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ESCROW AND PAYING AGENT AGREEMENT
(Class A)
Dated as of August 13, 1998
among
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION
as Escrow Agent
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
and
CREDIT SUISSE FIRST BOSTON CORPORATION
as Initial Purchasers
THE FIRST NATIONAL BANK OF MARYLAND
not in its individual capacity,
but solely as Pass Through Trustee
for and on behalf of
Midway Airlines Pass Through Trust 1998-1A-O
as Pass Through Trustee
and
THE FIRST NATIONAL BANK OF MARYLAND
as Paying Agent
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TABLE OF CONTENTS
Page
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SECTION 1. Escrow Agent...................................................... 2
Section 1.01. Appointment of Escrow Agent............................. 2
Section 1.02. Instruction; Etc........................................ 3
Section 1.03. Initial Escrow Amount; Issuance of Escrow Receipts...... 3
Section 1.04. Payments to Receiptholders.............................. 4
Section 1.05. Mutilated, Destroyed, Lost or Stolen Escrow Receipt..... 4
Section 1.06. Additional Escrow Amounts............................... 5
Section 1.07. Resignation or Removal of Escrow Agent.................. 5
Section 1.08. Persons Deemed Owners................................... 5
Section 1.09. Further Assurances...................................... 6
SECTION 2. Paying Agent...................................................... 6
Section 2.01. Appointment of Paying Agent............................. 6
Section 2.02. Establishment of Paying Agent Account................... 6
Section 2.03. Payments from Paying Agent Account...................... 6
Section 2.04. Withholding Taxes....................................... 7
Section 2.05. Resignation or Removal of Paying Agent.................. 8
Section 2.06. Notice of Final Withdrawal.............................. 8
SECTION 3. Payments.......................................................... 9
SECTION 4. Other Actions..................................................... 9
SECTION 5. Representations and Warranties of the Escrow Agent................ 9
SECTION 6. Representations and Warranties of the Paying Agent................ 10
SECTION 7. Indemnification................................................... 11
SECTION 8. Amendment, Etc.................................................... 12
SECTION 9. Notices........................................................... 12
SECTION 10. Transfer......................................................... 13
SECTION 11. Entire Agreement................................................. 13
SECTION 12. Governing Law.................................................... 13
i
SECTION 13. Waiver of Jury Trial Right....................................... 13
SECTION 14. Counterparts..................................................... 14
EXHIBIT A Escrow Receipt
EXHIBIT B Withdrawal Certificate
ii
ESCROW AND PAYING AGENT AGREEMENT (Class A) dated as of August 13,
1998 (as amended, modified or supplemented from time to time, this "Agreement")
among FIRST UNION TRUST COMPANY, National Association, a national banking
association, as Escrow Agent (in such capacity, together with its successors in
such capacity, the "Escrow Agent"); ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED and CREDIT
SUISSE FIRST BOSTON CORPORATION, as Initial Purchasers of the Certificates
referred to below (the "Initial Purchasers" and together with their respective
transferees and assigns as registered owners of the Certificates, the
"Investors") under the Purchase Agreement referred to below; THE FIRST NATIONAL
BANK OF MARYLAND, a national banking association, not in its individual capacity
except as otherwise expressly provided herein, but solely as trustee (in such
capacity, together with its successors in such capacity, the "Pass Through
Trustee") under the Pass Through Trust Agreement referred to below; and THE
FIRST NATIONAL BANK OF MARYLAND, a national banking association, as paying agent
hereunder (in such capacity, together with its successors in such capacity, the
"Paying Agent").
W I T N E S S E T H
WHEREAS, Midway Airlines Corporation ("Midway") and the Pass Through
Trustee have entered into the Pass Through Trust Agreement, dated as of August
13, 1998 (together, as amended, modified or supplemented from time to time in
accordance with the terms thereof, the "Pass Through Trust Agreement") relating
to Midway Airlines Pass Through Trust 1998-1A-O (the "Pass Through Trust")
pursuant to which the Midway Airlines Pass Through Trust, Series 1998-1A-O
Certificates referred to therein (the "Certificates") are being issued;
WHEREAS, Midway and the Initial Purchasers have entered into a
Purchase Agreement dated as of August 6, 1998 (as amended, modified or
supplemented from time to time in accordance with the terms thereof, the
"Purchase Agreement") pursuant to which the Pass Through Trustee will issue and
sell the Certificates to the Initial Purchasers;
WHEREAS, Midway, the Pass Through Trustee, certain other pass
through trustees and certain other persons concurrently herewith are entering
into the Note Purchase Agreement, dated as of the date hereof (the "Note
Purchase Agreement"), pursuant to which the Pass Through Trustee has agreed to
acquire from time to time on or prior to the Delivery Period Termination Date
(as defined in the Note Purchase Agreement) equipment notes (the "Equipment
Notes") issued to finance the acquisition of aircraft by Midway, as lessee or as
owner, utilizing a portion of the proceeds from the sale of the Certificates
(the "Net Proceeds");
WHEREAS, the Initial Purchasers and the Pass Through Trustee intend
that the Net Proceeds be held in escrow by the Escrow Agent on behalf of the
Investors, subject to withdrawal upon request by the Pass Through Trustee and
satisfaction of the conditions set forth in the Note Purchase Agreement for the
purpose of purchasing Equipment Notes, and that pending such withdrawal the Net
Proceeds be deposited on behalf of the Escrow Agent with First Union National
Bank, as Depositary (the "Depositary") under the Deposit Agreement, dated as of
the date hereof between the Depositary and the Escrow Agent relating to the Pass
Through Trust (as amended, modified or supplemented from time to time in
accordance with the terms thereof, the "Deposit Agreement") pursuant to which,
among other things, the Depositary will pay interest for distribution to the
Investors and establish accounts from which the Escrow Agent shall make
withdrawals upon request of and proper certification by the Pass Through
Trustee;
WHEREAS, the Escrow Agent wishes to appoint the Paying Agent to pay
amounts required to be distributed to the Investors in accordance with this
Agreement; and
WHEREAS, capitalized terms used but not defined herein shall have
the meanings ascribed to such terms in the Pass Through Trust Agreement.
NOW, THEREFORE, in consideration of the obligations contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION 1. Escrow Agent.
Section 1.01. Appointment of Escrow Agent. Each of the Initial
Purchasers, for and on behalf of each of the Investors, hereby irrevocably
appoints, authorizes and directs the Escrow Agent to act as escrow agent and
fiduciary hereunder and under the Deposit Agreement for such specific purposes
and with such powers as are specifically delegated to the Escrow Agent by the
terms of this Agreement, together with such other powers as are reasonably
incidental thereto. Any and all money received and held by the Escrow Agent
under this Agreement or the Deposit Agreement shall be held in escrow by the
Escrow Agent in accordance with the terms of this Agreement. This Agreement is
irrevocable and the Investors' rights with respect to any monies received and
held in escrow by the Escrow Agent under this Agreement or the Deposit Agreement
shall only be as provided under the terms and conditions of this Agreement and
the Deposit Agreement. The Escrow Agent (which term as used in this sentence
shall include reference to its affiliates and its own and its affiliates'
officers, directors, employees and agents): (a) shall have no duties or
responsibilities except those expressly set forth in this Agreement; (b) shall
not be responsible to the Pass Through Trustee or the Investors for any
recitals, statements, representations or warranties of any person other than
itself contained in this Agreement or the Deposit Agreement or for the failure
by the Pass Through Trustee, the Investors or any other person or entity (other
than the Escrow Agent) to perform any of its obligations hereunder (whether or
not the Escrow Agent shall have any knowledge thereof); and (c) shall not be
responsible for any action taken or omitted to be taken by it hereunder
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or provided for herein or in connection herewith, except for its own willful
misconduct or gross negligence (or simple negligence in connection with the
handling of funds).
Section 1.02. Instruction; Etc. The Initial Purchasers, for and on
behalf of each of the Investors, hereby irrevocably instruct the Escrow Agent,
and the Escrow Agent agrees, (a) to enter into the Deposit Agreement, (b) to
appoint the Paying Agent as provided in this Agreement, (c) upon receipt at any
time and from time to time prior to the Termination Date (as defined below) of a
certificate substantially in the form of Exhibit B hereto (a "Withdrawal
Certificate") executed by the Pass Through Trustee, together with an attached
Notice of Purchase Withdrawal in substantially the form of Exhibit A to the
Deposit Agreement duly completed by the Pass Through Trustee (the "Applicable
Notice of Purchase Withdrawal") and the withdrawal to which it relates, a
"Purchase Withdrawal"), immediately to execute the Applicable Notice of Purchase
Withdrawal as Escrow Agent and transmit it to the Depositary by facsimile
transmission in accordance with the Deposit Agreement; provided that, upon the
request of the Pass Through Trustee after such transmission, the Escrow Agent
shall cancel such Applicable Notice of Purchase Withdrawal, and (d) if there are
any undrawn Deposits (as defined in the Deposit Agreement) on the "Termination
Date", which shall mean the earlier of (i) October 1, 1999 (provided that, if a
labor strike occurs at Bombardier, Inc. prior to such date (a "Labor Strike"),
such date shall be extended by adding thereto the number of days that such
strike continued in effect (the "Additional Days") and (ii) the day on which the
Escrow Agent receives notice from the Pass Through Trustee that the Pass Through
Trustee's obligation to purchase Equipment Notes under the Note Purchase
Agreement has terminated, to give notice to the Depositary (with a copy to the
Paying Agent) substantially in the form of Exhibit B to the Deposit Agreement
requesting a withdrawal of all of the remaining Deposits, together with accrued
and unpaid interest on such Deposits to the date of withdrawal, on the 35th day
after the date that such notice of withdrawal is given to the Depositary (or, if
not a Business Day, on the next succeeding Business Day) (a "Final Withdrawal"),
provided that if the day scheduled for the Final Withdrawal in accordance with
the foregoing is within 10 days before or after a Regular Distribution Date,
then the Escrow Agent shall request that such requested Final Withdrawal be made
on such Regular Distribution Date (the date of such requested withdrawal, the
"Final Withdrawal Date"). If for any reason the Escrow Agent shall have failed
to give the Final Withdrawal Notice to the Depositary on or before October 7,
1999 (provided that if a Labor Strike occurs, such date shall be extended by the
Additional Days) and there are unwithdrawn Deposits on such date, the Final
Withdrawal Date shall be deemed to be October 31, 1999 (provided that if a Labor
Strike occurs, such date shall be extended by the Additional Days).
Section 1.03. Initial Escrow Amount; Issuance of Escrow Receipts.
The Escrow Agent hereby directs the Initial Purchasers to, and the Initial
Purchasers hereby acknowledge that on the date hereof they shall, irrevocably
deliver to the Depositary on behalf of the Escrow Agent, an amount in U.S.
dollars ("Dollars") and immediately available funds equal to $58,426,000 for
deposit on behalf of the Escrow Agent with the Depositary in accordance with
Section 2.1 of the Deposit Agreement.
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The Initial Purchasers hereby instruct the Escrow Agent, upon receipt of such
sum from the Initial Purchasers, to confirm such receipt by executing and
delivering to the Pass Through Trustee an Escrow Receipt in the form of Exhibit
A hereto (an "Escrow Receipt"), (a) to be affixed by the Pass Through Trustee to
each Certificate and (b) to evidence the same percentage interest (the "Escrow
Interest") in the Account Amounts (as defined below) as the Fractional Undivided
Interest in the Pass Through Trust evidenced by the Certificate to which it is
to be affixed. The Escrow Agent shall provide to the Pass Through Trustee for
attachment to each Certificate newly issued under and in accordance with the
Pass Through Trust Agreement an executed Escrow Receipt as the Pass Through
Trustee may from time to time request of the Escrow Agent. Each Escrow Receipt
shall be registered by the Escrow Agent in a register (the "Register")
maintained by the Escrow Agent in the same name and same manner as the
Certificate to which it is attached and may not thereafter be detached from such
Certificate to which it is to be affixed prior to the distribution of the Final
Withdrawal (the "Final Distribution"). After the Final Distribution, no
additional Escrow Receipts shall be issued and the Pass Through Trustee shall
request the return to the Escrow Agent for cancellation of all outstanding
Escrow Receipts.
Section 1.04. Payments to Receiptholders. All payments and
distributions made to holders of an Escrow Receipt (collectively
"Receiptholders") in respect of the Escrow Receipt shall be made only from
amounts deposited in the Paying Agent Account (as defined below) ("Account
Amounts"). Each Receiptholder, by its acceptance of an Escrow Receipt, agrees
that (a) it will look solely to the Account Amounts for any payment or
distribution due to such Receiptholder pursuant to the terms of the Escrow
Receipt and this Agreement and (b) it will have no recourse to Midway, the Pass
Through Trustee, the Paying Agent or the Escrow Agent, except as expressly
provided herein or in the Pass Through Trust Agreement. No Receiptholder shall
have any right to vote or in any manner otherwise control the operation and
management of the Paying Agent Account or the obligations of the parties hereto,
nor shall anything set forth herein, or contained in the terms of the Escrow
Receipt, be construed so as to constitute the Receiptholders from time to time
as partners or members of an association.
Section 1.05. Mutilated, Destroyed, Lost or Stolen Escrow Receipt.
If (a) any mutilated Escrow Receipt is surrendered to the Escrow Agent or the
Escrow Agent receives evidence to its satisfaction of the destruction, loss or
theft of any Escrow Receipt and (b) there is delivered to the Escrow Agent and
the Pass Through Trustee such security, indemnity, or bond, as may be required
by them to hold each of them harmless, then, absent notice to the Escrow Agent
or the Pass Through Trustee that such destroyed, lost or stolen Escrow Receipt
has been acquired by a bona fide purchaser, and provided that the requirements
of Section 8-405 of the Uniform Commercial Code in effect in any applicable
jurisdiction are met, the Escrow Agent shall execute, authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Escrow Receipt, a new Escrow Receipt or Escrow Receipts and of like Escrow
Interest in the Account Amounts and bearing a number not contemporaneously
outstanding.
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In connection with the issuance of any new Escrow Receipt under this
Section 1.05, the Escrow Agent may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Pass
Through Trustee and the Escrow Agent) connected therewith.
Any duplicate Escrow Receipt issued pursuant to this Section 1.05
shall constitute conclusive evidence of the appropriate Escrow Interest in the
Account Amounts, as if originally issued, whether or not the lost, stolen or
destroyed Escrow Receipt shall be found at any time.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Escrow Receipts.
Section 1.06. Additional Escrow Amounts. On the date of any Purchase
Withdrawal, the Pass Through Trustee may re-deposit with the Depositary some or
all of the amounts so withdrawn in accordance with Section 2.4 of the Deposit
Agreement.
Section 1.07. Resignation or Removal of Escrow Agent. Subject to the
appointment and acceptance of a successor Escrow Agent as provided below, the
Escrow Agent may resign at any time by giving 30 days' prior written notice
thereof to the Pass Through Trustee, but may not otherwise be removed except for
cause by the written consent of the Investors with respect to Investors
representing Escrow Interests aggregating not less than a majority in interest
in the Account Amounts (an "Action of Investors"). Upon any such resignation or
removal, the Investors, by an Action of Investors, shall have the right to
appoint a successor Escrow Agent. If no successor Escrow Agent shall have been
so appointed and shall have accepted such appointment within 30 days after the
retiring Escrow Agent's giving of notice of resignation or the removal of the
retiring Escrow Agent, then the retiring Escrow Agent may appoint a successor
Escrow Agent. Any successor Escrow Agent shall be a bank which has an office in
the United States with a combined capital and surplus of at least $100,000,000.
Upon the acceptance of any appointment as Escrow Agent hereunder by a successor
Escrow Agent, such successor Escrow Agent shall enter into such documents as the
Pass Through Trustee shall require and shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Escrow
Agent, and the retiring Escrow Agent shall be discharged from its duties and
obligations hereunder. No resignation or removal of the Escrow Agent shall be
effective unless a written confirmation shall have been obtained from each of
▇▇▇▇▇'▇ Investors Service, Inc. and Standard & Poor's Rating Group, a division
of ▇▇▇▇▇▇-▇▇▇▇ Inc., that the replacement of the Escrow Agent with the successor
Escrow Agent will not result in (a) a reduction of the rating for the
Certificates below the then current rating for the Certificates or (b) a
withdrawal or suspension of the rating of the Certificates.
Section 1.08. Persons Deemed Owners. Prior to due presentment of a
Certificate for registration of transfer, the Escrow Agent and the Paying Agent
may
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treat the Person in whose name any Escrow Receipt is registered (as of the day
of determination) as the owner of such Escrow Receipt for the purpose of
receiving distributions pursuant to this Agreement and for all other purposes
whatsoever, and neither the Escrow Agent nor the Paying Agent shall be affected
by any notice to the contrary.
Section 1.09. Further Assurances. The Escrow Agent agrees to take
such actions, and execute such other documents, as may be reasonably requested
by the Pass Through Trustee in order to effectuate the purposes of this
Agreement and the performance by the Escrow Agent of its obligations hereunder.
SECTION 2. Paying Agent.
Section 2.01. Appointment of Paying Agent. The Escrow Agent hereby
irrevocably appoints and authorizes the Paying Agent to act as its paying agent
hereunder, for the benefit of the Investors, for such specific purposes and with
such powers as are specifically delegated to the Paying Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto. Any and all money received and held by the Paying Agent under this
Agreement or the Deposit Agreement shall be held in the Paying Agent Account for
the benefit of the Investors. The Paying Agent (which term as used in this
sentence shall include reference to its affiliates and its own and its
affiliates' officers, directors, employees and agents): (a) shall have no duties
or responsibilities except those expressly set forth in this Agreement, and
shall not by reason of this Agreement be a trustee for the Escrow Agent; (b)
shall not be responsible to the Escrow Agent for any recitals, statements,
representations or warranties of any person other than itself contained in this
Agreement or for the failure by the Escrow Agent or any other person or entity
(other than the Paying Agent) to perform any of its obligations hereunder
(whether or not the Paying Agent shall have any knowledge thereof); and (c)
shall not be responsible for any action taken or omitted to be taken by it
hereunder or provided for herein or in connection herewith, except for its own
willful misconduct or gross negligence (or simple negligence in connection with
the handling of funds).
Section 2.02. Establishment of Paying Agent Account. The Paying
Agent shall establish a deposit account (the "Paying Agent Account") at The
First National Bank of Maryland in the name of the Escrow Agent. It is expressly
understood by the parties hereto that the Paying Agent is acting as the paying
agent of the Escrow Agent hereunder and that no amounts on deposit in the Paying
Agent Account constitute part of the Trust Property.
Section 2.03. Payments from Paying Agent Account. The Escrow Agent
hereby irrevocably instructs the Paying Agent, and the Paying Agent agrees to
act, as follows:
(a) On each Interest Payment Date (as defined in the Deposit
Agreement) or as soon thereafter as the Paying Agent has confirmed receipt
in
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the Paying Agent Account from the Depositary of any amount in respect of
accrued interest on the Deposits, the Paying Agent shall distribute out of
the Paying Agent Account the entire amount deposited therein by the
Depositary. There shall be so distributed to each Receiptholder of record
on the 15th day (whether or not a Business Day) preceding such Interest
Payment Date by check mailed to such Receiptholder, at the address
appearing in the Register, such Receiptholder's pro rata share (based on
the Escrow Interest in the Account Amounts held by such Receiptholder) of
the total amount of interest deposited by the Depositary in the Paying
Agent Account on such date, except that, with respect to Escrow Receipts
registered on the Record Date in the name of DTC, such distribution shall
be made by wire transfer in immediately available funds to the account
designated by DTC.
(b) Upon the confirmation by the Paying Agent of receipt in the
Paying Agent Account from the Depositary of any amount in respect of the
Final Withdrawal, the Paying Agent shall forthwith distribute the entire
amount of the Final Withdrawal deposited therein by the Depositary. There
shall be so distributed to each Receiptholder of record on the 15th day
(whether or not a Business Day) preceding the Final Withdrawal Date by
check mailed to such Receiptholder, at the address appearing in the
Register, such Receiptholder's pro rata share (based on the Escrow
Interest in the Account Amounts held by such Receiptholder) of the total
amount in the Paying Agent Account on account of such Final Withdrawal,
except that, with respect to Escrow Receipts registered on the Record Date
in the name of DTC, such distribution shall be made by wire transfer in
immediately available funds to the account designated by DTC.
(c) If any payment of interest or principal in respect of the Final
Withdrawal is not received by the Paying Agent within five days of the
applicable date when due, then it shall be distributed to Receiptholders
after actual receipt by the Paying Agent on the same basis as a Special
Payment is distributed under the Pass Through Trust Agreement.
(d) The Paying Agent shall include with any check mailed pursuant to
this Section any notice required to be distributed under the Pass Through
Trust Agreement that is furnished to the Paying Agent by the Pass Through
Trustee.
Section 2.04. Withholding Taxes. The Paying Agent shall exclude and
withhold from each distribution of accrued interest on the Deposits (as defined
in the Deposit Agreement) and any amount in respect of the Final Withdrawal any
and all withholding taxes applicable thereto as required by law. The Paying
Agent agrees to act as such withholding agent and, in connection therewith,
whenever any present or future taxes or similar charges are required to be
withheld with respect to any amounts payable in respect of the Deposits (as
defined in the Deposit Agreement) or the escrow amounts, to withhold such
amounts and timely pay the same to the appropriate authority in the name of and
on behalf of the Receiptholders, that it will file any necessary withholding tax
returns or statements when due, and that, as promptly as
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possible after the payment thereof, it will deliver to each such Receiptholder
appropriate documentation showing the payment thereof, together with such
additional documentary evidence as such Receiptholder may reasonably request
from time to time. The Paying Agent agrees to file any other information reports
as it may be required to file under United States law.
Section 2.05. Resignation or Removal of Paying Agent. Subject to the
appointment and acceptance of a successor Paying Agent as provided below, the
Paying Agent may resign at any time by giving 30 days' prior written notice
thereof to the Escrow Agent, but may not otherwise be removed except for cause
by the Escrow Agent. Upon any such resignation or removal, the Escrow Agent
shall have the right to appoint a successor Paying Agent. If no successor Paying
Agent shall have been so appointed and shall have accepted such appointment
within 30 days after the retiring Paying Agent's giving of notice of resignation
or the removal of the retiring Paying Agent, then the retiring Paying Agent may
appoint a successor Paying Agent. Any Successor Paying Agent shall be a bank
which has an office in the United States with a combined capital and surplus of
at least $100,000,000. Upon the acceptance of any appointment as Paying Agent
hereunder by a successor Paying Agent, such successor Paying Agent shall enter
into such documents as the Escrow Agent shall require and shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Paying Agent, and the retiring Paying Agent shall be discharged
from its duties and obligations hereunder.
Section 2.06. Notice of Final Withdrawal. Promptly after receipt by
the Paying Agent of notice that the Escrow Agent has requested a Final
Withdrawal or that a Final Withdrawal will be made, the Paying Agent shall cause
notice of the distribution of the Final Withdrawal to be mailed to each of the
Receiptholders at its address as it appears in the Register. Such notice shall
be mailed not less than 15 days prior to the Final Withdrawal Date. Such notice
shall set forth:
(i) the Final Withdrawal Date and the date for determining
Receiptholders of record who shall be entitled to receive
distributions in respect of the Final Withdrawal,
(ii) the amount of the payment in respect of the Final
Withdrawal for each $1,000 face amount Certificate (based on
information provided by the Pass Through Trustee) and the amount
thereof constituting unused Deposits (as defined in the Deposit
Agreement) and interest thereon, and
(iii) if the Final Withdrawal Date is the same date as a
Regular Distribution Date, the total amount to be received on such
date for each $1,000 face amount Certificate (based on information
provided by the Pass Through Trustee).
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Such mailing may include any notice required to be given to
Certificate holders in connection with such distribution pursuant to the Pass
Through Trust Agreement.
SECTION 3. Payments. If, notwithstanding the instructions in Section
4 of the Deposit Agreement that all amounts payable to the Escrow Agent under
the Deposit Agreement be paid by the Depositary directly to the Paying Agent or
the Pass Through Trustee (depending on the circumstances), the Escrow Agent
receives any payment thereunder, then the Escrow Agent shall forthwith pay such
amount in Dollars and in immediately available funds by wire transfer to (a) in
the case of a payment of accrued interest on the Deposits (as defined in the
Deposit Agreement) or any Final Withdrawal, directly to the Paying Agent Account
and (b) in the case of any Purchase Withdrawal, directly to the Pass Through
Trustee or its designee as specified and in the manner provided in the
Applicable Notice of Purchase Withdrawal. The Escrow Agent hereby waives any and
all rights of set-off, combination of accounts, right of retention or similar
right (whether arising under applicable law, contract or otherwise) it may have
against amounts payable to the Paying Agent howsoever arising.
SECTION 4. Other Actions. The Escrow Agent shall take such other
actions under or in respect of the Deposit Agreement (including, without
limitation, the enforcement of the obligations of the Depositary thereunder) as
the Investors, by an Action of Investors, may from time to time request.
SECTION 5. Representations and Warranties of the Escrow Agent. The
Escrow Agent represents and warrants to Midway, the Investors, the Paying Agent
and the Pass Through Trustee as follows:
(i) it is a national banking association duly organized and validly
existing in good standing under the laws of the United States of America;
(ii) it has full power, authority and legal right to conduct its
business and operations as currently conducted and to enter into and
perform its obligations under this Agreement and the Deposit Agreement;
(iii) the execution, delivery and performance of each of this
Agreement and the Deposit Agreement have been duly authorized by all
necessary corporate action on the part of it and do not require any
stockholder approval, or approval or consent of any trustee or holder of
any indebtedness or obligations of it, and each such document has been
duly executed and delivered by it and constitutes its legal, valid and
binding obligations enforceable against it in accordance with the terms
hereof or thereof except as such enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization or other similar laws
or equitable principles of general application to or affecting the
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enforcement of creditors' rights generally (regardless of whether such
enforceability is considered in a proceeding in equity or at law);
(iv) no authorization, consent or approval of or other action by,
and no notice to or filing with, any United States federal or state
governmental authority or regulatory body is required for the execution,
delivery or performance by it of this Agreement or the Deposit Agreement;
(v) neither the execution, delivery or performance by it of this
Agreement or the Deposit Agreement, nor compliance with the terms and
provisions hereof or thereof, conflicts or will conflict with or results
or will result in a breach or violation of any of the terms, conditions or
provisions of, or will require any consent or approval under, any law,
governmental rule or regulation or the charter documents, as amended, or
bylaws, as amended, of it or any similar instrument binding on it or any
order, writ, injunction or decree of any court or governmental authority
against it or by which it or any of its properties is bound or any
indenture, mortgage or contract or other agreement or instrument to which
it is a party or by which it or any of its properties is bound, or
constitutes or will constitute a default thereunder or results or will
result in the imposition of any lien upon any of its properties; and
(vi) there are no pending or, to its knowledge, threatened actions,
suits, investigations or proceedings (whether or not purportedly on behalf
of it) against or affecting it or any of its property before or by any
court or administrative agency which, if adversely determined, (A) would
adversely affect the ability of it to perform its obligations under this
Agreement or the Deposit Agreement or (B) would call into question or
challenge the validity of this Agreement or the Deposit Agreement or the
enforceability hereof or thereof in accordance with the terms hereof or
thereof, nor is the Escrow Agent in default with respect to any order of
any court, governmental authority, arbitration board or administrative
agency so as to adversely affect its ability to perform its obligations
under this Agreement or the Deposit Agreement.
SECTION 6. Representations and Warranties of the Paying Agent. The
Paying Agent represents and warrants to Midway, the Investors, the Escrow Agent
and the Pass Through Trustee as follows:
(i) it is a national banking association duly organized and validly
existing in good standing under the laws of the United States of America
incorporation;
(ii) it has full power, authority and legal right to conduct its
business and operations as currently conducted and to enter into and
perform its obligations under this Agreement;
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(iii) the execution, delivery and performance of this Agreement has
been duly authorized by all necessary corporate action on the part of it
and does not require any stockholder approval, or approval or consent of
any trustee or holder of any indebtedness or obligations of it, and such
document has been duly executed and delivered by it and constitutes its
legal, valid and binding obligations enforceable against it in accordance
with the terms hereof except as such enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization or other similar laws
or equitable principles of general application to or affecting the
enforcement of creditors' rights generally (regardless of whether such
enforceability is considered in a proceeding in equity or at law);
(iv) no authorization, consent or approval of or other action by,
and no notice to or filing with, any United States or State of Maryland
governmental authority or regulatory body is required for the execution,
delivery or performance by it of this Agreement;
(v) neither the execution, delivery or performance by it of this
Agreement, nor compliance with the terms and provisions hereof, conflicts
or will conflict with or results or will result in a breach or violation
of any of the terms, conditions or provisions of, or will require any
consent or approval under, any law, governmental rule or regulation or the
articles of association documents, as amended, or bylaws, as amended, of
it or any similar instrument binding on it or any order, writ, injunction
or decree of any court or governmental authority against it or by which it
or any of its properties is bound or any indenture, mortgage or contract
or other agreement or instrument to which it is a party or by which it or
any of its properties is bound, or constitutes or will constitute a
default thereunder or results or will result in the imposition of any lien
upon any of its properties; and
(vi) there are no pending or, to its knowledge, threatened actions,
suits, investigations or proceedings (whether or not purportedly on behalf
of it) against or affecting it or any of its property before or by any
court or administrative agency which, if adversely determined, (A) would
adversely affect the ability of it to perform its obligations under this
Agreement or (B) would call into question or challenge the validity of
this Agreement or the enforceability hereof in accordance with the terms
hereof, nor is the Paying Agent in default with respect to any order of
any court, governmental authority, arbitration board or administrative
agency so as to adversely affect its ability to perform its obligations
under this Agreement.
SECTION 7. Indemnification. Except for actions expressly required of
the Escrow Agent or the Paying Agent hereunder, each of the Escrow Agent and the
Paying Agent shall in all cases be fully justified in failing or refusing to act
hereunder
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unless it shall have been indemnified by the party requesting such action in a
manner reasonably satisfactory to it against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action. In the event Midway requests any amendment to any Operative Agreement
(as defined in the Note Purchase Agreement), the Pass Through Trustee, solely to
the extent of funds made available by Midway for such purpose, agrees to pay all
reasonable fees and expenses (including, without limitation, fees and
disbursements of counsel) of the Escrow Agent and the Paying Agent in connection
therewith.
SECTION 8. Amendment, Etc. Upon request of the Pass Through Trustee
and approval by an Action of Investors, the Escrow Agent shall enter into an
amendment to this Agreement, so long as such amendment does not adversely affect
the rights or obligations of the Escrow Agent or the Paying Agent, provided that
upon request of the Pass Through Trustee and without any consent of the
Investors, the Escrow Agent shall enter into an amendment to this Agreement for
any of the following purposes:
(1) to correct or supplement any provision in this Agreement which
may be defective or inconsistent with any other provision herein or to
cure any ambiguity or correct any mistake or to modify any other provision
with respect to matters or questions arising under this Agreement,
provided that any such action shall not materially adversely affect the
interests of the Investors; or
(2) to comply with any requirement of the SEC, applicable law, rules
or regulations of any exchange or quotation system on which the
Certificates are listed or any regulatory body; or
(3) to evidence and provide for the acceptance of appointment under
this Agreement of a successor Escrow Agent, successor Paying Agent or
successor Pass Through Trustee.
SECTION 9. Notices. Unless otherwise expressly provided herein, any
notice or other communication under this Agreement shall be in writing
(including by facsimile) and shall be deemed to be given and effective upon
receipt thereof. All notices shall be sent to (a) in the case of the Investors,
as their respective addresses shall appear in the Register, (b) in the case of
the Escrow Agent, First Union Trust Company, National Association, One ▇▇▇▇▇▇
Square, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Corporate Trust Administration (Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇), (c) in the case of
the Pass Through Trustee, The First National Bank of Maryland, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, Mail Code 101-591, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust
Department (Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇) or (d) in the case of the Paying Agent,
The First National Bank of Maryland, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Mail Code 101-591,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Department (Telecopier:
(▇▇▇) ▇▇▇-▇▇▇▇), in each case with a copy to Midway, Midway Airlines
Corporation, ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
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Attention: General Counsel (Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇) (or at such other
address as any such party may specify from time to time in a written notice to
the other parties). On or prior to the execution of this Agreement, the Pass
Through Trustee has delivered to the Escrow Agent a certificate containing
specimen signatures of the representatives of the Pass Through Trustee who are
authorized to give notices and instructions with respect to this Agreement. The
Escrow Agent may conclusively rely on such certificate until the Escrow Agent
receives written notice from the Pass Through Trustee to the contrary.
SECTION 10. Transfer. No party hereto shall be entitled to assign or
otherwise transfer this Agreement (or any interest herein) other than (in the
case of the Escrow Agent) to a successor escrow agent under Section 1.06 hereof
or (in the case of the Paying Agent) to a successor paying agent under Section
2.04 hereof, and any purported assignment in violation thereof shall be void.
This Agreement shall be binding upon the parties hereto and their respective
successors and (in the case of the Escrow Agent and the Paying Agent) their
respective permitted assigns. Upon the occurrence of the Transfer (as defined
below) contemplated by the Assignment and Assumption Agreement (as defined
below), the Pass Through Trustee shall (without further act) be deemed to have
transferred all of its right, title and interest in and to this Agreement to the
trustee of the Successor Trust (as defined below) and, thereafter, the trustee
of the Successor Trust shall be deemed to be the "Pass Through Trustee"
hereunder with the rights and obligations of the "Pass Through Trustee"
hereunder and each reference herein to "Midway Airlines Pass Through Trust"
1998-1A-O" shall be deemed to be a reference to "Midway Airlines Pass Through
Trust 1998-1A-S". The parties hereto hereby acknowledge and consent to the
Transfer contemplated by the Assignment and Assumption Agreement. As used
herein, "Transfer" means the transfers of the assets to the Successor Trust
contemplated by the Assignment and Assumption Agreement; "Assignment and
Assumption Agreement" means the Assignment and Assumption Agreement to be
entered into between the Pass Through Trustee and the trustee of the Successor
Trust, substantially in the form of Exhibit C to the Trust Supplement;
"Successor Trust" means the Midway Airlines Pass Through Trust 1998-1A-S.
SECTION 11. Entire Agreement. This Agreement sets forth all of the
promises, covenants, agreements, conditions and understandings among the Escrow
Agent, the Paying Agent, the Underwriters and the Pass Through Trustee with
respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements and undertakings, inducements or conditions, express
or implied, oral or written.
SECTION 12. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
SECTION 13. Waiver of Jury Trial Right. EACH OF THE ESCROW AGENT,
THE PAYING AGENT, THE INVESTORS AND THE PASS THROUGH TRUSTEE ACKNOWLEDGES AND
ACCEPTS THAT IN ANY SUIT, ACTION OR
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PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT SUCH PARTY IRREVOCABLY
WAIVES ITS RIGHT TO A TRIAL BY JURY.
SECTION 14. Counterparts. This Agreement may be executed in one or
more counterparts, all of which taken together shall constitute one instrument.
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IN WITNESS WHEREOF, the Escrow Agent, the Paying Agent, the Initial
Purchasers and the Pass Through Trustee have caused this Escrow and Paying Agent
Agreement (Class A) to be duly executed as of the day and year first above
written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO.
INCORPORATED; and
CREDIT SUISSE FIRST BOSTON
CORPORATION,
as Initial Purchasers
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO.
INCORPORATED
By: /s/ ▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Principal
THE FIRST NATIONAL BANK OF MARYLAND, not
in its individual capacity, but solely
as Pass Through Trustee for and on
behalf of Midway Airlines Pass Through
Trust 1998-1A-O
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Vice President
THE FIRST NATIONAL BANK OF MARYLAND, as
Paying Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
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EXHIBIT A
MIDWAY AIRLINES 1998-1A ESCROW RECEIPT
No. _
This Escrow Receipt evidences a fractional undivided interest in
amounts ("Account Amounts") from time to time deposited into a certain paying
agent account (the "Paying Agent Account") described in the Escrow and Paying
Agent Agreement (Class A) dated as of August 13, 1998 (as amended, modified or
supplemented from time to time, the "Escrow and Paying Agent Agreement") among
First Union Trust Company, National Association, as Escrow Agent (in such
capacity, together with its successors in such capacity, the "Escrow Agent"),
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and Credit Suisse First Boston Corporation, as
Initial Purchasers, The First National Bank of Maryland, as Pass Through Trustee
(in such capacity, together with its successors in such capacity, the "Pass
Through Trustee") and The First National Bank of Maryland, as paying agent (in
such capacity, together with its successors in such capacity, the "Paying
Agent"). Capitalized terms not defined herein shall have the meanings assigned
to them in the Escrow and Paying Agent Agreement.
This Escrow Receipt is issued under and is subject to the terms,
provisions and conditions of the Escrow and Paying Agent Agreement. By virtue of
its acceptance hereof the holder of this Escrow Receipt assents and agrees to be
bound by the provisions of the Escrow and Paying Agent Agreement and this Escrow
Receipt.
This Escrow Receipt represents a fractional undivided interest in
amounts deposited from time to time in the Paying Agent Account, and grants or
represents no rights, benefits or interests of any kind in respect of any assets
or property other than such amounts. This Escrow Receipt evidences the same
percentage interest in the Account Amounts as the Fractional Undivided Interest
in the Pass Through Trust evidenced by the Certificate to which this Escrow
Receipt is affixed.
All payments and distributions made to Receiptholders in respect of
the Escrow Receipt shall be made only from Account Amounts deposited in the
Paying Agent Account. The holder of this Escrow Receipt, by its acceptance of
this Escrow Receipt, agrees that it will look solely to the Account Amounts for
any payment or distribution due to it pursuant to this Escrow Receipt and that
it will not have any recourse to Midway, the Pass Through Trustee, the Paying
Agent or the Escrow Agent, except as expressly provided herein or in the Pass
Through Trust Agreement. No Receiptholder of this Escrow Receipt shall have any
right to vote or in any manner otherwise control the operation and management of
the Paying Agent Account, nor shall anything set forth herein, or contained in
the terms of this Escrow Receipt, be construed so as to constitute the
Receiptholders from time to time as partners or members of an association.
This Escrow Receipt may not be assigned or transferred except in
connection with the assignment or transfer of the Certificate to which this
Escrow Receipt is affixed. After payment to the holder hereof of its Escrow
Interest in the Final Distribution, upon the request of the Pass Through
Trustee, the holder hereof will return this Escrow Receipt to the Pass Through
Trustee.
The Paying Agent may treat the person in whose name the Certificate
to which this Escrow Receipt is attached as the owner hereof for all purposes,
and the Paying Agent shall not be affected by any notice to the contrary.
THIS ESCROW RECEIPT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the Escrow Agent has caused this Escrow Receipt
to be duly executed.
Dated: August ___, 1998
First Union Trust Company, National
Association, as Escrow Agent
By
-------------------------------------
Name:
Title:
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EXHIBIT B
WITHDRAWAL CERTIFICATE
(Class A)
First Union Trust Company, National Association
as Escrow Agent
Dear Sirs:
Reference is made to the Escrow and Paying Agent Agreement, dated as
of August 13, 1998 (the "Agreement"). We hereby certify to you that the
conditions to the obligations of the undersigned to execute a Participation
Agreement pursuant to the Note Purchase Agreement have been satisfied. Pursuant
to Section 1.02(c) of the Agreement, please execute the attached Notice of
Withdrawal and immediately transmit by facsimile to the Depositary, at First
Union National Bank, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (facsimile no. 704-383-9139).
Very truly yours,
THE FIRST NATIONAL BANK OF MARYLAND, not
in its individual capacity but solely as
Pass Through Trustee
By
--------------------------------------
Name
Dated: _______________, 199__