay each holder of a
Disputed Administrative Claim, Disputed Priority Tax Claim, Disputed Priority
Claim and Disputed Secured Claim against the Estate of FLYi the amount such
holder would be entitled to receive if such Disputed Claim were an Allowed
Claim
in its Face Amount. To the extent any such Disputed Claims are not subsequently
Allowed, the Distribution Trustee may transfer excess Cash from the FLYi
Disputed Claims Reserve to the FLYi Unsecured Claims Trust Account to satisfy
Claims against the Estate of FLYi that are Allowed in accordance with the terms
of the Plan. In connection with any subsequent transfers of Cash to the FLYi
Priority Claims Trust Account pursuant to Section 3.3.3
or
5.2.2(b),
the
Distribution Trustee will, in its Permitted Discretion, designate amounts so
transferred, to the extent they are not identified as Pending Payments, as
FLYi
Disputed Claims Reserves to be retained in such Trust Account to satisfy any
Disputed Administrative Claims, Disputed Priority Tax Claims, Disputed Priority
Claims or Disputed Secured Claims in accordance with the Plan, if, as and when
they are Allowed or, to the extent such Disputed Claims are not Allowed, the
Distribution Trustee may transfer excess Cash from the FLYi Disputed Claims
Reserves to the FLYi Unsecured Claims Trust Account to satisfy Claims against
the Estate of FLYi that are Allowed in accordance with the terms of the
Plan.
(b) Independence
Priority Claims Trust Account.
On the
Effective Date, in connection with the initial funding of the Independence
Priority Claims Trust Account pursuant to Section 3.3.1,
the
Distribution Trustee will designate a portion of such initial funding as
Independence Disputed Claims Reserves in an amount sufficient to pay each holder
of a Disputed Administrative Claim, Disputed Priority Tax Claim, Disputed
Priority Claim and Disputed Secured Claim against the Estates of the Debtors
other than FLYi the amount such holder would be entitled to receive if such
Disputed Claim were an Allowed Claim in its Face Amount. To the extent any
such
Disputed Claims are not subsequently Allowed, the Distribution Trustee may
transfer excess Cash from the Independence Disputed Claims Reserves to the
Independence Unsecured Claims Trust Account to satisfy Claims against the
Estates of the Debtors other than FLYi that are Allowed in accordance with
the
terms of the Plan. In connection with any subsequent transfers of Cash to the
Independence Priority Claims Trust Account pursuant to Section 3.3.3
or
5.2.2(b),
the
Distribution Trustee will, in its Permitted Discretion, designate amounts so
transferred, to the extent they are not identified as Pending Payments, as
Independence Disputed Claims Reserves to be retained in such Trust Account
to
satisfy any Disputed Administrative Claims, Disputed Priority Tax Claims,
Disputed Priority Claims or Disputed Secured Claims in accordance with the
Plan,
if, as and when they are Allowed or, to the extent such Disputed Claims are
not
Allowed, the Distribution Trustee may transfer excess Cash from the Independence
Disputed Claims Reserves to the Independence Unsecured Claims Trust Account
to
satisfy Claims against the Estates of the Debtors other than FLYi that are
Allowed in accordance with the terms of the Plan.
3.4 Unsecured
Claims Trust Accounts.
3.4.1 Funding.
(a) On
the
Effective Date, after the initial funding of the Distribution Trust Expenses
Account in accordance with Section 3.2.1
and the
initial funding of the FLYi Priority Claims Trust Account and the Independence
Priority Claims Trust Account in accordance with Section 3.3.1,
the
Distribution Trustee will (i) fund the FLYi Unsecured Claims Trust Account
with
the remainder of the Cash portion of the FLYi Distribution Trust
Assets,
and
(ii) fund the Independence Unsecured Claims Trust Account with the remainder
of
the Cash portion of the Independence Distribution Trust Assets.
(b) From
and
after the Effective Date, and in addition to any funding that may result from
the application of Section 3.2.4
or
3.3.4,
the
Distribution Trustee will
(i)
fund
the FLYi Unsecured Claims Trust Account with the net Cash proceeds from the
liquidation of any FLYi Distribution Trust Assets, and (ii) fund the
Independence Unsecured Claims Trust Account with the net Cash proceeds from
the
liquidation of any Independence Distribution Trust Assets.
3.4.2 Use
of
Funds.
(a) FLYi
Unsecured Claims Trust Account.
Cash in
the FLYi Unsecured Claims Trust Account will be used by the Distribution Trustee
only to (i) fund the Distribution Trust Expense Account and the FLYi
Priority Claims Trust Account, as contemplated by Sections 3.2.3
and
3.3.3,
respectively, (ii) satisfy Allowed General Unsecured Claims against
the
Estate of FLYi and all Allowed Class 3B Claims, each in accordance with the
terms of the Plan, and (iii) pay Taxes owing in respect of any amounts
included in the FLYi Unsecured Claims Trust Account in accordance with Section
10.4.
(b) Independence
Unsecured Claims Trust Account.
Cash in
the Independence Unsecured Claims Trust Account will be used by the Distribution
Trustee only to (i) fund the Distribution Trust Expense Account and
the
Independence Priority Claims Trust Account, as contemplated by
Sections 3.2.3
and
3.3.3,
respectively, (ii) satisfy Allowed General Unsecured Claims against
the
Estates of the Debtors other than FLYi in accordance with the terms of the
Plan,
and (iii) pay Taxes owing in respect of any amounts included in the
Independence Unsecured Claims Trust Account in accordance with Section
10.4.
3.4.3 Disputed
Claims Reserves.
(a) Initial
Funding; Subsequent Funding From Other Trust Accounts.
(i) In
connection with the initial funding of the FLYi Unsecured Claims Trust Account
pursuant to Section 3.4.1,
the
Distribution Trustee will designate a portion of such initial funding as FLYi
Disputed Claims Reserves in an amount sufficient to pay each holder of a
Disputed General Unsecured Claim against the Estate of FLYi and each holder
of a
Disputed Class 3B Claim the amount such holder would be entitled to receive
if
such Disputed Claim were an Allowed Claim in its Face Amount. To the extent
any
such Disputed Claims are not subsequently Allowed, the amount of such Disputed
Claims will be retained in such Trust Account to satisfy Claims against the
Estate of FLYi that are Allowed in accordance with the terms of the Plan. In
connection with any subsequent transfers of Cash to the FLYi Unsecured Claims
Trust Account pursuant to Section 3.2.4,
3.3.4,
3.4.3
or
5.2.2(b),
the
Distribution Trustee will, in its Permitted Discretion, designate amounts so
transferred, to the extent they are not identified as Pending Payments, as
FLYi
Disputed Claims Reserves to satisfy the Disputed General Unsecured Claims
against the Estate of FLYi and the Disputed Class 3B Claims, each in accordance
with the terms of the Plan, if, as and when they are Allowed or, to the extent
such Disputed Claims are not Allowed, to satisfy Claims against the Estate
of
FLYi that are Allowed in accordance with the terms of the Plan.
(ii) In
connection with the initial funding of the Independence Unsecured Claims Trust
Account pursuant to Section 3.4.1,
the
Distribution Trustee will designate a portion of such initial funding as
Independence Disputed Claims Reserves in an amount sufficient to pay each holder
of a Disputed General Unsecured Claim against the Estates of the Debtors other
than FLYi the amount such holder would be entitled to receive if such Disputed
Claim were an Allowed Claim in its Face Amount. To the extent any such Disputed
Claims are not subsequently Allowed, the amount of such Disputed Claims will
be
retained in such Trust Account to satisfy Claims against the Estates of the
Debtors other than FLYi that are Allowed in accordance with the terms of the
Plan. In connection with any subsequent transfers of Cash to the Independence
Unsecured Claims Trust Account pursuant to Section 3.2.4,
3.3.4,
3.4.3
or
5.2.2(b),
the
Distribution Trustee will, in its Permitted Discretion, designate amounts so
transferred, to the extent they are not identified as Pending Payments, as
Independence Disputed Claims Reserves to satisfy the Disputed General Unsecured
Claims against the Estates of the Debtors other than FLYi in accordance with
the
terms of the Plan, if, as and when they are Allowed or, to the extent such
Disputed Claims are not Allowed, to satisfy Claims against the Estates of the
Debtors other than FLYi that are Allowed in accordance with the terms of the
Plan.
(b) Deposit
of New Cash Following the Effective Date.
Any
Cash that becomes available to the Distribution Trust following the Effective
Date, including as a result of the receipt of any income or interest generated
by the investment of Cash held in the FLYi Unsecured Claims Trust Account or
the
Independence Claims Trust Account, will be deposited in the FLYi Unsecured
Claims Trust Account or the Independence Claims Trust Account, as
applicable.
3.5 Undeliverable
Cash Trust Accounts.
3.5.1 FLYi
Undeliverable Cash Trust Account.
After
the Effective Date, if any distribution to a holder of an Allowed Claim against
the Estate of FLYi is returned to the Distribution Trustee as undeliverable,
the
Distribution Trustee will deposit the undeliverable Cash in the FLYi
Undeliverable Cash Trust Account. The Distribution Trustee will hold such funds,
in a book-entry sub-account in the FLYi Undeliverable Cash Trust Account, for
the benefit of such holder. Until such holder notifies the Distribution Trustee
in writing of its then-current address, as contemplated by
Section 5.2.2,
no
attempt will be made to deliver subsequent distributions to such holder and
any
such distributions that such holder would otherwise be entitled to receive
will
instead be transferred from the appropriate FLYi Trust Account to the FLYi
Undeliverable Cash Trust Account and credited to such book-entry sub-account.
All Cash held in such book-entry sub-account for the benefit of such holder
will
be invested by the Distribution Trustee in a manner consistent with the
investment and deposit guidelines set forth in this Agreement. Any income or
interest generated from such investment activities will be held in such
book-entry sub-account for the benefit of such holder until such holder notifies
the Distribution Trustee in writing of its then-current address as contemplated
by Section 5.2.2.
Subject
to Section 5.2.2(b),
when
such holder notifies the Distribution Trustee in writing of its then-current
address as contemplated by Section 5.2.2,
the
Distribution Trustee will deliver to such holder all Cash contained in such
book-entry sub-account (net of provision for Taxes owing in respect of amounts
included in such book-entry sub-account in accordance with Section 10.4).
In the
event such holder’s right to assert a claim for undeliverable distributions is
forfeited as contemplated by Section 5.2.2(b),
all
Cash contained in such book-entry sub-account will be transferred from the
FLYi
Undeliverable Cash Trust Account to the appropriate FLYi Trust Account for
redistribution to holders of Allowed Claims entitled to distributions
therefrom.
3.5.2 Independence
Undeliverable Cash Trust Account.
After
the Effective Date, if any distribution to a holder of an Allowed Claim against
the Estates of the Debtors other than FLYi is returned to the Distribution
Trustee as undeliverable, the Distribution Trustee will deposit the
undeliverable Cash in the Independence Undeliverable Cash Trust Account. The
Distribution Trustee will hold such funds, in a book-entry sub-account in the
Independence Undeliverable Cash Trust Account, for the benefit of such holder.
Until such holder notifies the Distribution Trustee in writing of its
then-current address, as contemplated by Section 5.2.2,
no
attempt will be made to deliver subsequent distributions to such holder and
any
such distributions that such holder would otherwise be entitled to receive
will
instead be transferred from the appropriate Independence Trust Account to the
Independence Undeliverable Cash Trust Account and credited to such book-entry
sub-account. All Cash held in such book-entry sub-account for the benefit of
such holder will be invested by the Distribution Trustee in a manner consistent
with the investment and deposit guidelines set forth in this Agreement. Any
income or interest generated from such investment activities will be held in
such book-entry sub-account for the benefit of such holder until such holder
notifies the Distribution Trustee in writing of its then-current address as
contemplated by Section 5.2.2.
Subject
to Section 5.2.2(b),
when
such holder notifies the Distribution Trustee in writing of its then-current
address as contemplated by Section 5.2.2,
the
Distribution Trustee will deliver to such holder all Cash contained in such
book-entry sub-account (net of provision for Taxes owing in respect of amounts
included in such book-entry sub-account in accordance with Section 10.4).
In the
event such holder’s right to assert a claim for undeliverable distributions is
forfeited as contemplated by Section 5.2.2(b),
all
Cash contained in such book-entry sub-account will be transferred from the
Independence Undeliverable Cash Trust Account to the appropriate Independence
Trust Account for redistribution to holders of Allowed Claims entitled to
distributions therefrom.
3.6 Tax
Treatment.
The
Distribution Trust (which consists of the various Trust Accounts) is intended
to
be treated for U.S. federal income Tax purposes, in part, as a liquidating
trust
within the meaning of Treasury Regulations section 301.7701-4(d), for
the
benefit of holders of Allowed Claims entitled to distributions of Pending
Payments, and otherwise as one or more disputed ownership funds within the
meaning of Treasury Regulations section 1.468B-9(b)(1). The Distribution Trustee
will act as the “administrator,” within the meaning of Treasury Regulations
section 1.468B-9(b)(2), of such funds. The FLYi Disputed Claims Reserves
and the Independence Disputed Claims Reserves will be subject to the continuing
jurisdiction of the Bankruptcy Court, and, as a result, no money or property
can
be paid or distributed from the FLYi Disputed Claims Reserves or the
Independence Disputed Claims Reserves to, or on behalf of, a “claimant” or the
“transferor” (as such terms are defined in Treasury Regulations sections
1.468B-9(b)(3) and 1.468B-9(b)(7), respectively) except if, as and when Claims
become Allowed Claims (or Distribution Trust Expenses) pursuant to the
procedures for allowing Claims (or incurring and paying Distribution Trust
Expenses) and making distributions prescribed in the Plan.
ARTICLE
4
ADMINISTRATION
OF THE DISTRIBUTION TRUST
4.1 Rights,
Powers and Privileges.
The
Distribution Trustee will have only the rights, powers and privileges to act
on
behalf of the Distribution Trust expressly provided in the Plan and this
Agreement and as provided by law in the event that the Plan or this Agreement
does not reference any such right, power or privilege. Unless otherwise
expressly limited or restricted by the Plan or this Agreement, so long as such
actions are, in the Distribution Trustee’s reasonable judgment, necessary to
manage the affairs of the Distribution Trust and safeguard the interest of
the
Beneficiaries, the Distribution Trustee will have the right, power, privilege
and obligation, to:
(a) effect
all actions and execute all agreements, instruments and other documents
necessary to implement the Plan;
(b) establish,
maintain and administer the Trust Accounts and, if necessary, any additional
trust accounts (including paying all Distribution Trust Expenses using the
Distribution Trust Expenses Account), and determine the manner of ascertainment
of income and principal of the assets in the Distribution Trust, and the
apportionment of income and principal among such assets;
(c) accept,
preserve, receive, collect, manage, invest, supervise, prosecute, settle and
protect the Distribution Trust Assets (directly or through one or more third
party Disbursing Agents), each in accordance with the Plan and this Agreement;
(d) sell,
liquidate, transfer, distribute or otherwise dispose of the Distribution Trust
Assets (directly or through a Third Party Disbursing Agent) or any part thereof
or any interest therein upon such terms as the Distribution Trustee determines
to be necessary, appropriate or desirable, pursuant to the procedures for
allowing Claims and making distributions prescribed in the Plan, and otherwise
consistent with the terms of the Plan;
(e) calculate
and make distributions of the Distribution Trust Assets to holders of Allowed
Claims pursuant to the procedures for allowing Claims and making distributions
prescribed in the Plan;
(f) subject
to Section 7.2,
review,
reconcile, compromise, settle, prosecute or object to Disputed Claims and
resolve any such objections as set forth in the Plan and this
Agreement;
(g) investigate
and pursue Causes of Action as contemplated by Section 4.2,
and
raise defenses in connection with any actions or claims adverse to the
Distribution Trust and, in connection therewith, establish, maintain and
administer any litigation or similar trusts and related accounts, in each case,
as the Distribution Trustee determines, in its Permitted Discretion, to be
necessary, appropriate or desirable;
(h) retain
and compensate, without further order of the Bankruptcy Court, the services
of
professionals or other persons or entities (including professionals, persons
or
entities already retained by the Estates) to represent, advise and assist the
Distribution Trustee in the fulfillment of its responsibilities in connection
with the Plan and this Agreement, all as it determines, in its Permitted
Discretion, to be necessary, appropriate or desirable;
(i) file
appropriate Tax returns and other reports on behalf of the Distribution Trust
and the Debtors and pay Taxes or other obligations owed by the Distribution
Trust and the Debtors;
(j) enforce,
waive, assign or release rights, powers, privileges and immunities of any kind
of the Debtors, except to the extent expressly limited by, or otherwise contrary
to its duties established by, the Plan or this Agreement, as the Distribution
Trustee determines, in its Permitted Discretion, to be necessary, appropriate
or
desirable;
(k) take
such
actions as are necessary, appropriate or desirable to cause the transfer of
any
attorney-client privilege, work-product privilege or other privilege or immunity
of the Debtors attaching to any documents or communications (whether written
or
oral) to the Distribution Trust (which privileges and immunities are intended
to
be transferred to the Distribution Trust);
(l) purchase
insurance with such coverage and limits as it determines, in its Permitted
Discretion, to be necessary, appropriate or desirable (including insurance
covering the Indemnified Parties for liabilities incurred in connection with
the
performance of duties under the Plan and this Agreement);
(m) appear
and participate in any proceeding before the Bankruptcy Court with respect
to
any matter regarding or relating to the Plan, this Agreement, the Distribution
Trust, the Distribution Trust Assets or the Debtors;
(n) ▇▇▇,
defend and participate, as a party or otherwise, in any judicial,
administrative, arbitrative or other proceeding relating to the Plan, this
Agreement, the Distribution Trust, the Distribution Trust Assets or the Debtors
and, in connection therewith, establish, maintain and administer any litigation
or similar trusts and related accounts, in each case, as the Distribution
Trustee determines, in its Permitted Discretion, to be necessary, appropriate
or
desirable;
(o) take
such
actions as are necessary or appropriate to close or dismiss any or all of the
Bankruptcy Cases;
(p) comply
with the Plan and exercise its rights and fulfill its obligations thereunder,
including, without limitation, (i) any undertaking to perform any obligation
of
the Distribution Trustee and the Debtors provided for or required by the Plan,
including production of documents and providing of testimony, with respect
to
any investigation, subpoena or inquiry into the Debtors or the Debtors’
financial affairs, and (ii) the execution, delivery and performance of such
other agreements and documents or the exercise of such other powers and duties
as the Distribution Trustee determines, in its Permitted Discretion, to be
necessary, appropriate or desirable to accomplish and implement the purposes
and
provisions of the Distribution Trust as set forth in the Plan and this
Agreement;
(q) exercise
such further powers as the Distribution Trustee reasonably deems to be necessary
and proper to implement the provisions of the Plan and this Agreement;
and
(r) dissolve
the Distribution Trust in accordance with the terms of the Plan and this
Agreement.
4.2 Limitation
on Investigations; Delivery of Documents and Related Matters.
The
Distribution Trustee will have no obligation to investigate or to determine
the
existence of any Distribution Trust Asset. If, however, the Distribution Trustee
becomes aware of a potential Cause of Action with apparent value to the
Distribution Trust, it will take such reasonable steps as it determines, in
its
Permitted Discretion, to be appropriate, and such other steps as the Steering
Committee may direct, to investigate and pursue such Cause of Action. The
Distribution Trustee may reasonably rely upon any document or record that the
Debtors deliver to it and will be protected in acting or refraining from acting
on any such document based upon such reasonable reliance.
4.3 No
Personal Liability.
None
of
the provisions in the Plan or this Agreement will be construed to require the
Distribution Trustee to expend or risk its own funds or otherwise incur personal
liability in the performance of its duties or in the reasonable exercise of
its
rights,
powers and privileges
hereunder. Notwithstanding the foregoing, nothing in this
Section 4.3
will
relieve the Distribution Trustee of any liability for any action or omission
resulting from fraud, willful misconduct or gross negligence.
4.4 Dissolution
of the Debtors.
Notwithstanding anything to the contrary in this Agreement, the Distribution
Trustee will take all such actions (including making necessary filings) and
pay
all such amounts (using funds available in the Distribution Trust Expenses
Account) as are necessary, appropriate or desirable to complete the dissolution
of the Debtors in accordance with Article IV.B.1 of the Plan and applicable
state law as expeditiously as possible.
4.5 Agents
and Professionals.
Except
as otherwise provided in the Plan or this Agreement: (a) the Distribution
Trustee may consult with independent legal counsel to be selected by it and
the
advice or opinion of such counsel will be full and complete personal protection
to the Distribution Trustee and agents of the Distribution Trustee in respect
of
any action taken or suffered by it in good faith and in reliance on, or in
accordance with, such advice or opinion; and (b) persons (including any
professionals retained by the Distribution Trustee) dealing with the
Distribution Trustee will look only to the Distribution Trust Assets to satisfy
any liability incurred by the Distribution Trustee to such person in carrying
out the terms of the Plan or this Agreement, and (subject to Section
8.2
with
respect to liabilities resulting from the Distribution Trustee’s
fraud,
willful misconduct or gross negligence)
the
Distribution Trustee will have no personal or individual obligation to satisfy
any such liability.
4.6 Authentication
of Documents.
The
Distribution Trustee will not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Agreement and will be held harmless and will
be
fully indemnified (pursuant to Section 8.3)
by the
Distribution Trust in acting upon any document believed by it to be genuine
and
delivered by the proper party or parties.
4.7 Investment
Guidelines.
The
Distribution Trustee will invest the Distribution Trust Assets only in Permitted
Investments; provided,
however,
that,
notwithstanding anything to the contrary in this Agreement, the scope of any
such Permitted Investments will be limited to include only those investments
that a liquidating trust, within the meaning of Treasury Regulations
section 301.7701-4(d) and Internal Revenue Service Revenue
Procedure 94-45 may be permitted to hold, pursuant to any amendment
or
addition to the Internal Revenue Code or to the Treasury Regulations, or any
modification in Internal Revenue Service guidelines whether set forth in
Internal Revenue Service rulings, other Internal Revenue Service pronouncements
or otherwise. Such investments will mature in such amounts and at such times
as,
in the Permitted Discretion of the Distribution Trustee at the times such
investments are made, are necessary, appropriate or desirable with a view to
providing funds when needed to make payments from the Distribution Trust Assets.
Notwithstanding the foregoing, if
the
Distribution Trustee determines, in its Permitted
Discretion,
that
the administrative costs associated with such investment will exceed the return
on such investment, it may direct that such Cash not be invested. The
Beneficiaries entitled to receive Pending Payments will be responsible for
reporting their respective share of the income on investments of such amounts
in
the Trust Accounts and paying the applicable Taxes thereon in accordance with
Section 10.4.2.
The
Distribution Trustee will be responsible for reporting all other income in
each
of the Trust Accounts and paying any applicable Taxes thereon in accordance
with
Section 10.4.3.
The
Distribution Trustee will be under no liability to accrue interest or produce
income on any monies received by it hereunder and held for distribution or
payment to the Beneficiaries, except as such interest is actually received
by
the Distribution Trustee.
4.8 Disputed
Claims.
Notwithstanding anything to the contrary in the Plan or this Agreement, no
payments or distributions will be made on account of a Disputed Claim unless
and
until such Claim becomes an Allowed Claim. A holder of a Disputed Claim that
ultimately becomes an Allowed Claim will have recourse only to the undistributed
Cash held in the FLYi Disputed Claims Reserves or Independence Disputed Claims
Reserves of the applicable Trust Account (net of Taxes on such Disputed Claims
Reserves) for the satisfaction of such Allowed Claim and not to any other Trust
Account or any assets previously distributed on account of any Allowed
Claim.
4.9 Trade
or Business.
The
Distribution Trustee will not at any time, on behalf of the Distribution Trust
or the Beneficiaries, operate as a business entity within the meaning of
Treasury Regulations section 301.7701-2, or engage in any trade or business
as proscribed by Treasury Regulations section 301.7701-4(d), and the
Distribution Trustee will not use or dispose of any part of the Distribution
Trust Assets in furtherance of any trade or business. Notwithstanding the
foregoing, the Distribution Trustee will not be prohibited from engaging in
any
trade or business for its own account, provided
that
such activity does not interfere with the Distribution Trustee’s administration
of the Distribution Trust.
4.10 Court
Approval of Distribution Trustee Actions.
4.10.1 Court
Approval Generally Not Required.
Except
as otherwise provided in the Plan or this Agreement, the Distribution Trustee
will not be required to obtain the order or approval of the Bankruptcy Court
or
any other court of competent jurisdiction in,
or
account to the Bankruptcy Court or
any
other court of competent jurisdiction for, the exercise of any right,
power or privilege conferred hereunder.
4.10.2 Right
to Seek Court Approval.
Notwithstanding the foregoing, where the Distribution Trustee determines, in
its
Permitted Discretion, that it is necessary, appropriate or desirable, the
Distribution Trustee will
have
the right to submit to the Bankruptcy Court or
any
other court of competent jurisdiction any
question or questions regarding
any specific action proposed to be taken by the Distribution Trustee with
respect
to the Plan, this Agreement, the Distribution Trust, the Distribution Trust
Assets or the Debtors,
including the administration and distribution of the Distribution Trust Assets.
Pursuant to the Plan, the Bankruptcy
Court has retained jurisdiction for such purposes and may approve or disapprove
any such proposed action upon motion by the Distribution Trustee.
4.10.3 Court
Direction Absent Express Procedures.
For the
avoidance of doubt, in the event that this Agreement does not expressly
establish procedures governing the obligations of the Distribution Trustee
established by the Plan or this Agreement, the Distribution Trustee will
be
entitled to seek and will take direction from the Bankruptcy Court or any other
court of competent jurisdiction with respect to the fulfillment of such
obligations, including management of the Distribution Trust Assets, the creation
of reserves, the distribution of Distribution Trust Assets to satisfy Claims
and
the recognition of Beneficiaries.
4.10.4 No
Liability.
The
Distribution Trustee will have no liability for taking any action approved
by
the Bankruptcy Court or any other court of competent jurisdiction or for
otherwise complying with an order of the Bankruptcy Court or any other court
of
competent jurisdiction.
ARTICLE
5
DISTRIBUTIONS
FROM THE DISTRIBUTION TRUST
5.1 Method
of Distributions to Holders of Allowed Claims.
The
Distribution Trustee will
make all
distributions of Cash and net proceeds of other Distribution Trust Assets
required under the Plan. The Distribution Trustee will
serve
without bond and may employ or contract with other entities to assist in or
make
the distributions required by the Plan and this Agreement. Unless the context
otherwise requires, all references to the Distribution Trustee contained in
this
ARTICLE
5
will be
deemed to be references to the Distribution Trustee in its capacity as
Disbursing Agent and, in the event it employs or contracts with one or more
other entities to assist in or make the distributions required by the Plan
and
this Agreement as contemplated by the immediately preceding sentence, to any
such third party Disbursing Agent in its capacity as such. Notwithstanding
anything to the contrary in this Agreement, the Distribution Trustee itself
will
act as the Disbursing Agent for the Distribution Trust Expenses
Account.
5.2 Delivery
of Distributions.
5.2.1 Generally.
Except
as otherwise provided in the Plan, distributions in respect of Allowed Claims
will
be made
to holders of such Claims as of the Distribution Record Date at the addresses
set forth in the applicable Claims Report. Prior to making any distribution
to a
Beneficiary, the Distribution Trustee may request written notification of the
Beneficiary’s federal taxpayer identification number or social security number
if the Distribution Trustee determines, in its Permitted Discretion, that such
information (a) is necessary to fulfill its Tax reporting and withholding
obligations and (b) has not been provided in the applicable Claims Report or
otherwise. The Distribution Trustee, in its Permitted Discretion, may suspend
distributions to any Beneficiary that has not provided its federal taxpayer
identification number or social security number, as the case may be, after
a
request is made pursuant to and in accordance with the terms of this
Section 5.2.
In
addition to the foregoing, as a condition precedent to receiving any
distribution on account of an Allowed Claim evidenced by any instruments or
securities canceled pursuant to Section IV.I of the Plan, the holder of such
Claim must tender, as specified in Section VI.H of the Plan, the applicable
instruments or securities evidencing such Claim to the Distribution Trustee,
together with any letter of transmittal required by the Distribution Trustee.
Pending any such surrender, any distributions on account of any such Claim
will
be treated as undeliverable and held in accordance with Section 5.2.2.
5.2.2 Undeliverable
Distributions.
(a) No
Further Attempts At Delivery.
If any
distribution to a holder of an Allowed Claim is returned to the Distribution
Trustee as undeliverable, then unless and until the Distribution Trustee is
notified in writing of such holder’s then-current address:
(i)
subject to Section 5.2.2(b),
such
undeliverable distribution will remain in the possession of the Distribution
Trustee as provided in Section 3.5
and no
further attempt will be made to deliver such distribution and (ii) no
attempt will be made to deliver subsequent distributions to such holder and
any
such distributions that such holder would otherwise be entitled to receive
will
instead be treated as provided in Section 3.5.
(b) Forfeiture
and Redistribution.
Any
holder of an Allowed Claim that does not assert a claim for an undeliverable
distribution by delivering to the Distribution Trustee a written notice setting
forth such holder’s then-current address within 180 days after the later of (i)
the Effective Date and (ii) the last date on which a distribution was
deliverable to the holder will have its claim for undeliverable distributions
discharged and will be forever barred from asserting such claim or any claim
for
subsequent distributions against the Debtors, the Distribution Trustee or the
property of any of them, including the Trust Accounts, whereupon all Cash
contained in the book-entry sub-account in the FLYi Undeliverable Cash Trust
Account or the Independence Undeliverable Trust Account, as applicable, created
for the benefit of such holder will be transferred to the FLYi Priority Claims
Trust Account, FLYi Unsecured Claims Trust Account, Independence Priority Claims
Trust Account or Independence Unsecured Claims Trust Account, as applicable,
for
redistribution to holders of Allowed Claims entitled to distributions therefrom.
For purposes of any such redistribution, each Allowed Claim in respect of which
a claim for undeliverable distributions has been discharged as contemplated
by
this Section 5.2.2(b)
will be
deemed disallowed in its entirety.
(c) No
Requirement to Attempt to Locate Holders.
Nothing
contained in the Plan will require the Debtors or the Distribution Trustee
to
attempt to locate any holder of an Allowed Claim.
5.2.3 Annual
Distributions of Net Income.
The
Distribution Trustee will distribute at least annually to the Beneficiaries
(as
such may have been determined at such time) the net income of the Distribution
Trust (net of any payment of or provisions for Taxes), except for amounts
retained as reasonably necessary to maintain the value of the Distribution
Trust
Assets, to pay Distribution Trust Expenses or to meet claims and contingent
liabilities (including Disputed Claims).
5.3 Means
of Cash Payments.
Except
as otherwise provided in the Plan or this Agreement, Cash payments made pursuant
to the Plan will be in United States currency by checks drawn on the applicable
Trust Accounts or, at the option of the Distribution Trustee, by wire transfer
from a domestic bank; provided,
however,
that
Cash payments to foreign holders of Allowed Claims may be made, at the option
of
the Distribution Trustee, in such funds and by such means as are necessary
or
customary in a particular foreign jurisdiction. If a check included in a
distribution to a holder of an Allowed General Unsecured Claim or to the
indenture trustee under the FLYi Indenture for the benefit of holders of Allowed
Class 3B Claims is not cashed within 180 days of the issuance thereof, the
Distribution Trustee will void such check and such distribution will be treated
as undeliverable in accordance with Section 5.2.2(a).
5.4 Timing
and Calculation of Amounts to Be Distributed.
5.4.1 Administrative
Claims, Priority Tax Claims, Priority Claims and Secured Claims.
(a) Claims
Against the Estate of FLYi.
On or
as promptly as practicable after the Effective Date, the Distribution Trustee
will
make
distributions to holders of Administrative Claims, Priority Tax Claims, Priority
Claims and Secured Claims against the Estate of FLYi that are Allowed as of
the
Effective Date. On or as promptly as practicable after each Quarterly
Distribution Date, the Distribution Trustee will
make
distributions to holders of Disputed Administrative Claims, Disputed Priority
Tax Claims, Disputed Priority Claims and Disputed Secured Claims against the
Estate of FLYi that have become Allowed Claims during the immediately preceding
calendar quarter.
(b) Claims
Against the Estates of the Other Debtors.
On or
as promptly as practicable after the Effective Date, the Distribution Trustee
will
make
distributions to holders of Administrative Claims, Priority Tax Claims, Priority
Claims and Secured Claims against the Estates of the Debtors other than FLYi
that are Allowed as of the Effective Date. On or as promptly as practicable
after each Quarterly Distribution Date, the Distribution Trustee will
make
distributions to holders of Disputed Administrative Claims, Disputed Priority
Tax Claims, Disputed Priority Claims and Disputed Secured Claims against the
Estates of the Debtors other than FLYi that have become Allowed Claims during
the immediately preceding calendar quarter.
5.4.2 Class
3A and 3B Claims.
(a) On
or as
promptly as practicable after the Effective Date, the Distribution Trustee
will make
distributions to holders of Class 3A Claims and Class 3B Claims that are Allowed
as of the Effective Date in accordance with Sections III.B.3 and III.B.4 of
the
Plan, respectively; provided
that the
amount of such distributions will
be
calculated as if each Disputed Class 3A Claim and each Disputed Class 3B Claim
was an Allowed Class 3A Claim or Allowed Class 3B Claim, as applicable, for
its
Face Amount under the Plan as of the Effective Date.
(b) On
or as
promptly as practicable after each Quarterly Distribution Date, the Distribution
Trustee will
distribute to each holder of a Disputed Class 3A Claim or Disputed Class 3B
Claim that has become an Allowed Class 3A Claim or an Allowed Class 3B Claim,
as
applicable, during the immediately preceding calendar quarter a distribution
from the FLYi Unsecured Claims Trust Account (net of provision for Taxes payable
in accordance with Section 10.4)
in an
amount equal to: (i) the amount of Cash that such holder would have
been
entitled to receive pursuant to the Plan if such Claim and each other Class
3A
Claim and Class 3B Claim allowed prior to such Quarterly Distribution Date
had
been an Allowed Class 3A Claim or Allowed Class 3B Claim as of the Effective
Date (with such amount to be calculated in the manner provided in
Section 5.4.2(a)),
minus
(ii) the aggregate amount of Cash previously distributed on account
of such
Claim. In the event of the disallowance of a Disputed Class 3A Claim or Disputed
Class 3B Claim, any amounts held in respect thereof will be released from the
FLYi Disputed Claims Reserves of the FLYi Unsecured Claims Trust Account for
distribution as set forth in this Section 5.4.2.
5.4.3 Class
4 Claims.
(a) On
or as
promptly as practicable after the Effective Date, the Distribution Trustee
will make
distributions to holders of Class 4 Claims that are Allowed as of the Effective
Date in accordance with Section III.B.5 of the Plan; provided
that the
amount of such distributions will
be
calculated as if each Disputed Class 4 Claim were an Allowed Class 4 Claim
for
its Face Amount under the Plan as of the Effective Date.
(b) On
or as
promptly as practicable after each Quarterly Distribution Date, the Distribution
Trustee will
distribute to each holder of a Disputed Class 4 Claim that has become an Allowed
Class 4 Claim during the immediately preceding calendar quarter a distribution
from the Independence Unsecured Claims Trust Account (net of provision for
Taxes
payable in accordance with Section 10.4)
in an
amount equal to: (i) the amount of Cash that such holder would have
been
entitled to receive pursuant to the Plan if such Claim and each other Class
4
Claim allowed prior to such Quarterly Distribution Date had been an Allowed
Class 4 Claim as of the Effective Date (with such amount to be calculated in
the
manner provided in Section 5.4.3(a)),
minus
(ii) the aggregate amount of Cash previously distributed on account
of such
Claim. In the event of the disallowance of a Disputed Class 4 Claim, any amounts
held in respect thereof will be released from the Independence Disputed Claims
Reserves of the Independence Unsecured Claims Trust Account for distribution
as
set forth in this Section 5.4.3.
5.4.4 Allowed
Class 5 Claims.
On or
as promptly as practicable after each Quarterly Distribution Date, the
Distribution Trustee will
distribute to each holder of a Class 5 Claim that has become an Allowed Class
5
Claim during the immediately preceding calendar quarter a Cash distribution
from
the FLYi Unsecured Claims Trust Account (net of provision for Taxes payable
in
accordance with Section 10.4)
in an
amount equal to 10.3% of the Allowed amount of such Claim (as
reduced, if applicable, pursuant to an election by the holder thereof in
accordance with Section II.6 of the Plan).
After
receiving such amount, a holder of an Allowed Class 5 Claim will not be entitled
to any further distribution of Distribution Trust Assets on account of such
Claim.
5.4.5 Allowed
Class 6 Claims.
On or as
promptly as practicable after each Quarterly Distribution Date, the Distribution
Trustee will
distribute to each holder of a Class 6 Claim that has become an Allowed Class
6
Claim during the immediately preceding calendar quarter a Cash distribution
from
the Independence Unsecured Claims Trust Account (net of provision for Taxes
payable in accordance with Section 10.4)
in an
amount equal to 19.5% of the Allowed amount of such Claim (as
reduced, if applicable, pursuant to an election by the holder thereof in
accordance with Section II.7 of the Plan).
After
receiving such amount, a holder of an Allowed Class 6 Claim will not be entitled
to any further distribution of Distribution Trust Assets on account of such
Claim.
5.4.6 Postponed
and De Minimis Distributions.
Notwithstanding anything to the contrary in this Agreement, if the Distribution
Trustee determines, with the consent of the Steering Committee, that the amount
of any quarterly distribution is too small to justify the administrative costs
associated with such distribution, the Distribution Trustee may (a) postpone
such quarterly distribution until the next Quarterly Distribution Date, or
(b)
if quarterly distributions have been previously postponed with respect to two
or
more Quarterly Distribution Dates and the Distribution Trustee determines,
with
the consent of the Steering Committee, that the amount of Distribution Assets
will not increase to an amount that justifies the administrative costs
associated with making any future distributions, the Distribution Trustee may
contribute all remaining Distribution Trust Assets to a charitable organization
that is exempt from federal income taxation pursuant to Section 501(c)(3) of
the
Internal Revenue Code and that is selected by the Bankruptcy Court or the
Steering Committee. The Distribution Trustee will
have no
obligation to notify Beneficiaries if any quarterly distribution is postponed
pursuant to clause (a) of the preceding sentence; however, the Distribution
Trustee will provide reasonable notice to the Beneficiaries (which may be by
publication) if distributions will cease due to a contribution made pursuant
to
clause (b) of such sentence. In addition, the Distribution Trustee will
not be
required to distribute Cash to the holder of an Allowed General Unsecured Claim
or to the indenture trustee under the FLYi Indenture on behalf of the holders
of
Allowed Class 3B Claims if the amount of Cash to be distributed on account
of
such Claim or Claims is less than $5 in the aggregate. In such event, the Claim
or Claims for such distribution shall be deemed satisfied, waived and released
and the claimant or the indenture trustee under the FLYi Indenture, as the
case
may be, will
be
forever barred from asserting any such Claim against the Debtors, the
Distribution Trustee or the property of any of them, including the Trust
Accounts. Any Cash not distributed with respect to Allowed General Unsecured
Claims or Allowed Class 3B Claims as a result of this Section 5.4.6 will
be
retained in the FLYi Unsecured Claims Trust Account or the Independence
Unsecured Claims Trust Account, as applicable, for redistribution to other
holders of Allowed General Unsecured Claims and Allowed Class 3B Claims entitled
to distributions from such account.
5.4.7 Compliance
with Tax Requirements.
To the
extent applicable, the Distribution Trustee will
comply
with all Tax withholding and reporting requirements imposed on it by any
governmental unit, and all distributions pursuant to the Plan will
be
subject to such withholding and reporting requirements. The Distribution Trustee
will
be
authorized to take any actions that it determines, in its Permitted Discretion,
to be necessary, appropriate or desirable to comply with such withholding and
reporting requirements. Notwithstanding any other provision of the Plan or
this
Agreement, each entity receiving a distribution of Cash pursuant to the Plan
will
have
sole and exclusive responsibility for the satisfaction and payment of any Tax
obligations imposed on it by any governmental unit on account of such
distribution, including income, withholding and other Tax
obligations.
5.4.8 Setoffs.
Except
with respect to claims of a Debtor expressly released pursuant to the Plan
or
any contract, instrument, release or other agreement or document entered into
or
delivered in connection with the Plan, the Distribution Trustee may, pursuant
to
section 553 of the Bankruptcy Code or applicable non-bankruptcy law, set off
against any Allowed Claim and the distributions to be made pursuant to the
Plan
on account of such Claim (before any distribution is made on account of such
Claim) the Causes of Action of any nature that the applicable Debtor may hold
against the holder of such Allowed Claim; provided,
however,
that
neither the failure to effect a setoff nor the allowance of any Claim hereunder
will
constitute a waiver or release by the applicable Debtor of any Causes of Action
that the Debtor or Debtors may possess against such a Claim holder, which are
preserved under the Plan. To
the
extent that the Distribution Trustee reduces the distribution on account of
an
Allowed Claim as a result of a right of setoff by the Distribution Trustee,
the
Distribution Trustee will not release Disputed Claims Reserves held on account
of the portion of the Allowed Claim for which the setoff has been made for
a
period of 60 days after the date the distribution is made. If the Distribution
Trustee receives during that 60-day period a written notice from the holder
of
the Allowed Claim (at the address set forth in this Agreement) challenging
the
setoff, then the Distribution Trustee shall be required to retain the Disputed
Claim Reserves on account of the portion of the Allowed Claim setoff to the
extent of such challenge pending a resolution of the issues among the parties
or
an order of the Bankruptcy Court.
5.5 Compensation
and Reimbursement for Services Related to Distributions.
If the
Distribution Trustee employs or contracts with a third-party Disbursing Agent,
such Disbursing Agent will
receive,
without the need for further Bankruptcy Court approval, reasonable compensation
for such services and reimbursement of reasonable out-of-pocket expenses
incurred in connection with such services. These payments will
be made
on terms agreed to with Distribution Trustee and will
be paid
to such Disbursing Agent from funds in the Distribution Trust Expenses Account.
To assist in making distributions under the Plan, notwithstanding any other
provision of this Agreement, the applicable Trust Accounts (other than the
Distribution Trust Expenses Account) may be held in the name of one or more
such
Disbursing Agents. Any such Disbursing Agent will
invest
the Cash in the Trust Accounts as directed by the Distribution Trustee, who
will
direct such Disbursing Agent to invest such Cash only in Permitted Investments;
provided,
however,
that
should the Distribution Trustee determine, in its Permitted Discretion, that
the
administrative costs associated with such investment will exceed the return
on
such investment, it may direct such Disbursing Agent to not invest such
Cash.
5.6 Payments
Limited to Trust Accounts.
All
payments or other distributions to be made by the Distribution Trustee in
accordance with the Plan or this Agreement will
be made
only from the Trust Accounts.
5.7 Insufficient
Funds.
Provided that the Distribution Trustee has not engaged in fraud, willful
misconduct or gross negligence, or breached its fiduciary duties, if the
Distribution Trust Assets at any point prove insufficient to pay all
Beneficiaries of either the FLYi Priority Claims Trust Account or the
Independence Priority Claims Trust Account in full or all Beneficiaries of
the
FLYi Unsecured Claims Trust Account and the Independence Unsecured Claims Trust
Account in accordance with the terms of the Plan, the Distribution Trustee
will
have no obligation to seek disgorgement from any Beneficiary, but may seek
the
guidance of the Bankruptcy Court or another court of competent jurisdiction
consistent with Section 4.10.2.
ARTICLE
6
BENEFICIARIES
6.1 Rights
to Distributions.
The
right to distributions from the Distribution Trust will not be evidenced by
any
certificate, security or receipt or in any other form or manner whatsoever,
except as maintained on the books and records of the Distribution Trust by
the
Distribution Trustee. No Beneficiary will have any rights or interests in the
Distribution Trust Assets until such time as the Beneficiary’s related Claim
becomes an Allowed Claim pursuant to the mechanism for determining Allowed
Claims prescribed in the Plan. Except as expressly provided in Section
12.1,
rights
to distributions under this Agreement may not be assigned, alienated, pledged,
encumbered or subjected to attachment, garnishment, levy, execution or other
legal or equitable process.
6.2 Exemption
From Registration.
The
parties hereto intend that the rights of the Beneficiaries arising under this
Distribution Trust will not be “securities” under applicable laws, but none of
the parties hereto represent or warrant that such rights will not be securities
or that their issuance under the Plan will be entitled to exemption from
registration under applicable securities laws. If such rights constitute
securities, the parties hereto intend for the exemptions from registration
provided by section 1145 of the Bankruptcy Code and by other applicable law
to
apply to their issuance under the Plan.
ARTICLE
7
CERTAIN
RIGHTS OF THE DISTRIBUTION TRUSTEE
7.1 Causes
of Action.
Except
as otherwise provided in the Plan, including without limitation Section
XIII.A.3, or in any contract, instrument, release or other agreement or document
entered into or delivered in connection with the Plan, in accordance with
section 1123(b) of the Bankruptcy Code, the Distribution Trust will
retain
and may enforce any Causes of Action that the Debtors or the Estates may hold
against any person or Entity to the extent not expressly released under the
Plan. Without intending to limit the generality of the foregoing, the
Distribution Trustee will retain the right to File and pursue any adversary
proceedings available to the Debtors.
7.2 Objections
to Claims.
Subject
to its Permitted Discretion, the Distribution Trustee, on behalf of the
Distribution Trust, will
have the
authority to File, settle, compromise, withdraw or litigate to judgment
objections to Claims, including pursuant to any alternative dispute resolution
or similar procedures approved by the Bankruptcy Court. The Distribution
Trustee, in its Permitted Discretion, may settle or compromise any Disputed
Claim without approval of the Bankruptcy Court in accordance with this Agreement
and Section IV.A of the Plan; provided,
however,
that
the Distribution Trustee must seek and obtain Bankruptcy Court approval of
the
compromise or settlement of any Claim whereby the amount of such compromise
or
settlement provides the claimant with an Allowed Claim in excess of
$1,000,000.
7.3 Establishment
of Litigation Trusts.
The
Distribution Trustee, on behalf of the Distribution Trust, will have the
authority to establish, maintain and administer any litigation or similar trusts
and related accounts, as the Distribution Trustee determines, in its Permitted
Discretion, to be necessary, appropriate or desirable in connection with
prosecuting, Filing, reconciling, settling, compromising, resolving, defending,
objecting to or litigating to judgment any Claims or Causes of
Action.
ARTICLE
8
THIRD
PARTY RIGHTS AND LIMITATION OF LIABILITY
8.1 Parties
Dealing With the Distribution Trustee.
In the
absence of actual knowledge to the contrary, any person dealing with the
Distribution Trust or the Distribution Trustee will be entitled to rely on
the
authority of the Distribution Trustee or any of its agents to act in connection
with the Distribution Trust Assets. There is no obligation on any person dealing
with the Distribution Trustee to inquire into the validity or propriety of
any
transaction by the Distribution Trustee or any agent of the Distribution
Trustee.
8.2 Limitation
of Liability.
Notwithstanding anything to the contrary in this Agreement, in exercising the
rights granted hereunder, the Distribution Trustee will use the same degree
of
care and skill as an individual of ordinary prudence, discretion and judgment
would exercise or use in its own affairs. The Distribution Trustee will not
be
liable with respect to any action it takes or omits to take in good faith or
with the consent, or at the direction, of the Steering Committee. The
Distribution Trustee will not be liable for punitive, exemplary, consequential
or special damages for a breach of this Agreement under any circumstances or
for
any other act or omission not constituting fraud, willful misconduct or gross
negligence. The Debtors, the Distribution Trust, the Distribution Trustee and
their respective directors, officers, employees, agents, professionals and
other
representatives, acting in such capacity, will neither have nor incur any
liability to any entity for any act taken or omitted to be taken in connection
with or related to the formulation, preparation, dissemination, implementation,
confirmation or consummation of the Plan, the Disclosure Statement, this
Agreement or any contract, instrument, release or other agreement or document
created or entered into, or any other act taken or omitted to be taken, in
connection with the Plan or this Agreement; provided,
however,
that
the foregoing provisions of this Section 8.2 will
have no
effect on (a) the liability of any Entity that would otherwise result from
the
failure to perform or pay any obligation or liability under the Plan, this
Agreement or any contract, instrument, release or other agreement or document
to
be entered into or delivered in connection with the Plan or (b) the liability
of
any such entity that otherwise would result from any such act or omission to
the
extent that such act or omission is determined in a Final Order to have
constituted
fraud,
willful misconduct or gross negligence.
8.3 Indemnification.
The
Indemnified Parties will be indemnified by the Distribution Trust from the
Distribution Expenses Trust Account (taking into account transfers of Cash
thereto as contemplated by Section 3.2.3)
for any
losses, claims, damages, liabilities or expenses, including reasonable
attorneys’ fees, disbursements and related expenses, that the Indemnified
Parties may incur or to which the Indemnified Parties may become subject in
connection with any action, suit, proceeding or investigation brought by or
threatened against one or more of the Indemnified Parties on account of any
action or omission by the Distribution Trustee in its capacity as such,
including actions or omissions with respect to the Disputed Claims; provided,
however,
that
the Distribution Trust will
not be
liable to so indemnify any Indemnified Party for any
losses,
claims, damages, liabilities or expenses, including reasonable attorneys’ fees,
disbursements and related expenses, due to any action
or
omission or by such Indemnified Party constituting fraud, willful misconduct
or
gross negligence;
provided further
that
(except as provided in the preceding proviso) nothing in this
Section 8.3 will
be
deemed to restrict the Distribution Trustee’s right to receive an indemnity
based on any act or omission taken in accordance with the provisions of this
Agreement. Notwithstanding anything to the contrary in this Agreement, the
Indemnified Parties will
be
entitled to obtain advances from the Distribution Expenses Trust Account to
cover their expenses of defending themselves in any action brought against
them
as a result of the acts or omissions, actual or alleged, of the Distribution
Trustee in its capacity as such. Without limiting the generality or effect
of
the foregoing, within five Business Days after written request by an Indemnified
Party (including the Distribution Trustee) to the Distribution Trustee and
the
Steering Committee, the Distribution Trustee will, in accordance with such
request (but without duplication), from the Distribution Trust Expenses Account
(taking into account transfers of Cash thereto as contemplated in
Section 3.2.3)
(a) pay such expenses on behalf of the Indemnified Party, (b) advance
to the Indemnified Party Cash in an amount sufficient to pay such expenses,
or
(c) reimburse the Indemnified Party for such expenses; provided,
however,
that
the Indemnified Party provides
an undertaking to
repay
the amount so paid, advanced or reimbursed to the Distribution Expenses Trust
Account upon the entry of a Final Order finding that such Indemnified Party
was
not entitled to indemnity under the provisions of this Section 8.3.
ARTICLE
9
SELECTION,
REMOVAL AND
COMPENSATION
OF THE DISTRIBUTION TRUSTEE
9.1 Initial
Distribution Trustee.
The
initial Distribution Trustee will be ENA Advisors, LLC.
9.2 Term
of Service.
The
Distribution Trustee will serve until (a) termination of the Distribution
Trust in accordance with this Agreement or (b) the Distribution Trustee’s
resignation or removal.
9.3 Removal
of the Distribution Trustee.
Any
person or Entity serving as the Distribution Trustee may be removed at any
time
by a Final Order of the Bankruptcy Court. The removal will be effective on
the
date specified in such Final Order.
9.4 Resignation
of the Distribution Trustee.
The
Distribution Trustee may resign at any time by giving the Bankruptcy Court
at
least 30 days’ written notice of the Distribution Trustee’s intention to do so.
In the event of a resignation, the resigning Distribution Trustee (or the
successor Distribution Trustee) will render to the Bankruptcy Court a full
and
complete accounting of monies and assets received, disbursed and held during
the
term of office of the resigning Distribution Trustee pursuant to this Agreement.
The resignation will be effective on the latest of (a) the date specified
in the notice; (b) the date that is 30 days after the date the notice is
delivered; (c) the date the accounting described in the preceding sentence
is delivered; and (d) the date the successor Distribution Trustee accepts its
appointment as such. Notwithstanding the resignation of the Distribution Trustee
pursuant to this Section 9.4,
the
rights of the resigning Distribution Trustee under Sections 8.2
and
8.3
with
respect to acts or omissions occurring prior to the effectiveness of such
resignation will continue for the benefit of such resigning Distribution Trustee
following the effectiveness of such resignation.
9.5 Appointment
of Successor Distribution Trustee.
Prior
to the resignation or removal of the Distribution Trustee, the resigning
Distribution Trustee will (a) identify a successor Distribution Trustee
to
fill the vacancy and (b) request the Bankruptcy Court’s approval of the
identity and terms of engagement of such successor Distribution Trustee. Except
as otherwise ordered by the Bankruptcy Court, any successor Distribution Trustee
so appointed must consent to and accept in writing the terms of this Agreement
and agree that the provisions of this Agreement are binding upon and inure
to
the benefit of the successor Distribution Trustee and all of such successor
Distribution Trustee’s heirs and legal and personal representatives, successors
or assigns.
9.6 Powers
and Duties of Successor Distribution Trustee.
A
successor Distribution Trustee will have all the rights, powers, privileges
and
duties of its predecessor.
9.7 Trust
Continuance.
The
resignation or removal of the Distribution Trustee will not terminate the
Distribution Trust or revoke any existing agency created pursuant to this
Agreement or invalidate any action theretofore taken by the Distribution
Trustee.
9.8 Compensation
and Costs of Administration.
As
compensation for its services pursuant to this Agreement, the Distribution
Trustee will be entitled to $75,000 per month (pro rated for any partial month
based on the number of days services were provided during such month) plus
reasonable out-of-pocket expenses until the resignation or removal of the
Distribution Trustee or the termination of this Agreement, which fee and
expenses will be charged against and paid out of the Distribution Trust Expenses
Account on the first business day of the month immediately following the month
with respect to which such fee was earned and such expenses were submitted
for
payment. The Distribution Trustee's compensation for services under this
Agreement as set forth in this Section 9.8 shall be subject to review by the
Steering Committee after 180 days from the Effective Date. In addition, all
reasonable costs, expenses and obligations incurred by the Distribution Trustee
in administering the Distribution Trust, in carrying out its other
responsibilities under this Agreement or in any manner connected, incidental
or
related thereto (including the cost of professionals that may, in accordance
with this Agreement, be employed by the Distribution Trustee) will be paid,
at
the direction of the Distribution Trustee, from the Distribution Trust Expenses
Account.
ARTICLE
10
MAINTENANCE
OF RECORDS; REPORTING
10.1 Books
and Records.
The
Distribution Trustee will maintain books and records containing a description
of
all property from time to time constituting the Distribution Trust Assets (which
assets will be valued consistently for all federal income Tax purposes), taking
into account any changes to the Distribution Trust Assets existing immediately
prior to the Effective Date, and an accounting of all receipts and
disbursements. Such books and records will be open to inspection by any
Beneficiary or the Bankruptcy Court at any reasonable time during normal
business hours. The fiscal year of the Distribution Trust will be the calendar
year.
10.2 Reports
to be Filed with the Bankruptcy Court.
10.2.1 Quarterly
Reports.
Within
45 days after the end of each of the first three calendar quarters of each
calendar year, the Distribution Trustee, on behalf of the Distribution Trust,
will File a Quarterly Receipts/Disbursements Report with the Bankruptcy
Court.
10.2.2 Annual
Reports.
Within
90 days after the end of each calendar year, the Distribution Trustee, on behalf
of the Distribution Trust, will File an Annual Receipts/Disbursements Report
with the Bankruptcy Court.
10.2.3 Current
Reports.
In the
event of developments affecting the Distribution Trust in any material respect
(as determined by the Distribution Trustee in its Permitted Discretion), the
Distribution Trustee, on behalf of the Distribution Trust, will File promptly
with the Bankruptcy Court a Current Report.
10.2.4 Reports
Available on Request.
The
Distribution Trustee will furnish or otherwise make available to any
then-current Beneficiary, upon written request, a copy of: (a) the most
recent Annual Receipts/Disbursements Report; (b) any Quarterly
Receipts/Disbursements Report for any period subsequent to the period covered
by
the most recent Annual Receipts/Disbursements Report (or, if no Annual
Receipts/Disbursements Report has yet been Filed, for any period subsequent
to
the Effective Date); or (c) any Current Report Filed subsequent to the period
covered by the most recent Annual Receipts/Disbursements Report (or, if no
Annual Receipts/Disbursements Report has yet been Filed, subsequent to the
Effective Date).
10.3 Compliance
with Federal Securities Laws.
The
parties hereto do not anticipate that the Distribution Trust will be required
to
comply with the registration and reporting requirements of the Securities
Exchange Act of 1934, as amended, or the Investment Company Act of 1940, as
amended. However, if following the Effective Date, the Distribution Trustee
determines, based on the advice of counsel, that the Distribution Trust is
required to comply with the registration and reporting requirements of the
Securities Exchange Act of 1934, as amended, or the Investment Company Act
of
1940, as amended, then the Distribution Trustee will take any and all actions
to
comply with such requirements.
10.4 Tax
Returns and Payments.
10.4.1 General.
The
Distribution Trustee will be responsible for filing all foreign, U.S. federal,
state and local Tax returns for the Distribution Trust and the
Debtors and
for
the timely preparation and distribution to the Beneficiaries of any necessary
foreign, U.S. federal, state or local information returns. Notwithstanding
anything to the contrary in this Agreement, the Distribution Trustee will not
be
obligated to deliver any such information returns to holders of Disputed Claims
in their capacity as such.
10.4.2 Pending
Payments.
The
Distribution Trustee will timely file Tax returns for the Trust Accounts as
a
grantor trust and/or a liquidating trust under Treasury Regulations section
1.671-1(a) and/or Treasury Regulations section 301.7701-4(d) and related
regulations with respect to Pending Payments. Pursuant to such provisions,
for
federal income Tax purposes the Distribution Trustee will allocate to
Beneficiaries entitled to receive Pending Payments, their pro rata shares of
any
income or loss of the Trust Accounts, and such Beneficiaries will be subject
to
Tax on the Trust Accounts’ taxable income on a current basis.
10.4.3 Trust
Accounts Exclusive of Pending Payments.
With
respect to the Trust Accounts (excluding amounts constituting Pending Payments),
the Distribution Trustee will timely (a) file such income Tax and other returns
and statements as are required to comply with (i) the applicable provisions
of the Internal Revenue Code and the Treasury Regulations promulgated
thereunder, including the requirements set forth in Treasury Regulations
section 1.468B-9(c), and (ii) any applicable state and local
law and
the regulations promulgated thereunder, and (b) pay from the applicable
Trust Account any Taxes reported as owing on such returns and
statements.
ARTICLE
11
DURATION
OF THE DISTRIBUTION TRUST
11.1 Duration.
The
Distribution Trust will become effective upon the Effective Date. Thereupon,
the
Distribution Trust and its provisions herein will remain and continue in full
force and effect until the Distribution Trust is terminated as contemplated
in
this ARTICLE
11.
11.2 Termination
Upon Distribution of All Distribution Trust Assets.
The
Distribution Trustee will liquidate (including objecting to Claims and
determining the proper recipients and amounts of distributions to be made from
the Distribution Trust) and distribute the Distribution Trust Assets to the
Beneficiaries that are determined to hold Allowed Claims and take such steps
as
are necessary, appropriate or desirable to close the Bankruptcy Cases. Upon
(a) the payment of all costs, expenses and obligations incurred in
connection with administering the Distribution Trust; (b) the distribution
of
all remaining Distribution Trust Assets and/or proceeds therefrom in accordance
with the provisions of the Plan, the Confirmation Order and this Agreement;
(c)
the closure of the Bankruptcy Cases; and (d) the completion of any necessary
or
appropriate reports, Tax returns or other documentation, the Distribution Trust
will terminate and the Distribution Trustee will have no additional
responsibility in connection therewith except as may be required to effectuate
such termination under relevant law and except as described in
Section 11.4.
11.3 Termination
After Five Years.
If the
Distribution Trust has not been previously terminated pursuant to Section
11.2,
on the
fifth anniversary of the Effective Date, unless otherwise extended by the
Bankruptcy Court due to the Distribution Trust’s necessity to complete its
claims resolution and liquidating purpose, and provided such extension does
not
adversely affect the status of the Distribution Trust for federal income Tax
or
federal securities law purposes, the Distribution Trustee will distribute all
of
the Distribution Trust Assets to the Beneficiaries in accordance with the Plan
and this Agreement. Immediately after (a) the payment of all costs,
expenses and obligations incurred in connection with administering the
Distribution Trust; (b) the distribution of all remaining Distribution
Trust Assets and/or proceeds therefrom in accordance with the provisions of
the
Plan, the Confirmation Order and this Agreement; (c) the closure of
the
Bankruptcy Cases; and (d) the completion of any reports, Tax returns or other
documentation determined by the Distribution Trustee, in its Permitted
Discretion, to be necessary, appropriate or desirable, the Distribution Trust
will terminate and the Distribution Trustee will have no further responsibility
in connection therewith except as may be required to effectuate such termination
under relevant law and except as described in Section 11.4.
The
Distribution Trustee will have the right to apply to the Bankruptcy Court to
extend the term of the Distribution Trust as contemplated above if the
Distribution Trustee determines, in its Permitted Discretion, that such
extension is necessary to enable the Distribution Trust to complete its
resolution and liquidating purpose.
11.4 Other
Termination Procedures.
The
Distribution Trustee will at all times endeavor to liquidate expeditiously
the
Distribution Trust Assets, and in no event will the Distribution Trustee unduly
prolong the duration of the Distribution Trust. On termination of this
Distribution Trust, the Distribution Trustee will advise the Bankruptcy Court
in
writing of the Distribution Trust’s termination. Notwithstanding the foregoing,
after the termination of the Distribution Trust, the Distribution Trustee will
have the power to exercise all the powers, authorities and discretion herein
conferred solely for the purpose of liquidating and winding up the affairs
of
the Distribution Trust. For a period of five years after the distribution of
all
of the Distribution Trust Assets, the Distribution Trustee will retain the
books, records and files that have been delivered to or created by the
Distribution Trustee, at which time the Distribution Trustee may dispose of
such
books, records and files in any manner that the Distribution Trustee deems
appropriate.
11.5 No
Reversions.
Notwithstanding anything to the contrary in the Plan or this Agreement, in
no
event will any of the Distribution Trust Assets revert to the Debtors upon
termination of the Distribution Trust.
ARTICLE
12
MISCELLANEOUS
12.1 Limitation
on Transferability.
12.1.1 No
Transfer of Rights to Distributions.
Except
as otherwise expressly provided in the Plan, it is understood and agreed that
the rights to distributions from the Distribution Trust will be non-transferable
during the term of this Agreement, except with respect to a transfer by will
or
under the laws of descent and distribution. Such transfers will not be effective
until appropriate written notification and proof thereof is submitted to the
Distribution Trustee, and the Distribution Trustee may continue to pay all
amounts to or for the benefit of the Beneficiaries until receipt of proper
written notification and proof of any such transfer. The Distribution Trustee
may rely upon such written proof without the requirement of any further
investigation.
12.1.2 No
Assignment.
Neither
the Debtors, on the one hand, nor the Distribution Trustee, on the other hand,
may assign this Agreement without the prior written consent of the
other.
12.2 Notices.
All
notices to be given to Beneficiaries may be given by regular mail, electronic
transmission or delivered personally, at the addresses appearing on the books
kept by the Distribution Trustee. Any notice or other communication which may
be
or is required to be given, served or sent to the Debtors, the Distribution
Trustee, the Steering Committee or United States Trustee will be in writing
and
will be sent by registered or certified mail, return receipt requested (postage
prepaid), transmitted electronically, sent by hand delivery or sent by facsimile
(if receipt is confirmed), addressed as follows:
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If
to the Debtors:
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FLYi,
Inc. and its Debtor Affiliates
Attn:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
President
and General Counsel
▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
|
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With
Copies to:
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▇▇▇▇▇
Day
Attn:
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
Day
Attn:
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇
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|
If
to the Distribution Trustee:
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ENA
Advisors, LLC
Attn:
▇▇▇▇▇ Artist
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
|
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With
Copies to:
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[To
Come]
|
|
If
to the Steering Committee:
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[To
Come]
|
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With
Copies to:
|
[To
Come]
|
|
If
to the United States Trustee:
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Office
of the United States Trustee
Attn:
▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
Room
2207
Lockbox
#35
Wilmington,
Delaware 19801
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or
to
such other address as may from time to time be provided in a written notice
to
each party.
12.3 No
Bond.
Notwithstanding any state law to the contrary, the Distribution Trustee
(including any successor) and the Disbursing Agent will be exempt from giving
any bond or other security in any jurisdiction.
12.4 Governing
Law; Submission to Jurisdiction; Service of Process.
This
Agreement will be construed in accordance with and governed by the internal
substantive law of the State of Delaware regardless of the laws that might
otherwise govern under principles of conflict of laws applicable thereto. The
Bankruptcy Court will have exclusive jurisdiction over any dispute arising
out
of or in connection with the transactions contemplated by this Agreement. The
parties to this Agreement consent to the exclusive jurisdiction of the
Bankruptcy Court (and of the appropriate appellate courts therefrom) in any
such
dispute and irrevocably waive, to the fullest extent permitted by law, any
objection that they may now or hereafter have to the laying of the venue of
any
such dispute in the Bankruptcy Court or that any such dispute brought in the
Bankruptcy Court has been brought in an inconvenient forum. This Agreement
is
subject to any order or act of the Bankruptcy Court applicable hereto. Process
may be served on any party anywhere in the world, whether within or without
the
jurisdiction of any court to which the parties have submitted herein. Without
limiting the foregoing, each party to this Agreement agrees that service of
process on that party may be made upon the designated Person at the address
provided in Section 12.2
and will
be deemed to be effective service of process on that party.
12.5 Successors
and Assigns.
This
Agreement will inure to the benefit of and will be binding upon the parties
hereto and their respective successors and permitted assigns.
12.6 No
Execution.
All
funds in the Distribution Trust will be deemed in
custodia legis
until
such times as the funds have actually been paid to or for the benefit of a
Beneficiary, and no Beneficiary or any other person can execute upon, garnish
or
attach the Distribution Trust Assets or the Distribution Trust in any manner
or
compel payment from the Distribution Trust except by order of the Bankruptcy
Court. Payment will be solely governed by the Plan and this
Agreement.
12.7 Amendment.
This
Agreement may be amended only by order of the Bankruptcy Court.
12.8 Severability.
If any
term, provision, covenant or restriction contained in this Agreement is held
by
a court of competent jurisdiction or other authority to be invalid, void,
unenforceable or against its regulatory policy, the remainder of the terms,
provisions, covenants and restrictions contained in this Agreement will remain
in full force and effect and will in no way be affected, impaired or
invalidated.
[this
space left blank intentionally - signature page follows]
CHI-1578198v2 --
IN
WITNESS WHEREOF, the parties have executed this Agreement (or are deemed to
have
so executed this Agreement) as of the day and year first written
above.
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Debtors:
FLYi,
Inc.
Independence
Air, Inc.
Atlantic
Coast Jet, LLC
Atlantic
Coast Academy, Inc.
IA
Sub, Inc.
WaKeeney,
Inc.
Atlantic
Coast Airlines, Inc.
By:
Name:
Title:
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Distribution
Trustee:
ENA
Advisors, LLC
By:
Name:
Title:
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