EXHIBIT 4.20
AMBAC ASSURANCE CORPORATION,
as Policy Provider,
AMERICA WEST AIRLINES, INC.
and
WILMINGTON TRUST COMPANY,
not in its individual capacity but solely as Subordination Agent
INSURANCE AND INDEMNITY AGREEMENT
AMERICA WEST AIRLINES, INC.
PASS THROUGH CERTIFICATES,
SERIES 2001-1G
Dated as of May 17, 2001
TABLE OF CONTENTS
(This Table of Contents is for convenience of reference only
and shall not be deemed to be part of this Agreement. All capitalized terms used
in this Agreement and not otherwise defined shall have the meanings set forth in
Article I of this Agreement.)
Page
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ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms......................................................... 2
Section 1.02 Other Definitional Provisions......................................... 6
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.01 Representations and Warranties of AWA................................. 6
Section 2.02 Covenants of AWA...................................................... 9
Section 2.03 Covenants of WTC and Subordination Agent.............................. 12
Section 2.04 Representations, Warranties and Covenants of the Policy Provider...... 12
ARTICLE III
THE POLICY; REIMBURSEMENT; INDEMNIFICATION
Section 3.01 Issuance of the Policy................................................ 13
Section 3.02 Payment of Fees and Premium........................................... 15
Section 3.03 Reimbursement Obligation.............................................. 16
Section 3.04 Indemnification....................................................... 16
Section 3.05 Procedure for Payment of Fees and Premiums............................ 17
ARTICLE IV
FURTHER AGREEMENTS
Section 4.01 Effective Date; Term of the Insurance Agreement....................... 17
Section 4.02 Further Assurances and Corrective Instruments......................... 17
Section 4.03 Obligations Absolute.................................................. 17
Section 4.04 Assignments; Reinsurance; Third-Party Rights.......................... 19
Section 4.05 Liability of the Policy Provider...................................... 19
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ARTICLE V
MISCELLANEOUS
Section 5.01 Amendments, Etc....................................................... 20
Section 5.02 Notices............................................................... 20
Section 5.03 Severability.......................................................... 21
Section 5.04 Governing Law......................................................... 21
Section 5.05 Consent to Jurisdiction............................................... 21
Section 5.06 Consent of the Policy Provider........................................ 22
Section 5.07 Counterparts.......................................................... 22
Section 5.08 Headings.............................................................. 22
Section 5.09 Trial by Jury Waived.................................................. 22
Section 5.10 Limited Liability..................................................... 23
Section 5.11 Entire Agreement...................................................... 23
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INSURANCE AND INDEMNITY AGREEMENT (as may be amended, modified
or supplemented from time to time, this "Insurance Agreement"), dated as of May
17, 2001, by and among AMBAC ASSURANCE CORPORATION, as Policy Provider, AMERICA
WEST AIRLINES, INC. ("AWA") and WILMINGTON TRUST COMPANY, not in its individual
capacity but solely as Subordination Agent (the "Subordination Agent").
W I T N E S S E T H :
WHEREAS, AWA intends to finance (or refinance) the acquisition
of fourteen Aircraft either (i) through separate leveraged lease Transactions in
which AWA will lease the Leased Aircraft or (ii) through separate secured loan
Transactions in which AWA will own the Owned Aircraft;
WHEREAS, in the case of each Leased Aircraft, the Owner
Trustee acting on behalf of a corresponding Owner Participant, will issue
pursuant to an Indenture, on a non-recourse basis, three series of Equipment
Notes in order to finance a portion of its purchase price of such Leased
Aircraft;
WHEREAS, in the case of each Owned Aircraft, AWA will issue
pursuant to an Indenture, on a recourse basis, three series of Equipment Notes
to finance a portion of the purchase price of such Owned Aircraft;
WHEREAS, WTC, not in its individual capacity but as Trustee
under each of the Trust Agreements, will create the Trusts, which will acquire
the Equipment Notes under the Note Purchase Agreement;
WHEREAS, (i) Westdeutsche Landesbank Girozentrale, acting
through its New York branch, as Liquidity Provider, has entered into two
Liquidity Facilities, one for the benefit of the Class G Certificateholders and
one for the benefit of the Class C Certificateholders, with WTC, as the
Subordination Agent, as agent and Trustee for the applicable Trust, and (ii)
WTC, as the Subordination Agent and as Trustee of each Trust, the Liquidity
Provider, the Policy Provider and the Subordination Agent have entered into the
Intercreditor Agreement;
WHEREAS, pursuant to each Trust Agreement, a separate Trust
has been created to facilitate the sale of the Certificates;
WHEREAS, the Policy Provider has issued the Policy in respect
of the Class G Certificates, pursuant to which it has agreed to guarantee the
payment of interest to the Subordination Agent for the benefit of the Class G
Trustee and Class G Certificateholders, and the payment of principal of the
Class G Certificates on the Final Distribution Date for the Class G Certificates
and as otherwise provided herein;
WHEREAS, the Policy Provider shall be paid the Premium as set
forth herein; and
WHEREAS, each of AWA and the Subordination Agent has agreed to
undertake certain obligations in consideration for the Policy Provider's
issuance of the Policy;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Defined Terms. Unless the context clearly
requires otherwise, all capitalized terms used but not defined herein shall have
the respective meanings assigned to them in the Intercreditor Agreement or, if
not defined therein, in the Policy described below. For purposes of this
Insurance Agreement, the following terms shall have the following meanings:
"Act" means Part A of subtitle VII of Xxxxx 00, Xxxxxx Xxxxxx
Code.
"Aircraft" means any aircraft which is or will be part of the
Collateral.
"Airframe" means any airframe which is or will be part of the
Collateral.
"Bankruptcy Code" means the United States Bankruptcy Code, 11
U.S.C. Section 101 et seq.
"Citizen of the United States" is defined in Section
40102(a)(15) of the Act and in the FAA Regulations.
"Collateral" means the "Collateral" as defined or to be
defined in any Indenture with respect to an Owned Aircraft, and the "Trust
Indenture Estate" as defined or to be defined in any Indenture with respect to a
Leased Aircraft.
"Delivery Date" means with respect to each Participation
Agreement, the "Closing Date" as defined or to be defined in each such
Participation Agreement.
"Engine" means any engine which is or will be part of the
Collateral.
"Exchange Offer Registration Statement" has the meaning given
such term in the Trust Agreement.
"Expenses" means any and all liabilities, obligations, losses,
damages, settlements, penalties, claims, actions, suits, costs, expenses and
disbursements (including, without limitation, reasonable fees and disbursements
of legal counsel, accountants, appraisers, inspectors or other professionals,
and costs of investigation).
"Event of Loss" means any Event of Loss defined or to be
defined in any Participation Agreement.
"FAA" means the Federal Aviation Administration of the United
States of America or any Government Entity succeeding to the functions of the
Federal Aviation Administration.
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"FAA Filed Documents" with respect to each Aircraft has the
meaning given such term in the related Participation Agreement.
"Final Dissolution Date" means, following the occurrence of a
Triggering Event, the Distribution Date next succeeding the date of receipt by
the Subordination Agent of the proceeds of the last Aircraft (or the related
Equipment Notes) then subject to the Lien of any Indenture.
"Final Distribution Date" means the date which is the earlier
of (i) the Final Legal Distribution Date or (ii) the Final Dissolution Date.
"Final Legal Distribution Date" means October 2, 2022.
"Financing Statements" means collectively, UCC-1 (and, where
appropriate, UCC-3) financing statements covering (A) in respect of each Owned
Aircraft, the related Collateral, executed by Owner, as debtor, showing
Mortgagee as secured party, for filing in Delaware and Arizona, unless the
revised Uniform Commercial Code has been adopted in Arizona and the Policy
Provider shall have received an opinion of counsel from AWA, acceptable to the
Policy Provider, that filing is not necessary in Arizona and each other
jurisdiction in which such filing is made on or before the related Delivery Date
and (B) with respect to each Leased Aircraft (a) the related Collateral,
executed by the related Owner Trustee as debtor, showing Mortgagee as secured
party, for filing in the Trust Company Jurisdiction (as defined in Schedule 3 to
the related Participation Agreement) and each other jurisdiction that, in the
opinion of Mortgagee, is necessary to perfect its Lien on the related Collateral
and (b) the related Lease and the Aircraft, as a precautionary matter, executed
by Lessee, as lessee, showing Owner Trustee as lessor and Mortgagee as assignee
of Owner Trustee, for filing in Delaware and Arizona, unless the revised Uniform
Commercial Code has been adopted in Arizona and the Policy Provider shall have
received an opinion of counsel from AWA, acceptable to the Policy Provider, that
filing is not necessary in Arizona.
"GAAP" means generally accepted accounting principles as set
forth in the statements of financial accounting standards issued by the
Financial Accounting Standards Board of the American Institute of Certified
Public Accountants, as such principles may at any time or from time to time be
varied by any applicable financial accounting rules or regulations issued by the
SEC and, with respect to any Person, shall mean such principles applied on a
basis consistent with prior periods except as may be disclosed in such Person's
financial statements.
"Government Entity" means (a) any federal, state, provincial
or similar government, and any body, board, department, commission, court,
tribunal, authority, agency or other instrumentality of any such government or
otherwise exercising any executive, legislative, judicial, administrative or
regulatory functions of such government or (b) any other government entity
having jurisdiction over any matter contemplated by the Operative Agreements or
relating to the observance or performance of the obligations of any of the
parties to the Operative Agreements.
"Holder" has the meaning given such term in the Policy.
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"Initial Purchasers" means Xxxxxxx Xxxxx Xxxxxx Inc., Deutsche
Banc Alex. Xxxxx Inc., Mizuho International plc, Banc One Capital Markets, Inc.
and Tokyo-Mitsubishi International plc.
"Insurance Agreement" has the meaning given such term in the
initial paragraph hereof.
"Intercreditor Agreement" means the Intercreditor Agreement
(2001-1), dated as the date hereof by and among WTC, as Trustee under each of
the Class G Trust, the Class C Trust and the Class D Trust, the Liquidity
Provider, the Policy Provider and the Subordination Agent.
"Investment Company Act" means the Investment Company Act of
1940, including, unless the context otherwise requires, the rules and
regulations thereunder, as amended from time to time.
"Lease Default" means, with respect to any Lease, any Event of
Default (as such term is defined in the Lease).
"Lien" means any mortgage, pledge, lien, charge, encumbrance
or security interest affecting the title to or any interest in property.
"Material Adverse Change" means, in respect of any Person as
at any date, a material adverse change in the ability of such Person to perform
its obligations under any of the Operative Agreements to which it is a party as
of such date, including any material adverse change in the business, financial
condition, results of operations or properties of such Person on a consolidated
basis with its subsidiaries which might have such effect.
"Moody's" means Xxxxx'x Investors Service, Inc., and any
successor thereto.
"Mortgagee" with respect to each Aircraft means WTC in its
capacity as Loan Trustee under the related Indentures.
"Offering Document" means the Offering Memorandum dated May
10, 2001, any supplemental Offering Memorandum relating to the Class G
Certificates, the Exchange Offer Registration Statement and any amendment or
supplement to any of the foregoing.
"Operative Agreements" (i) means this Insurance Agreement, the
Intercreditor Agreement, each Participation Agreement, the Note Purchase
Agreement, each Indenture, the Series G Equipment Notes, the Class G
Certificates, the Liquidity Facilities, the Class G Trust Agreement, the
Purchase Agreement, the Leases and the Policy Fee Letter, together with all
exhibits and schedules included with any of the foregoing.
"Owner" means, with respect to a Leased Aircraft, the related
Owner Trustee, and with respect to an Owned Aircraft, AWA.
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"Person" means an individual, joint stock company, trust,
unincorporated association, joint venture, corporation, business or owner trust,
partnership or other organization or entity (whether governmental or private).
"Policy" means the Certificate Guaranty Insurance Policy No.
AB0455BE together with all endorsements thereto, issued by the Policy Provider
in favor of the Subordination Agent for the benefit of the Class G
Certificateholders and the Liquidity Provider to the extent provided therein.
"Policy Fee Letter" means the fee letter, dated as of May 17,
2001 between the Policy Provider and AWA setting forth the Premium and certain
other amounts payable in respect of the Policy.
"Policy Provider" means Ambac Assurance Corporation, or any
successor thereto, as issuer of the Policy.
"Policy Provider Information" means the information set forth
under the caption "Description of the Policy Provider" in the Offering Document.
"Premium" means the premium payable in respect of the Policy
on the Closing Date and on each Distribution Date thereafter in an amount equal
to 1/2 of the product of (i) the Premium Percentage and (ii) with respect to the
payment to be made on the Closing Date, the Pool Balance of the Class G
Certificates on the Closing Date, or with respect to the payments to be made on
each Distribution Date, the Pool Balance of the Class G Certificates on such
Distribution Date after giving effect to any distributions to be made on such
Distribution Date; provided, however, the fee payable on the Closing Date shall
be pro rated from the Closing Date to the first Distribution Date (based upon a
360 day year of twelve 30 day months).
"Premium Percentage" shall have the meaning set forth in the
Policy Fee Letter.
"Purchase Agreement" means the Purchase Agreement, dated May
10, 2001, among AWA, Xxxxxxx Xxxxx Barney Inc., Deutsche Banc Alex. Xxxxx Inc.,
Mizuho International plc, Banc One Capital Markets, Inc. and Tokyo-Mitsubishi
International plc., with respect to the Certificates, as may be amended,
modified or supplemented from time to time.
"Registration Rights Agreement" has the meaning given such
term in the Purchase Agreement.
"S&P" means Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc., and any successor thereto.
"SEC" means the Securities and Exchange Commission of the
United States of America, or any successor thereto.
"Section 1110" means 11 U.S.C. Section 1110 of the Bankruptcy
Code or any successor or analogous section of the federal bankruptcy law in
effect from time to time.
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"Securities Act" means the Securities Act of 1933, including,
unless the context otherwise requires, the rules and regulations thereunder, as
amended from time to time.
"Security" means a "security" as defined in Section 2(1) of
the Securities Act.
"Series G Equipment Notes" means the 7.10% Series G Equipment
Notes issued pursuant to any Indenture by the related Owner Trustee or AWA, as
the case may be, and authenticated by the Loan Trustee thereunder, and any
Equipment Notes issued in exchange therefor or replacement thereof pursuant to
the terms of such Indenture.
"Transactions" means the Transactions contemplated by the
Operative Agreements, including the Transactions described in the Offering
Document.
"UCC" means the Uniform Commercial Code as in effect in any
applicable jurisdiction.
"U.S. Air Carrier" means any United States air carrier that is
a Citizen of the United States holding an air carrier operating certificate
issued by the Secretary of Transportation pursuant to the Act for aircraft
capable of carrying 10 or more individuals or 6000 pounds or more of cargo, and
as to which there is in force an air carrier operating certificate issued
pursuant to Part 121 of the FAA Regulations, or which may operate as an air
carrier by certification or otherwise under any successor or substitute
provisions therefor or in the absence thereof.
"WTC" means Wilmington Trust Company, a Delaware banking
corporation.
SECTION 1.02 Other Definitional Provisions. The words
"hereof," "herein" and "hereunder" and words of similar import when used in this
Insurance Agreement shall refer to this Insurance Agreement as a whole and not
to any particular provision of this Insurance Agreement. Section, subsection,
Schedule and Exhibit references are to this Insurance Agreement unless otherwise
specified. The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms. The words
"include" and "including" shall be deemed to be followed by the phrase "without
limitation."
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 2.01 Representations and Warranties of AWA. AWA
represents and warrants as of the Closing Date and as of each Delivery Date as
follows:
(a) Organization; Qualification. AWA is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware and has the corporate power and authority to conduct its business in
which it is currently engaged and to own or hold under lease its properties and
to enter into and perform its obligations under the Operative Agreements to
which it is a party as of such date. AWA is duly qualified to do business as a
foreign corporation in good standing in each jurisdiction in which the nature
and extent of the business conducted by it, or the ownership of its properties,
requires such
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qualification, except where the failure to be so qualified would not give rise
to a Material Adverse Change to AWA.
(b) Corporate Authorization. AWA has taken, or caused to be
taken, all necessary corporate action (including, without limitation, the
obtaining of any consent or approval of stockholders required by its certificate
of incorporation or by-laws) to authorize the execution and delivery of each of
the Operative Agreements to which it is a party as of such date, and the
performance of its obligations thereunder.
(c) No Violation. The execution and delivery by AWA of the
Operative Agreements to which it is a party as of such date, the performance by
AWA of its obligations thereunder and the consummation by AWA of the
Transactions contemplated thereby, do not and will not (a) violate any provision
of the certificate of incorporation or by-laws of AWA, (b) violate any law,
regulation, rule or order applicable to or binding on AWA or (c) violate or
constitute any default under (other than any violation or default that would not
result in a Material Adverse Change to AWA), or result in the creation of any
Lien (other than as permitted under the related Lease or as created by the
related Indenture) upon the Aircraft under, any indenture, mortgage, chattel
mortgage, deed of trust, conditional sales contract, lease, loan or other
material agreement, instrument or document to which AWA is a party or by which
it or any of its properties is bound.
(d) Approvals. The execution and delivery by AWA of the
Operative Agreements to which it is a party as of such date, the performance by
AWA of its obligations thereunder and the consummation by AWA of the
Transactions contemplated thereby do not and will not require the consent or
approval of, or the giving of notice to, or the registration with, or the
recording or filing of any documents with, or the taking of any other action in
respect of, (a) any trustee or other creditor of AWA and (b) any Government
Entity, other than the filing of (w) the FAA Filed Documents and the Financing
Statements (and continuation statements periodically), (x) filings, recordings,
notices or other ministerial actions pursuant to any routine recording,
contractual or regulatory requirements applicable to it, (y) filings,
recordings, notices or other actions contemplated by the Operative Agreements in
connection with the subleasing or reregistration of the Aircraft and (z)
filings, recordings, notices or other actions relating to the Securities Act as
contemplated by the Registration Rights Agreement.
(e) Valid and Binding Agreements. The Operative Agreements
executed and delivered by AWA on or prior to such date have been duly executed
and delivered by AWA and, assuming the due authorization, execution and delivery
thereof by the other party or parties thereto, constitute the legal, valid and
binding obligations of AWA and are enforceable against AWA in accordance with
the respective terms thereof, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, receivership, moratorium and other
similar laws affecting the rights of creditors generally and general principles
of equity, whether considered in a proceeding at law or in equity and subject to
principles of public policy limiting the right to enforce the indemnification
provisions contained herein, insofar as such provisions relate to
indemnification for liabilities arising under federal securities laws.
(f) Litigation. Except as set forth in the most recent Annual
Report on Form 10-K, as amended, of America West Holdings Corporation
("Holdings"), the parent of AWA,
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filed by Holdings with the SEC on or prior to the Closing Date or such Delivery
Date, as the case may be, or in any Quarterly Report on Form 10-Q or Current
Report on Form 8-K filed by Holdings with the SEC subsequent to such Form 10-K,
no action, claim or proceeding is now pending or, to the actual knowledge of
AWA, threatened, against AWA or Holdings, before any court, governmental body,
arbitration board, tribunal or administrative agency, which is reasonably likely
to be determined adversely to AWA or Holdings and if determined adversely to AWA
or Holdings is reasonably likely to result in a Material Adverse Change.
(g) Financial Condition. The audited consolidated balance
sheet of Holdings with respect to Holding's most recent fiscal year included in
Holding's most recent Annual Report on Form 10-K, as amended, filed by Holdings
with the SEC, and the related consolidated statements of operations and cash
flows for the period then ended have been prepared in conformity with GAAP and
present fairly in all material respects the financial condition of Holdings and
its consolidated subsidiaries as of such date and the results of its operations
and cash flows for such period, and since the date of such balance sheet, there
has been no material adverse change in such financial condition or operations of
Holdings, except for matters disclosed in (a) the financial statements referred
to above or (b) any subsequent Quarterly Report on Form 10-Q or Current Report
on Form 8-K filed by Holdings with the SEC on or prior to the Closing Date or
such Delivery Date, as the case may be.
(h) Registration and Recordation. Except for (a) the
registration of the Aircraft with the FAA pursuant to the Act in the name of
Owner Trustee in respect of a Leased Aircraft and AWA in respect of an Owned
Aircraft, (b) the filing for recordation (and recordation) of the FAA Filed
Documents, (c) the filing of the Financing Statements (and continuation
statements relating thereto at periodic intervals), (d) the taking of possession
and retention by Mortgagee of the original counterparts of the related Lease
with respect to the Leased Aircraft, (e) the affixation of the nameplates
referred to in Section 7.1.3 of the Lease in respect of a Leased Aircraft, and
Section 4.02(e) of the Indenture, with respect to Owned Aircraft, at the
Delivery Date with respect to each Aircraft, no further action, including any
filing or recording of any document (including any financing statement in
respect thereof under Article 9 of the UCC) is necessary in order to establish
and perfect (i) in respect of a Leased Aircraft, the right, title or interest of
Owner Trustee, and the Mortgagee's first priority perfected security interest in
such Aircraft and in the related Lease (subject only to Permitted Liens as
defined in the related Indenture), and (ii) in respect of an Owned Aircraft, the
Mortgagee's first priority perfected security interest in such Aircraft (subject
only to Permitted Liens as defined in the related Indenture), as against AWA and
any other Person, in each case, in any applicable jurisdictions in the United
States.
(i) Chief Executive Office. The chief executive office (as
such term is defined in Article 9 of the UCC) of AWA is located at 0000 X. Xxx
Xxxxxx Xxxxxxxxx, Xxxxxxx, Xxxxxxx 00000.
(j) No Default. On each Delivery Date, no event exists that in
respect of a Leased Aircraft delivered on such date constitutes a Lease Default
(as defined in the Lease for such Aircraft), and no event exists that in respect
of an Owned Aircraft delivered on such date would constitute an Event of Default
(as defined in the Indenture for such Aircraft).
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(k) No Event of Loss. With respect to each Delivery Date, no
Event of Loss has occurred with respect to the Airframe or any Engine which is
Collateral under the Indenture executed as of such Delivery Date, and to the
actual knowledge of AWA, no circumstance, condition, act or event has occurred
that, with the giving of notice or lapse of time or both gives rise to or
constitutes an Event of Loss with respect to such Airframe or any such Engine.
(l) Compliance with Laws.
(a) AWA is a Citizen of the United States and a U.S.
Air Carrier.
(b) AWA holds all licenses, permits and franchises
from the appropriate Government Entities necessary to
authorize AWA to lawfully engage in air transportation and to
carry on scheduled commercial passenger service as currently
conducted, except where the failure to so hold any such
license, permit or franchise would not give rise to a Material
Adverse Change to AWA.
(c) AWA is not an "investment company" or a company
controlled by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(m) Securities Laws. Neither AWA nor any person authorized to
act on its behalf has directly or indirectly offered any beneficial interest or
Security relating to the ownership of the Aircraft or any Lease or any interest
in any Trust Property and Trust Agreement, or any of the Equipment Notes or any
other interest in or security under any Indenture, for sale, to, or solicited
any offer to acquire any such interest or security from, or has sold any such
interest or security to, any Person in violation of the Securities Act.
(n) Section 1110. With respect to each Leased Aircraft
delivered on such Delivery Date, the Owner Trustee, as lessor under the related
Lease and the Mortgagee, as assignee under the related Indenture, and with
respect to each Owned Aircraft delivered on such Delivery Date, the related
Mortgagee, is entitled to the benefits of Section 1110 (as in effect on such
date) in the event of a case under Chapter 11 of the Bankruptcy Code in which
AWA is a debtor.
(o) Accuracy of Information. Neither the Operative Agreements
to which it is a party as of such date nor other material information relating
to the Aircraft or the operations or financial condition of AWA furnished to the
Policy Provider contains any statement of a material fact which was untrue or
misleading in any material respect when made. Except as disclosed in the
Offering Document under the caption "Risk Factors - Risk Factors Relating to
Holdings," or as provided in Section 2.01(f) hereof, AWA has no knowledge of any
circumstances that could reasonably be expected to cause a Material Adverse
Change with respect to AWA.
SECTION 2.02 Covenants of AWA. AWA covenants and agrees with
the Policy Provider as follows:
(a) Without the prior written consent of the Policy Provider
(which may be granted or withheld in its sole discretion), each Participation
Agreement and the other Financing Agreements (as defined in the Note Purchase
Agreement) to be entered into pursuant to such
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Participation Agreement, will not vary the Mandatory Economic Terms and will
contain the Mandatory Document Terms in the form attached to the Note Purchase
Agreement without modification in any adverse respect (without regard to the
materiality thereof) as regards the interests, rights and remedies of the Policy
Provider, notwithstanding the provisions in the Note Purchase Agreement
permitting such modifications to be made if the effect thereof is not materially
adverse to certain parties.
(b) With respect to the Mandatory Document Terms referred to
in the Note Purchase Agreement that relate to certain maintenance standards but
which are not required to be included in the Leases related to Participation
Agreements to which General Electric Capital Corporation (or any Affiliate
thereof) is the owner participant, America West shall adhere to such standards
as if they were contained in such Leases.
(c) Notwithstanding the provisions of any Lease or any other
Operative Agreement and in addition to and not in limitation of any other right
which the Policy Provider may have under any other Operative Agreement, AWA
agrees that the Policy Provider and its representatives may at least once in
every five year period following the issuance of the Class G Certificates, at
their expense, inspect any Aircraft or Aircraft Document (as defined in the
related Indenture) , and may otherwise meet with the relevant officers and
managers of AWA (at any time) to discuss the affairs, finances and accounts of
AWA, upon reasonable request by the Policy Provider; provided that (i) each such
inspection or meeting shall be conducted during the business hours of AWA, (ii)
each such inspection or meeting shall not be conducted in any manner so as to be
unreasonably disruptive to the day to day operations of AWA or otherwise
interfere with AWA's quiet enjoyment of the Aircraft to the extent provided in
Section 4.3 of the related Lease (in the case of a Leased Aircraft) or Section
5.4.1 of the related Participation Agreement (in the case of an Owned Aircraft)
so long as the Lease is not in default, (iii) the Policy Provider shall give AWA
at least thirty (30) days notice of its intention to inspect any Aircraft or
Aircraft Document (as defined in Annex A to the related Participation
Agreement), and (iv) any inspection of the Aircraft hereunder shall be limited
to a visual, walk-around inspection, and shall not include the opening of any
panels, bays, or other components of the Aircraft. AWA will reasonably cooperate
with the Policy Provider in response to each such request by the Policy
Provider.
(d) Anything in the Note Purchase Agreement to the contrary
notwithstanding, without the consent of the Policy Provider, AWA agrees not to
utilize lease economics or debt in relation to the Aircraft to be financed under
the Note Purchase Agreement such that the principal amount of the Class G
Equipment Notes (assuming the amortization of the Class G Equipment Notes occurs
as set forth on the amortization schedule established on the delivery date with
respect to such Class G Equipment Notes or, if such amortization schedule is
modified thereafter, assuming the amortization of the Class G Equipment Notes
occurs as set forth on such modified amortization schedule), in aggregate or in
relation to an individual Owned Aircraft or Leased Aircraft, as of the last day
of each semi-annual period, expressed as a percentage of the Appraised Current
Market Value as of the delivery date of each Aircraft, exceeds the applicable
percentage set forth in the following schedule:
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SEMI-ANNUAL PERIOD SCHEDULE A SCHEDULE B
Initial Date* 53.6% 53.6%
1 53.6% 53.6%
2 52.0% 52.0%
3 52.0% 52.0%
4 50.4% 50.4%
5 50.4% 50.4%
6 48.8% 48.8%
7 48.8% 48.8%
8 47.2% 47.2%
9 47.2% 47.2%
10 45.6% 45.6%
11 45.6% 45.6%
12 44.0% 44.0%
13 44.0% 44.0%
14 42.3% 42.3%
15 42.3% 42.3%
16 40.7% 40.7%
17 40.7% 40.7%
18 39.1% 39.1%
19 36.9% 39.1%
20 35.4% 37.5%
21 34.1% 37.3%
22 32.6% 35.9%
23 31.1% 34.2%
24 29.7% 34.2%
25 30.3% 30.1%
26 28.9% 30.1%
27 27.6% 27.1%
28 26.2% 27.1%
29 23.2% 24.5%
30 22.0% 23.3%
31 19.2% 21.5%
32 17.8% 21.5%
33 15.5% 17.3%
34 14.2% 17.3%
35 13.3% 17.3%
36 12.2% 17.3%
37 8.4% 16.7%
38 7.6% 16.7%
39 3.4% 16.7%
40 3.0% 16.7%
Schedule A applies in the case of the aggregate of all Aircraft.
Schedule B applies to any individual Aircraft.
----------
* The Initial Date for an individual Aircraft is the delivery date and the
Initial Date for the aggregate of all Aircraft is the Closing Date.
-11-
SECTION 2.03 Covenants of WTC and Subordination Agent. WTC and
Subordination Agent shall perform and observe, in all material respects, all of
its covenants, obligations and agreements in any Operative Agreement to which it
is a party to be observed or performed by it.
SECTION 2.04 Representations, Warranties and Covenants of the
Policy Provider. The Policy Provider represents, warrants and covenants to AWA
and the Subordination Agent as follows:
(a) Organization and Licensing. The Policy Provider is duly
organized, validly existing and in good standing as a Wisconsin-domiciled stock
insurance company duly qualified to conduct an insurance business in every
jurisdiction where qualification may be necessary to accomplish the
Transactions.
(b) Corporate Power. The Policy Provider has the corporate
power and authority to issue the Policy, to execute and deliver this Insurance
Agreement and the other Operative Agreements to which it is a party and to
perform all of its obligations hereunder and thereunder.
(c) Authorization; Approvals. Proceedings legally required for
the issuance and execution of the Policy and the execution, delivery and
performance of this Insurance Agreement have been taken and licenses, orders,
consents or other authorizations or approvals of any governmental boards or
bodies legally required for the enforceability of the Policy have been obtained;
any proceedings not taken and any licenses, authorizations or approvals not
obtained are not material to the enforceability of the Policy.
(d) Enforceability. This Insurance Agreement constitutes, and
the Policy, when issued, will constitute, a legal, valid and binding obligation
of the Policy Provider, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium, receivership and other
similar laws affecting creditors' rights generally and to general principles of
equity and subject to principles of public policy limiting the right to enforce
the indemnification provisions contained herein, insofar as such provisions
relate to indemnification for liabilities arising under federal securities laws.
(e) Financial Information. The balance sheet of the Policy
Provider as of December 31, 2000 and the related statements of income,
stockholders' equity and cash flows for the three fiscal years ended December
31, 2000, and the accompanying footnotes, together with an opinion thereon dated
March 28, 2001 of KPMG LLP, independent certified public accountants, a copy of
which is incorporated by reference into the Offering Document, fairly present in
all material respects the financial condition of the Policy Provider as of such
dates and for the periods covered by such statements in accordance with
generally accepted accounting principles consistently applied. Since December
31, 2000, there has been no material change in such financial condition of the
Policy Provider that would materially and adversely affect its ability to
perform its obligations under the Policy.
(f) Policy Provider Information. The Policy Provider
Information is true and correct in all material respects and does not contain
any untrue statement of a material fact.
-12-
(g) No Litigation. There are no actions, suits, proceedings or
investigations pending or, to the best of the Policy Provider's knowledge,
threatened against it at law or in equity or before or by any court,
governmental agency, board or commission or any arbitrator which, if decided
adversely, would materially and adversely affect its ability to perform its
obligations under the Policy or this Insurance Agreement.
(h) Compliance with Law, Etc. No practice, procedure or policy
employed, or proposed to be employed, by the Policy Provider in the conduct of
its business violates any law, regulation, judgment, agreement, order or decree
applicable to the Policy Provider that, if enforced, could result in a Material
Adverse Change with respect to the Policy Provider.
(i) No Acceleration Payments. The Policy Provider shall not
make any payment under the Policy except as specifically required in the
definition of "Deficiency Amount" therein and in respect of any "Preference
Amount" (as defined therein).
ARTICLE III
THE POLICY; REIMBURSEMENT; INDEMNIFICATION
SECTION 3.01 Issuance of the Policy. The Policy Provider
agrees to issue the Policy on the Closing Date subject to satisfaction of the
conditions precedent set forth below on or prior to the Closing Date:
(a) Operative Agreements. The Policy Provider shall have
received a copy of (i) each of the Operative Agreements to be executed and
delivered on or prior to the Closing Date, in form and substance reasonably
satisfactory to the Policy Provider, duly authorized, executed and delivered by
each party thereto and (ii) a copy of the Offering Document;
(b) Certified Documents and Resolutions. The Policy Provider
shall have received (i) a copy of the certificate of incorporation and by-laws
of AWA and (ii) a certificate of the Secretary or Assistant Secretary of AWA
dated the Closing Date stating that attached thereto is a true, complete and
correct copy of resolutions duly adopted by the Board of Directors of AWA
authorizing the execution, delivery and performance by AWA of the Operative
Agreements to which it is a party and the consummation of the Transactions and
that such applicable organizational documents and resolutions are in full force
and effect without amendment or modification on the Closing Date;
(c) Incumbency Certificate. The Policy Provider shall have
received a certificate of the Secretary or an Assistant Secretary of each of AWA
and the Subordination Agent certifying the names and signatures of the officers
of AWA and the Subordination Agent authorized to execute and deliver the
Operative Agreements to which it is a party on or prior to Closing Date and
that, with respect to AWA, shareholder consent to the execution and delivery of
such documents by AWA, is not necessary or has been obtained;
(d) Representations and Warranties. The representations and
warranties of AWA and the Subordination Agent dated the Closing Date set forth
or incorporated by reference in this Insurance Agreement shall be true and
correct on and as of the Closing Date;
-13-
(e) Documentation. The Policy Provider shall have received a
copy of each document, instrument, certificate and opinion delivered on or
before the Closing Date pursuant to the Operative Agreement, including each
opinion of counsel addressed to any of Moody's, S&P, the Trustee, AWA, the
Subordination Agent and the Initial Purchasers (except for the opinion of
counsel to the Initial Purchasers addressed only to the Initial Purchasers), in
respect of AWA and the Subordination Agent or any of the other parties to the
Operative Agreements and the Transactions dated the Closing Date in form and
substance reasonably satisfactory to the Policy Provider, addressed to the
Policy Provider (or accompanied by a letter from the counsel rendering such
opinion to the effect that the Policy Provider is entitled to rely on such
opinion as of its date as if it were addressed to the Policy Provider) and
addressing such matters as the Policy Provider may reasonably request, and the
counsel providing each such opinion shall have been instructed by its client to
deliver such opinion to the addressees thereof;
(f) Approvals, Etc. The Policy Provider shall have received
true and correct copies of all approvals, licenses and consents, if any,
including any required approval of the shareholders of AWA, required in
connection with the Transactions;
(g) No Litigation, Etc. No suit, action or other proceeding,
investigation or injunction, or final judgment relating thereto, shall be
pending or threatened before any court, governmental or administrative agency or
arbitrator in which it is sought to restrain or prohibit or to obtain damages or
other relief in connection with any of the Operative Agreements or the
consummation of the Transactions;
(h) Legality. No statute, rule, regulation or order shall have
been enacted, entered or deemed applicable by any government or governmental or
administrative agency or court that would make the Transactions illegal or
otherwise prevent the consummation thereof;
(i) Issuance of Ratings. The Policy Provider shall have
received confirmation that the risk insured by the Policy (without regard to the
Policy) is rated no lower than "A-" by S&P and "Baa3" by Moody's, the Class G
Certificates, when issued, will be rated "AAA" by S&P and "Aaa" by Moody's, that
the Class C Certificates, when issued, will be rated "BBB+" by S&P and "Ba1" by
Moody's, and that the Class D Certificates, when issued, will be rated "BB" by
S&P and "Ba3" by Moody's, and shall have received the confirmation from S&P of a
capital charge acceptable to the Policy Provider;
(j) Satisfactory Documentation. The Policy Provider and its
counsel shall have reasonably determined that all documents, certificates and
opinions to be delivered in connection with the Certificates conform to the
terms of the related Trust Agreement, the Offering Document, this Insurance
Agreement and the Intercreditor Agreement;
(k) Filings. The Policy Provider shall have received evidence
that there shall have been made and shall be in full force and effect, all
filings, recordings and registrations, and there shall have been given or taken
any notice or similar action as is necessary in order to establish, perfect,
protect and preserve the right, title and interest of the Policy Provider
created by the Operative Agreements executed and delivered on or prior to the
Closing Date;
-14-
(l) Conditions Precedent. All conditions precedent to the
issuance of the Certificates under the Trust Agreements shall have been
satisfied, or waived with the consent of the Policy Provider. All conditions
precedent to the effectiveness of the Liquidity Facilities shall have been
satisfied or waived and all conditions precedent to the purchases of the
Certificates by the Initial Purchasers under the Purchase Agreement shall have
been satisfied or waived by the Initial Purchasers; and
(m) Expenses. The Policy Provider shall have received payment
in full of all amounts required to be paid to or for account of the Policy
Provider on or prior to the Closing Date.
SECTION 3.02 Payment of Fees and Premium.
(a) Legal Fees. On the Closing Date, AWA shall pay or cause to
be paid to, or as directed by, the Policy Provider, legal fees, disbursements
and charges incurred by the Policy Provider in connection with the issuance of
the Policy and this Agreement in accordance with the Policy Fee Letter. Any
additional fees of the Policy Provider's counsel or auditors payable in respect
of any amendment or supplement to the Offering Document or the preparation of
the Exchange Offering Registration Statement requested by AWA and incurred after
the Closing Date shall be paid by AWA promptly following receipt of
documentation thereof.
(b) Rating Agency Fees. AWA shall promptly pay the initial
fees of S&P and Moody's with respect to the Certificates and the Transactions
following receipt of a statement with respect thereto. All periodic and
subsequent fees of S&P or Moody's with respect to, and directly allocable to,
the Certificates shall be for the account of, and shall be billed to, AWA. The
fees for any other rating agency shall be paid by the party requesting such
other agency's rating unless such other agency is a substitute for S&P or
Moody's in the event that S&P or Xxxxx'x is no longer rating the Certificates,
in which case the fees for such agency shall be paid by AWA.
(c) Appraisal Fees. AWA shall pay as directed by the Policy
Provider on the Closing Date the cost of appraisals of the Aircraft performed by
Xxxxxx Xxxxx and Xxxxx, Inc. for the Policy Provider, not to exceed $2,000 in
total.
(d) Premium.
(i) In consideration of the issuance by the Policy Provider of the Policy, AWA
shall pay or cause to be paid to the Policy Provider, the Premium, provided,
however, such requirement shall not be duplicative of any payments in respect of
Premiums made in accordance with Section 6(b) of the Note Purchase Agreement and
the provisions of each Lease and each Owned Aircraft Indenture. AWA shall also
pay any additional amounts, as and when due, to be paid by it under the Policy
Fee Letter.
(ii) No portion of the Premium paid shall be refundable, without regard to
whether the Policy Provider makes any payment under the Policy or any other
circumstances relating to the Class G Certificates or provision being made for
payment of the Class G Certificates prior to maturity.
-15-
SECTION 3.03 Reimbursement Obligation.
(a) As and when due in accordance with and from the funds
specified in Sections 2.4(b), 3.2 and 3.3 of the Intercreditor Agreement, the
Policy Provider shall be entitled to reimbursement from AWA for any payment made
by the Policy Provider under the Policy or to the Liquidity Provider under
Section 2.6(c) of the Intercreditor Agreement, which reimbursement shall be due
and payable on the date provided in such Sections, in an amount equal to the
amount to be so paid and all amounts previously paid that remain unreimbursed.
In addition, to the extent that any such payment by the Policy Provider shall
have been made as a result of a default by a Liquidity Provider in its
obligation to make an Advance, as provided in the Intercreditor Agreement, the
Policy Provider shall be entitled to the payment of interest on such amounts to
the extent, at the time and in the priority that the Liquidity Provider would
have been paid pursuant to the Intercreditor Agreement had the Liquidity
Provider made such Advance.
(b) After the distribution to the Policy Provider of all
amounts distributable to it under the Intercreditor Agreement, AWA agrees to
reimburse the Policy Provider immediately, upon demand, to the extent of any
payment made under the Policy or to the Liquidity Provider under Section 2.6(c)
of the Intercreditor Agreement, less any amount in respect of such payment paid
to and received by the Policy Provider pursuant to the Operative Agreements.
(c) AWA agrees to pay to the Policy Provider any and all
charges, fees, costs and expenses that the Policy Provider may reasonably pay or
incur, including reasonable attorneys' and accountants' fees and expenses
(without duplication of amounts paid to the Policy Provider in respect of the
Operative Agreements), in connection with (i) the enforcement, defense or
preservation of any rights in respect of this Insurance Agreement, including
defending, monitoring or participating in any litigation or proceeding and (ii)
any amendment, waiver or other action requested by AWA with respect to, or
related to, any Operative Agreements or to any form document attached to any
Operative Agreement as an exhibit, schedule or annex thereto, whether or not
executed or completed. Provided that three Business Days' written notice of the
intended payment or incurrence shall have been given to AWA by the Policy
Provider, such reimbursement shall be due on the dates on which such charges,
fees, costs or expenses are paid or incurred by the Policy Provider.
SECTION 3.04 Indemnification. AWA agrees (i) that the Policy
Provider is hereby entitled to the full benefit of the General Indemnity
contained in, and the General Tax Indemnity contained in Annex A to, the forms
of Participation Agreement attached to the Note Purchase Agreement as if such
provisions were set forth in full herein, the Policy Provider were an Indemnitee
thereunder and the Operative Agreements referred to therein include this
Insurance Agreement and the Note Purchase Agreement and (ii) that it shall name
the Policy Provider as an Indemnitee in each Participation Agreement and that
the Policy Provider shall be entitled to the full benefit of the General Tax
Indemnity provisions set forth in or incorporated by reference in each
Participation Agreement; provided, however, any exclusion contained in any
Participation Agreement or form thereof related to any representation or
warranty by any Indemnitee other than the Policy Provider, the failure by any
Indemnitee other than the Policy Provider to perform or observe any agreement,
covenant or condition in any of the Operative Documents, the acts or omissions
involving the willful misconduct or gross negligence of any Indemnitee other
than the
-16-
Policy Provider or any other action or omission of any other Person other than
the Policy Provider shall not apply to the indemnification obligations of AWA to
the Policy Provider.
SECTION 3.05 Procedure for Payment of Fees and Premiums. All
payments to be made to the Policy Provider under this Insurance Agreement shall
be made to the Policy Provider in lawful currency of the United States of
America in immediately available funds at the notice address for the Policy
Provider as specified in the Intercreditor Agreement on the date when due or as
the Policy Provider shall otherwise direct by written notice to the other
parties hereto. In the event that the date of any payment to the Policy Provider
or the expiration of any time period hereunder occurs on a day that is not a
Business Day, then such payment shall be made, or such expiration of time period
shall occur, on the next succeeding Business Day with the same force and effect
as if such payment was made or time period expired on the scheduled date of
payment or expiration date, as applicable.
ARTICLE IV
FURTHER AGREEMENTS
SECTION 4.01 Effective Date; Term of the Insurance Agreement.
This Insurance Agreement shall take effect on the Closing Date and shall remain
in effect until the later of (a) such time as the Policy Provider is no longer
subject to a claim under the Policy and the Policy shall have been surrendered
to the Policy Provider for cancellation and (b) all amounts payable to the
Policy Provider by AWA or the Subordination Agent hereunder or from any other
source hereunder or under the Operative Agreements and all amounts payable under
the Class G Certificates have been paid in full; provided, however, that the
provisions of Section 3.04 hereof shall survive any termination of this
Insurance Agreement.
SECTION 4.02 Further Assurances and Corrective Instruments.
(a) Neither AWA nor the Subordination Agent shall grant any
waiver of rights or agree to any amendment or modification to any of the
Operative Agreements to which either of them is a party, which waiver,
amendment, or modification would have an adverse effect on the rights or
remedies of the Policy Provider, without the prior written consent of the Policy
Provider so long as the Policy Provider shall be the Controlling Party, and any
such waiver without prior written consent of the Policy Provider shall be null
and void and of no force or effect.
(b) To the extent permitted by law, each of AWA and the
Subordination Agent agrees that it will, from time to time, execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, such
supplements hereto and such further instruments as the Policy Provider may
reasonably request and as may be required in the Policy Provider's reasonable
judgment to effectuate the intention of or facilitate the performance of this
Insurance Agreement.
SECTION 4.03 Obligations Absolute.
(a) So long as no Policy Provider Default shall have occurred
and be continuing beyond any grace period applicable thereto, the obligations of
AWA hereunder shall be absolute and unconditional and shall be paid or performed
strictly in accordance with this Insurance Agreement under all circumstances
irrespective of:
-17-
(i) any lack of validity or enforceability of, or any
amendment or other modifications of, or waiver, with respect
to any of the Operative Agreements or the Certificates;
(ii) any exchange or release of any other obligations
hereunder;
(iii) the existence of any claim, setoff, defense,
reduction, abatement or other right that AWA may have at any
time against the Policy Provider or any other Person;
(iv) any document presented in connection with the
Policy proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(v) any payment by the Policy Provider under the
Policy against presentation of a certificate or other document
that does not strictly comply with the terms of the Policy;
(vi) any failure of AWA to receive the proceeds from
the sale of the Certificates; and
(vii) any other circumstances, other than payment in
full, that might otherwise constitute a defense available to,
or discharge of, AWA in respect of any Operative Agreements.
(b) So long as no Policy Provider Default shall have occurred
and be continuing beyond any period of cure applicable thereto and except as
expressly provided herein or in any Operative Agreement, AWA renounces the right
to assert as a defense to the performance of its obligations each of the
following: (i) to the extent permitted by law, any and all redemption and
exemption rights and the benefit of all valuation and appraisement privileges
against the indebtedness and obligations evidenced by any Operative Agreements
or by any extension or renewal thereof; (ii) presentment and demand for payment,
notices of nonpayment and of dishonor, protest of dishonor and notice of
protest; (iii) all notices in connection with the delivery and acceptance hereof
and all other notices in connection with the performance, default or enforcement
of any payment hereunder, except as required by the Operative Agreements; and
(iv) all rights of abatement, diminution, postponement or deduction, or to any
defense other than payment, or to any right of setoff or recoupment arising out
of any breach under any of the Operative Agreements, by any party thereto or any
beneficiary thereof, or out of any obligation at any time owing to AWA.
(c) AWA (i) agrees that any consent, waiver or forbearance
hereunder with respect to an event shall operate only for such event and not for
any subsequent event; (ii) consents to any and all extensions of time that may
be granted by the Policy Provider with respect to any payment hereunder or other
provisions hereof and to the release of any security at any time given for any
payment hereunder, or any part thereof, with or without substitution, and to the
release of any Person or entity liable for any such payment; and (iii) consents
to the addition of any and all other makers, endorsers, guarantors and other
obligors for any payment hereunder, and to the acceptance of any and all other
security for any payment hereunder, and
-18-
agrees that the addition of any such obligors or security shall not affect the
liability of AWA for any payment hereunder.
(d) No failure by the Policy Provider to exercise, and no
delay by the Policy Provider in exercising, any right hereunder shall operate as
a waiver thereof. The exercise by the Policy Provider of any right hereunder
shall not preclude the exercise of any other right, and the remedies provided
herein to the Policy Provider are declared in every case to be cumulative and
not exclusive of any remedies provided by law or equity.
(e) Nothing herein shall be construed as prohibiting AWA from
pursuing any rights or remedies it may have against any Person in a separate
legal proceeding.
SECTION 4.04 Assignments; Reinsurance; Third-Party Rights.
(a) This Insurance Agreement shall be a continuing obligation
of the parties hereto and shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. The
Subordination Agent, except as provided in Section 8.1 of the Agreement, and
AWA, except for any transaction expressly permitted by Section 5.02 of the Class
G Trust Agreement, may not assign their respective rights under this Insurance
Agreement, or delegate any of their duties hereunder, without the prior written
consent of the other parties hereto. Any assignments made in violation of this
Insurance Agreement shall be null and void.
(b) The Policy Provider shall have the right to grant
participations in its rights under this Insurance Agreement and to enter into
contracts of reinsurance with respect to the Policy upon such terms and
conditions as the Policy Provider may in its discretion determine; provided,
however, that no such participation or reinsurance agreement or arrangement
shall relieve the Policy Provider of any of its obligations hereunder or under
the Policy or grant to any participant or reinsurer any rights hereunder or
under any Operative Agreement.
(c) Except as provided herein with respect to participants and
reinsurers, nothing in this Insurance Agreement shall confer any right, remedy
or claim, express or implied, upon any Person, including, particularly, any
Holder, other than upon the Policy Provider against AWA, or upon AWA against the
Policy Provider, and all the terms, covenants, conditions, promises and
agreements contained herein shall be for the sole and exclusive benefit of the
parties hereto and their successors and permitted assigns. Neither the Trustee
nor any Holder shall have any right to payment from the Premium paid or payable
hereunder or from any amounts paid by AWA pursuant to Sections 3.02 or 3.03.
SECTION 4.05 Liability of the Policy Provider. Neither the
Policy Provider nor any of its officers, directors or employees shall be liable
or responsible for: (a) the use that may be made of the Policy by the
Subordination Agent or for any acts or omissions of the Subordination Agent in
connection therewith; or (b) the validity, sufficiency, accuracy or genuineness
of documents delivered to the Policy Provider in connection with any claim under
the Policy, or of any signatures thereon, even if such documents or signatures
should in fact prove to be in any or all respects invalid, insufficient,
fraudulent or forged (unless the Policy Provider shall have actual knowledge
thereof). In furtherance and not in limitation of the
-19-
foregoing, the Policy Provider may accept documents that appear on their face to
be in order, without responsibility for further investigation.
ARTICLE V
MISCELLANEOUS
SECTION 5.01 Amendments, Etc. This Insurance Agreement may be
amended, modified, supplemented or terminated only by written instrument or
written instruments signed by the parties hereto; provided that if such
amendment, modification, supplement or termination would have a material adverse
affect on the interests of the Subordination Agent, a Pass Through Trustee or
any Certificateholder, Ratings Confirmation shall also be obtained prior to such
amendment, modification, supplement or termination being effective. AWA agrees
to provide a copy of any amendment to this Insurance Agreement promptly to the
Subordination Agent and the rating agencies maintaining a rating on the Class G
Certificates. No act or course of dealing shall be deemed to constitute an
amendment, modification, supplement or termination hereof.
SECTION 5.02 Notices. All demands, notices and other
communications to be given hereunder shall be in writing (except as otherwise
specifically provided herein) and shall be mailed by registered mail or
personally delivered and telecopied to the recipient as follows:
(a) To the Policy Provider:
Ambac Assurance Corporation
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Surveillance Department
Facsimile: (000) 000-0000
Confirmation: (000) 000-0000
In each case in which notice or other communication to the
Policy Provider refers to an event of default under any Operative Agreement, a
claim on the Policy or with respect to which failure on the part of the Policy
Provider to respond shall be deemed to constitute consent or acceptance, then a
copy of such notice or other communication should also be sent to the attention
of the general counsel of each of the Policy Provider (if by facsimile to (212)
208-3566) and AWA and, in all cases, both any original and all copies shall be
marked to indicate "URGENT MATERIAL ENCLOSED.")
-20-
(b) To AWA:
America West Airlines, Inc.
0000 X. Xxx Xxxxxx Xxxx.
Xxxxxxx, XX 00000
Attention: Vice President and Treasurer
Facsimile: (000) 000-0000
Confirmation: (000) 000-0000
(c) To the Subordination Agent:
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Corporate Trust Administration
Facsimile: (000) 000-0000.
A party may specify an additional or different address or
addresses by writing mailed or delivered to the other parties as aforesaid. All
such notices and other communications shall be effective upon receipt unless
received after business hours on any day, in which case on the opening of
business on the next Business Day.
SECTION 5.03 Severability. In the event that any provision of
this Insurance Agreement shall be held invalid or unenforceable by any court of
competent jurisdiction, the parties hereto agree that such holding shall not
invalidate or render unenforceable any other provision hereof. The parties
hereto further agree that the holding by any court of competent jurisdiction
that any remedy pursued by any party hereto is unavailable or unenforceable
shall not affect in any way the ability of such party to pursue any other remedy
available to it.
SECTION 5.04 Governing Law. This Insurance Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
including all matters of construction, validity and performance. This Agreement
is being delivered in New York.
SECTION 5.05 Consent to Jurisdiction.
(a) The parties hereto hereby irrevocably submit to the
non-exclusive jurisdiction of the United States District Court for the Southern
District of New York and any court of appropriate jurisdiction in the State of
New York located in the City and County of New York, and any appellate court
from any thereof, in any action, suit or proceeding brought against it and to or
in connection with any of the Operative Agreements or the Transactions or for
recognition or enforcement of any judgment, and the parties hereto hereby
irrevocably and unconditionally agree that all claims in respect of any such
action or proceeding may be heard or determined in such New York state court or,
to the extent permitted by law, in such federal court. The parties hereto agree
that a final unappealable judgment in any such action, suit or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. To the extent permitted by applicable
law, the parties hereto hereby waive and agree not to assert by way of motion,
as a defense or otherwise in any such suit, action
-21-
or proceeding, any claim that it is not personally subject to the jurisdiction
of such courts, that the suit, action or proceeding is brought in an
inconvenient forum, that the venue of the suit, action or proceeding is improper
or that the related documents or the subject matter thereof may not be litigated
in or by such courts.
(b) To the extent permitted by applicable law, the parties
hereto shall not seek and hereby waive the right to any review of the judgment
of any such court by any court of any other nation or jurisdiction which may be
called upon to grant an enforcement of such judgment.
(c) Service on AWA may be made by delivering, by U.S.
registered mail, messenger or courier service, copies of the summons and
complaint and other process which may be served in any suit, action or
proceeding to AWA addressed as follows: c/o Vedder, Price, Xxxxxxx & Kammholz,
000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, attention: Xxx Xxxxxxxxxx, and such
service shall be effective service of process for any litigation brought against
AWA in any court. Such address may be changed by AWA by written notice to the
other parties hereto.
(d) Nothing contained in this Insurance Agreement shall limit
or affect any party's right to serve process in any other manner permitted by
law or to start legal proceedings relating to any of the Operative Agreements
against any other party or its properties in the courts of any jurisdiction.
SECTION 5.06 Consent of the Policy Provider. No disclosure
relating to the Policy or the Policy Provider contained in the Exchange Offer
Registration Statement, which disclosure modifies, alters, changes, amends or
supplements the disclosure relating to the Policy or the Policy Provider
contained in the Offering Memorandum, shall be made without the Policy
Provider's prior written consent. In the event that the consent of the Policy
Provider is required under any of the Operative Agreements, the determination
whether to grant or withhold such consent shall be made by the Policy Provider
in its sole discretion without any implied duty towards any other Person, except
as otherwise expressly provided therein.
SECTION 5.07 Counterparts. This Insurance Agreement may be
executed in counterparts by the parties hereto, and all such counterparts shall
constitute one and the same instrument.
SECTION 5.08 Headings. The headings of Articles and Sections
and the Table of Contents contained in this Insurance Agreement are provided for
convenience only. They form no part of this Insurance Agreement and shall not
affect its construction or interpretation.
SECTION 5.09 Trial by Jury Waived. Each party hereby waives,
to the fullest extent permitted by law, any right to a trial by jury in respect
of any litigation arising directly or indirectly out of, under or in connection
with this Insurance Agreement or any of the other Operative Agreements or any of
the Transactions contemplated hereunder or thereunder. Each party hereto (A)
certifies that no representative, agent or attorney of any party hereto has
represented, expressly or otherwise, that it would not, in the event of
litigation, seek to enforce the foregoing waiver and (B) acknowledges that it
has been induced to enter into the Operative Agreements to which it is a party
by, among other things, this waiver.
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SECTION 5.10 Limited Liability. No recourse under any
Operative Agreement shall be had against, and no personal liability shall attach
to, any officer, employee, director, affiliate or shareholder of any party
hereto, as such, by the enforcement of any assessment or by any legal or
equitable proceeding, by virtue of any statute or otherwise in respect of any of
the Operative Agreements, the Certificates or the Policy, it being expressly
agreed and understood that each Operative Agreement is solely an obligation of
each party hereto, and that any and all personal liability, either at common law
or in equity, or by statute or constitution, of every such officer, employee,
director, affiliate or shareholder for breaches of any party hereto of any
obligations under any Operative Agreement is hereby expressly waived as a
condition of and in consideration for the execution and delivery of this
Insurance Agreement.
SECTION 5.11 Entire Agreement. This Insurance Agreement, the
Policy, the Policy Fee letter and the other Operative Agreements set forth the
entire agreement between the parties with respect to the subject matter hereof
and thereof, and supersede and replace any agreement or understanding that may
have existed between the parties prior to the date hereof in respect of such
subject matter. This Insurance Agreement and the Policy are separate and
independent agreements. No breach by any party hereto of any representation,
warranty, covenant, agreement or undertaking contained herein shall in any way
affect the obligations of the Policy Provider under the Policy.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement, all as of the day and year first above mentioned.
AMBAC ASSURANCE CORPORATION,
as Policy Provider
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Managing Director
WILMINGTON TRUST COMPANY,
not in its individual capacity but solely as
Subordination Agent
By: /s/ W. Xxxxx Xxxxxxxxxx
--------------------------------------------
Name: W. Xxxxx Xxxxxxxxxx
Title: Assistant Vice President
AMERICA WEST AIRLINES, INC.
By: /s/ Xxxxxx X. Xxxx
--------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President & Treasurer
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