EXECUTION COPY
MIDWAY AIRLINES CORPORATION
PURCHASE AGREEMENT
August 6, 1998
Xxxxxx Xxxxxxx & Co. Incorporated
Credit Suisse First Boston
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Dear Sirs and Mesdames:
Midway Airlines Corporation, a Delaware corporation (the "Company"),
in connection with the financing of eight (8) new Canadair Regional Jet Series
200-ER aircraft, proposes that The First National Bank of Maryland, as trustee
(the "Trustee"), issue and sell to the placement agents named in Schedule II
hereto its Pass Through Certificates, Series 1998-1 in the aggregate principal
amounts and with the interest rates and final distribution dates set forth on
Schedule I hereto (the "Certificates") on the terms and conditions stated
herein. As used herein, unless the context otherwise requires, the term
"Placement Agents" shall mean the firms named as Placement Agents in Schedule II
hereto, and the term "you" shall mean Xxxxxx Xxxxxxx & Co. Incorporated.
The Certificates will be issued pursuant to four separate pass
through trust agreements each to be dated as of August 13, 1998 (collectively
the "Original Pass Through Trust Agreements") between the Company and the
Trustee. The Pass Through Trust Agreements are related to the creation and
administration of Midway Airlines Corporation Pass Through Trust Series
1998-1A-0 (the "Class A Trust"), Midway Airlines Corporation Pass Through Trust
Series 1998-1B-0 (the "Class B Trust"), Midway Airlines Corporation Pass Through
Trust Series 1998-1C-0 (the "Class C Trust") and Midway Airlines Corporation
Pass Through Trust Series 1998-1D-0 (the "Class D Trust"; and together with the
Class A Trust, the Class B Trust and Class C Trust, the "Original Trusts").
The cash proceeds of the offering of Certificates by each Original
Trust will be paid to First Union Trust Company, National Association, as escrow
agent (the "Escrow Agent"), under an Escrow and Paying Agent Agreement among the
Escrow Agent, the Placement Agents, the Trustee of such Original Trust and The
First National Bank of Maryland, as paying agent (the
"Paying Agent"), for the benefit of the holders of Certificates issued by such
Original Trust (each, an "Escrow Agreement"). The Escrow Agent will deposit such
cash proceeds (each, a "Deposit") with First Union National Bank (the
"Depositary"), in accordance with a Deposit Agreement relating to such Original
Trust (each, a "Deposit Agreement"), and will withdraw Deposits upon request to
allow the Trustee to purchase Equipment Notes (as defined in the Note Purchase
Agreement referred to herein) referred to herein from time to time pursuant to a
Note Purchase Agreement to be dated as of the Closing Date (the "Note Purchase
Agreement") among the Company, The First National Bank of Maryland, as Trustee
of each of the Original Trusts, as Subordination Agent (as hereinafter defined)
and as Paying Agent, and the Escrow Agent. Each Escrow Agent will issue receipts
to be attached to each related Certificate ("Escrow Receipts") representing each
holder's fractional undivided interest in amounts deposited with such Escrow
Agent and will pay to such holders through the related Paying Agent interest
accrued on the Deposits and received by such Paying Agent pursuant to the
related Deposit Agreement at a rate per annum equal to the interest rate
applicable to the corresponding Certificates.
On the earlier of (i) the first Business Day after September 30,
1999, or, if later, the fifth Business Day after the Delivery Period Termination
Date (as defined in the Note Purchase Agreement) and (ii) the fifth Business Day
after the occurrence of a Triggering Event (as defined in the Intercreditor
Agreement) (such Business Day, the "Trust Transfer Date"), each of the Original
Trusts will transfer and assign all of its assets and rights to a newly-created
successor trust with substantially identical terms except as described in the
Offering Memorandum (as hereinafter defined) (each, a "Successor Trust" and,
together with the Original Trusts, the "Trusts") governed by four separate pass
through trust agreements, dated as of August 13, 1998, between the Company and
the Trustee, with respect to each series of Certificates (each, a "Successor
Pass Through Trust Agreement" and, together with the Original Pass Through Trust
Agreements, the "Designated Agreements"). Each Certificate outstanding on the
Trust Transfer Date will represent the same interest in the Successor Trust as
the Certificate represented in the Original Trust. The First National Bank of
Maryland initially will also act as trustee of the Successor Trusts (each, a
"Successor Trustee").
Certain amounts of interest payable on the Certificates to be issued
by the Class A Trust, the Class B Trust and the Class C Trust will be entitled
to the benefits of a separate liquidity facility for each such Trust. ABN AMRO
Bank, N.V., acting through its Chicago branch (the "Liquidity Provider"), will
enter into three separate revolving credit agreements (each, a "Liquidity
Facility") to be dated as of August 13, 1998 for the benefit of the holders of
the Certificates issued by the Class A Trust, the Class B Trust and the Class C
Trust, respectively. The Liquidity Provider and the holders of the Certificates
will be entitled to the benefits of an Intercreditor Agreement to be dated as of
August 13, 1998 (the "Intercreditor Agreement") among the Trusts, the First
National Bank of Maryland, as Subordination Agent (the "Subordination Agent"),
and the Liquidity Provider.
The Certificates will be offered without being registered under the
Securities Act of 1933, as amended (the "Securities Act"), in reliance on
exemptions therefrom.
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The Placement Agents and their direct and indirect transferees will
be entitled to the benefits of a Registration Rights Agreement (the
"Registration Rights Agreement"), to be dated the Closing Date (as defined
below) and to be substantially in the form attached hereto as Exhibit A,
pursuant to which the Company will file a registration statement (the
"Registration Statement") with the Securities and Exchange Commission (the
"Commission") registering the Exchange Certificates referred to in such
Registration Rights Agreement (the "Exchange Certificates") or the Certificates
under the Securities Act.
In connection with the sale of the Certificates, the Company has
prepared a preliminary offering memorandum (the "Preliminary Memorandum") and
will prepare a final offering memorandum (the "Final Memorandum" and, with the
Preliminary Memorandum, each a "Memorandum") setting forth or including a
description of the terms of the Certificates, the terms of the offering and a
description of the Company and its business. As used herein, the term
"Memorandum" shall include in each case the documents incorporated by reference
therein.
Capitalized terms not otherwise defined in this Agreement shall have
the meanings specified therefor in the Original Pass Through Trust Agreements or
in the Note Purchase Agreement or Intercreditor Agreement referred to in the
Designated Agreements; provided that, as used in this Agreement, the term
"Operative Documents" shall mean this Agreement, the Indentures, the Leases, the
Note Purchase Agreement, the Participation Agreements, the Designated
Agreements, the Deposit Agreements, the Escrow Agreements, and the Registration
Rights Agreement.
1. Representations and Warranties. The Company represents and
warrants to, and agrees with, you that as of the date hereof:
(a) The Preliminary Memorandum does not contain and the Final
Memorandum, in the form used by the Placement Agents to confirm sales and on the
Closing Date, will not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this Section 1(a) do not apply to
statements or omissions in either Memorandum based upon information relating to
any Placement Agent furnished to the Company in writing by such Placement Agent
through Xxxxxx Xxxxxxx & Co. Incorporated expressly for use therein.
(b) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in each Memorandum and to perform its
obligations under this Agreement and the Operative Documents to which it is, or
is to be, a party; and the Company is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification, except to the
extent that the failure
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to be so qualified or be in good standing would not have a material adverse
effect on the Company (a "Material Adverse Effect").
(c) This Agreement has been duly authorized, executed and delivered
by the Company. The Operative documents to which the Company will be a party
will be duly executed and delivered by the Company on or prior to the Closing
Date or the applicable Transfer Date or Delivery Date, as the case may be.
(d) [Reserved]
(e) The Company has no subsidiaries.
(f) On or prior to the Closing Date, the issuance of the
Certificates will be duly authorized by the Trustee. When executed,
authenticated, issued and delivered in the manner provided for in the related
Original Pass Through Trust Agreement and sold and paid for as provided in this
Agreement, each of the Certificates will be valid and binding obligations of the
Trustee entitled to the benefits of the related Original Pass Through Trust
Agreement, enforceable against the Trustee in accordance with its terms, except
as limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally and general equitable principles (whether considered in a proceeding
in equity or at law). Based on applicable law as in effect on the date hereof,
upon the execution and delivery of the Assignment and Assumption Agreements in
accordance with the Original Pass Through Trust Agreements, the Certificates
will be legally and validly outstanding under the related Successor Pass Through
Trust Agreements, enforceable against the Trustee in accordance with their
terms, except as limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally and general equitable principles (whether considered
in a proceeding in equity or at law). When executed, authenticated, issued and
delivered in the manner provided for in the Escrow Agreements, the Escrow
Receipts will be legally and validly issued and will be entitled to the benefits
of the related Escrow Agreements.
(g) [Reserved]
(h) The Operative Documents to which the Company is, or is to be, a
party, have each been duly authorized by the Company, are or will be
substantially in the form heretofore supplied to you and, when duly executed and
delivered by Company, will constitute valid and binding obligations of the
Company, except (i) as limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally and general equitable principles (whether considered
in a proceeding in equity or at law) and (ii) in the case of each Lease, as
limited by applicable laws which may affect the remedies provided in such Lease,
which laws, however, do not make the remedies provided in such Lease inadequate
for the practical realization of the rights and benefits provided thereby. On
each Delivery Date, the related Leases and the other Operative Documents to
which the Company
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is, or is to be, a party will constitute the valid and binding obligations of
the Company, except (i) as limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and general equitable principles (whether
considered in a proceeding in equity or at law) and (ii) in the case of each
Lease, as limited by applicable laws which may affect the remedies provided in
such Lease, which laws, however, do not make the remedies provided in such Lease
inadequate for the practical realization of the rights and benefits provided
thereby. The Certificates, the Equipment Notes, the Indentures, the Leases and
the other Operative Documents to which the Company is, or is to be, a party will
conform in all material respects to the descriptions thereof in the Final
Memorandum
(i) The execution and delivery by the Company of this Agreement and
the Operative Documents to which the Company is, or is to be, a party, the
consummation by the Company of the transactions contemplated in this Agreement
and such Operative Documents, and compliance by the Company with the terms of
this Agreement and such Operative Documents will not contravene (i) any
provision of applicable law or the certificate of incorporation or by-laws of
the Company, (ii) any agreement or other instrument binding upon the Company or
(iii) any judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company other than, in the case of clauses (ii) and
(iii) above, such contraventions that would not individually or in the aggregate
have a Material Adverse Effect, and no consent, approval, authorization or order
of, or qualification with, any governmental body or agency is required for the
valid authorization, execution, delivery and performance by the Company of this
Agreement and the Operative Documents to which the Company is, or is to be, a
party, or the consummation by the Company of the transactions contemplated by
this Agreement and such Operative Documents, except (x) such as may be required
by the securities or Blue Sky laws of the various states in connection with the
offer and sale of the Certificates and the Equipment Notes, (y) such as may be
required under the Securities Act, the Trust Indenture Act or rules of the
National Association of Securities Dealers in connection with the registration
of the Certificates or the Exchange Certificates under the Securities Act
pursuant to the Registration Rights Agreement and (z) filings or recordings with
the Federal Aviation Administration (the "FAA") and under the Uniform Commercial
Code as in effect in North Carolina and Utah, which filings or recordings
referred to in this clause (z) shall have been made or obtained in connection
with the purchase of Equipment Notes relating to each Aircraft on or prior to
the Delivery Date for such Aircraft.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company from that set forth in the Preliminary Memorandum.
(k) There are no legal or governmental proceedings pending or, to
the best knowledge of the Company, threatened to which the Company is a party or
to which any of the properties of the Company is subject other than proceedings
accurately described in all material respects in each Memorandum and proceedings
that would not have a Material Adverse Effect or adversely affect the power or
ability of the Company to perform its obligations under this
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Agreement or any of the Operative Documents, to which it is, or is to be, a
party, or to consummate the transactions contemplated by the Final Memorandum.
(l) The Company has all necessary consents, authorizations,
approvals, orders, certificates and permits of and from, and has made all
declarations and filings with, all federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts and other
tribunals, to own, lease, license and use its properties and assets and to
conduct its business in the manner described in the Final Memorandum, except to
the extent that the failure to obtain such consents, authorizations, approvals,
orders, certificates and permits or make such declarations and filings would not
have a Material Adverse Effect on the Company. The Company has not received any
notice of proceedings relating to the revocation or modification of any such
consent, authorization, approval, order, certificate or permit which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a material adverse change in the condition, financial or
otherwise, or in the earnings, business or operations of the Company, except as
described in or contemplated by the Final Memorandum.
(m) Neither the Company nor any of the Original Trusts is, nor
(based on applicable law as in effect on the date hereof) will any of the
Successor Trusts be as of the execution and delivery of the Assignment and
Assumption Agreements in accordance with the Original Pass Through Trust
Agreements, an "investment company", within the meaning of the Investment
Company Act of 1940, as amended (the "Investment Company Act"); and after giving
effect to the offering and sale of the Certificates and the application of the
proceeds thereof as described in the Final Memorandum, neither the Original
Trusts will be, nor (based on applicable law as in effect on the date hereof)
will any of the Successor Trusts be as of the execution and delivery of the
Assignment and Assumption Agreements in accordance with the Original Pass
Through Trust Agreements, nor will the escrow arrangements contemplated by the
Escrow Agreements result in the creation of, an "investment company", as defined
in the Investment Company Act.
(n) The Company (i) is in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"), (ii)
has received all permits, licenses or other approvals required of it under
applicable Environmental Laws to conduct its business and (iii) is in compliance
with all terms and conditions of any such permit, license or approval, except
where such noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not, singly or in the
aggregate, have a Material Adverse Effect on the Company.
(o) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with Environmental
Laws or any permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties) for which
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the Company is now liable which would, singly or in the aggregate, have a
Material Adverse Effect on the Company.
(p) The Company is not in default in the performance or observance
of any obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which it is a party or by which it may be bound or to which any of
its properties may be subject, except for such defaults that would not have a
Material Adverse Effect.
(q) Subsequent to the dates as of which information is given in each
of the Memorandum, (i) the Company has not incurred any material liability or
obligation, direct or contingent, nor entered into any material transaction not
in the ordinary course of business; (ii) the Company has not purchased any of
its outstanding capital stock, nor declared, paid or otherwise made any dividend
or distribution of any kind on its capital stock; and (iii) there has not been
any material change in the capital stock, short-term debt or long-term debt of
the Company except in each case as described in or contemplated by the Final
Memorandum.
(r) The Company has good and marketable title in fee simple to all
real property and good and marketable title to all personal property owned by it
which is material to the business of the Company, in each case free and clear of
all liens, encumbrances and defects except such as are described in the Final
Memorandum or such as do not materially affect the value of such property and do
not interfere with the use made and proposed to be made of such property by the
Company; and any real property and buildings held under lease by the Company are
held by it under valid, subsisting and enforceable leases with such exceptions
as are not material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company, in each case except as
described in or contemplated by the Final Memorandum.
(s) The Company owns or possesses, or can acquire on reasonable
terms, all material patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures), trademarks,
service marks and trade names currently employed by it in connection with the
business now operated by it, and the Company has not received any notice of
infringement of or conflict with asserted rights of others with respect to any
of the foregoing which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in any material adverse
change in the condition, financial or otherwise, or in the earnings, business or
operations of the Company.
(t) No material labor dispute with the employees of the Company
exists, except as described in or contemplated by the Final Memorandum, or, to
the knowledge of the Company, is imminent; and the Company is not aware of any
existing, threatened or imminent labor disturbance by the employees of any of
its principal suppliers, manufacturers or contractors
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that could result in any material adverse change in the condition, financial or
otherwise, or in the earnings, business or operations of the Company.
(u) Neither the Company nor any affiliate (as defined in Rule 501(b)
of Regulation D under the Securities Act, an "Affiliate") of the Company has
directly, or through any agent, (i) sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of, any security (as defined in the
Securities Act) which is or will be integrated with the sale of the Certificates
in a manner that would require the registration under the Securities Act of the
Certificates or (ii) engaged in any form of general solicitation or general
advertising in connection with the offering of the Certificates (as those terms
are used in Regulation D under the Securities Act) or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities Act.
(v) None of the Company, its Affiliates or any person acting on its
or their behalf (other than the Placement Agents) has engaged in any directed
selling efforts (as that term is defined in Regulation S under the Securities
Act ("Regulation S")) with respect to the Certificates and the Company and its
Affiliates and any person acting on its or their behalf (other than the
Placement Agents) have complied with the offering restrictions requirement of
Regulation S.
(w) The Company is subject to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
(x) The Certificates satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(y) It is not necessary in connection with the offer, sale and
delivery of the Certificates to the Placement Agents in the manner contemplated
by this Agreement to register the Certificates under the Securities Act or to
qualify any of the Indentures or the Designated Agreements under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act").
(z) The accountants that examined and issued an auditors report with
respect to the financial statements of the Company included in the Final
Memorandum are independent public accountants within the meaning of the
Securities Act and the regulations thereunder.
(aa) The financial statements included in the Final Memorandum
present fairly the financial position of the Company as of the dates indicated
and the results of operations and cash flows or changes in financial position of
the Company for the periods specified. Such financial statements have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis throughout the periods involved. The financial statement
schedules, if any, included in the Final Memorandum present fairly the
information required to be stated therein.
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(bb) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which it is engaged; the Company has not been
refused any insurance coverage sought or applied for; and the Company has no
reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that
would not materially and adversely affect the condition, financial or otherwise,
or the earnings, business or operations of the Company, except as described in
or contemplated by the Final Memorandum.
(cc) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(dd) The Company has no customer sales which account for ten percent
or more of the Company's revenues.
(ee) The Company is a "citizen of the United States" (as defined in
Section 40102(a)(15) of Title 49 of the United States Code, as amended) and is
an air carrier operating under a certificate of public convenience and necessity
issued by the Secretary of Transportation pursuant to Section 41102 of Xxxxx 00,
Xxxxxx Xxxxxx Code. There is in force with respect to the Company an air carrier
operating certificate issued by the Federal Aviation Administration pursuant to
14 C.F.R. Part 119.
(ff) No Appraiser is an affiliate of the Company or, to the
knowledge of the Company, has a substantial interest, direct or indirect, in the
Company. To the knowledge of the Company, none of the officers and directors of
any of such appraisers are connected with the Company or any of its affiliates
as an officer, employee, promoter, underwriter, trustee, partner, director or
person performing similar functions.
The representations and warranties contained in this Agreement shall
be true and correct as of the date of this Agreement and as of the Closing Date.
2. Offering. The Placement Agents have advised the Company that the
Placement Agents will make an offering of the Certificates purchased by the
Placement Agents hereunder on the terms to be set forth in the Final Memorandum
as soon as practicable after this Agreement is entered into as in your judgment
is advisable.
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3. Purchase and Delivery. The Company hereby agrees to cause the
Trustee to sell to the several Placement Agents, and the Placement Agents, upon
the basis of the representations and warranties herein contained, but subject to
the conditions hereinafter stated, agree, severally and not jointly, to purchase
from the Trustee the principal amount of Certificates set forth in Schedule II
hereto opposite their names at a purchase price of 100% of the principal amount
thereof. Concurrently with the issuance of the Certificates, the Escrow Agents
shall issue and deliver to the Trustees the Escrow Receipts in accordance with
the terms of the Escrow Agreements, which Escrow Receipts shall be attached to
the related Certificates. Payment for the Certificates (with attached Escrow
Receipts) shall be made against delivery of the Certificates (with attached
Escrow Receipts) at a closing (the "Closing") to be held at the office of
Fulbright & Xxxxxxxx L.L.P., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00
A.M., local time, on August 13, 1998, or at such other time on the same or such
other date, not later than August 20, 1998, as shall be designated in writing by
you (such date of Closing being the "Closing Date"). The time and date of such
payment are herein referred to as the Closing Date. Delivery of the Certificates
(with attached Escrow Receipts) shall be made to your respective accounts at The
Depository Trust Company against payment by the Placement Agents of the purchase
price thereof to or upon the order of the Trustee by wire transfer. The
Certificates (with attached Escrow Receipts) shall be in definitive or global
form and registered in the name of Cede & Co. or in such other names, and in
such denominations as you may request in writing at least one full business day
in advance of the Closing Date in definitive or global form. The Company agrees
to have the Certificates (with attached Escrow Receipts) available for
inspection, checking and packaging by you in New York, New York not later than
1:00 P.M. on the business day prior to the Closing Date.
As compensation to the Placement Agents for their commitments and
obligations hereunder in respect of the Certificates, including their
undertakings to distribute the Certificates, the Company will pay to each
Placement Agent an amount equal to that percentage of the aggregate principal
amount of Certificates purchased by it as set forth in Schedule B. Such payment
shall be made on the Closing Date simultaneously with the issuance and sale of
the Certificates (with attached Escrow Receipts) to the Placement Agents and
shall be made by Federal funds check or other immediately available funds.
4. Conditions to Closing. The several obligations of the Placement
Agents under this Agreement to purchase the Certificates will be subject to the
following conditions:
(a) Subsequent to the date of this Agreement and prior to the
Closing Date,
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of the
possible change, in the rating accorded any of the Company's securities,
including the Certificates, by any "nationally recognized statistical
rating organization," as such term is defined for purposes of Rule
436(g)(2) under the Securities Act; and
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(ii) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise,
or in the earnings, business or operations, of the Company from that set
forth in the Preliminary Memorandum that, in your judgment, is material
and adverse and that makes it, in your judgment, impracticable to market
the Certificates on the terms and in the manner contemplated in the Final
Memorandum.
(b) You shall have received on the Closing Date a certificate, dated
the Closing Date and signed by an executive officer of the Company, to the
effect set forth in clause (a)(i) above and to the effect that the
representations and warranties of the Company contained in this Agreement are
true and correct as of the Closing Date and that the Company has complied with
all of the agreements and satisfied all of the conditions on its part to be
performed or satisfied on or before the Closing Date.
The officer signing and delivering such certificate may rely upon
the best of his knowledge as to proceedings threatened.
(c) You shall have received on the Closing Date (i) an opinion of
Fulbright & Xxxxxxxx L.L.P., independent counsel for the Company, dated the
Closing Date, to the effect set forth in Exhibit B, (ii) an opinion of General
Counsel of the Company, dated the Closing Date, to the effect set forth in
Exhibit C, (iii) an opinion of Ober, Kaler, Xxxxxx and Xxxxxxx, independent
counsel for the Trustee and Paying Agent, dated the Closing Date, to the effect
set forth in Exhibit D, (iv) an opinion of Morris, James, Hitchens & Xxxxxxxx,
counsel for the Escrow Agent, dated the Closing Date, to the effect set forth in
Exhibit E and (v) an opinion of Xxxxxx & Xxxxx, counsel for the Depositary,
dated the Closing Date, to the effect set forth in Exhibit F.
(d) You shall have received on the Closing Date an opinion of
Shearman & Sterling, counsel for the Placement Agents, dated the Closing Date,
in form and substance satisfactory to you.
(e) You shall have received on each of the date hereof and the
Closing Date a letter, dated the date hereof or the Closing Date, as the case
may be, in form and substance satisfactory to you, from Ernst & Young L.L.P.,
the Company's independent public accountants, containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in or incorporated by reference into the Final Memorandum.
(f) The Company shall have furnished to you and to counsel for the
Placement Agents, in form and substance satisfactory to you, such other
documents, certificates and opinions as such counsel may reasonably request in
order to pass upon the matters referred to in Section 4(d) and in order to
evidence the accuracy and completeness of any of the representations,
11
warranties or statements, the performance of any covenant by the Company
theretofore to be performed, or the compliance with any of the conditions herein
contained.
(g) Each of the Appraisers shall have furnished to you a letter from
such Appraiser, addressed to the Company and dated the Closing Date, confirming
that such Appraiser and each of its directors and officers (i) is not an
affiliate of the Company or any of its affiliates, (ii) does not have any
substantial interest, direct or indirect, in the Company or any of its
affiliates, (iii) is not connected with the Company or any of its affiliates as
an officer, employee, promoter, underwriter, trustee, partner, director or
person performing similar functions and (iv) is undertaking to provide its
consent to the use of its appraisal in the Registration Statement.
(h) At the Closing Date, each of the Operative Documents (other than
the Indentures, Leases and Participation Agreements) shall have been duly
executed and delivered by each of the parties thereto; the representations and
warranties of the Company contained in each of such executed Operative Documents
shall be true and correct as of the Closing Date (except to the extent that they
relate solely to an earlier date in which case they shall be true and correct as
of such earlier date) and you shall have received a certificate of a Vice
President of the Company, dated as of the Closing Date, to such effect.
(i) On the Closing Date, the Certificates shall be rated "A-" in the
case of the Certificates of the Class A Trust, "BBB-" in the case of the
Certificates of the Class B Trust, "BB-" in the case of the Certificates of the
Class C Trust and "B" in the case of the Certificates of the Class D Trust, by
Standard & Poor's Ratings Group; and "Baa1" in the case of the Certificates of
the Class A Trust, "Ba1" in the case of the Certificates of the Class B Trust,
"Ba3" in the case of the Certificates of the Class C Trust and "B2" in the case
of the Certificates of the Class D Trust by Xxxxx'x Investors Service, Inc.
(j) At the Closing Date, the Registration Rights Agreement, attached
as Exhibit A hereto, shall have been duly executed and delivered and be in full
force and effect.
5. Covenants of the Company. In further consideration of the
agreements of the Placement Agents contained in this Agreement, the Company
covenants as follows:
(a) To furnish to you, without charge, during the period mentioned
in paragraph (c) below, as many copies of the Final Memorandum and any
supplements and amendments thereto as you may reasonably request and to
use its best efforts to deliver such copies to you by 5 p.m. (New York
time) or the business day next following the execution of this Agreement.
(b) Before amending or supplementing either Memorandum, to furnish
to you a copy of each such proposed amendment or supplement and not to use
any such proposed amendment or supplement to which you reasonably object.
12
(c) If, during such period after the date hereof and prior to the
Closing Date, any event shall occur or condition exist as a result of
which it is necessary in your judgment to amend or supplement the Final
Memorandum in order to make the statements therein, in the light of the
circumstances when such Memorandum is delivered to a purchaser, not
misleading, or if, with the opinion of counsel to the Placement Agents it
is necessary to amend or supplement such Memorandum to comply with
applicable law, forthwith to prepare and furnish, at their own expense, to
the Placement Agents, either amendments or supplements to such Memorandum
so that the statements in such Memorandum as so amended or supplemented
will not, in the light of the circumstances when such Memorandum is
delivered to a purchaser, be misleading or so that such Memorandum, as so
amended or supplemented, will comply with applicable law.
(d) To endeavor to qualify the Certificates for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(e) The Company agrees to furnish to the Placement Agents, promptly
after the applicable Delivery Date (as defined in the applicable
Participation Agreement), a copy of each opinion required to be delivered
under the applicable Participation Agreement addressed to the Placement
Agents and of such other documents furnished in connection with the
fulfillment of the conditions precedent therein as the Placement Agents or
counsel for the Placement Agents may reasonably request.
(f) Whether or not any sale of such Certificates is consummated, to
pay all expenses incident to the performance of their obligations under
this Agreement, including: (i) the preparation of each Memorandum and all
amendments and supplements thereto, (ii) the preparation, issuance and
delivery of the Certificates, (iii) the fees and disbursements of the
Company's counsel and accountants and the Indenture Trustee, the
Subordination Agent, the Escrow Agent, the Depositary, the Trustees and
their counsel, (iv) the qualification of such Certificates under
securities or Blue Sky laws in accordance with the provisions of Section
5(d), including filing fees and the fees and disbursements of counsel for
the Placement Agents in connection therewith and in connection with the
preparation of any Blue Sky or legal investment memoranda, (v) the
printing and delivery to the Placement Agents in quantities as hereinabove
stated of copies of the Memorandum and any amendments or supplements
thereto, (vi) any fees charged by rating agencies for the rating of such
Certificates, (vii) all document production charges and expenses of
counsel to the Placement Agents (but not including their fees for
professional services) in connection with the preparation of this
Agreement, (viii) the fees and expenses, if any, incurred in connection
with the admission of such Certificates for trading in PORTAL or any other
appropriate market system, (ix) the costs and expenses of the Company
relating to investor presentations on any "road show" undertaken in
connection with the marketing of the Certificates, including, without
limitation, expenses associated with the production of road show slides
and graphics, fees and expenses of any consultants engaged in connection
with the road show presentations with the prior approval of the Company,
13
travel and lodging expense of the representatives and officers of the
Company and any such consultants, and the cost of any aircraft chartered
in connection with the road show, and (x) all other costs and expenses
incident to the performance of the obligations of the Company hereunder
for which provision is not otherwise made in this Section.
(g) Neither the Company nor any Affiliate will sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security
(as defined in the Securities Act) which could be integrated with the sale
of the Certificates in a manner which would require the registration under
the Securities Act of such Certificates.
(h) Not to solicit any offer to buy or offer or sell the
Certificates by means of any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities
Act) or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act.
(i) While any of the Certificates remain outstanding, to make
available, upon request, to any seller of such Certificates the
information specified in Rule 144A(d)(4) under the Securities Act, unless
the Company is then subject to Section 13 or 15(d) of the Exchange Act.
(j) None of the Company, its Affiliates or any person acting on its
or their behalf (other than the Placement Agents) will engage in any
directed selling efforts (as that term is defined in Regulation S) with
respect to the Certificates, and the Company and their Affiliates and each
person acting on its or their behalf (other than the Placement Agents)
will comply with the offering restrictions of Regulation S.
(k) For a period of five years after the Closing Date, upon request,
to make available to the Placement Agents, copies of all annual reports,
quarterly reports and current reports filed by the Company with the
Securities and Exchange Commission (the "Commission") on Forms 10-K, 10-Q
and 8-K, or such other similar forms as may be designated by the
Commission, and such other documents, reports and information as shall be
furnished by the Company to the holders of Certificates or the Company to
its security holders generally.
(l) During the period of two years after the Closing Date, upon
request, to furnish to the Placement Agent and any holder of Offered
Certificates a copy of the restrictions on transfer applicable to the
Offered Certificates.
(m) During the period of two years after the Closing Date, not to,
and not to permit any of its Affiliates to, resell any of the Offered
Certificates that have been reacquired by any of them.
14
(n) During the period of two years after the Closing Date, not to
become an open-end investment company, unit investment trust or
face-amount certificate company that is or is required to be registered
under Section 8 of the Investment Company Act, or a closed-end investment
company required to be registered, but not registered, under the
Investment Company Act.
(o) In connection with the offering, until the Placement Agents
shall have notified the Company of the completion of the resale of the
Certificates, neither the Company nor any of its Affiliates has bid for or
purchased or will bid for or purchase, either alone or with one or more
other persons, for any account in which it or any of its Affiliates has a
beneficial interest any Certificates; and neither it nor any of its
Affiliates will make bids or purchases for the purpose of creating actual,
or apparent, active trading in, or of raising the price of, the
Certificates.
(p) Between the date of this Agreement and the Closing Date, the
Company will not without your prior written consent offer, sell, or enter
into any agreement to sell, any public debt securities registered under
the Securities Act or any debt securities which may be resold in a
transaction exempt from the registration requirements of the Securities
Act in reliance on Rule 144A thereunder and which are marketed through the
use of a disclosure document containing substantially the same information
as a prospectus for similar debt securities registered under the
Securities Act (other than the Certificates).
(q) If requested by you, to use its best efforts to permit the
Certificates to be designated PORTAL securities in accordance with the
rules and regulations adopted by the National Association of Securities
Dealers, Inc. relating to trading in the PORTAL Market; unless so
requested by you, the Company will not take any action to permit the
Certificates to be designated PORTAL securities without your prior
consent, which shall not be unreasonably withheld.
6. Offering of Certificates; Restrictions on Transfer. (a) Each
Placement Agent, severally and not jointly, represents and warrants that such
Placement Agent is a qualified institutional buyer as defined in Rule 144A under
the Securities Act (a "QIB"). Each Placement Agent, severally and not jointly,
agrees with the Company that (i) it will not solicit offers for, or offer or
sell, such Certificates by any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities Act)
or in any manner involving a public offering within the meaning of Section 4(2)
of the Securities Act and (ii) it will solicit offers for such Certificates only
from, and will offer such Certificates only to, persons that it reasonably
believes to be (A) in the case of offers inside the United States, (x) QIBs or
(y) other institutional accredited investors (as defined in Rule 501(a) (1),
(2), (3) or (7) under the Securities Act) ("institutional accredited investors")
that, prior to their purchase of the Certificates, deliver to such Placement
Agent a letter containing the representations and agreements set forth in Annex
III to the Final Memorandum and (B) in the case of offers outside the United
States, to persons other than U.S. persons ("foreign purchasers", which term
shall include dealers or other
15
professional fiduciaries in the United States acting on a discretionary basis
for foreign beneficial owners (other than an estate or trust)) that, in each
case, in purchasing such Certificates are deemed to have represented and agreed
as provided in the Final Memorandum under the caption "Transfer Restrictions."
(b) Each Placement Agent, severally and not jointly, represents,
warrants, and agrees with respect to offers and sales outside the United States
that:
(i) it understands that no action has been or will be taken in any
jurisdiction by the Company that would permit a public offering of the
Certificates, or possession or distribution of either Memorandum or any
other offering or publicity material relating to the Certificates, in any
country or jurisdiction where action for that purpose is required;
(ii) such Placement Agent will comply with all applicable laws and
regulations in each jurisdiction in which it acquires, offers, sells or
delivers Certificates or has in its possession or distributes either
Memorandum or any such other material, in all cases at its own expense;
(iii) the Certificates have not been and will not be registered
under the Securities Act and may not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons except in
accordance with Regulation S under the Securities Act or pursuant to an
exemption from the registration requirements of the Securities Act;
(iv) such Placement Agent has offered the Certificates and will
offer and sell the Certificates (A) as part of its distribution at any
time and (B) otherwise until 40 days after the later of the commencement
of the offering of the Certificates and the Closing Date, only in
accordance with Rule 903 of Regulation S or another exemption from the
registration requirements of the Securities Act. Accordingly, neither such
Placement Agent, its Affiliates nor any persons acting on its or their
behalf have engaged or will engage in any directed selling efforts (within
the meaning of Regulation S) with respect to the Certificates, and any
such Placement Agent, its Affiliates and any such persons have complied
and will comply with the offering restrictions requirements of Regulation
S;
(v) such Placement Agent (A) has not offered or sold and will not
offer or sell any Certificates to persons in the United Kingdom prior to
the expiring of the period six months from the issue date of the
Certificates except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or
agent) for the purposes of their businesses or otherwise in circumstances
which have not resulted and will not result in an offer to the public in
the United Kingdom within the meaning of the Public Offers of Securities
Regulations 1995 (the "Regulations"); (B) has complied and will comply
with all applicable provisions of the Financial Services Xxx 0000 and the
Regulations with respect to anything done by it in relation to the
Certificates in,
16
from or otherwise involving the United Kingdom; and (C) has only issued or
passed on and will only issue or pass on in the United Kingdom any
document received by it in connection with the issue of the Certificates
to a person who is of a kind described in Article 11(3) of the Financial
Services Xxx 0000 (Investment Advertisements) (Exemptions) Order 1996 or
is a person to whom such document may otherwise lawfully be issued or
passed on; and
(vi) such Placement Agent understands that the Certificates have not
been and will not be registered under the Securities and Exchange Law of
Japan, and represents that it has not offered or sold, and agrees that it
will not offer or sell, any Certificates, directly or indirectly in Japan
or to any resident of Japan except (A) pursuant to an exemption from the
registration requirements of the Securities and Exchange Law of Japan and
(B) in compliance with any other applicable requirements of Japanese law.
Terms used in this Section 6 have the meanings given to them by Regulation S.
7. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Placement Agent, and each person, if any, who
controls such Placement Agent within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, or is under common control
with, or is controlled by, such Placement Agent, from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred by any Placement Agent or any such
controlling or affiliated person in connection with defending or investigating
any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in either Memorandum (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated or necessary to make the statements therein
not misleading, except insofar as such losses, claims, damages or liabilities
are caused by any such untrue statement or omission or alleged untrue statement
or omission based upon information relating to any Placement Agent furnished to
the Company in writing by such Placement Agent through Xxxxxx Xxxxxxx & Co.
Incorporated expressly for use therein; provided, however, that the foregoing
indemnity agreement with respect to any Preliminary Memorandum shall not inure
to the benefit of any Placement Agent from whom the person asserting any such
losses, claims, damages or liabilities purchased Certificates, or any person
controlling such Placement Agent, if a copy of the Final Memorandum (as then
amended or supplemented if the Company shall have furnished any amendment or
supplements thereto) was not sent or given by or on behalf of such Placement
Agent to such person, if required by law so to have been delivered, at or prior
to the written confirmation of the sale of the Certificates to such person, and
if the Final Memorandum (as so amended or supplemented) would have cured the
defect giving rise to such losses, claims, damages from liabilities, unless such
failure is the result of noncomplicance by the Company with Section 5(a) hereof.
17
(b) Each Placement Agent agrees, severally and not jointly, to
indemnify and hold harmless the Company, each of its directors, its officers and
each person, if any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in either
Memorandum, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only with reference to information relating to any
Placement Agent furnished to the Company in writing by such Placement Agent
through Xxxxxx Xxxxxxx & Co. Incorporated expressly for use in either
Memorandum.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or (b) above, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of an indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Xxxxxx Xxxxxxx & Co. Incorporated in the case of
parties indemnified pursuant to paragraph (a) above and by the Company in the
case of parties indemnified pursuant to paragraph (b) above. The indemnifying
party shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
18
(d) To the extent the indemnification provided for in paragraph (a)
or (b) of this Section 7 is unavailable to an indemnified party or insufficient
in respect of any losses, claims, damages or liabilities, then each indemnifying
party under such paragraph, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Placement Agents, on the other hand, from the
offering of such Certificates or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the Placement Agents
on the other hand in connection with the statements or omissions that resulted
in such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Placement Agents on the other hand in connection with the
offering of such Certificates shall be deemed to be in the same respective
proportions as the net proceeds from the offering of such Certificates (before
deducting expenses) received by the Trusts and the total discounts and
commissions received by the Placement Agents in respect thereof bear to the
aggregate offering price of such Certificates. The relative fault of the Company
on the one hand and of the Placement Agents on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or by the
Placement Agents and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
(e) The Company and the Placement Agents agree that it would not be
just or equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in paragraph (d) above shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, no Placement Agent shall be required to contribute
any amount in excess of the amount by which the total price at which the
Certificates resold by it in the initial placement of such Certificates were
offered to investors exceeds the amount of any damages that such Placement Agent
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The indemnity and contribution provisions
contained in this Section 7 and the representations and warranties of the
Company contained in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of the Placement Agents or any person
controlling any Placement Agent or by or on behalf of the Company, its officers
or directors or any person controlling the Company and (iii) acceptance of and
payment for any of the Certificates. The remedies provided for in this
19
Section 7 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
8. Termination. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the National Association
of Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses (a)(i) through (iv), such event singly or
together with any other such event makes it, in your judgment, impracticable to
market the Certificates on the terms and in the manner contemplated in the Final
Memorandum. If this Agreement is terminated by the Placement Agents in
accordance with the provisions of this Section 8, the Company shall reimburse
the Placement Agents for all their reasonable out-of-pocket expenses, including
the fees and disbursements of counsel for the Placement Agents.
9. Default by a Placement Agent. If, on the Closing Date, any one or
more of the Placement Agents shall fail or refuse to purchase Certificates that
it or they have agreed to purchase hereunder on such date, and the aggregate
principal amount of Certificates which such defaulting Placement Agent or
Placement Agents agreed but failed or refused to purchase is not more than
one-tenth of the aggregate principal amount of Certificates to be purchased on
such date, the non-defaulting Placement Agent shall be obligated to purchase the
Certificates that such defaulting Placement Agent has agreed but failed or
refused to purchase on such date; provided that in no event shall the principal
amount of Certificates that any Placement Agent has agreed to purchase pursuant
to this Agreement be increased pursuant to this Section 9 by an amount in excess
of one-ninth of such principal amount of Certificates without the written
consent of such Placement Agent. If, on the Closing Date any Placement Agent or
Placement Agents shall fail or refuse to purchase Certificates which it or they
have agreed to purchase hereunder on such date and the aggregate principal
amount of Certificates with respect to which such default occurs is more than
one-tenth of the aggregate principal amount of Certificates to be purchased on
such date, and arrangements satisfactory to you and the Company for the purchase
of such Certificates are not made within 36 hours after such default, this
Agreement shall terminate without liability on the part of any non-defaulting
Placement Agent or the Company. In any such case either you or the Company shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Final Memorandum
or in any other documents or arrangements may be effected. Any action taken
under this paragraph shall not relieve any defaulting Placement Agent from
liability in respect of any default of such Placement Agent under this
Agreement.
20
10. Notices. All notices and other communications under this
Agreement shall be in writing, and, if sent to the Placement Agents, shall be
mailed, delivered or sent by facsimile transmission to:
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx
Facsimile number: (000) 000-0000
or, if sent to the Company, will be mailed, delivered or sent by facsimile
transmission to it at:
Midway Airlines Corporation
000 X. Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx
Facsimile number: (000) 000-0000
with a copy to:
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Facsimile number: (000) 000-0000
11. Miscellaneous. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
If this Agreement shall be terminated by the Placement Agents, or
any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company shall be unable to perform its obligations under
this Agreement, the Company will reimburse the Placement Agents or such
Placement Agents as have so terminated this Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the fees and
disbursements of their counsel) reasonably incurred by such Placement Agents in
connection with this Agreement or the offering contemplated hereunder.
This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York.
The headings of the sections of this Agreement have been inserted
for convenience of reference only and shall not be deemed a part of this
Agreement.
21
Please confirm your agreement to the foregoing by signing in the
space provided below for that purpose and returning to us a copy hereof,
whereupon this Agreement shall constitute a binding agreement between us.
Very truly yours,
MIDWAY AIRLINES CORPORATION
By /s/Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Senior Vice President
General Counsel
Agreed, August 6, 1998
XXXXXX XXXXXXX & CO. INCORPORATED
CREDIT SUISSE FIRST BOSTON
By Xxxxxx Xxxxxxx & Co. Incorporated
By /s/ Xxx Xxxxxx
-----------------------------------
Name: Xxx Xxxxxx
Title: Principal
22
SCHEDULE I
Pass Through Aggregate Final
Certificate Principal Interest Distribution
Designation Amounts Rate Date
------------ --------- -------- ------------
1998-1A $58,426,000 7.14% January 2, 2015
1998-1B 25,266,000 8.14 January 2, 2013
1998-1C 20,528,000 8.92 January 2, 2008
1998-1D 5,502,000 8.86 January 2, 2003
SCHEDULE II
Principal Amount of Certificates
To Be Purchased
--------------------------------
Class A Class B Class C Class D
Placement Agent Certificates Certificates Certificates Certificates
--------------- ------------ ------------ ------------ ------------
Xxxxxx Xxxxxxx & Co.
Incorporated .................... $29,213,000 $12,633,000 $10,264,000 $2,751,000
Credit Suisse First
Boston Corporation .............. 29,213,000 12,633,000 10,264,000 2,751,000
----------- ----------- ----------- ----------
Total ......................... $58,426,000 $25,266,000 $20,528,000 $5,502,000
----------- ----------- ----------- ----------
24
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into on August 13, 1998, among MIDWAY AIRLINES CORPORATION, a Delaware
corporation (the "Company"), THE FIRST NATIONAL BANK OF MARYLAND, as Trustee
under each of the Trust Agreements (as defined below), XXXXXX XXXXXXX & CO.
INCORPORATED and CREDIT SUISSE FIRST BOSTON CORPORATION (the "Placement
Agents").
This Agreement is made pursuant to the Purchase Agreement dated
August 6, 1998, between the Company and the Placement Agents (the "Purchase
Agreement"),which provides for the sale by the Trustee to the Placement Agents
of (i) $58,426,000 aggregate principal amount of 7.14% 1998-1A Pass Through
Certificates (the "Class A Certificates"), (ii) $25,266,000 aggregate principal
amount of 8.14% 1998-1B Pass Through Certificates (the "Class B Certificates"),
(iii) $20,528,000 aggregate principal amount of 8.92% 1998-1C Pass Through
Certificates (the "Class C Certificates") and (iv) $5,502,000 aggregate
principal amount of 8.86% 1998-1D Pass Through Certificates (the "Class D
Certificates", and together with the Class A Certificates, the Class B
Certificates and the Class C Certificates, the "Certificates"). In order to
induce the Placement Agents to enter into the Purchase Agreement, the Company
has agreed to provide to the Placement Agents and their direct and indirect
transferees the registration rights set forth in this Agreement. The execution
of this Agreement is a condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions.
As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from
time to time.
"1934 Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"Applicable Trust Agreement" shall mean, (i) with respect to the
Class A Certificates, the Class A Holders or the Class A Trustee, the
Class A Trust Agreement, (ii) with respect to the Class B Certificates,
the Class B Holders or the Class B Trustee, the Class B Trust Agreement,
(iii) with respect to the Class C Certificates, the Class C Holders or the
Class C Trustee, the Class C Trust Agreement and (iv) with respect to the
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Class D Certificates, the Class D Holders or the Class D Trustee, the
Class D Trust Agreement.
"Certificates" shall have the meaning set forth in the second
paragraph of this Agreement.
"Class A Certificates" shall have the meaning set forth in the
second paragraph of this Agreement.
"Class A Exchange Certificates" shall mean securities issued under
the Class A Trust Agreement of equal outstanding principal amount as and
containing terms identical to the Class A Certificates (except that (i)
interest thereon shall accrue from the last date on which interest was
paid on the Class A Certificates or, if no such interest has been paid,
from August 13, 1998, (ii) the transfer restrictions thereon shall be
modified or eliminated, as appropriate and (iii) certain provisions
relating to an increase in the stated rate of interest thereon shall be
eliminated), to be offered to Holders of the Class A Certificates in
exchange for such Class A Certificates pursuant to the Exchange Offer.
"Class A Holder" shall mean any Placement Agent, for so long as it
owns any Class A Registrable Certificates, and each of its successors,
assigns and direct and indirect transferees who become registered owners
of Class A Registrable Certificates under the Class A Trust Agreement;
provided that for purposes of Sections 4 and 5 of this Agreement, the term
"Class A Holder" shall include Participating Broker-Dealers (as defined in
Section 4(a)).
"Class A Registrable Certificates" shall mean the Class A
Certificates; provided, however, that the Class A Certificates shall cease
to be Class A Registrable Certificates upon the earliest to occur of (i)
the consummation of the Exchange Offer, (ii) a Registration Statement with
respect to such Class A Certificates shall have been declared effective
under the 1933 Act and such Class A Certificates shall have been disposed
of pursuant to such Registration Statement, (iii) such Class A
Certificates shall have been sold to the public pursuant to Rule 144(k)
(or any similar provision then in force, but not Rule 144A) under the 1933
Act or (iv) such Class A Certificates shall have ceased to be outstanding.
"Class A Trust Agreement" shall mean the Pass Through Trust
Agreement relating to the Class A Certificates dated as of August 13, 1998
among the Company and the Class A Trustee, as the same may be amended from
time to time in accordance with the terms thereof.
"Class A Trustee" shall mean The First National Bank of Maryland,
not in its individual capacity except as expressly set forth in the Class
A Trust Agreement, but solely
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as Trustee under the Class A Trust Agreement, together with any successor
Trustee under the terms of the Class A Trust Agreement.
"Class B Certificates" shall have the meaning set forth in the
second paragraph of this Agreement.
"Class B Exchange Certificates" shall mean securities issued under
the Class B Trust Agreement of equal outstanding principal amount as and
containing terms identical to the Class B Certificates (except that (i)
interest thereon shall accrue from the last date on which interest was
paid on the Class B Certificates or, if no such interest has been paid,
from August 13, 1998, (ii) the transfer restrictions thereon shall be
modified or eliminated, as appropriate and (iii) certain provisions
relating to an increase in the stated rate of interest thereon shall be
eliminated), to be offered to Holders of the Class B Certificates in
exchange for such Class B Certificates pursuant to the Exchange Offer.
"Class B Holder" shall mean any Placement Agent, for so long as it
owns any Class B Registrable Certificates, and each of its successors,
assigns and direct and indirect transferees who become registered owners
of Class B Registrable Certificates under the Class B Trust Agreement;
provided that for purposes of Sections 4 and 5 of this Agreement, the term
"Class B Holder" shall include Participating Broker-Dealers (as defined in
Section 4(a)).
"Class B Registrable Certificates" shall mean the Class B
Certificates; provided, however, that the Class B Certificates shall cease
to be Class B Registrable Certificates upon the earliest to occur of (i)
the consummation of the Exchange Offer, (ii) a Registration Statement with
respect to such Class B Certificates shall have been declared effective
under the 1933 Act and such Class B Certificates shall have been disposed
of pursuant to such Registration Statement, (iii) such Class B
Certificates shall have been sold to the public pursuant to Rule 144(k)
(or any similar provision then in force, but not Rule 144A) under the 1933
Act or (iv) such Class B Certificates shall have ceased to be outstanding.
"Class B Trust Agreement" shall mean the Pass Through Trust
Agreement relating to the Class B Certificates dated as of August 13, 1998
among the Company and the Class B Trustee, as the same may be amended from
time to time in accordance with the terms thereof.
"Class B Trustee" shall mean The First National Bank of Maryland,
not in its individual capacity except as expressly set forth in the Class
B Trust Agreement, but solely as Trustee under the Class B Trust
Agreement, together with any successor Trustee under the terms of the
Class B Trust Agreement.
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"Class C Certificates" shall have the meaning set forth in the
second paragraph of this Agreement.
"Class C Exchange Certificates" shall mean securities issued under
the Class C Trust Agreement of equal outstanding principal amount as and
containing terms identical to the Class C Certificates (except that (i)
interest thereon shall accrue from the last date on which interest was
paid on the Class C Certificates or, if no such interest has been paid,
from August 13, 1998, (ii) the transfer restrictions thereon shall be
modified or eliminated, as appropriate and (iii) certain provisions
relating to an increase in the stated rate of interest thereon shall be
eliminated), to be offered to Holders of the Class C Certificates in
exchange for such Class C Certificates pursuant to the Exchange Offer.
"Class C Holder" shall mean any Placement Agent, for so long as it
owns any Class C Registrable Certificates, and each of its successors,
assigns and direct and indirect transferees who become registered owners
of Class C Registrable Certificates under the Class C Trust Agreement;
provided that for purposes of Sections 4 and 5 of this Agreement, the term
"Class C Holder" shall include Participating Broker-Dealers (as defined in
Section 4(a)).
"Class C Registrable Certificates" shall mean the Class C
Certificates; provided, however, that the Class C Certificates shall cease
to be Class C Registrable Certificates upon the earliest to occur of (i)
the consummation of the Exchange Offer, (ii) a Registration Statement with
respect to such Class C Certificates shall have been declared effective
under the 1933 Act and such Class C Certificates shall have been disposed
of pursuant to such Registration Statement, (iii) such Class C
Certificates shall have been sold to the public pursuant to Rule 144(k)
(or any similar provision then in force, but not Rule 144A) under the 1933
Act or (iv) such Class C Certificates shall have ceased to be outstanding.
"Class C Trust Agreement" shall mean the Pass Through Trust
Agreement relating to the Class C Certificates dated as of August 13, 1998
among the Company and the Class C Trustee, as the same may be amended from
time to time in accordance with the terms thereof.
"Class C Trustee" shall mean The First National Bank of Maryland,
not in its individual capacity except as expressly set forth in the Class
C Trust Agreement, but solely as Trustee under the Class C Trust
Agreement, together with any successor Trustee under the terms of the
Class C Trust Agreement.
"Class D Certificates" shall have the meaning set forth in the
second paragraph of this Agreement.
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"Class D Exchange Certificates" shall mean securities issued under
the Class D Trust Agreement of equal outstanding principal amount as and
containing terms identical to the Class D Certificates (except that (i)
interest thereon shall accrue from the last date on which interest was
paid on the Class D Certificates or, if no such interest has been paid,
from August 13, 1998, (ii) the transfer restrictions thereon shall be
modified or eliminated, as appropriate and (iii) certain provisions
relating to an increase in the stated rate of interest thereon shall be
eliminated), to be offered to Holders of the Class D Certificates in
exchange for such Class D Certificates pursuant to the Exchange Offer.
"Class D Holder" shall mean any Placement Agent, for so long as it
owns any Class D Registrable Certificates, and each of its successors,
assigns and direct and indirect transferees who become registered owners
of Class D Registrable Certificates under the Class D Trust Agreement;
provided that for purposes of Sections 4 and 5 of this Agreement, the term
"Class D Holder" shall include Participating Broker-Dealers (as defined in
Section 4(a)).
"Class D Registrable Certificates" shall mean the Class D
Certificates; provided, however, that the Class D Certificates shall cease
to be Class D Registrable Certificates upon the earliest to occur of (i)
the consummation of the Exchange Offer, (ii) a Registration Statement with
respect to such Class D Certificates shall have been declared effective
under the 1933 Act and such Class D Certificates shall have been disposed
of pursuant to such Registration Statement, (iii) such Class D
Certificates shall have been sold to the public pursuant to Rule 144(k)
(or any similar provision then in force, but not Rule 144A) under the 1933
Act or (iv) such Class D Certificates shall have ceased to be outstanding.
"Class D Trust Agreement" shall mean the Pass Through Trust
Agreement relating to the Class D Certificates dated as of August 13, 1998
among the Company and the Class D Trustee, as the same may be amended from
time to time in accordance with the terms thereof.
"Class D Trustee" shall mean The First National Bank of Maryland,
not in its individual capacity except as expressly set forth in the Class
D Trust Agreement, but solely as Trustee under the Class D Trust
Agreement, together with any successor Trustee under the terms of the
Class D Trust Agreement.
"Closing Date" shall mean the Closing Date as defined in the
Purchase Agreement.
"Company" shall have the meaning set forth in the preamble and shall
also include the Company's successors.
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"Exchange Certificates" shall mean, together, the Class A Exchange
Certificates, the Class B Exchange Certificates, the Class C Exchange
Certificates and the Class D Exchange Certificates.
"Exchange Offer" shall mean the exchange offer by the Company of
Exchange Certificates for Registrable Certificates pursuant to Section
2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the
1933 Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another
appropriate form) and all amendments and supplements to such registration
statement, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"Holder" shall mean a Class A Holder, a Class B Holder, a Class C
Holder or a Class D Holder; provided that for purposes of Sections 4 and 5
of this Agreement, the term "Holder" shall include Participating
Broker-Dealers (as defined in Section 4(a)).
"Majority Holders" shall mean, together, the Holders of a majority
in aggregate principal amount of the Registrable Certificates then
outstanding; provided that whenever the consent or approval of Holders of
a specified percentage of Registrable Certificates is required hereunder,
Registrable Certificates held by the Company or any of its affiliates (as
such term is defined in Rule 405 under the 0000 Xxx) (other than the
Placement Agents or subsequent holders of Registrable Certificates if such
subsequent holders are deemed to be such affiliates solely by reason of
their holding of such Registrable Certificates) shall not be counted in
determining whether such consent or approval was given by the Holders of
such required percentage or amount.
"Person" shall mean an individual, partnership, corporation, trust
or unincorporated organization, or a government or agency or political
subdivision thereof.
"Placement Agents" shall have the meaning set forth in the preamble.
"Purchase Agreement" shall have the meaning set forth in the
preamble.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus
as amended or supplemented by any prospectus supplement, including a
prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Certificates covered by a Shelf Registration
Statement, and by all other amendments and supplements to such prospectus,
and in each case including all material incorporated by reference therein.
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"Registrable Certificates" shall mean, together, the Class A
Registrable Certificates, the Class B Registrable Certificates, the Class
C Registrable Certificates and the Class D Registrable Certificates.
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company and the Trustees with this
Agreement, including without limitation: (i) all SEC, stock exchange or
National Association of Securities Dealers, Inc. registration and filing
fees, (ii) all fees and expenses incurred in connection with compliance
with state securities or blue sky laws (including reasonable fees and
disbursements of counsel for any underwriters or Holders in connection
with blue sky qualification of any of the Exchange Certificates or
Registrable Certificates), (iii) all expenses of any Persons in preparing
or assisting in preparing, word processing, printing and distributing any
Registration Statement, any Prospectus, any amendments or supplements
thereto, any underwriting agreements, securities sales agreements and
other documents relating to the performance of and compliance with this
Agreement, (iv) all rating agency fees, (v) all fees and disbursements
relating to the qualification of the Trust Agreements under applicable
securities laws, (vi) the fees and disbursements of the Trustees and their
counsel, (vii) the fees and disbursements of counsel for the Company and,
in the case of a Shelf Registration Statement, the fees and disbursements
of one counsel for the Holders (which counsel shall be selected by the
Majority Holders and which counsel may also be counsel for the Placement
Agents) and (viii) the fees and disbursements of the independent public
accountants of the Company, including the expenses of any special audits
or "cold comfort" letters required by or incident to such performance and
compliance, but excluding fees and expenses of counsel to the underwriters
(other than fees and expenses set forth in clause (ii) above) or the
Holders and underwriting discounts and commissions and transfer taxes, if
any, relating to the sale or disposition of Registrable Certificates by a
Holder.
"Registration Statement" shall mean any registration statement of
the Company that covers any of the Exchange Certificates or Registrable
Certificates pursuant to the provisions of this Agreement and all
amendments and supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"SEC" shall mean the Securities and Exchange Commission.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2(b) of
this Agreement which covers all of the Registrable Certificates (but no
other securities unless approved by the Holders whose Registrable
Certificates are covered by such Shelf Registration Statement) on an
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appropriate form under Rule 415 under the 1933 Act, or any similar rule
that may be adopted by the SEC, and all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Trust Agreement" shall mean the Class A Trust Agreement, the Class
B Trust Agreement, the Class C Trust Agreement or the Class D Trust
Agreement, as applicable, and when used in the plural shall mean,
together, the Class A Trust Agreement, the Class B Trust Agreement, the
Class C Trust Agreement and the Class D Trust Agreement.
"Trustee" shall mean the Class A Trustee, the Class B Trustee, the
Class C Trustee or the Class D Trustee, as applicable, and when used in
the plural shall mean, together, the Class A Trustee, the Class B Trustee,
the Class C Trustee and the Class D Trustee.
"Underwritten Registration" or "Underwritten Offering" shall mean a
registration in which Registrable Certificates are sold to an Underwriter
(as hereinafter defined) for reoffering to the public.
2. Registration Under the 0000 Xxx. To the extent not prohibited by
any applicable law or applicable interpretation of the Staff of the SEC, the
Company shall use its best efforts (A) to file with the SEC within 120 days
after the Closing Date an Exchange Offer Registration Statement covering the
offer by the Company to the Holders to exchange all of the Registrable
Certificates for Exchange Certificates and (B) to cause such Exchange Offer
Registration Statement to be declared effective by the SEC within 180 days after
the Closing Date. The Company shall commence the Exchange Offer promptly after
the Exchange Offer Registration Statement has been declared effective by the
SEC. The Company shall commence the Exchange Offer by mailing the related
exchange offer Prospectus and accompanying documents to each Holder stating, in
addition to such other disclosures as are required by applicable law:
(i) that the Exchange Offer is being made pursuant to this
Registration Rights Agreement and that all Registrable Certificates
validly tendered will be accepted for exchange;
(ii) the period for exchange (which shall be a period of at least 20
consecutive business days from the date such notice is mailed) (such days
being the "Exchange Dates");
(iii) that any Registrable Certificate not tendered will remain
outstanding and continue to accrue interest, but will not retain any
rights under this Registration Rights Agreement;
(iv) that Holders electing to have a Registrable Certificate
exchanged pursuant to the Exchange Offer will be required to surrender
such Registrable Certificate, together
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with the enclosed letters of transmittal, to the institution and at the
office specified in the notice prior to the close of business on the last
Exchange Date; and
(v) that Holders will be entitled to withdraw their election, not
later than the close of business on the last Exchange Date, by sending to
the institution and at the office specified in the notice, a telegram,
telex, facsimile transmission or letter setting forth the name of such
Holder, the principal amount of Registrable Certificates delivered for
exchange, and a statement that such Holder is withdrawing his election to
have such Certificates exchanged.
As soon as practicable after the last Exchange Date, the Company
shall or shall cause the Trustees to:
(i) accept for exchange Registrable Certificates or portions thereof
tendered and not validly withdrawn pursuant to the Exchange Offer;
(ii) deliver, or cause to be delivered, to the Class A Trustee for
cancellation all Class A Registrable Certificates or portions thereof so
accepted for exchange by the Company, and issue, and cause the Class A
Trustee to promptly authenticate and mail to each Class A Holder, Class A
Exchange Certificates equal in principal amount to the principal amount of
the Class A Registrable Certificates surrendered by such Class A Holder;
(iii) deliver, or cause to be delivered, to the Class B Trustee for
cancellation all Class B Registrable Certificates or portions thereof so
accepted for exchange by the Company, and issue, and cause the Class B
Trustee to promptly authenticate and mail to each Class B Holder, Class B
Exchange Certificates equal in principal amount to the principal amount of
the Class B Registrable Certificates surrendered by such Class B Holder;
(iv) deliver, or cause to be delivered, to the Class C Trustee for
cancellation all Class C Registrable Certificates or portions thereof so
accepted for exchange by the Company, and issue, and cause the Class C
Trustee to promptly authenticate and mail to each Class C Holder, Class C
Exchange Certificates equal in principal amount to the principal amount of
the Class C Registrable Certificates surrendered by such Class C Holder;
and
(v) deliver, or cause to be delivered, to the Class D Trustee for
cancellation all Class D Registrable Certificates or portions thereof so
accepted for exchange by the Company, and issue, and cause the Class D
Trustee to promptly authenticate and mail to each Class D Holder, Class D
Exchange Certificates equal in principal amount to the principal amount of
the Class D Registrable Certificates surrendered by such Class D Holder.
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The Company shall use its best efforts to complete the Exchange Offer as
provided above and shall comply with the applicable requirements of the 1933
Act, the 1934 Act and other applicable laws and regulations in connection with
the Exchange Offer. The Exchange Offer shall not be subject to any conditions,
other than that the Exchange Offer does not violate applicable law or any
applicable interpretation of the Staff of the SEC. The Company shall inform the
Placement Agents of the names and addresses of the Holders to whom the Exchange
Offer is made, and the Placement Agents shall have the right, subject to
applicable law, to contact such Holders and otherwise facilitate the tender of
Registrable Certificates in the Exchange Offer.
(b) In the event that (i) the Company determines that the Exchange
Offer Registration provided for in Section 2(a) above is not available or may
not be consummated as soon as practicable after the last Exchange Date because
it would violate applicable law or the applicable interpretations of the Staff
of the SEC, (ii) the Exchange Offer Registration Statement is not declared
effective by within 180 days after the Closing Date, (iii) the Exchange Offer is
not for any other reason consummated by March 11, 1999 or (iv) the Exchange
Offer has been completed and in the opinion of counsel for the Placement Agents
a Registration Statement must be filed and a Prospectus must be delivered by the
Placement Agents in connection with any offering or sale of Registrable
Certificates, the Company shall file as soon as practicable after such
determination, date or notice of such opinion of counsel is given to the
Company, as the case may be, a Shelf Registration Statement providing for the
sale by the Holders of all of the Registrable Certificates, and shall use its
best efforts to have such Shelf Registration Statement declared effective by the
SEC by the 180th day after the Closing Date. The Company agrees to use its best
efforts to keep the Shelf Registration Statement continuously effective until
the second anniversary of the Closing Date or such shorter period that will
terminate when all of the Registrable Certificates covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement. The Company further agrees to supplement or amend the Shelf
Registration Statement, if required by the rules, regulations or instructions
applicable to the registration form used by the Company for such Shelf
Registration Statement or by the 1933 Act or by any other rules and regulations
thereunder for shelf registration or if reasonably requested by a Holder with
respect to information relating to such Holder, and to use its best efforts to
cause any such amendment to become effective and such Shelf Registration
Statement to become usable as soon as thereafter practicable. The Company agrees
to furnish to the Holders of Registrable Certificates copies of any such
supplement or amendment promptly after its being used or filed with the SEC.
(c) The Company shall pay all Registration Expenses in connection
with the registration pursuant to Section 2(a) or Section 2(b). Each Holder
shall pay all underwriting discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of such Holder's Registrable Certificates
pursuant to the Shelf Registration Statement.
(d) An Exchange Offer Registration Statement pursuant to Section
2(a) hereof or a Shelf Registration Statement pursuant to Section 2(b) hereof
will not be deemed to have
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become effective unless it has been declared effective by the SEC; provided,
however, that if, after it has been declared effective, the offering of
Registrable Certificates pursuant to a Shelf Registration Statement is
interfered with by any stop order, injunction or other order or requirement of
the SEC or any other governmental agency or court, such Shelf Registration
Statement will be deemed not to have become effective during the period of such
interference until the offering of Registrable Certificates pursuant to such
Registration Statement may legally resume. As provided for in the Trust
Agreements, the interest rate on the Class A Certificates, the Class B
Certificates, the Class C Certificates and the Class D Certificates shall be
7.14%, 8.14%, 8.92% and 8.86% per annum, respectively; however, in the event
that the Exchange Offer is not consummated and, if a Shelf Registration
Statement is required hereby, the Shelf Registration Statement is not declared
effective on or prior to March 11, 1999, the interest rate will increase by
0.50% per annum until the Exchange Offer is consummated or a Shelf Registration
Statement is declared effective.
(e) Without limiting the remedies available to the Placement Agents
and the Holders, the Company acknowledges that any failure by the Company to
comply with its obligations under Section 2(a) and Section 2(b) hereof may
result in material irreparable injury to the Placement Agents or the Holders for
which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of any such
failure, the Placement Agents or any Holder may obtain such relief as may be
required to specifically enforce the Company's obligations under Section 2(a)
and Section 2(b) hereof.
3. Registration Procedures. In connection with the obligations of
the Company with respect to the Registration Statements pursuant to Section 2(a)
and Section 2(b) hereof, the Company shall as expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement on the
appropriate form under the 1933 Act, which form (x) shall be selected by
the Company and (y) shall, in the case of a Shelf Registration, be
available for the sale of the Registrable Certificates by the selling
Holders thereof and (z) shall comply as to form in all material respects
with the requirements of the applicable form and include all financial
statements required by the SEC to be filed therewith, and use its best
efforts to cause such Registration Statement to become effective and
remain effective in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to (x) keep
such Registration Statement effective for the applicable period under this
Registration Rights Agreement, and (y) cause each Prospectus to be
supplemented by any required prospectus supplement and, as so
supplemented, to be filed pursuant to Rule 424 under the 1933 Act and (z)
keep each Prospectus current during the period described under Section
4(3) and Rule 174 under the 1933 Act that is applicable to transactions by
brokers or dealers with respect to the Registrable Certificates or
Exchange Certificates;
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(c) in the case of a Shelf Registration, furnish to each Holder of
Registrable Certificates, to counsel for the Placement Agents, to counsel
for the Holders and to each Underwriter of an Underwritten Offering of
Registrable Certificates, if any, and each such Underwriter's Counsel,
without charge, as many copies of each Prospectus, including each
preliminary Prospectus, and any amendment or supplement thereto and such
other documents as such Holder or Underwriter may reasonably request, in
order to facilitate the public sale or other disposition of the
Registrable Certificates; and the Company consents to the use of such
Prospectus and any amendment or supplement thereto in accordance with
applicable law by each of the selling Holders of Registrable Certificates
and any such Underwriters in connection with the offering and sale of the
Registrable Certificates covered by and in the manner described in such
Prospectus or any amendment or supplement thereto in accordance with
applicable law;
(d) use their best efforts to register or qualify the Registrable
Certificates under all applicable state securities or "blue sky" laws of
such jurisdictions as any Holder of Registrable Certificates covered by a
Registration Statement shall reasonably request in writing by the time the
applicable Registration Statement is declared effective by the SEC, to
cooperate with such Holders in connection with any filings required to be
made with the National Association of Securities Dealers, Inc. and do any
and all other acts and things which may be reasonably necessary or
advisable to enable such Holder to consummate the disposition in each such
jurisdiction of such Registrable Certificates owned by such Holder;
provided, however, that the Company shall not be required to (i) qualify
as a foreign corporation or as a dealer in securities in any jurisdiction
where it would not otherwise be required to qualify but for this Section
3(d), (ii) file any general consent to service of process or (iii) subject
itself to taxation in any such jurisdiction if it is not so subject;
(e) in the case of a Shelf Registration, notify each Holder of
Registrable Certificates, counsel for the Holders and counsel for the
Placement Agents promptly and, if requested by any such Holder or counsel,
confirm such advice in writing, (i) when a Registration Statement has
become effective and when any post-effective amendment thereto has been
filed and become effective, (ii) of any request by the SEC or any state
securities authority for amendments and supplements to a Registration
Statement and Prospectus or for additional information, in each case after
the Registration Statement has become effective, (iii) of the issuance by
the SEC or any state securities authority of any stop order suspending the
effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose, (iv) if, between the effective date of a
Registration Statement and the closing of any sale of Registrable
Certificates covered thereby, the representations and warranties of the
Company contained in any underwriting agreement, securities sales
agreement or other similar agreement, if any, relating to such offering
cease to be true and correct in all material respects or if the Company
receives any notification with respect to the suspension of the
qualification of the Registrable Certificates for sale in any jurisdiction
or the initiation of any proceeding for such purpose, (v) of the happening
of any event
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during the period a Shelf Registration Statement is effective which makes
any statement made in such Registration Statement or the related
Prospectus untrue in any material respect or which requires the making of
any changes in such Registration Statement or Prospectus in order to make
the statements therein not misleading, and (vi) of any determination by
the Company that a post-effective amendment to a Registration Statement
would be appropriate;
(f) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement at the
earliest possible moment and provide immediate notice to each Holder of
the withdrawal of any such order;
(g) in the case of a Shelf Registration, furnish to each Holder of
Registrable Certificates, without charge, at least one conformed copy of
each Registration Statement and any post-effective amendment thereto
(without documents incorporated therein by reference or exhibits thereto,
unless requested)
(h) in the case of a Shelf Registration, cooperate and cause the
Trustee to cooperate with the selling Holders of Registrable Certificates
to facilitate the timely preparation and delivery of certificates
representing Registrable Certificates to be sold and not bearing any
restrictive legends and enable such Registrable Certificates to be in such
denominations (consistent with the provisions of the Applicable Trust
Agreement) and registered in such names as the selling Holders may
reasonably request at least two business days prior to the closing of any
sale of Registrable Certificates;
(i) in the case of a Shelf Registration, upon the occurrence of any
event contemplated by Section 3(e)(v) hereof, use its best efforts to
prepare and file with the SEC a supplement or post-effective amendment to
a Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable
Certificates, such Prospectus will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; the Company agrees to notify the Holders to suspend
use of the Prospectus as promptly as practicable after the occurrence of
such an event, and the Holders hereby agree to suspend use of the
Prospectus until the Company has amended or supplemented the Prospectus to
correct such misstatement or omission;
(j) a reasonable time prior to the filing of any Registration
Statement, any Prospectus, any amendment to a Registration Statement or
amendment or supplement to a Prospectus or any document which is to be
incorporated by reference into a Registration Statement or a Prospectus
(other than filings pursuant to the 0000 Xxx) after initial filing of a
Registration Statement, provide copies of such document to the Placement
Agents and their counsel (and, in the case of a Shelf Registration
Statement, the Holders and their counsel) and make such of the
representatives of the Company as shall be reasonably
A-13
requested by the Placement Agents or their counsel (and, in the case of a
Shelf Registration Statement, the Holders or their counsel) available for
discussion of such document, and shall not at any time file or make any
amendment to the Registration Statement, any Prospectus or any amendment
of or supplement to a Registration Statement or a Prospectus or any
document which is to be incorporated by reference into a Registration
Statement or a Prospectus, of which the Placement Agents and their counsel
(and, in the case of a Shelf Registration Statement, the Holders and their
counsel) shall not have previously been advised and furnished a copy or to
which the Placement Agents or their counsel (and, in the case of a
Registration Statement, the Holders or their counsel) shall object;
(k) obtain a CUSIP number for all Exchange Certificates or
Registrable Certificates, as the case may be, not later than the effective
date of a Registration Statement and provide the Trustees with printed
certificates evidencing the Exchange Certificates or the Registrable
Certificates, as the case may be, held in book entry form in a form
eligible for deposit with The Depository Trust Company;
(l) cause the Trust Agreements to be qualified under the Trust
Indenture Act of 1939, as amended (the "TIA"), in connection with the
registration of the Exchange Certificates or Registrable Certificates, as
the case may be, cooperate with the Trustees and the Holders to effect
such changes to the Trust Agreements as may be required for the Trust
Agreements to be so qualified in accordance with the terms of the TIA and
execute, and use its best efforts to cause the Trustees to execute, all
documents as may be required to effect such changes, and all other forms
and documents required to be filed with the SEC to enable the Trust
Agreements to be so qualified in a timely manner;
(m) in the case of a Shelf Registration, make available for
inspection by a representative of the Holders of the Registrable
Certificates, any Underwriter participating in any disposition pursuant to
such Shelf Registration Statement, and attorneys and accountants
designated by the Holders, at reasonable times and in a reasonable manner,
all financial and other records, pertinent documents and properties of the
Company, and cause the respective officers, directors and employees of the
Company to supply all information reasonably requested by any such
representative, Underwriter, attorney or accountant in connection with a
Shelf Registration Statement;
(n) in the case of a Shelf Registration, use its best efforts to
cause all Registrable Certificates to be listed on any securities exchange
or any automated quotation system on which similar securities issued by
the Company are then listed if requested by the Majority Holders, to the
extent such Registrable Certificates satisfy applicable listing
requirements;
A-14
(o) use its best efforts to cause the Exchange Certificates or
Registrable Certificates, as the case may be, to be rated by two
nationally recognized statistical rating organizations (as such term is
defined in Rule 436(g)(2) under the 0000 Xxx);
(p) if reasonably requested by any Holder of Registrable
Certificates covered by a Registration Statement, (i) promptly incorporate
in a Prospectus supplement or post-effective amendment such information
with respect to such Holder as such Holder reasonably requests to be
included therein and (ii) make all required filings of such Prospectus
supplement or such post-effective amendment as soon as the Company has
received satisfactory notification of the matters to be incorporated in
such filing; and
(q) in the case of a Shelf Registration, enter into such customary
agreements and take all such other actions in connection therewith
(including those requested by the Holders of a majority of the class of
Registrable Certificates being sold) in order to expedite or facilitate
the disposition of such Registrable Certificates including, but not
limited to, an Underwritten Offering and in such connection, (i) to the
extent possible, make such representations and warranties to the Holders
and any Underwriters of such Registrable Certificates with respect to the
business of the Company, the Registration Statement, Prospectus and
documents incorporated by reference or deemed incorporated by reference,
if any, in each case, in form, substance and scope as are customarily made
by issuers to underwriters in similar underwritten offerings and confirm
the same if and when requested, (ii) obtain an opinion of counsel to the
Company (which counsel and opinion, in form, scope and substance, shall be
reasonably satisfactory to the Holders and such Underwriters and their
respective counsel) addressed to each selling Holder and Underwriter of
Registrable Certificates, covering the matters customarily covered in
opinions requested in similar underwritten offerings, (iii) obtain "cold
comfort" letters from the independent certified public accountants of the
Company addressed to each selling Holder and Underwriter of Registrable
Certificates, such letters to be in customary form and covering matters of
the type customarily covered in "cold comfort" letters in connection with
underwritten offerings, and (iv) deliver such documents and certificates
as may be reasonably requested by the Holders of a majority in principal
amount of the Registrable Certificates being sold or the Underwriters, and
which are customarily delivered in underwritten offerings, to evidence the
continued validity of the representations and warranties of the Company
made pursuant to clause (i) above and to evidence compliance with any
customary conditions contained in an underwriting agreement.
In the case of a Shelf Registration Statement, the Company may
require each Holder of Registrable Certificates to furnish to the Company such
information regarding the Holder and the proposed distribution by such Holder of
such Registrable Certificates as the Company may from time to time reasonably
request in writing.
A-15
In the case of a Shelf Registration Statement, each Holder agrees
that, upon receipt of any notice from the Company of the happening of any event
of the kind described in Section 3(e)(v) hereof, such Holder will forthwith
discontinue disposition of Registrable Certificates pursuant to a Shelf
Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 3(i) hereof, and, if
so directed by the Company, such Holder will deliver to the Company (at its
expense) all copies in its possession, other than permanent file copies then in
such Holder's possession, of the Prospectus covering such Registrable
Certificates current at the time of receipt of such notice. If the disposition
of Registrable Certificates pursuant to a Shelf Registration Statement shall be
suspended for more than an aggregate of 60 days, whether or not consecutive,
during any 12-month period, the interest rate per annum borne by the
Certificates will be increased by 0.50% from the 61st day of the applicable
12-month period until such time as disposition of Registrable Certificates is no
longer suspended. If the Company shall give any such notice to suspend the
disposition of Registrable Certificates pursuant to a Registration Statement,
the Company shall extend the period during which the Registration Statement
shall be maintained effective pursuant to this Registration Rights Agreement by
the number of days during the period from and including the date of the giving
of such notice to and including the date when the Holders shall have received
copies of the supplemented or amended Prospectus necessary to resume such
dispositions.
The Holders of Registrable Certificates covered by a Shelf
Registration Statement who desire to do so may sell such Registrable
Certificates in an Underwritten Offering. In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers (the
"Underwriters") that will administer the offering will be selected by the
Majority Holders of the Registrable Certificates included in such offering.
4. Participation of Broker-Dealers in Exchange Offer. (a) The Staff
of the SEC has taken the position that any broker-dealer that receives Exchange
Certificates for its own account in the Exchange Offer in exchange for
Certificates that were acquired by such broker-dealer as a result of market
making or other trading activities (a "Participating Broker-Dealer") may be
deemed to be an "underwriter" within the meaning of the 1933 Act and must
deliver a prospectus meeting the requirements of the 1933 Act in connection with
any resale of such Exchange Certificates.
The Company understands that it is the Staff's position that if the
Prospectus contained in the Exchange Offer Registration Statement includes a
plan of distribution containing a statement to the above effect and the means by
which Participating Broker-Dealers may resell the Exchange Certificates, without
naming the Participating Broker-Dealers or specifying the amount of Exchange
Certificates owned by them, such Prospectus may be delivered by Participating
Broker-Dealers to satisfy their prospectus delivery obligation under the 1933
Act in connection with resales of Exchange Certificates for their own accounts,
so long as the Prospectus otherwise meets the requirements of the 1933 Act.
A-16
(b) In light of Section 4(a) above, notwithstanding the other
provisions of this Registration Rights Agreement, the Company agrees that the
provisions of this Registration Rights Agreement as they relate to a Shelf
Registration shall also apply to an Exchange Offer Registration to the extent,
and with such reasonable modifications thereto as may be reasonably requested by
the Placement Agents or by one or more Participating Broker-Dealers, in each
case as provided in clause (ii) below, in order to expedite or facilitate the
disposition of any Exchange Certificates by Participating Broker-Dealers
consistent with the positions of the Staff recited in Section 4(a) above;
provided that:
(i) the Company shall not be required to amend or supplement the
Prospectus contained in the Exchange Offer Registration Statement, as
would otherwise be contemplated by Section 3(i), for a period exceeding 90
days after the last Exchange Date (as such period may be extended pursuant
to the penultimate paragraph of Section 3 of this Agreement) and
Participating Broker-Dealers shall not be authorized by the Company to
deliver and shall not deliver such Prospectus after such period in
connection with the resales contemplated by this Section 4; and
(ii) the application of the Shelf Registration procedures set forth
in Section 3 of this Registration Rights Agreement to an Exchange Offer
Registration, to the extent not required by the positions of the Staff of
the SEC or the 1933 Act and the rules and regulations thereunder, will be
in conformity with the reasonable request to the Company by the Placement
Agents or with the reasonable request in writing to the Company by one or
more broker-dealers who certify to the Placement Agents and the Company in
writing that they anticipate that they will be Participating
Broker-Dealers; provided that in connection with such application of the
Shelf Registration procedures set forth in Section 3 to an Exchange Offer
Registration, the Company shall be obligated (x) to deal only with one
entity representing the Participating Broker-Dealers, which shall be
Xxxxxx Xxxxxxx & Co. Incorporated unless it elects not to act as such
representative, (y) to pay the fees and expenses of only one counsel
representing the Participating Broker-Dealers, which shall be counsel to
the Placement Agents unless such counsel elects not to so act, and (z) to
cause to be delivered only one, if any, "cold comfort" letter with respect
to the Prospectus in the form existing on the last Exchange Date and with
respect to each subsequent amendment or supplement, if any, effected
during the period specified in clause (i) above.
(c) The Placement Agents shall have no liability to the Company or
any Holder with respect to any request that it may make pursuant to Section 4(b)
above.
5. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Placement Agent, each Holder and each person,
if any, who controls any Placement Agent or any Holder within the meaning of
either Section 15 of the 1933 Act or Section 20 of the 1934 Act, or is under
common control with, or is controlled by, any Placement Agent or any Holder,
from and against all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred by any Placement
Agent, any Holder
A-17
or any such controlling or affiliated person in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement (or any amendment thereto) pursuant to which Exchange Certificates or
Registrable Certificates were registered under the 1933 Act, including all
documents incorporated therein by reference, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or caused by any
untrue statement or alleged untrue statement of a material fact contained in any
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact necessary to make the statements
therein in light of the circumstances under which they were made not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Placement Agent or any Holder furnished to the
Company in writing by such Placement Agent or any selling Holder expressly for
use therein; provided, however, that the foregoing indemnity agreement with
respect to any preliminary prospectus shall not inure to the benefit of any
Placement Agent from whom the person asserting any such losses, claims, damages
or liabilities purchased Certificates, or any person controlling such Placement
Agent, if a copy of the final Prospectus (as then amended or supplemented if the
Company shall have furnished any amendment or supplements thereto) was not sent
or given by or on behalf of such Placement Agent to such person, if required by
law so to have been delivered, at or prior to the written confirmation of the
sale of the Certificates to such person, and if the final Prospectus (as so
amended or supplemented) would have cured the defect giving rise to such losses,
claims, damages or liabilities, unless such failure is the result of
noncomplicance by the Company with Section 3 hereof. In connection with any
Underwritten Offering permitted by Section 3, the Company will also indemnify
the Underwriters, if any, selling brokers, dealers and similar securities
industry professionals participating in the distribution, their officers and
directors and each Person who controls such Persons (within the meaning of the
1933 Act and the 0000 Xxx) to the same extent as provided above with respect to
the indemnification of the Holders, if requested in connection with any
Registration Statement.
(b) Each Holder agrees, severally and not jointly, to indemnify and
hold harmless the Company, each Placement Agent and the other selling Holders,
and each of their respective directors, officers who sign the Registration
Statement and each Person, if any, who controls the Company, each Placement
Agent and any other selling Holder within the meaning of either Section 15 of
the 1933 Act or Section 20 of the 1934 Act to the same extent as the foregoing
indemnity from the Company to each Placement Agent and the Holders, but only
with reference to information relating to such Holder furnished to the Company
in writing by such Holder expressly for use in any Registration Statement (or
any amendment thereto) or any Prospectus (or any amendment or supplement
thereto).
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or paragraph (b) above,
such person (the "indemnified party") shall promptly notify
A-18
the person against whom such indemnity may be sought (the "indemnifying party")
in writing and the indemnifying party, upon request of the indemnified party,
shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for (a)
the fees and expenses of more than one separate firm (in addition to any local
counsel) for the Placement Agents and all persons, if any, who control any
Placement Agent within the meaning of either Section 15 of the 1933 Act or
Xxxxxxx 00 xx xxx 0000 Xxx, (x) the fees and expenses of more than one separate
firm (in addition to any local counsel) for the Company, its directors, its
officers who sign the Registration Statement and each person, if any, who
controls the Company within the meaning of either such Section and (c) the fees
and expenses of more than one separate firm (in addition to any local counsel)
for all Holders and all persons, if any, who control any Holders within the
meaning of either such Section, and that all such fees and expenses shall be
reimbursed as they are incurred. In such case involving any Placement Agent and
persons who control such Placement Agent, such firm shall be designated in
writing by Xxxxxx Xxxxxxx & Co. Incorporated. In such case involving the Holders
and such persons who control Holders, such firm shall be designated in writing
by the Majority Holders. In all other cases, such firm shall be designated by
the Company. The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent but, if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which such
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) If the indemnification provided for in paragraph (a) or
paragraph (b) of this Section 4 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative fault
of the indemnifying party or parties on the one hand and of the indemnified
party or parties on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault of the
Company and the Holders shall be determined
A-19
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or by the Holders
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Holders'
respective obligations to contribute pursuant to this Section 5(d) are several
in proportion to the respective number of Registrable Certificates of such
Holder that were registered pursuant to a Registration Statement.
(e) The Company and each Holder agree that it would not be just or
equitable if contribution pursuant to this Section 5 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) above. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages
and liabilities referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 5, no Holder shall be required to indemnify or contribute any amount in
excess of the amount by which the total price at which Registrable Certificates
were sold by such Holder exceeds the amount of any damages that such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 5 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
The indemnity and contribution provisions contained in this Section
5 shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Placement Agent, any Holder or any person controlling any Placement Agent or
any Holder, or by or on behalf of the Company, its officers or directors or any
person controlling the Company, (iii) acceptance of any of the Exchange
Certificates and (iv) any sale of Registrable Certificates pursuant to a Shelf
Registration Statement.
6. Miscellaneous. (a) No Inconsistent Agreements. The Company has
not entered into, and on or after the date of this Registration Rights Agreement
will not enter into, any agreement which is inconsistent with the rights granted
to the Holders of Registrable Certificates in this Registration Rights Agreement
or otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Company's other issued and outstanding
securities under any such agreements.
(b) Amendments and Waivers. The provisions of this Registration
Rights Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given
A-20
unless the Company has obtained the written consent of Holders of at least a
majority in aggregate principal amount of the outstanding Registrable
Certificates affected by such amendment, modification, supplement, waiver or
consent; provided, however, that no amendment, modification, supplement, waiver
or consent to any departure from the provisions of Section 5 hereof shall be
effective as against any Holder of Registrable Certificates unless consented to
in writing by such Holder.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder to
the Company by means of a notice given in accordance with the provisions of this
Section 6(c), which address initially is, with respect to the Placement Agents,
the address set forth in the Purchase Agreement; and (ii) if to the Company,
initially at the Company's address set forth in the Purchase Agreement and
thereafter at such other address, notice of which is given in accordance with
the provisions of this Section 6(c).
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next business day if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands, or other communications shall
be concurrently delivered by the person giving the same to each Trustee, at the
address specified in the Applicable Trust Agreement.
(d) Successors and Assigns. This Registration Rights Agreement shall
inure to the benefit of and be binding upon the successors, assigns and
transferees of each of the parties, including, without limitation and without
the need for an express assignment, subsequent Holders; provided that nothing
herein shall be deemed to permit any assignment, transfer or other disposition
of Registrable Certificates in violation of the terms of the Purchase Agreement
or the Trust Agreements. If any transferee of any Holder shall acquire
Registrable Certificates, in any manner, whether by operation of law or
otherwise, such Registrable Certificates shall be held subject to all of the
terms of this Registration Rights Agreement, and by taking and holding such
Registrable Certificates, such Person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Registration Rights Agreement and such Person shall be entitled to receive the
benefits hereof. The Placement Agents (in their capacity as Placement Agents)
shall have no liability or obligation to the Company with respect to any failure
by any other Holder to comply with, or any breach by any other Holder of, any of
the obligations of such other Holder under this Registration Rights Agreement.
A-21
(e) Purchases and Sales of Certificates. The Company shall not, and
shall use its best efforts to cause its affiliates (as defined in Rule 405 under
the 1933 Act), not to purchase and then resell or otherwise transfer any
Certificates.
(f) Trustees. The Trustees shall take such action as may be
reasonably requested by the Company pursuant to Sections 2(a), 3(h), and 3(l)
hereof.
(g) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder and shall have the right to
enforce such agreements directly to the extent they deem such enforcement
necessary or advisable to protect their rights hereunder.
(h) Counterparts. This Registration Rights Agreement may be executed
in any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
(i) Headings. The headings in this Registration Rights Agreement are
for convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(j) Governing Law. This Registration Rights Agreement shall be
governed by and construed in accordance with the internal laws of the State of
New York
(k) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
A-22
IN WITNESS WHEREOF, the parties have executed this Registration
Rights Agreement as of the date first written above.
MIDWAY AIRLINES CORPORATION
By /s/ Xxxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Senior Vice President
General Counsel
THE FIRST NATIONAL BANK OF MARYLAND, not
in its individual capacity, but solely
as Trustee under each of the Trust
Agreements
By /s/Xxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Assistrant Vice Pesident
Confirmed and accepted as of
the date first above written:
XXXXXX XXXXXXX & CO. INCORPORATED
CREDIT SUISSE FIRST BOSTON
By Xxxxxx Xxxxxxx & Co. Incorporated
By /s/ Xxx Xxxxxx
------------------------
Name: Xxx Xxxxxx
Title: Principal
A-23
EXHIBIT B
Form of Opinion of
Fulbright & Xxxxxxxx L.L.P.
(i) No authorization, approval or other action by, and no notice to,
consent of, order of, or filing with, any United States Federal or New
York, governmental authority or regulatory body is required for the
consummation of the transactions contemplated by the Purchase Agreement,
except such as may be required under the blue sky laws of any jurisdiction
in connection with the purchase and distribution of the Certificates by
the Placement Agents and except for filings or recordings with the Federal
Aviation Administration and under the Uniform Commercial Code as in effect
in various jurisdictions, which filings or recordings shall have been
made, or duly presented for filing, on or prior to the respective Delivery
Date (as defined in the Note Purchase Agreement); the issuance and sale of
the Certificates to the Placement Agents pursuant to the Purchase
Agreement, the issuance of the Escrow Receipts attached to the
Certificates, the valid authorization, execution and delivery of the Pass
Through Trust Agreements and Note Purchase Agreement (the "Company Pass
Through Trust Documents") and the performance by the Company of its
respective obligations under the Company Pass Through Trust Documents do
not require the Company to obtain or effect any consent, approval,
authorization, registration or qualification of or with any governmental
agency or body of the United States or of the State of New York, except
such as may be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Certificates by the
Placement Agents;
(ii) The statements in the Final Memorandum under the caption "ERISA
Considerations" fairly summarize the matters therein described;
(iii) Assuming (i) the accuracy of the representations and
warranties of the Company and you set forth in the Purchase Agreement,
(ii) the due performance by the Company and you of the covenants and
agreements set forth in the Purchase Agreement, (iii) your compliance with
the offering and transfer procedures and restrictions described in the
Final Memorandum and (iv) the accuracy of the representations and
warranties made in accordance with the Purchase Agreement and the Final
Memorandum by purchasers to whom you initially resell the Certificates
(with attached Escrow Receipts), the offer, sale and delivery of the
Certificates (with attached Escrow Receipts) to you in the manner
contemplated by the Purchase Agreement and the Final Memorandum and the
initial resale of the Certificates (with attached Escrow Receipts) by you
in the manner contemplated in the Final Memorandum and the Purchase
Agreement, do not require registration under the Securities Act of 1933,
as amended, and the Pass Through Trust Agreements do not require
qualification under the Trust Indenture Act of 1939, as amended, it being
understood that no opinion is expressed as to any subsequent resale of any
Certificates;
(iv) Neither the Company nor any of the Original Trusts is an
"investment company" within the meaning of the Investment Company Act of
1940, as amended (the "Investment Company Act"); as of the Successor Pass
Through Trust Effective Date, assuming that all facts and circumstances
relevant to such matter are the same as is the case on the date hereof,
none of the Successor Trusts will be an "investment company" within the
meaning of the Investment Company Act; and none of the Original Trusts or
Successor Trusts, after giving effect to the offering and sale of the
Certificates and the application of the proceeds thereof as described in
the Final Memorandum, will be an "investment company" as defined in the
Investment Company Act;
(v) The Purchase Agreement, the Registration Rights Agreement and
the Company Pass Through Trust Agreements constitute legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with each of their terms (subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other
similar laws affecting creditors' rights generally from time to time in
effect and to general principles of equity, including, without limitation,
concepts of materiality, reasonableness, good faith and fair dealing,
regardless of whether such enforceability is considered in a proceeding in
equity or at law);
(vi) When each Successor Pass Through Trust Agreement becomes
effective in accordance with the terms of Section [___] of the related
successor Pass Through Trust Agreement (the "Successor Pass Through Trust
Effective Date"), the applicable conditions precedent set forth in Section
[___] of the corresponding Original Pass Through Trust Agreement and in
Section [___] of such Successor Pass Through Trust Agreement have been
satisfied and the related Assignment and Assumption Agreement has been
executed and delivered by each of the parties thereto, assuming that all
facts and circumstances relevant to such matter are the same as is the
case of the date hereof, each of the Certificates lawfully and validly
Outstanding (as such term is defined in the Original Pass Through Trust
Agreements) under the Original Pass Through Trust Agreement at such time
will be entitled to the benefits of such Successor Pass Through Trust
Agreement.
(vii) Assuming due authorization, execution and delivery of the Pass
Through Trust Agreements by the Trustee, each of the Successor Pass
Through Trust Agreements is a valid and biding obligation of the
applicable Successor Trustee enforceable against the applicable Successor
Trustee in accordance with its terms, in each case, enforceable in
accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
enforcement of creditors' rights generally and by general principles of
equity; when executed and delivered in accordance with the terms of the
Original Pass Through Trust Agreement and the Successor Pass Through Trust
Agreements and in the form of the
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applicable Form Assignment and Assumption Agreement, properly completed,
assuming that all facts and circumstances relevant to such matter are the
same as is the case on the date hereof, each of the assignment and
assumption agreements contemplated under the Original Pass Through Trust
Agreements to be executed and delivered by the Trustees and the Successor
Trustees (collectively, the "Assignment and Assumption Agreements") will
be a valid and binding obligation of each of the parties thereto
enforceable against each of such parties in accordance with its terms;
each of the Escrow Agreements, the Deposit Agreements and the Note
Purchase Agreement is a valid and binding obligation of each Escrow Agent
that is a party thereto enforceable against each such Escrow Agent in
accordance with its terms; the Escrow Receipts are validly issued and
outstanding and are entitled to the benefits of the applicable Escrow
Agreement; each of the Escrow Agreements and the Note Purchase Agreement
is valid and binding obligation of the Paying Agent that is a party
thereto enforceable against such Paying Agent in accordance with its
terms;
(viii)The statements set forth under the headings "Summary",
"Description of the Certificates", "Description of the Deposit
Agreements", "Description of the Escrow Agreements", "Description of the
Liquidity Facilities", "Description of the Intercreditor
Agreement","Description of the Equipment Notes" and "Exchange Offer;
Registration Rights" in the Final Memorandum, insofar as such statements
purport to summarize certain provisions of the Certificates, the Pass
Through Trust Agreements, the Deposit Agreements, the Escrow Agreements,
the Escrow Receipts, the Liquidity Facilities, the Intercreditor
Agreement, the Equipment Notes and the forms of "Leased Aircraft
Indenture", "Leased Aircraft Participation Agreement", "Lease", "Owned
Aircraft Indenture", "Owned Aircraft Participation Agreement" and "Special
Indenture" attached to the Note Purchase Agreement (collectively, the
"Form Aircraft Financing Documents"), and the Registration Rights
Agreement, fairly summarize such provisions referred to therein; Section
1110 of the Bankruptcy Code conforms in all material respects to the
description thereof contained in "Description of the Equipment Notes -
Remedies" in the Final Memorandum; and the statements in the Final
Memorandum under the caption "Certain U.S. Federal Income Tax
Consequences" insofar as they purport to describe the material tax
consequences of an investment in the Certificates (with attached Escrow
Receipts) fairly summarize the matters therein described;
(ix) While there is no authority addressing the characterization of
entities that are similar to the Trusts in all material respects, each of
the Original Trusts should be classified as a grantor trust for U.S.
federal income tax purposes. If, as may be the case, the Original Trusts
are not classified as grantor trusts, they will be classified as
partnerships for U.S. federal income tax purposes and will not be
classified as publicly traded partnerships taxable as corporations,
provided that at least 90% of each such Original Trust's gross income for
each taxable year of its existence is "qualifying income" within the
meaning of the Section 7704(b) of the Internal Revenue Code of
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1986, as amended; each of the Successor Trusts will be classified as a
grantor trust for U.S. federal income tax purposes;
(x) Each of the Escrow Agreements creates a valid escrow under New
York law and a valid equitable interest in the escrowed property in favor
of the corresponding Trustee; neither a New York court nor a United States
Federal Court applying New York law or the U.S. Bankruptcy Code, if
properly presented with the issue and after having properly considered
such issue, would permit any holder of an Escrow Receipt to terminate the
related Escrow Agreement, except in accordance with its terms;
(xi) So long as an Escrow Agreement has not been terminated,
creditors of any person that is a holder of an Escrow Receipt thereunder
or holders of a lien against the assets of any such person, such as
trustees, receivers or liquidators (whether or not any insolvency
proceeding has been commenced) (collectively, the "Creditors"), may
acquire valid claims and liens, as to the Deposits established thereunder
and as to the related Deposit Agreement and Escrow Agreement, only against
the rights of the holder of such Escrow Receipt under such Escrow
Agreement, and do not have, and may not through the enforcement of such
Creditors' rights acquire, any greater right than the holder of such
Escrow Receipt with respect to such Deposits, Deposit Agreement or Escrow
Agreement;
(xii) No creditor of the Company or any of its subsidiaries, and no
holder of a lien against the assets of any such person, such a trustees,
receivers or liquidators (whether or not any insolvency proceeding has
been commenced), may acquire valid claims or liens as to the Deposits and
the related Deposit Agreements and Escrow Agreements;
and to such further effect with respect to other legal matters relating to the
Purchase Agreement, the Financing Agreements, the Pass Through Trust Agreements
and other Operative Documents and the sale of the Certificates thereunder as
counsel for the Placement Agents may reasonably request.
Such opinion shall also state that, in connection with the preparation of
the Final Memorandum, such counsel has participated in conferences with certain
officers of, and with the accountants and counsel for, the Company concerning
the preparation of the Final Memorandum. Such opinion may state that although
such counsel has made certain inquiries and investigations in connection with
the preparation of the Final Memorandum, the limitations inherent in the role of
outside counsel are such that such counsel cannot does not assume responsibility
for the accuracy or completeness of the statements made in the Final Memorandum,
except insofar as the statements relate to such counsel and except to the extent
set forth in paragraph (ii) of such counsel's opinion dated the date hereof.
Subject to the foregoing, such opinion shall state that such counsel advises the
Placement Agents that their
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work in connection with this matter did not disclose any information that gave
such counsel reason to the believe that the Final Memorandum (except the
financial statements and other information of a statistical, accounting or
financial nature included therein, as to which such counsel does not express any
view) as of its date or the date hereof, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
In such opinion, such counsel may assume that each of the parties to each
of the applicable documents, other than the Company, has full power, authority
and legal right to enter into such documents and that each such document has
been duly authorized, executed and delivered by each of such parties. In
addition, such counsel may rely upon the opinion of counsel for the Company and
counsel for the Trustee and may state that their opinion is limited to matters
governed by the laws of the State of New York and the federal law of the United
States.
B-5
EXHIBIT C
Form of Opinion of the General Counsel
of the Company
(i) The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the state of its incorporation with
corporate power and authority under such laws to own, lease and operate
its properties and conduct its business as described in the Final
Memorandum and to perform its obligations under the Purchase Agreement,
the Pass Through Trust Agreements, the Note Purchase Agreement and the
Registration Rights Agreement;
(ii) The Company is duly qualified to transact business as a foreign
corporation and is in good standing in each other jurisdiction in which it
owns or leases property of a nature, or transacts business of a type, that
would make such qualification necessary, except to the extent that the
failure to so qualify or be in good standing would not have a Material
Adverse Effect;
(iii) The Company is a "citizen of the United States" (as defined in
Section 40102(a)(15) of Title 49 of the United States Code, as amended)
and is an air carrier operating under a certificate issued by the
Secretary of Transportation pursuant to Chapter 447 of Title 49, United
States Code, for aircraft capable of carrying 10 or more individuals or
6,000 pounds or more of cargo. There is in force with respect to the
Company an air carrier operating certificate issued pursuant to Part 121
of the regulations under the Federal Aviation Act; [all of the outstanding
shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and non-assessable and are owned by the
Company, free and clear of any pledge, lien, security interest, charge,
claim, equity or encumbrance of any kind];
(iv) No consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
valid authorization, issuance and delivery of the Certificates or the
Escrow Receipts, the valid authorization, execution, delivery and
performance by the Company of the Purchase Agreement, the Pass Through
Trust Agreements, the Note Purchase Agreement and the Registration Rights
Agreement (the "Subject Documents") or the consummation by the Company of
the transactions contemplated by such Subject Documents, except such as
may be required by the securities or blue sky laws of the various states
in connection with the offer and sale of the Certificates;
(v) The execution and delivery by the Company of the Subject
Documents, the issuance and sale of the Certificates (with attached Escrow
Receipts), the consummation by the Company of the transactions
contemplated in Subject Documents and compliance by the Company with the
terms thereof will not contravene (i) any
C-1
provision of applicable law, (ii) the certificate of incorporation or
by-laws of the Company, (iii) to such counsel's knowledge, any agreement
or other instrument binding upon the Company that is material to the
Company or (iv) to such counsel's knowledge, any judgment, order or decree
of any governmental body, agency or court having jurisdiction over the
Company; assuming that all facts and circumstances relevant to such matter
are the same on the Successor Pass Through Trust Effective Date as is the
case on the date hereof, neither the execution and delivery of the
Assignment and Assumption Agreements on such Successor Pass Through Trust
Effective Date in accordance with the terms of the Original Pass Through
Trust Agreements and the Successor Pass Through Trust Agreements and in
the form of the applicable Form Assignment and Assumption Agreement, nor
the consummation by the parties thereto of the transactions contemplated
to be consummated thereunder on such Successor Pass Through Trust
Effective Date, will violate any law or governmental rule or regulation
applicable to the transactions contemplated by the Assignment and
Assumption Agreements;
(vi) The Subject Documents have each been duly authorized, executed
and delivered by the Company;
(vii) The sale of the Certificates (with the attached Escrow
Receipts) by the Company pursuant to the Purchase Agreement has been duly
authorized; and
(viii)There are no legal or governmental proceedings pending or
threatened to which the Company is a party or to which any of the
properties of the Company is subject other than proceedings accurately
described in all material respects in the Final Memorandum and proceedings
that would not have a Material Adverse Effect, or a Material Adverse
Effect on the power or ability of the Company to perform its obligations
under any Subject Document to which it is a party, or to consummate the
transactions contemplated by the Final Memorandum.
In addition, counsel shall state that such counsel or lawyers on his staff
have participated in the preparation of the Final Memorandum and nothing has
come to such counsel's attention that leads him to believe that the Final
Memorandum as of the date of the Purchase Agreement or at the Closing Date
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein in
the light of the circumstances under which they were made not misleading, except
that such counsel need express no opinion with respect to the financial
statements, schedules and other financial data included in the Final Memorandum.
C-2
EXHIBIT D
Form of Opinion of
Ober, Kaler, Xxxxxx & Xxxxxxx
(i) The First National Bank of Maryland ("First National") is a
national banking association duly organized and validly existing in good
standing under the laws of the United States and, in its individual
capacity, or as Pass Through Trustee, Indenture Trustee [,Paying Agent] or
Subordination Agent, has the full corporate power and authority to
execute, deliver and perform its obligations under the Pass Through Trust
Agreements, the Intercreditor Agreement, the Note Purchase Agreement, the
Liquidity Facilities, and the Escrow Agreements (collectively, the
"Transaction Documents") [and First National is a "citizen of the United
States" as defined in 49 U.S.C. ss. 40102];
(ii) Each of the Transaction Documents has been duly authorized,
executed and delivered by First National, in its individual capacity, or
as Pass Through Trustee, Indenture Trustee [,Paying Agent] or
Subordination Agent, as the case may be, and constitutes the legal, valid
and binding obligation of First National, in its individual capacity, or
as Pass Through Trustee, Indenture Trustee [,Paying Agent], or
Subordination Agent, as the case may be, enforceable against First
National, in its individual capacity, or as Pass Through Trustee,
Indenture Trustee [,Paying Agent], or Subordination Agent, as the case may
be, in accordance with their respective terms; each of the Original Pass
Through Trust Agreements is a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms;
(iii) The Certificates to be issued and dated the Closing Date have
been duly authenticated and delivered by First National pursuant to the
terms of the Original Pass Through Trust Agreements;
(iv) The Certificates are the legal, valid and binding obligations
of the Original Trusts, enforceable against the Original Trusts in
accordance with their terms and the terms of the Original Pass Through
Trust Agreements and are entitled to the benefits of the related Pass
Through Trust Agreements; the Exchange Certificates when issued in
accordance with the terms of the Original Pass Through Trust Agreements
and the Registration Rights Agreement, will be entitled to the benefits
and security afforded by the Original Pass Through Trust Agreements in
accordance with the terms of the Original Pass Through Trust Agreements;
(v) The execution, delivery and performance by First National, in
its individual capacity, or as Pass Through Trustee or as Indenture
Trustee [,Paying
Agent] or Subordination Agent, as the case may be, of the Transaction
Documents or the Certificates will not contravene (i) any provision of
applicable law of the United States or the State of Maryland governing the
banking or trust powers of First National, (ii) the certificate of
incorporation or by-laws of First National, (iii) to such counsel's
knowledge, any agreement or other instrument binding upon First National
or any of its subsidiaries that is material to First National and its
subsidiaries, taken as a whole, or (iv) to such counsel's knowledge, any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over First National or any subsidiary;
(vi) No authorization, consent or approval of, notice to or order
of, or filing with, any governmental authority or agency of the United
States or the State of Maryland governing the banking or trust powers of
First National is required for the execution, delivery or performance by
First National, in its individual capacity, or as Pass Through Trustee,
Indenture Trustee [,Paying Agent] or Subordination Agent, as the case may
be, of the Transaction Documents or the Certificates;
(vii) Assuming that the Trusts will not be taxable as corporations,
but, rather, will be classified as grantor trusts under subpart E, Part I
of Subchapter J of (or as a partnership under) the United States Internal
Revenue Code of 1986, as amended, (i) the Trusts will not be subject to
any tax (including, without limitation, net or gross income, tangible or
intangible property, net worth, capital, franchise or doing business tax),
fee or other governmental charge under the laws of the State of Maryland
or any political subdivision thereof and (ii) Certificateholders that are
not residents of or otherwise subject to tax in Maryland will not be
subject to any tax (including, without limitation, net or gross income,
tangible or intangible property, net worth, capital, franchise or doing
business tax), fee or other governmental charge under the laws of the
State of Maryland or any political subdivision thereof as a result of
purchasing, holding (including receiving payments with respect to) or
selling an Certificate;
(viii)To such counsel's knowledge, there are no proceedings pending
or threatened against or affecting First National in any court or before
any governmental authority, agency, arbitration board or tribunal which,
if adversely determined, individually or in the aggregate, would
materially and adversely affect any Trust or question the right, power and
authority of First National, in its individual capacity, or as Pass
Through Trustee, Indenture Trustee, [Paying Agent] or Subordination Agent,
as the case may be, to enter into or perform its obligation under the
Transaction Documents; and
(ix) Each of the Equipment Notes to be delivered to and registered
in the name of the Subordination Agent pursuant to the Participation
Agreements shall be held by the Subordination Agent as the trustee of the
Trustee under each Trust on behalf of the Certificateholders of such
Trust.
D-2
