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PASS THROUGH TRUST AGREEMENT
Dated as of August 13, 1998
among
MIDWAY AIRLINES CORPORATION
and
THE FIRST NATIONAL BANK OF MARYLAND
as Trustee
Midway Airlines 1998-1B-S Pass Through Trust
8.14% 1998-1B-S Initial Pass Through Certificates
8.14% 0000-0X-X Xxxxxxxx Xxxx Through Certificates
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS................................................ 2
Section 1.01. Definitions....................................... 2
Section 1.02. Compliance Certificates and Opinions.............. 14
Section 1.03. Form of Documents Delivered to Trustee............ 15
Section 1.04. Acts of Certificateholders........................ 15
ARTICLE II ORIGINAL ISSUANCE OF CERTIFICATES.......................... 17
Section 2.01. Acquisition of Trust Property..................... 17
Section 2.02. [Reserved]........................................ 18
Section 2.03. The Trustee....................................... 18
Section 2.04. Acceptance by Trustee............................. 18
Section 2.05. Limitation of Powers.............................. 18
ARTICLE III THE CERTIFICATES........................................... 19
Section 3.01. Title, Form, Denomination and Execution
of Certificates................................... 19
Section 3.02. Restrictive Legends............................... 21
Section 3.03. Authentication of Certificates.................... 23
Section 3.04. Transfer and Exchange............................. 23
Section 3.05. Book-Entry Provisions for U.S. Global Certificate
and Offshore Global Certificates.................. 24
Section 3.06. Special Transfer Provisions....................... 25
Section 3.07. Mutilated, Destroyed, Lost or Stolen Certificates. 28
Section 3.08. Persons Deemed Owners............................. 28
Section 3.09. Cancellation...................................... 29
Section 3.10. Limitation of Liability for Payments.............. 29
Section 3.11. Temporary Certificates............................ 29
Section 3.12. ERISA Restrictive Legend.......................... 29
ARTICLE IV DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS............ 30
Section 4.01. Certificate Account and Special Payments Account.. 30
Section 4.02. Distributions from Certificate Account and
Special Payments Account.......................... 30
Section 4.03. Statements to Certificateholders.................. 32
Section 4.04. Investment of Special Payment Moneys.............. 33
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ARTICLE V THE COMPANY................................................ 34
Section 5.01. Maintenance of Corporate Existence................ 34
Section 5.02. Consolidation, Merger, Etc........................ 34
ARTICLE VI DEFAULT.................................................... 35
Section 6.01. Events of Default................................. 35
Section 6.02. Incidents of Sale of Equipment Notes.............. 38
Section 6.03. Judicial Proceedings Instituted by Trustee;
Trustee May Bring Suit............................ 38
Section 6.04. Control by Certificateholders..................... 39
Section 6.05. Waiver of Past Defaults........................... 39
Section 6.06. Right of Certificateholders to Receive Payments
Not to Be Impaired................................ 40
Section 6.07. Certificateholders May Not Bring Suit Except
Under Certain Conditions.......................... 40
Section 6.08. Remedies Cumulative............................... 41
Section 6.09. Undertaking for Costs............................. 41
ARTICLE VII THE TRUSTEE................................................ 41
Section 7.01. Certain Duties and Responsibilities............... 41
Section 7.02. Notice of Defaults................................ 41
Section 7.03. Certain Rights of Trustee......................... 42
Section 7.04. Not Responsible for Recitals or Issuance of
Certificates...................................... 43
Section 7.05. May Hold Certificates............................. 43
Section 7.06. Money Held in Trust............................... 44
Section 7.07. Compensation and Reimbursement.................... 44
Section 7.08. Corporate Trustee Required; Eligibility........... 45
Section 7.09. Resignation and Removal; Appointment of
Successor......................................... 45
Section 7.10. Acceptance of Appointment by Successor............ 47
Section 7.11. Merger, Conversion, Consolidation or Succession to
Business.......................................... 47
Section 7.12. Maintenance of Agencies........................... 48
Section 7.13. Money for Certificate Payments to Be Held
in Trust.......................................... 49
Section 7.14. Registration of Equipment Notes in Name of
Subordination Agent............................... 49
Section 7.15. Representations and Warranties of Trustee......... 49
Section 7.16. Withholding Taxes; Information Reporting.......... 50
Section 7.17. Trustee's Liens................................... 51
Section 7.18. Preferential Collection of Claims................. 51
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ARTICLE VIII CERTIFICATEHOLDERS' LISTS AND REPORTS
BY TRUSTEE................................................. 51
Section 8.01. The Company to Furnish Trustee with Names and
Addresses of Certificateholders................... 51
Section 8.02. Preservation of Information; Communications to
Certificateholders................................ 52
Section 8.03. Reports by Trustee................................ 52
Section 8.04. Reports by the Company............................ 52
ARTICLE IX SUPPLEMENTAL AGREEMENTS.................................... 53
Section 9.01. Supplemental Agreements Without Consent of
Certificateholders................................ 53
Section 9.02. Supplemental Agreements with Consent of
Certificateholders................................ 54
Section 9.03. Documents Affecting Immunity or Indemnity......... 55
Section 9.04. Execution of Supplemental Agreements.............. 55
Section 9.05. Effect of Supplemental Agreements................. 56
Section 9.06. Conformity with Trust Indenture Act............... 56
Section 9.07. Reference in Certificates to Supplemental
Agreements........................................ 56
ARTICLE X AMENDMENTS TO INDENTURES AND FINANCING
DOCUMENTS.................................................. 56
Section 10.01 Amendments and Supplement to Indentures and
Other Note Documents.............................. 56
ARTICLE XI TERMINATION OF TRUST....................................... 57
Section 11.01. Termination of the Trust.......................... 57
ARTICLE XII MISCELLANEOUS PROVISIONS................................... 58
Section 12.01. Limitation on Rights of Certificateholders........ 58
Section 12.02. Certificates Nonassessable and Fully Paid......... 58
Section 12.03. Notices........................................... 58
Section 12.04. Governing Law..................................... 60
Section 12.05. Severability of Provisions........................ 60
Section 12.06. Effect of Headings and Table of Contents.......... 60
Section 12.07. Successors and Assigns............................ 60
Section 12.08. Benefits of Agreement............................. 60
Section 12.09. Legal Holidays.................................... 60
Section 12.10. Counterparts...................................... 60
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Section 12.11. Communication by Certificateholders with Other
Certificateholders................................ 60
Section 12.12. Intention of Parties.............................. 61
Section 12.13. Trust Indenture Act Controls...................... 61
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EXHIBIT LIST
Exhibit A Form of Certificate
Exhibit B Form of Certificate for Unlegended Certificates
Exhibit C Form of Certificate to be Delivered in connection with
Transfers Pursuant to Regulation S
Exhibit D Form of Certificate to be Delivered in connection with
Transfers to Non-QIB Accredited Investors
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PASS THROUGH TRUST AGREEMENT
This PASS THROUGH TRUST AGREEMENT, dated as of August 13, 1998,
among MIDWAY AIRLINES CORPORATION, a Delaware corporation (the "Company"), and
THE FIRST NATIONAL BANK OF MARYLAND, a national banking association, as Trustee,
is made with respect to the formation of Midway Airlines 1998-1B-S Pass Through
Trust and the issuance of 8.14% Midway Airlines 1998-1B-S Pass Through
Certificates representing fractional undivided interests in the Trust.
WITNESSETH:
WHEREAS, the Company has obtained commitments from Bombardier for
the delivery of certain Aircraft;
WHEREAS, as of the Transfer Date (as defined below), the Company
will have financed the acquisition of all or a portion of such Aircraft either
(i) through separate leveraged lease transactions, in which case the Company
leases such Aircraft (collectively, the "Leased Aircraft") or (ii) through
separate secured loan transactions, in which case the Company owns such Aircraft
(collectively, the "Owned Aircraft");
WHEREAS, as of the Transfer Date in the case of each Leased
Aircraft, each Owner Trustee, acting on behalf of the corresponding Owner
Participant, will have issued pursuant to an Indenture, on a non-recourse basis,
Equipment Notes in order to finance a portion of its purchase price of such
Leased Aircraft;
WHEREAS, as of the Transfer Date, in the case of each Owned
Aircraft, the Company will have issued pursuant to an Indenture, on a resource
basis, Equipment Notes to finance a portion of the purchase price of such Owned
Aircraft;
WHEREAS, as of the Transfer Date, the Related Trustee will assign,
transfer and deliver all of such trustee's right, title and interest to the
trust property held by the Related Trustee to the Trustee pursuant to the
Assignment and Assumption Agreement (as defined below);
WHEREAS, the Trustee, effective only, but automatically, upon
execution and delivery of the Assignment and Assumption Agreement, will be
deemed to have declared the creation of the Midway Airlines Pass Through Trust
1998-1B-S (the "Trust") for the benefit of the Certificateholders, and each
Holder of Certificates outstanding as of the Transfer Date, as the grantors of
the Trust, by their respective acceptances of such Certificates, will join in
the creation of this Trust with the Trustee;
WHEREAS, all Certificates deemed issued by the Trust will evidence
fractional undivided interests in the Trust and will convey no rights, benefits
or
interests in respect of any property other than the Trust Property except for
those Certificates to which an Escrow Receipt (as defined below) has been
affixed;
WHEREAS, upon execution and delivery of the Assignment and
Assumption Agreement, all of the conditions and requirements necessary to make
this Trust Agreement, when duly executed and delivered, a valid, binding and
legal instrument in accordance with its terms and for the purposes herein
expressed, have been done, performed and fulfilled, and the execution and
delivery of this Trust Agreement in the form and with the terms hereof have been
in all respects duly authorized; and
WHEREAS, upon issuance of the Exchange Certificates, if any, or the
effectiveness of the Shelf Registration Statement, this Agreement, as amended or
supplemented from time to time, will be subject to the provisions of the Trust
Indenture Act of 1939, and shall, to the extent applicable, be governed by such
provisions;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires:
(1) the terms used herein that are defined in this Article have the
meanings assigned to them in this Article, and include the plural as well
as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference herein have the meanings
assigned to them therein;
(3) all references in this Agreement to designated "Articles",
"Sections", "Subsections" and other subdivisions are to the designated
Articles, Sections, Subsections and other subdivisions of this Agreement;
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular Article, Section, Subsection or other subdivision; and
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(5) unless the context otherwise requires, whenever the words
"including", "include" or "includes" are used herein, it shall be deemed
to be followed by the phrase "without limitation".
Act: With respect to any Certificateholder has the meaning specified
in Section 1.04.
Affiliate: Means, with respect to any specified Person, any other
Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such Person. For purposes of this
definition, "control", when used with respect to any specified Person,
means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agent Members: Has the meaning specified in Section 3.05(a).
Aircraft: Means each of the New Aircraft in respect of which a
Participation Agreement is entered into in accordance with the Note
Purchase Agreement.
Assignment and Assumption Agreement: Means the assignment and
assumption agreement substantially in the form of Exhibit E to the Related
Trust Agreement executed and delivered in accordance with Section 11.01 of
the Related Trust Agreement.
Authorized Agent: Means any Paying Agent or Registrar for the
Certificates.
Avoidable Tax: Means a state or local tax (i) upon (w) the Trust,
(x) the Trust Property, (y) Certificateholders or (z) the Trustee for
which the Trustee is entitled to seek reimbursement from the Trust
Property, and (ii) which would be avoided if the Trustee were located in
another state, or jurisdiction within a state, within the United States. A
tax shall not be an Avoidable Tax if the Company or any Owner Trustee
shall agree to pay, and shall pay, such tax.
Book-Entry Certificates: With respect to the Certificates, means a
beneficial interest in the Certificates, ownership and transfers of which
shall be made through book entries as described in Section 3.04.
Business Day: Means any day other than a Saturday, a Sunday or a day
on which commercial banks are required or authorized to close in
Baltimore, Maryland, New York, New York, Charlotte, North Carolina or, so
long as any Certificate is outstanding, the city and state in which the
Trustee or any Loan Trustee maintains its Corporate Trust Office or
receives and disburses funds.
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Cedel: Means Cedel Bank societe anonyme.
Certificate: Means any of the Initial Certificates or Exchange
Certificates issued by the Related Trust and that are "Outstanding" (as
defined in the Related Pass Through Trust Agreement) as of the Transfer
Date (the "Transfer Date Certificates") and any Certificates issued in
exchange therefor or replacement thereof pursuant to this Agreement.
Certificate Account: Means the account or accounts created and
maintained pursuant to Section 4.01(a).
Certificateholder or Holder: Means the Person in whose name a
Certificate is registered in the Register.
Clearing Agency: Means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended.
Clearing Agency Participant: Means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a
Clearing Agency effects, directly or indirectly, book-entry transfers and
pledges of securities deposited with the Clearing Agency.
Code: Means the United States Internal Revenue Code of 1986, as
amended.
Company: Means Midway Airlines Corporation, a Delaware corporation,
or its successor in interest.
Controlling Party: Means the party entitled to act as such pursuant
to the terms of the Intercreditor Agreement.
Corporate Trust Office: With respect to the Trustee or any Loan
Trustee, means the office of such trustee in the city at which at any
particular time its corporate trust business shall be principally
administered.
Delivery Notice: Has the meaning specified in the Note Purchase
Agreement.
Delivery Period Termination Date: Has the meaning specified in the
Related Pass Through Trust Agreement.
Deposits: Has the meaning specified in the Deposit Agreement.
Deposit Agreement: Means the Deposit Agreement dated as of August
13, 1998 relating to the Certificates between the Depositary and the
Escrow Agent,
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as the same may be amended, supplemented or otherwise modified from time
to time in accordance with its terms.
Depositary: Means First Union National Bank.
DTC: Means The Depository Trust Company, its nominees and their
respective successors.
Direction: Has the meaning specified in Section 1.04(c).
Distribution Date: Means each Regular Distribution Date or Special
Distribution Date.
Equipment Notes: Means the Equipment Notes issued pursuant to the
Indentures.
ERISA: Means the Employee Retirement Income Security Act of 1974, as
amended.
Escrow Agent: Means, initially, First Union Trust Company, National
Association, and any replacement or successor therefor appointed in
accordance with the Escrow Agreement.
Escrow Agreement: Means the Escrow and Paying Agent Agreement dated
as of August 13, 1998 relating to the Certificates, among the Escrow
Agent, the Escrow Paying Agent, the Trustee and the Initial Purchasers, as
the same may be amended, supplemented or otherwise modified from time to
time in accordance with its terms.
Escrow Paying Agent: Means the Person acting as paying agent under
the Escrow Agreement.
Escrow Receipt: Means the receipt substantially in the form annexed
to the Escrow Agreement representing a fractional undivided interest in
the funds held in escrow thereunder.
Euroclear: Means the Euroclear System.
Exchange Certificates: Means the pass through certificates
substantially in the form of Exhibit A hereto issued in exchange for the
Initial Certificates pursuant to the Registration Rights Agreement and
authenticated hereunder.
Exchange Offer: Means the exchange offer which may be made pursuant
to the Registration Rights Agreement to exchange Initial Certificates for
Exchange Certificates.
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Exchange Offer Registration Statement: Means the registration
statement that, pursuant to the Registration Rights Agreement, is filed by
the Company with the SEC with respect to the exchange of Initial
Certificates for Exchange Certificates.
Event of Default: Means the occurrence of an Indenture Default under
any Indenture pursuant to which Equipment Notes held by the Trust were
issued.
Final Maturity Date: Means July, 2, 2014.
Final Withdrawal: Has the meaning specified in the Escrow Agreement.
Final Withdrawal Date: Has the meaning specified in the Escrow
Agreement.
Fractional Undivided Interest: Means the fractional undivided
interest in the Trust that is evidenced by a Certificate.
Global Certificates: Has the meaning assigned to such term in
Section 3.01.
Indenture: Means each of the separate trust indenture and security
agreements relating to the Aircraft, each as specified or described in a
Delivery Notice delivered pursuant to the Note Purchase Agreement or the
related Participation Agreement in each case as the same may be amended,
supplemented or otherwise modified from time to time in accordance with
its terms.
Indenture Default: With respect to any Indenture, means any
Indenture Event of Default (as such term is defined in such Indenture)
thereunder.
Initial Certificates: Means the certificates issued and
authenticated hereunder substantially in the form of Exhibit A hereto
other than the Exchange Certificates.
Initial Purchasers: Means Xxxxxx Xxxxxxx & Co. Incorporated and
Credit Suisse First Boston Corporation.
Initial Regular Distribution Date: Means the first Regular
Distribution Date on which a Scheduled Payment is to be made.
Institutional Accredited Investor: Means an institutional investor
that is an "accredited investor" within the meaning set forth in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act.
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Intercreditor Agreement: Means the Intercreditor Agreement dated
August 13, 1998 among the Trustee, the Other Trustees, the Liquidity
Provider, the liquidity providers, if any, relating to the Certificates
issued under (and as defined in) the Other Pass Through Trust Agreements,
and The First National Bank of Maryland, as Subordination Agent
thereunder, as amended, supplemented or otherwise modified from time to
time in accordance with its terms.
Issuance Date: Means the date of the issuance of the Initial
Certificates.
Lease: Means, with respect to each Leased Aircraft, the lease
between an Owner Trustee, as the lessor, and the Company, as the lessee,
referred to in the related Indenture, as each such lease may be amended or
supplemented in accordance with its respective terms; and Leases means all
such leases.
Leased Aircraft: Has the meaning given to such term in the recitals
hereto.
Letter of Representations: Means the agreement dated the Issuance
Date among the Company, the Trustee and the initial Clearing Agency.
Liquidity Facility: Means the Irrevocable Revolving Credit Agreement
dated August 13, 1998 relating to the Certificates, between the Liquidity
Provider and the Subordination Agent, as amended, replaced, supplemented
or otherwise modified from time to time in accordance with its terms and
the terms of the Intercreditor Agreement.
Liquidity Provider: Means, initially, ABN AMRO Bank N.V., acting
through its Chicago branch, and any replacement or successor therefor
appointed in accordance with the Liquidity Facility and the Intercreditor
Agreement.
Loan Trustee: With respect to any Equipment Note or the Indenture
applicable thereto, means the bank or trust company designated as loan or
indenture trustee under such Indenture; and any successor to such Loan
Trustee as such trustee; and Loan Trustees means all of the Loan Trustees
under the Indentures.
New Aircraft: Has the meaning specified in the Note Purchase
Agreement.
Non-U.S. Person: Means a Person that is not a U.S. Person, as
defined in Regulation S.
Note Documents: With respect to any Equipment Note, means (i) the
Indenture and the Participation Agreement relating to such Equipment Note,
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and (ii) in the case of any Equipment Note related to a Leased Aircraft,
also includes the Lease relating to such Leased Aircraft.
Note Purchase Agreement. Means the Note Purchase Agreement dated as
of August 13, 1998 among the Trustee, the Other Trustees, the Company, the
Escrow Agent, the Escrow Paying Agent and the Subordination Agent,
providing for, among other things, the purchase of Equipment Notes by the
Trustee on behalf of the Trust, as the same may be amended, supplemented
or otherwise modified from time to time, in accordance with its terms.
Officer's Certificate: Means a certificate signed, (a) in the case
of the Company, by (i) the President or any Executive Vice President or
Senior Vice President of the Company, signing alone or (ii) any Vice
President of the Company signing together with the Secretary, the
Assistant Secretary, the Treasurer or any Assistant Treasurer of the
Company or (b) in the case of the Trustee or an Owner Trustee or a Loan
Trustee, a Responsible Officer of the Trustee or such Owner Trustee or
such Loan Trustee, as the case may be.
Offshore Certificates Exchange Date: Has the meaning specified in
Section 3.01.
Offshore Global Certificates: Has the meaning assigned to such term
in Section 3.01.
Offshore Physical Certificates: Has the meaning assigned to such
term in Section 3.01.
Opinion of Counsel: Means a written opinion of legal counsel who (a)
in the case of counsel for the Company may be (i) a senior attorney in
rank of the officers of the Company a principal duty of which is
furnishing advice as to legal matters or (ii) such other counsel
designated by the Company and reasonably acceptable to the Trustee and (b)
in the case of any Owner Trustee or any Loan Trustee may be such counsel
as may be designated by any of them whether or not such counsel is an
employee of any of them, and who shall be reasonably acceptable to the
Trustee.
Other Pass Through Trust Agreement: Means each of the three other
Midway Airlines 1998-1 Pass Through Trust Agreements relating to,
respectively, Midway Airlines 1998-1A-S Pass Through Trust, Midway
Airlines 1998-1C-S Pass Through Trust and Midway Airlines 1998-1D-S Pass
Through Trust, each dated the date hereof; and Other Pass Through Trust
Agreements means all such agreements.
Other Trust: Means each of the Midway Airlines Pass Through Trust
1998-1A-S, the Midway Airlines Pass Through Trust 1998-1C-S and the Midway
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Airlines Pass Through Trust 1998-1D-S, each created on the date hereof;
and Other Trusts means all such trusts.
Other Trustee: Means the trustee under each of the Other Pass
Through Trust Agreements, and any successor or other trustee appointed as
provided therein; and Other Trustees means all such trustees.
Outstanding: With respect to Certificates, means, as of the date of
determination, all Certificates theretofore authenticated and delivered
under this Agreement, except:
(i) Certificates theretofore cancelled by the Registrar or delivered
to the Trustee or the Registrar for cancellation;
(ii) All of the Certificates if money in the full amount
required to make the final distribution with respect thereto
pursuant to Section 11.01 hereof has been theretofore deposited with
the Trustee in trust for the Holders of such Certificates as
provided in Section 4.01 pending distribution of such money to such
Certificateholders pursuant to such final distribution payment; and
(iii) Certificates in exchange for or in lieu of which other
Certificates have been authenticated and delivered pursuant to this
Agreement.
Owned Aircraft: Has the meaning given to such term in the recitals
hereto.
Owner Participant: With respect to any Equipment Note relating to a
Leased Aircraft, means the "Owner Participant" as referred to in the
Indenture pursuant to which such Equipment Note is issued and any
permitted successor or assign of such Owner Participant; and Owner
Participants at any time of determination means all of the Owner
Participants thus referred to in the Indentures.
Owner Trustee: With respect to any Equipment Note relating to a
Leased Aircraft, means the "Owner Trustee", as referred to in the
Indenture pursuant to which such Equipment Note is issued, not in its
individual capacity but solely as trustee; and Owner Trustees means all of
the Owner Trustees party to any of the Indentures.
Participation Agreement: Means each Participation Agreement to be
entered into by the Trustee pursuant to the Note Purchase Agreement, as
the same may be amended, supplemented or otherwise modified in accordance
with its terms.
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Paying Agent: Means the paying agent maintained and appointed for
the Certificates pursuant to Section 7.12.
Permanent Offshore Global Certificates: Has the meaning specified in
Section 3.01.
Permitted Investments: Means obligations of the United States of
America or agencies or instrumentalities thereof for the payment of which
the full faith and credit of the United States of America is pledged,
maturing in not more than 60 days or such lesser time as is necessary for
payment of any Special Payments on a Special Distribution Date or any
mutual fund the portfolio of which is limited to such obligations,
including any proprietary mutual fund of The First National Bank of
Maryland for which such bank or an affiliate is investment advisor or to
which such bank provides other services and receives reasonable
compensation for such services.
Person: Means any person, including any individual, corporation,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.
Physical Certificates: Has the meaning specified in Section 3.01.
Plan Transferee: Means any Plan or any entity that is using the
assets of any Plan to purchase or hold its interest in a Certificate. For
purposes of this definition, a "Plan" means any employee benefit plan
subject to ERISA as well as any plan that is not subject to ERISA but
which is subject to Section 4975 of the Internal Revenue Code of 1986, as
amended.
Pool Balance: Means, as of any date, (i) the original aggregate face
amount of the Certificates less (ii) the aggregate amount of all payments
made in respect of such Certificates or in respect of Deposits other than
payments made in respect of interest or premium thereon or reimbursement
of any costs or expenses incurred in connection therewith. The Pool
Balance as of any Distribution Date shall be computed after giving effect
to any special distribution with respect to unused Deposits, payment of
principal, if any, on the Equipment Notes or other Trust Property held in
the Trust and the distribution thereof to be made on such Distribution
Date.
Pool Factor: Means, as of any date, the quotient (rounded to the
seventh decimal place) computed by dividing (i) the Pool Balance as at
such date by (ii) the original aggregate face amount of the Certificates.
The Pool Factor as of any Distribution Date shall be computed after giving
effect to any special distribution with respect to unused Deposits,
payment of principal, if any, on the Equipment Notes or other Trust
Property and the distribution thereof to be made on such Distribution
Date.
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Private Placement Legend: Has the meaning specified in Section 3.02.
Purchase Agreement: Means the Purchase Agreement dated August 6,
1998 between the Company and the Initial Purchasers.
QIB: Means a qualified institutional buyer as defined in Rule 144A.
Record Date: Means (i) for Scheduled Payments to be distributed on
any Regular Distribution Date, other than the final distribution, the 15th
day (whether or not a Business Day) preceding such Regular Distribution
Date, and (ii) for Special Payments to be distributed on any Special
Distribution Date, other than the final distribution, the 15th day
(whether or not a Business Day) preceding such Special Distribution Date.
Register and Registrar: Mean the register maintained and the
registrar appointed pursuant to Sections 3.04 and 7.12.
Registration Rights Agreement: Means the Registration Rights
Agreement, dated as of August 13, 1998, among the Initial Purchasers, the
Trustee, the Other Trustees and the Company, as amended, supplemented or
otherwise modified from time to time in accordance with its terms.
Regular Distribution Date: With respect to distributions of
Scheduled Payments in respect of the Certificates, means each date
designated as a Regular Distribution Date in this Agreement, until payment
of all the Scheduled Payments to be made under the Equipment Notes held in
the Trust have been made; provided, however, that, if any such day shall
not be a Business Day, the related distribution shall be made on the next
succeeding Business Day without additional interest.
Regulation S: Means Regulation S under the Securities Act or any
successor regulation thereto.
Related Other Pass Through Trust Agreements: Means the "Other
Agreements" as defined in the Related Pass Through Trust Agreement.
Related Other Trustees: Means the "Other Trustees" as defined in the
Related Pass Through Trust Agreement.
Related Pass Through Trust Agreement: Means the Pass Through Trust
Agreement 1998-1B-O dated the date hereof relating to the Midway Airlines
Pass Through Trust 1998-1B-O and entered into by the Company and the
Trustee.
Related Trust: Means the Midway Pass Through Trust 1998-1B-O, to be
formed under the Related Pass Through Trust Agreement.
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Related Trustee: Means the trustee under the Related Pass Through
Trust Agreement.
Request: Means a request by the Company setting forth the subject
matter of the request accompanied by an Officer's Certificate and an
Opinion of Counsel as provided in Section 1.02 of this Agreement.
Responsible Officer: With respect to the Trustee, any Loan Trustee
and any Owner Trustee, means any officer in the Corporate Trust Division
of the Trustee, Loan Trustee or Owner Trustee or any other officer
customarily performing functions similar to those performed by the persons
who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of his knowledge of and
familiarity with a particular subject.
Rule 144A: Means Rule 144A under the Securities Act and any
successor regulation thereto.
Scheduled Payment: With respect to any Equipment Note, means any
payment of principal and interest on such Equipment Note (other than any
such payment which is not in fact received by the Trustee or any
Subordination Agent within five days of the date on which such payment is
scheduled to be made) or any payment of interest on the Certificates with
funds drawn under the Liquidity Facility due from the obligor thereon
which payment represents the installment of principal at the stated
maturity of such installment of principal on such Equipment Note, the
payment of regularly scheduled interest accrued on the unpaid principal
amount of such Equipment Note, or both; provided that any payment of
principal, premium, if any, or interest resulting from the redemption or
purchase of any Equipment Note shall not constitute a Scheduled Payment.
SEC: Means the Securities and Exchange Commission, as from time to
time constituted or created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it
under the Trust Indenture Act, then the body performing such duties on
such date.
Securities Act: Means the United States Securities Act of 1933, as
amended from time to time, or any successor thereto.
Shelf Registration Statement: Means the shelf registration statement
which may be required to be filed by the Company with the SEC pursuant to
any Registration Rights Agreement, other than an Exchange Offer
Registration Statement.
Special Distribution Date: Means each date on which a Special
Payment is to be distributed as specified in this Agreement; provided,
however, that, if any
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such day shall not be a Business Day, the related distribution shall be
made on the next succeeding Business Day without additional interest.
Special Payment: Means any payment (other than a Scheduled Payment)
in respect of, or any proceeds of, any Equipment Note or Trust Indenture
Estate (as defined in each Indenture) or Special Redemption Premium.
Special Payments Account: Means the account or accounts created and
maintained pursuant to Section 4.01(b).
Special Redemption Premium: Means the premium payable by the Company
in respect of the Final Withdrawal pursuant to the Note Purchase
Agreement.
Specified Investments: Means (i) obligations of, or guaranteed by,
the United States Government or agencies thereof, (ii) open market
commercial paper of any corporation incorporated under the laws of the
United States of America or any State thereof rated at least P-2 or its
equivalent by Xxxxx'x Investors Service, Inc. or at least A-2 or its
equivalent by Standard & Poor's Ratings Group, (iii) certificates of
deposit issued by commercial banks organized under the laws of the United
States or of any political subdivision thereof having a combined capital
and surplus in excess of $500,000,000 which banks or their holding
companies have a rating of A or its equivalent by Xxxxx'x Investors
Service, Inc. or Standard & Poor's Ratings Group; provided, however, that
the aggregate amount at any one time so invested in certificates of
deposit issued by any one bank shall not exceed 5% of such bank's capital
and surplus, (iv) U.S. dollar denominated offshore certificates of deposit
issued by, or offshore time deposits with, any commercial bank described
in (iii) or any subsidiary thereof, (v) repurchase agreements with any
financial institution having combined capital and surplus of at least
$500,000,000 with any of the obligations described in clauses (i) through
(iv) as collateral and (vi) any mutual fund the portfolio of which is
limited to investments of the types specified in the preceding clauses (i)
through (v), including any proprietary mutual fund of The First National
Bank of Maryland for which such bank or an affiliate is investment advisor
or to which such bank provides other services and receives reasonable
compensation for such services; provided further that if all of the above
investments are unavailable, the entire amounts to be invested may be used
to purchase Federal Funds from an entity described in clause (iii) above.
Subordination Agent: Has the meaning specified in the Intercreditor
Agreement.
Temporary Offshore Global Certificates: Has the meaning specified in
Section 3.01.
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Transfer Date: Means the moment of execution and delivery of the
Assignment and Assumption Agreement by each of the parties thereto.
Transfer Date Certificate: Has the meaning specified in the
definition of "Certificates".
Triggering Event: Has the meaning assigned to such term in the
Intercreditor Agreement.
Trust: Means the trust created by this Agreement, the estate of
which consists of the Trust Property.
Trust Indenture Act: Except as otherwise provided in Section 9.06,
means the United States Trust Indenture Act of 1939 as in force at the
date hereof.
Trust Property: Means (i) subject to the Intercreditor Agreement,
the Equipment Notes held as the property of the Trust, all monies at any
time paid thereon and all monies due and to become due thereunder, (ii)
funds from time to time deposited in the Certificate Account and the
Special Payments Account and, subject to the Intercreditor Agreement, any
proceeds from the sale by the Trustee pursuant to Section 6.02 of any
Equipment Note and (iii) all rights of the Trust and the Trustee, on
behalf of the Trust, under the Intercreditor Agreement, the Escrow
Agreement, the Note Purchase Agreement and the Liquidity Facilities,
including, without limitation, all rights to receive certain payments
thereunder, and all monies paid to the Trustee on behalf of the Trust
pursuant to the Intercreditor Agreement or the Liquidity Facilities,
provided that rights with respect to the Deposits or under the Escrow
Agreement, except for the right to direct withdrawals for the purchase of
Equipment Notes to be held herein, will not constitute Trust Property.
Trustee: Means The First National Bank of Maryland, or its successor
in interest, and any successor or other trustee appointed as provided
herein.
Trustee's Lien: Has the meaning specified in Section 7.17.
U.S. Global Certificate: Has the meaning specified in Section 3.01.
U.S. Physical Certificates: Has the meaning specified in Section
3.01.
Section 1.02. Compliance Certificates and Opinions. Upon any
application or request by the Company, any Owner Trustee or any Loan Trustee to
the Trustee to take any action under any provision of this Agreement, the
Company, such Owner Trustee or such Loan Trustee, as the case may be, shall
furnish to the Trustee (i) an Officer's Certificate stating that, in the opinion
of the signers, all conditions precedent, if any, provided for in this Agreement
relating to the proposed action have been complied with and (ii) an Opinion of
Counsel stating that in the opinion of such counsel
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all such conditions precedent, if any, have been complied with, except that in
the case of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Agreement relating
to such particular application or request, no additional certificate or opinion
need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement (other than a certificate
provided pursuant to Section 8.04(d)) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions in this
Agreement relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.03. Form of Documents Delivered to Trustee. In any case
where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such
matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but
one such Person may certify or give an opinion with respect to some
matters and one or more other such Persons as to other matters and any
such Person may certify or give an opinion as to such matters in one or
several documents.
Any Opinion of Counsel stated to be based on the opinion of other
counsel shall be accompanied by a copy of such other opinion.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
Section 1.04. Acts of Certificateholders. (a) Any direction,
consent, waiver or other action provided by this Agreement to be given or taken
by Certificateholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Certificateholders in
person or by an agent or proxy duly appointed in writing; and, except as herein
otherwise expressly provided,
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such action shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly required pursuant to
this Agreement, to the Company or any Loan Trustee. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Certificateholders signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Agreement and conclusive in favor of the Trustee, the Company and any Loan
Trustee, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the certificate of any notary public or
other officer of any jurisdiction authorized to take acknowledgments of deeds or
administer oaths that the Person executing such instrument acknowledged to him
the execution thereof, or by an affidavit of a witness to such execution sworn
to before any such notary or such other officer and where such execution is by
an officer of a corporation or association or a member of a partnership, on
behalf of such corporation, association or partnership, such certificate or
affidavit shall also constitute sufficient proof of his authority. The fact and
date of the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other reasonable manner
which the Trustee deems sufficient.
(c) In determining whether the Certificateholders of the requisite
Fractional Undivided Interests of Certificates Outstanding have given any
direction, consent or waiver (a "Direction") under this Agreement, Certificates
owned by the Company, any Owner Trustee, any Owner Participant or any Affiliate
of any such Person thereof shall be disregarded and deemed not to be Outstanding
for purposes of any such determination. In determining whether the Trustee shall
be protected in relying upon any such Direction, only Certificates which the
Trustee in fact knows to be so owned shall be so disregarded. Notwithstanding
the foregoing, (i) if any such Person owns 100% of the Certificates Outstanding,
such Certificates shall not be so disregarded as aforesaid, and (ii) if any
amount of Certificates so owned by any such Person have been pledged in good
faith, such Certificates shall not be disregarded as aforesaid if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Certificates and that the pledgee is not the Company, any
Owner Trustee, any Owner Participant or any Affiliate of any such Person.
(d) For all purposes of this Agreement, all Initial Certificates and
all Exchange Certificates shall vote and take all other actions of
Certificateholders together as one series of Certificates.
(e) The Company may at its option, by delivery of an Officer's
Certificate to the Trustee, set a record date to determine the
Certificateholders entitled to give any consent, request, demand, authorization,
direction, notice, waiver or other Act. Such record date shall be the record
date specified in such Officer's Certificate, which shall be a date not more
than 30 days prior to the first solicitation of Certificateholders in connection
therewith. If such a record date is fixed, such consent,
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request, demand, authorization, direction, notice, waiver or other Act may be
given before or after such record date, but only the Certificateholders of
record at the close of business on such record date shall be deemed to be
Certificateholders for the purposes of determining whether Certificateholders of
the requisite proportion of Outstanding Certificates have authorized or agreed
or consented to such consent, request, demand, authorization, direction, notice,
waiver or other Act, and for that purpose the Outstanding Certificates shall be
computed as of such record date; provided that no such consent, request, demand,
authorization, direction, notice, waiver or other Act by the Certificateholders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Agreement not later than one year after such
record date.
(f) Any direction, consent, waiver or other action by the
Certificateholder of any Certificate shall bind the Certificateholder of every
Certificate issued upon the transfer thereof or in exchange therefor or in lieu
thereof, whether or not notation of such action is made upon such Certificate.
(g) Except as otherwise provided in Section 1.04(c), Certificates
owned by or pledged to any Person shall have an equal and proportionate benefit
under the provisions of this Agreement, without preference, priority, or
distinction as among all of the Certificates.
ARTICLE II
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Acquisition of Trust Property. (a) The Trustee is
hereby irrevocably authorized and directed to execute and deliver the Assignment
and Assumption Agreement on the date specified in Section 11.01 of the Related
Trust Supplement, subject only to the satisfaction of the conditions set forth
in said Section 11.01. This Agreement (except only for the immediately preceding
sentence hereof, which is effective upon execution and delivery hereof) shall
become effective upon the execution and delivery of the Assignment and
Assumption Agreement by the Trustee and the Related Trustee, automatically and
without any further signature or action on the part of the Company and the
Trustee, and shall thereupon constitute the legal, valid and binding obligation
of the parties hereto enforceable against each of the parties hereto in
accordance with its terms. Upon such execution and delivery of the Assignment
and Assumption Agreement, the Related Trust shall be terminated, the
Certificateholders shall receive beneficial interests in the Trust in exchange
for their interests in the Related Trust equal to their respective beneficial
interests in the Related Trust and the "Outstanding" (as defined in the Related
Pass Through Trust Agreement) pass through certificates representing fractional
undivided interests in the Related Trust shall be deemed for all purposes of
this Agreement, without further signature or action of any party or
Certificateholder, to be Certificates representing the same Fractional Undivided
Interests in the Trust and Trust Property. By acceptance
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of its Certificate, each Certificateholder consents to and ratifies such
assignment, transfer and delivery of the trust property of the Related Trust to
the Trustee upon the execution and delivery of the Assignment and Assumption
Agreement. Except as provided in Sections 3.04, 3.05, 3.07 and 3.11, the Trustee
shall not execute, authenticate or deliver Certificates in excess of the
aggregate amount specified in this paragraph.
(b) The Trustee, upon the execution and delivery of the Assignment
and Assumption Agreement, acknowledges its acceptance of all right, title and
interest in and to the Trust Property and declares that the Trustee holds and
will hold such right, title and interest for the benefit of all then present and
future Certificateholders, upon the trusts herein set forth. By the acceptance
of each Certificate issued to it under the Related Pass Through Trust Agreement
and deemed issued under this Agreement, each Holder of any such Certificate as
grantor of the Trust thereby joins in the creation and declaration of the Trust.
Section 2.02. [Reserved]
Section 2.03. The Trustee. Subject to Section 7.15, the Trustee
shall not be responsible in any manner whatsoever for or in respect of the
validity or sufficiency of this Agreement, the Deposit Agreement or the Escrow
Agreement or the due execution hereof or thereof by the Company or the other
parties thereto (other than the Trustee), or for or in respect of the recitals
and statements contained herein or therein, all of which recitals and statements
are made solely by the Company.
Section 2.04. Acceptance by Trustee. The Trustee, upon the execution
and delivery of this Agreement, acknowledges its acceptance of all right, title
and interest in and to the Trust Property acquired pursuant to Section 2.01
hereof and the Note Purchase Agreement and declares that the Trustee holds and
will hold such right, title and interest, together with all other property
constituting the Trust Property, for the benefit of all then present and future
Certificateholders, upon the trusts herein set forth. Subject to Section 7.14,
the Trustee shall take all actions reasonably necessary to effect the
registration of all such Equipment Notes in the name of the Subordination Agent.
By its payment for and acceptance of each Certificate issued to it under this
Agreement, each initial Certificateholder as grantor of the Trust thereby joins
in the creation and declaration of the Trust.
Section 2.05. Limitation of Powers. The Trust is constituted solely
for the purpose of making the investment in the Equipment Notes, and, except as
set forth herein, the Trustee shall not be authorized or empowered to acquire
any other investments or engage in any other activities and, in particular, the
Trustee shall not be authorized or empowered to do anything that would cause
such Trust to fail to qualify as a "grantor trust" for federal income tax
purposes (including as subject to this restriction, acquiring any Aircraft (as
defined in the respective Indentures) by bidding such Equipment Notes or
otherwise, or taking any action with respect to any such Aircraft once
acquired).
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ARTICLE III
THE CERTIFICATES
Section 3.01. Title, Form, Denomination and Execution of
Certificates. (a) The Initial Certificates shall be known as the "8.14%
1998-1B-S Initial Pass Through Certificates" and the Exchange Certificates shall
be known as the "8.14% 0000-0X-X Xxxxxxxx Xxxx Through Certificates", in each
case, of the Trust. Each Certificate will represent a fractional undivided
interest in the Trust and shall be substantially in the form set forth as
Exhibit A hereto, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Agreement and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Certificates, as evidenced by their execution of the
Certificates. Any portion of the text of any Certificate may be set forth on the
reverse thereof, with an appropriate reference thereto on the face of the
Certificate. At the Escrow Agent's request under the Escrow Agreement, the
Trustee shall affix the corresponding Escrow Receipt to each Certificate. In any
event, any transfer or exchange of any Certificate shall also effect a transfer
or exchange of the related Escrow Receipt. Prior to the Final Withdrawal Date,
no transfer or exchange of any Certificate shall be permitted unless the
corresponding Escrow Receipt is attached thereto and also is so transferred or
exchanged. By acceptance of any Certificate to which an Escrow Receipt is
attached, each Holder of such a Certificate acknowledges and accepts the
restrictions on transfer of the Escrow Receipt set forth herein and in the
Escrow Agreement.
(b) The Initial Certificates shall be issued only in fully
registered form without coupons and only in denominations of $100,000 or
integral multiples of $1,000 in excess thereof, except that one Certificate may
be issued in a denomination of less than $100,000. The Exchange Certificates
will be issued in denominations of $1,000 or integral multiples thereof. Each
Certificate shall be dated the date of its authentication. The aggregate
Fractional Undivided Interest of Certificates shall not at any time exceed
$20,528,000.
(c) Initial Certificates offered and sold in reliance on Rule 144A
shall be issued initially in the form of a single permanent global Certificate
in registered form, substantially in the form set forth as Exhibit A hereto (the
"U.S. Global Certificate"), duly executed and authenticated by the Trustee as
hereinafter provided. The U.S. Global Certificate will be registered in the name
of a nominee for DTC and deposited with the Trustee, as custodian for DTC. The
aggregate principal amount of the U.S. Global Certificate may from time to time
be increased or decreased by adjustments made on the records of the Depositary
or its nominee, or of the Trustee, as custodian for DTC or its nominee, as
hereinafter provided.
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(d) Initial Certificates offered and sold in offshore transactions
in reliance on Regulation S shall be issued initially in the form of a single
temporary global Certificate in registered form, substantially in the form set
forth as Exhibit A hereto (the "Temporary Offshore Global Certificate") duly
executed and authenticated by the Trustee as hereinafter provided. The Temporary
Offshore Global Certificate will be registered in the name of a nominee of DTC
for credit to the account of the Agent Members acting as depositaries for
Euroclear and Cedel and deposited with the Trustee as custodian for DTC. At any
time on or after September 23, 1998 (the "Offshore Certificates Exchange Date"),
upon receipt by the Trustee of a certificate substantially in the form of
Exhibit B hereto, a single permanent global Certificate in registered form
substantially in the form set forth in Exhibit A (the "Permanent Offshore Global
Certificate"; and together with the Temporary Offshore Global Certificate, the
"Offshore Global Certificates"), duly executed and authenticated by the Trustee
as hereinafter provided, shall be registered in the name of a nominee for DTC
and deposited with the Trustee, as custodian for DTC, and the Registrar shall
reflect on its books and records the date of such transfer and a decrease in the
principal amount of any Temporary Offshore Global Certificate in an amount equal
to the principal amount of the beneficial interest in such Temporary Offshore
Global Certificate transferred. The U.S. Global Certificate and the Offshore
Global Certificates are sometimes referred to as the "Global Certificates".
(e) Initial Certificates offered and sold to Institutional
Accredited Investors shall be issued in the form of permanent certificated
Certificates in registered form in substantially the form set forth as Exhibit A
hereto (the "U.S. Physical Certificates"). Certificates issued pursuant to
Section 3.05(b) in exchange for interests in any Offshore Global Certificate
shall be in the form of permanent certificated Certificates in registered form
substantially in the form set forth in Exhibit A (the "Offshore Physical
Certificates"). The Offshore Physical Certificates and U.S. Physical
Certificates are sometimes collectively herein referred to as the "Physical
Certificates".
(f) The Exchange Certificates shall be issued in the form of one or
more global Certificates substantially in the form of Exhibit A hereto (each, a
"Global Exchange Certificate"), except that (i) the Private Placement Legend
(hereinafter defined) shall be omitted. Such Global Exchange Certificates shall
be in registered form and be registered in the name of DTC and deposited with
the Trustee, at its Corporate Trust Office, as custodian DTC. The aggregate
principal amount of any Global Exchange Certificate may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for DTC for such Global Exchange Certificate, which adjustments shall
be conclusive as to the aggregate principal amount of any such Global Exchange
Certificates. Subject to clause (i) of the first sentence of this Section
3.01(f), the terms hereof applicable to Global Certificates shall apply to the
Global Exchange Certificates, mutatis mutandis.
(g) The definitive Certificates shall be in registered form and
shall be typed, printed, lithographed or engraved or produced by any combination
of these
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methods or may be produced in any other manner, all as determined by the
officers executing such Certificates, as evidenced by their execution of such
Certificates.
Section 3.02. Restrictive Legends. (a) Subject to Section 3.06, each
Global Certificate (other than the Permanent Offshore Global Certificate) and
each U.S. Physical Certificate shall bear the following legend (the "Private
Placement Legend") on the face thereof:
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT
BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT
A U.S. PERSON AND IS ACQUIRING THIS CERTIFICATE IN AN OFFSHORE TRANSACTION
IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT; (2) AGREES THAT
IT WILL NOT WITHIN TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF
THIS CERTIFICATE OR THE LAST DATE ON WHICH THIS CERTIFICATE WAS HELD BY
MIDWAY AIRLINES CORPORATION ("MIDWAY") OR ANY AFFILIATE OF MIDWAY, RESELL
OR OTHERWISE TRANSFER THIS CERTIFICATE EXCEPT (A) TO MIDWAY OR ANY
SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
(C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR
ACQUIRING $100,000 OR MORE AGGREGATE PRINCIPAL AMOUNT OF SUCH CERTIFICATES
THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS CERTIFICATE (THE FORM OF WHICH LETTER CAN
BE OBTAINED FROM THE TRUSTEE), (D) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT; AND (3) AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THIS CERTIFICATE IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS CERTIFICATE WITHIN TWO YEARS AFTER THE LATER OF THE
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ORIGINAL ISSUANCE OF THIS CERTIFICATE OR THE LAST DATE ON WHICH THIS
CERTIFICATE WAS HELD BY MIDWAY OR AN AFFILIATE OF MIDWAY, THE HOLDER MUST
CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE
MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF THE
PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER
MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND MIDWAY SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO
THEM BY REGULATION S UNDER THE SECURITIES ACT. THE PASS THROUGH TRUST
AGREEMENT CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER
ANY TRANSFER OF THIS CERTIFICATE IN VIOLATION OF THE FOREGOING
RESTRICTIONS.
(b) Each Global Certificate shall also bear the following legend on
the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IN EXCHANGE FOR THIS CERTIFICATE IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
CERTIFICATE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTIONS 3.05 AND 3.06 OF THE PASS THROUGH TRUST
AGREEMENT REFERRED TO HEREIN.
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Section 3.03. Authentication of Certificates. (a) The Trustee shall
duly execute, authenticate and deliver Certificates in authorized denominations
equalling in the aggregate the aggregate principal amount of the Equipment Notes
to be purchased by the Trustee pursuant to the Participation Agreements and
evidencing the entire ownership of the Trust.
(b) No Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose, unless there appears on
such Certificate a certificate of authentication substantially in the form
provided for herein executed by the Trustee by the manual signature of one of
its authorized signatories, and such certificate upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder.
Section 3.04. Transfer and Exchange. The Trustee shall cause to be
kept at the office or agency to be maintained by it in accordance with the
provisions of Section 7.12 of this Agreement a register (the "Register") for the
Certificates in which, subject to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of the Certificates
and of transfers and exchanges of the Certificates as herein provided. The
Trustee shall initially be the registrar (the "Registrar") for the purpose of
registering the Certificates and transfers and exchanges of the Certificates as
herein provided. A Certificateholder may transfer or exchange a Certificate by
written application to the Registrar stating the name of the proposed transferee
and otherwise complying with the terms of this Agreement, including providing a
written certificate or other evidence of compliance with any restrictions on
transfer; provided that no exchanges of Initial Certificates for Exchange
Certificates shall occur until an Exchange Offer Registration Statement shall
have been declared effective by the SEC (notice of which shall be provided to
the Trustee by the Company). No such transfer shall be effected until, and such
transferee shall succeed to the rights of a Certificateholder only upon, final
acceptance and registration of the transfer by the Registrar in the Register.
Prior to the registration of any transfer by a Certificateholder as provided
herein, the Trustee shall treat the person in whose name the Certificate is
registered as the owner thereof for all purposes, and the Trustee shall not be
affected by notice to the contrary. Furthermore, DTC shall, by acceptance of a
Global Certificate, agree that transfers of beneficial interests in such Global
Certificate may be effected only through a book-entry system maintained by the
Depositary (or its agent), and that ownership of a beneficial interest in the
Certificate shall be required to be reflected in a book entry. When Certificates
are presented to the Registrar with a request to register the transfer or to
exchange them for an equal face amount of Certificates of other authorized
denominations, the Registrar shall register the transfer or make the exchange as
requested if its requirements for such transactions are met. To permit
registrations of transfers and exchanges in accordance with the terms,
conditions and restrictions hereof, the Trustee shall execute and authenticate
Certificates at the Registrar's request. No service charge shall be made for any
registration of transfer or exchange of the Certificates, but the Trustee may
require payment by the transferor of a sum sufficient to cover any transfer tax
or similar governmental charge payable in connection therewith.
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Section 3.05. Book-Entry Provisions for U.S. Global Certificate and
Offshore Global Certificates. (a) Members of, or participants in, DTC ("Agent
Members") shall have no rights under this Agreement with respect to any Global
Certificate held on their behalf by DTC, or the Trustee as its custodian, and
DTC may be treated by the Trustee and any agent of the Trustee as the absolute
owner of such Global Certificate for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Trustee or any agent of the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by DTC or shall impair, as between DTC and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a holder of any Certificate. Upon the issuance of any Global
Certificate, the Registrar or its duly appointed agent shall record a nominee of
DTC as the registered holder of such Global Certificate.
(b) Transfers of any Global Certificate shall be limited to
transfers of such Global Certificate in whole, but not in part, to nominees of
DTC, its successor or such successor's nominees. Beneficial interests in the
U.S. Global Certificate and any Offshore Global Certificate may be transferred
in accordance with the rules and procedures of DTC and the provisions of Section
3.06. Beneficial interests in the U.S. Global Certificate or an Offshore Global
Certificate shall be delivered to all beneficial owners in the form of U.S.
Physical Certificates or Offshore Physical Certificates, as the case may be, if
(i) the Company notifies the Trustee in writing that DTC is unwilling or unable
to discharge properly its responsibilities as DTC for the U.S. Global
Certificate or such Offshore Global Certificate, as the case may be, and the
Company is unable to locate a qualified successor depositary within 90 days of
such notice or (ii) after the occurrence of an Event of Default, beneficial
owners of the U.S. Global Certificate or Offshore Global Certificates evidencing
Fractional Undivided Interests aggregating not less than a majority in interest
in the Trust, by Act of such Certificateholders delivered to the Company and the
Trustee, advise the Company, the Trustee and DTC through its Clearing Agency
Participants in writing that the continuation of a book-entry system through DTC
is no longer in the best interests of the Certificateholders, then the Trustee
shall notify all owners of beneficial interests in the U.S. Global Certificate
or an Offshore Global Certificate, through DTC, of the occurrence of any such
event and the availability of definitive Certificates.
(c) Any beneficial interest in one of the Global Certificates that
is transferred to a Person who takes delivery in the form of an interest in the
other Global Certificate will, upon such transfer, cease to be an interest in
such Global Certificate and become an interest in the other Global Certificate
and, accordingly, will thereafter be subject to all transfer restrictions, if
any, and other procedures applicable to beneficial interests in such other
Global Certificate for as long as it remains such an interest.
(d) [Intentionally omitted.]
(e) In connection with the transfer of the entire U.S. Global
Certificate or an entire Offshore Global Certificate to the beneficial owners
thereof pursuant to
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paragraph (b) of this Section 3.05, such U.S. Global Certificate or Offshore
Global Certificate, as the case may be, shall be deemed to be surrendered to the
Trustee for cancellation, and the Trustee shall execute, authenticate and
deliver, to each beneficial owner identified by DTC in exchange for its
beneficial interest in such U.S. Global Certificate or Offshore Global
Certificate, as the case may be, an equal aggregate principal amount of U.S.
Physical Certificates or Offshore Physical Certificates, as the case may be, of
authorized denominations.
(f) Any U.S. Physical Certificate delivered in exchange for an
interest in the U.S. Global Certificate pursuant to paragraph (b) of this
Section 3.05 shall, except as otherwise provided by paragraph (f) of Section
3.06, bear the Private Placement Legend.
(g) Any Offshore Physical Certificate delivered in exchange for an
interest in an Offshore Global Certificate pursuant to paragraph (b) of this
Section shall, except as otherwise provided by paragraph (f) of Section 3.06,
bear the applicable legend regarding transfer restrictions set forth in Section
3.02(a).
(h) The registered holder of the U.S. Global Certificate or any
Offshore Global Certificate may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Agreement or the Certificates.
Section 3.06. Special Transfer Provisions. Unless and until (i) an
Initial Certificate is sold under an effective Shelf Registration Statement or
(ii) an Initial Certificate is exchanged for an Exchange Certificate pursuant to
an effective Exchange Offer Registration Statement, in each case pursuant to the
terms of the Registration Rights Agreement, the following provisions shall apply
to the Certificates:
(a) Transfers to Non-QIB Institutional Accredited Investors. The
following provisions shall apply with respect to the registration of any
proposed transfer of a Certificate to any Institutional Accredited Investor
which is not a QIB (excluding transfers to or by Non-U.S. Persons):
(i) The Registrar shall register the transfer of any Certificate,
whether or not such Certificate bears the Private Placement Legend, if (x)
the requested transfer is at least two years after the later of the
original issue date of the Certificates and the last date on which such
Certificate was held by the Company or any affiliate thereof or (y) the
proposed transferee has delivered to the Registrar a letter substantially
in the form of Exhibit D hereto and the aggregate principal amount of the
Certificates being transferred is at least $100,000.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Certificate, upon receipt by the
Registrar of (x) the documents, if any, required by paragraph (i) and (y)
instructions given in accordance with DTC's and the Registrar's
procedures, the Registrar shall reflect
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on its books and records the date of the transfer and a decrease in the
principal amount of such U.S. Global Certificate in an amount equal to the
principal amount of the beneficial interest in such U.S. Global
Certificate to be transferred, and the Company shall execute, and the
Trustee shall authenticate and deliver to the transferor or at its
direction, one or more U.S. Physical Certificates of like tenor and
amount.
(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of an Initial Certificate
to a QIB (excluding Non-U.S. Persons):
(i) If the Certificate to be transferred consists of U.S. Physical
Certificates or an interest in any Temporary Offshore Global Certificate,
the Registrar shall register the transfer if such transfer is being made
by a proposed transferor who has checked the box provided for on the form
of Initial Certificate stating, or has otherwise advised the Trustee and
the Registrar in writing, that the sale has been made in compliance with
the provisions of Rule 144A to a transferee who has signed the
certification provided for on the form of Initial Certificate stating, or
has otherwise advised the Trustee and the Registrar in writing, that it is
purchasing the Initial Certificate for its own account or an account with
respect to which it exercises sole investment discretion and that it, or
the Person on whose behalf it is acting with respect to any such account,
is a QIB within the meaning of Rule 144A, and is aware that the sale to it
is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Trust and/or the Company as it has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon its
foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
(ii) Upon receipt by the Registrar of the documents referred to in
clause (i) above and instructions given in accordance with DTC's and the
Registrar's procedures therefor, the Registrar shall reflect on its books
and records the date of such transfer and an increase in the principal
amount of the U.S. Global Certificate in an amount equal to the principal
amount of the U.S. Physical Certificates or interests in the Temporary
Offshore Global Certificate, as the case may be, being transferred, and
the Trustee shall cancel such Physical Certificates or decrease the amount
of such Temporary Offshore Global Certificate so transferred.
(c) [Intentionally omitted.]
(d) Transfers of Interests in the Permanent Offshore Global
Certificate or Offshore Physical Certificates. The Registrar shall register any
transfer of interests in the Permanent Offshore Global Certificate or Offshore
Physical Certificates without requiring any additional certification.
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(e) Transfers to Non-U.S. Persons at Any Time. The following
provisions shall apply with respect to any registration of any transfer of an
Initial Certificate to a Non-U.S. Person:
(i) Prior to the Offshore Certificates Exchange Date, the Registrar
shall register any proposed transfer of an Initial Certificate to a
Non-U.S. Person upon receipt of a certificate substantially in the form
set forth as Exhibit C hereto from the proposed transferor.
(ii) On and after the Offshore Certificates Exchange Date, the
Registrar shall register any proposed transfer to any Non-U.S. Person if
the Certificate to be transferred is a U.S. Physical Certificate or an
interest in the U.S. Global Certificate, upon receipt of a certificate
substantially in the form of Exhibit C from the proposed transferor. The
Registrar shall promptly send a copy of such certificate to the Company.
(iii) Upon receipt by the Registrar of (x) the documents, if any,
required by paragraph (ii) and (y) instructions in accordance with the
Depositary's and the Registrar's procedures, the Registrar shall reflect
on its books and records the date of such transfer and a decrease in the
principal amount of such U.S. Global Certificate in an amount equal to the
principal amount of the beneficial interest in such U.S. Global
Certificate to be transferred, and (B) upon receipt by the Registrar of
instructions given in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date
and an increase in the principal amount of the Offshore Global Certificate
in an amount equal to the principal amount of the U.S. Physical
Certificate or the U.S. Global Certificate, as the case may be, to be
transferred, and the Trustee shall cancel the Physical Certificate, if
any, so transferred or decrease the amount of such U.S. Global
Certificate.
(f) Private Placement Legend. Upon the transfer, exchange or
replacement of Certificates not bearing the Private Placement Legend, the
Registrar shall deliver Certificates that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of Certificates bearing the
Private Placement Legend, the Registrar shall deliver only Certificates that
bear the Private Placement Legend unless either (i) the circumstances
contemplated by paragraph (a)(i)(x) or (e)(ii) of this Section 3.06 exist or
(ii) there is delivered to the Registrar an Opinion of Counsel to the effect
that neither such legend nor the related restrictions on transfer are required
in order to maintain compliance with the provisions of the Securities Act.
(g) General. By its acceptance of any Certificate bearing the
Private Placement Legend, each Holder of such a Certificate acknowledges the
restrictions on transfer of such Certificate set forth in this Agreement and
agrees that it will transfer such Certificate only as provided in this
Agreement. The Registrar shall not register a transfer of any Certificate unless
such transfer complies with the restrictions on transfer of such Certificate set
forth in this Agreement. In connection with any
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transfer of Certificates, each Certificateholder agrees by its acceptance of the
Certificates to furnish the Registrar or the Trustee such certifications, legal
opinions or other information as either of them may reasonably require to
confirm that such transfer is being made pursuant to an exemption from, or a
transaction not subject to, the registration requirements of the Securities Act;
provided that neither the Trustee nor the Registrar shall be required to
determine the sufficiency of any such certifications, legal opinions or other
information.
Until such time as no Certificates remain Outstanding, the Registrar
shall retain copies of all letters, notices and other written communications
received pursuant to Section 3.05 or this Section 3.06. The Trustee, if not the
Registrar at such time, shall have the right to inspect and make copies of all
such letters, notices or other written communications at any reasonable time
upon the giving of reasonable written notice to the Registrar.
Section 3.07. Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate is surrendered to the Registrar or the Registrar
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (b) there is delivered to the Registrar and the Trustee such
security, indemnity or bond, as may be required by them to save each of them
harmless, then, in the absence of notice to the Registrar or the Trustee that
such Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate or
Certificates, in authorized denominations and of like Fractional Undivided
Interest and bearing a number not contemporaneously outstanding.
In connection with the issuance of any new Certificate under this
Section 3.07, the Trustee shall require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Trustee and the
Registrar) connected therewith.
Any duplicate Certificate issued pursuant to this Section 3.07 shall
constitute conclusive evidence of the appropriate Fractional Undivided Interest
in the Trust, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Certificates.
Section 3.08. Persons Deemed Owners. Prior to due presentment of a
Certificate for registration of transfer, the Trustee, the Registrar and any
Paying Agent may treat the Person in whose name any Certificate is registered as
the owner of such Certificate for the purpose of receiving distributions
pursuant to Article IV and for all
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other purposes whatsoever, and none of the Trustee, the Registrar or any Paying
Agent shall be affected by any notice to the contrary.
Section 3.09. Cancellation. All Certificates surrendered for payment
or transfer or exchange shall, if surrendered to the Trustee or any agent of the
Trustee other than the Registrar, be delivered to the Registrar for cancellation
and shall promptly be cancelled by it. No Certificates shall be authenticated in
lieu of or in exchange for any Certificates cancelled as provided in this
Section, except as expressly permitted by this Agreement. All cancelled
Certificates held by the Registrar shall be destroyed and a certification of
their destruction delivered to the Trustee.
Section 3.10. Limitation of Liability for Payments. All payments and
distributions made to Certificateholders shall be made only from the Trust
Property and only to the extent that the Trustee shall have sufficient income or
proceeds from the Trust Property to make such payments in accordance with the
terms of Article IV of this Agreement. Each Certificateholder, by its acceptance
of a Certificate, agrees that it will look solely to the income and proceeds
from the Trust Property to the extent available for distribution to such
Certificateholder as provided in this Agreement.
Section 3.11. Temporary Certificates. Until definitive Certificates
are ready for delivery, the Trustee shall authenticate temporary Certificates.
Temporary Certificates shall be substantially in the form of definitive
Certificates but may have insertions, substitutions, omissions and other
variations determined to be appropriate by the officers executing the temporary
Certificates, as evidenced by their execution of such temporary Certificates. If
temporary Certificates are issued, the Trustee will cause definitive
Certificates to be prepared without unreasonable delay. After the preparation of
definitive Certificates, the temporary Certificates shall be exchangeable for
definitive Certificates upon surrender of the temporary Certificates at the
office or agency of the Trustee designated for such purpose pursuant to Section
7.12, without charge to the Certificateholder. Upon surrender for cancellation
of any one or more temporary Certificates, the Trustee shall execute,
authenticate and deliver in exchange therefor a like face amount of definitive
Certificates of authorized denominations. Until so exchanged, the temporary
Certificates shall be entitled to the same benefits under this Agreement as
definitive Certificates.
Section 3.12. ERISA Restrictive Legend. All Certificates issued
pursuant to this Agreement shall bear a legend to the following effect (the
"ERISA Legend") unless the Company and the Trustee determine otherwise
consistent with applicable law:
"BY ITS ACQUISITION HEREOF, THE HOLDER REPRESENTS FOR THE BENEFIT OF
THE COMPANY AND EACH OWNER PARTICIPANT THAT (A) IT IS NOT A PLAN TRANSFEREE (AS
DEFINED IN THE PASS THROUGH TRUST AGREEMENT) OR (B) ONE OR MORE PROHIBITED
TRANSACTION STATUTORY OR ADMINISTRATIVE EXEMPTIONS APPLIES SUCH THAT THE USE OF
PLAN ASSETS TO PURCHASE AND HOLD THIS PASS THROUGH CERTIFICATE WILL
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NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975
OF THE CODE. THE PASS THROUGH TRUST AGREEMENT CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS CERTIFICATE IN VIOLATION OF
THE FOREGOING RESTRICTIONS."
By acceptance of any Certificate bearing the ERISA Legend, each
Holder of such a Certificate acknowledges for the benefit of the Company and
each Owner Participant the restrictions on transfer of such Certificate set
forth in this Agreement and agrees that it will transfer such Certificate only
as provided in this Agreement. The Registrar shall not register a transfer of
any Certificate unless such transfer complies with the restrictions on transfer,
if any, of such Certificate set forth in this Agreement.
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS
Section 4.01. Certificate Account and Special Payments Account. (a)
The Trustee shall establish and maintain on behalf of the Certificateholders a
Certificate Account as one or more non-interest-bearing accounts. The Trustee
shall hold the Certificate Account in trust for the benefit of the
Certificateholders, and shall make or permit withdrawals therefrom only as
provided in this Agreement. On each day when a Scheduled Payment is made to the
Trustee, the Trustee upon receipt thereof shall immediately deposit the
aggregate amount of such Scheduled Payment into the Certificate Account.
(b) The Trustee shall establish and maintain on behalf of the
Certificateholders a Special Payments Account as one or more accounts, which
shall be non-interest bearing except as provided in Section 4.04. The Trustee
shall hold the Special Payments Account in trust for the benefit of the
Certificateholders and shall make or permit withdrawals therefrom only as
provided in this Agreement. On each day when one or more Special Payments are
made to the Trustee, the Trustee, upon receipt thereof, shall immediately
deposit the aggregate amount of such Special Payments into the Special Payments
Account.
(c) The Trustee shall present to the Loan Trustee to which an
Equipment Note relates such Equipment Note on the date of its stated final
maturity or, in the case of any Equipment Note which is to be redeemed in whole
pursuant to the relevant Indenture, on the applicable redemption date under such
Indenture.
Section 4.02. Distributions from Certificate Account and Special
Payments Account. (a) On each Regular Distribution Date or as soon thereafter as
the Trustee has confirmed receipt of the payment of the Scheduled Payments due
on such date, the
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Trustee shall distribute out of the Certificate Account the entire amount
deposited therein pursuant to Section 4.01(a). There shall be so distributed to
each Certificateholder of record on the Record Date with respect to such Regular
Distribution Date (other than as provided in Section 11.01 concerning the final
distribution) by check mailed to such Certificateholder, at the address
appearing in the Register, such Certificateholder's pro rata share (based on the
Fractional Undivided Interest in the Trust held by such Certificateholder) of
the total amount in the Certificate Account, except that, with respect to
Certificates registered on the Record Date in the name of the nominee of the
Depositary (initially, such nominee to be Cede & Co.), such distribution shall
be made by wire transfer in immediately available funds to the account
designated by such nominee.
(b) On each Special Distribution Date with respect to any Special
Payment or as soon thereafter as the Trustee has confirmed receipt of any
Special Payments, the Trustee shall distribute out of the Special Payments
Account the entire amount of such Special Payment deposited therein pursuant to
Section 4.01(b). There shall be so distributed to each Certificateholder of
record on the Record Date with respect to such Special Distribution Date (other
than as provided in Section 11.01 concerning the final distribution) by check
mailed to such Certificateholder, at the address appearing in the Register, such
Certificateholder's pro rata share (based on the aggregate Fractional Undivided
Interest in the Trust held by such Certificateholder) of the aggregate amount in
the Special Payments Account on account of such Special Payment, except that,
with respect to Certificates registered on the Record Date in the name of the
nominee of the Depositary (initially, such nominee to be Cede & Co.), such
distribution shall be made by wire transfer in immediately available funds to
the account designated by such nominee.
(c) The Trustee shall, at the expense of the Company, cause notice
of each Special Payment to be mailed to each Certificateholder at his address as
it appears in the Register. In the event of redemption, prepayment or purchase
of Equipment Notes held in the Trust, such notice shall be mailed not less than
15 days prior to the date any Special Payment is scheduled to be distributed. In
the case of any other Special Payments, such notice shall be mailed as soon as
practicable after the Trustee has confirmed that it has received funds for such
Special Payment (which notice, in the case of a Special Redemption Premium,
shall include a copy of the notice delivered by the Escrow Paying Agent under
Section 2.06 of the Escrow Agreement). Notices mailed by the Trustee shall set
forth:
(i) the Special Distribution Date and the Record Date therefor
(except as otherwise provided in Section 11.01),
(ii) the amount of the Special Payment for each $1,000 face amount
Certificate (taking into account any payment to be made by the Company
pursuant to Section 2.02) and the amount thereof constituting principal,
premium, if any, and interest,
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(iii) the reason for the Special Payment, and
(iv) if the Special Distribution Date is the same date as a Regular
Distribution Date, the total amount to be received on such date for each
$1,000 face amount Certificate.
If the amount of (x) premium, if any, payable upon the redemption, prepayment or
purchase of an Equipment Note or (y) Special Redemption Premium has not been
calculated at the time that the Trustee mails notice of a Special Payment, it
shall be sufficient if the notice sets forth the other amounts to be distributed
and states that any such premium or Special Redemption Premium, as the case may
be, received will also be distributed.
If any redemption of the Equipment Notes held in the Trust is
cancelled, the Trustee, as soon as possible after learning thereof, shall cause
notice thereof to be mailed to each Certificateholder at its address as it
appears on the Register.
Section 4.03. Statements to Certificateholders. (a) On each
Distribution Date, the Trustee will include with each distribution to
Certificateholders of a Scheduled Payment or Special Payment, as the case may
be, a statement setting forth the information provided below (in the case of a
Special Payment, including any Special Redemption Premium, reflecting in part
the information provided by the Escrow Paying Agent under the Escrow Agreement).
Such statement shall set forth (per $1,000 face amount Certificate as to (ii),
(iii), (iv) and (v) below) the following information:
(i) the aggregate amount of funds distributed on such Distribution
Date under the Agreement and under the Escrow Agreement, indicating the
amount allocable to each source;
(ii) the amount of such distribution under the Agreement allocable
to principal and the amount allocable to premium (including the Special
Redemption Premium), if any;
(iii) the amount of such distribution under the Agreement allocable
to interest;
(iv) the amount of such distribution under the Escrow Agreement
allocable to interest;
(v) the amount of such distribution under the Escrow Agreement
allocable to Deposits; and
(vi) the Pool Balance and the Pool Factor.
With respect to the Certificates registered in the name of a
Clearing Agency or its nominee, on the record date prior to each Distribution
Date, the Trustee
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will request from the Clearing Agency a securities position listing setting
forth the names of all the Clearing Agency Participants reflected on the
Clearing Agency's books as holding interests in the Certificates on such record
date. On each Distribution Date, the Trustee will mail to each such Clearing
Agency Participant the statement described above and will make available
additional copies as requested by such Clearing Agency Participant for
forwarding to holders of Certificates.
(b) Within a reasonable period of time after the end of each
calendar year but not later than the latest date permitted by law, the Trustee
shall furnish to each Person who at any time during such calendar year was a
Certificateholder of record a statement containing the sum of the amounts
determined pursuant to clauses (a)(i), (a)(ii), (a)(iii), (a)(iv) and (a)(v)
above with respect to the Trust for such calendar year or, in the event such
Person was a Certificateholder of record during a portion of such calendar year,
for the applicable portion of such year, and such other items as are readily
available to the Trustee and which a Certificateholder shall reasonably request
as necessary for the purpose of such Certificateholder's preparation of its
federal income tax returns. With respect to Certificates registered in the name
of a Clearing Agency or its nominee, such report and such other items shall be
prepared on the basis of information supplied to the Trustee by the Clearing
Agency Participants and shall be delivered by the Trustee to such Clearing
Agency Participants to be available for forwarding by such Clearing Agency
Participants.
(c) Utilizing information provided by Midway, promptly following (i)
the Delivery Period Termination Date, if there has been any change in the
information set forth in clauses (x), (y) and (z) below from that set forth in
page 65 of the Offering Memorandum, and (ii) any early redemption or purchase
of, or any default in the prepayment of principal or interest in respect of, any
of the Equipment Notes held in the Trust, or any Final Withdrawal, the Trustee
shall furnish to Certificateholders of record on such date a statement setting
forth (x) the expected Pool Balances for each subsequent Regular Distribution
Date following the Delivery Period Termination Date, (y) the related Pool
Factors for such Regular Distribution Dates and (z) the expected principal
distribution schedule of the Equipment Notes, in the aggregate, held as Trust
Property at the date of such notice. With respect to the Certificates registered
in the name of a Clearing Agency, on the Delivery Period Termination Date, the
Trustee will request from such Clearing Agency a securities position listing
setting forth the names of all Clearing Agency Participants reflected on such
Clearing Agency's books as holding interests in the Certificates on such date.
The Trust will mail to each such Clearing Agency Participant the statement
described above and will make available additional copies as requested by such
Clearing Agency Participant for forwarding to holders of interests in the
Certificates.
Section 4.04. Investment of Special Payment Moneys. Any money
received by the Trustee pursuant to Section 4.01(b) representing a Special
Payment which is not to be promptly distributed shall, to the extent
practicable, be invested in Permitted Investments by the Trustee as directed in
writing by the Company pending distribution of such Special Payment pursuant to
Section 4.02. Any investment made
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pursuant to this Section 4.04 shall be in such Permitted Investments having
maturities not later than the date that such moneys are required to be used to
make the payment required under Section 4.02 on the applicable Special
Distribution Date and the Trustee shall hold any such Permitted Investments
until maturity. The Trustee shall have no liability with respect to any
investment made pursuant to this Section 4.04, other than by reason of the
willful misconduct or gross negligence (or simple negligence in the handling of
funds) of the Trustee. All income and earnings from such investments shall be
distributed on such Special Distribution Date as part of such Special Payment.
ARTICLE V
THE COMPANY
Section 5.01. Maintenance of Corporate Existence. The Company, at
its own cost and expense, will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence, rights and
franchises, except as otherwise specifically permitted in Section 5.02;
provided, however, that the Company shall not be required to preserve any right
or franchise if the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company.
Section 5.02. Consolidation, Merger, Etc. The Company shall not
consolidate with or merge into any other corporation or convey, transfer or
lease substantially all of its assets as an entirety to any Person unless:
(a) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance, transfer or
lease substantially all of the assets of the Company as an entirety shall
be (i) organized and validly existing under the laws of the United States
of America or any state thereof or the District of Columbia, (ii) a
"citizen of the United States" (as defined in Section 40102(a)(15) of
Title 49 of the United States Code) and (iii) a United States certificated
air carrier, if and so long as such status is a condition of entitlement
to the benefits of Section 1110 of the Bankruptcy Reform Act of 1978, as
amended (11 U.S.C. ss. 1110), with respect to the Aircraft;
(b) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance, transfer or
lease substantially all of the assets of the Company as an entirety shall
execute and deliver to the Trustee a duly authorized, valid, binding and
enforceable agreement in form and substance reasonably satisfactory to the
Trustee containing an assumption by such successor corporation or Person
of the due and punctual performance and observance of each covenant and
condition of this Agreement, the Other Pass Through Trust Agreements, the
Participation Agreements, and each other Note Document to be performed or
observed by the Company;
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(c) immediately after giving effect to such transaction, no Event of
Default (as defined in any Lease or any Indenture relating to an Owned
Aircraft), shall have occurred and be continuing; and
(d) the Company shall have delivered to the Trustee an Officer's
Certificate of the Company and an Opinion of Counsel of the Company
reasonably satisfactory to the Trustee, each stating that such
consolidation, merger, conveyance, transfer or lease and the assumption
agreement mentioned in clause (b) above comply with this Section 5.02 and
that all conditions precedent herein provided for relating to such
transaction have been complied with.
Upon any consolidation or merger, or any conveyance, transfer or
lease of substantially all of the assets of the Company as an entirety in
accordance with this Section 5.02, the successor corporation or Person formed by
such consolidation or into which the Company is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Agreement with
the same effect as if such successor corporation or Person had been named as the
Company herein. No such conveyance, transfer or lease of substantially all of
the assets of the Company as an entirety shall have the effect of releasing the
Company or any successor corporation or Person which shall theretofore have
become such in the manner prescribed in this Section 5.02 from its liability in
respect of this Agreement or any Financing Document to which it is a party.
ARTICLE VI
DEFAULT
Section 6.01. Events of Default. (a) Exercise of Remedies. Upon the
occurrence and during the continuation of any Indenture Default under any
Indenture, the Trustee may, to the extent it is the Controlling Party at such
time, direct the exercise of remedies as provided in the Intercreditor
Agreement.
(b) Purchase Rights of Certificateholders.
(i) At any time after the occurrence and during the continuation of
a Triggering Event, each Certificateholder shall have the right to
purchase all, but not less than all, of the Class A Certificates upon ten
days written notice to the Class A Trustee and each other
Certificateholder, provided that (A) if prior to the end of such ten-day
period any other Certificateholder notifies such purchasing
Certificateholder that such other Certificateholder wants to participate
in such purchase, then such other Certificateholder may join with the
purchasing Certificateholder to purchase all, but not less than all, of
the Class A Certificates pro rata based on the principal amount of the
Certificates held by each such Certificateholder and (B) if prior to the
end of such ten-day period any
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other Certificateholder fails to notify the purchasing Certificateholder
of such other Certificateholder's desire to participate in such a
purchase, then such other Certificateholder shall lose its right to
purchase the Class A Certificates pursuant to this Section 6.01(b)(i).
(ii) By its acceptance of its Certificate, each Certificateholder
agrees that at any time after the occurrence and during the continuation
of a Triggering Event:
(A) each Class C Certificateholder shall have the right (which shall
not expire upon any purchase of the Class A Certificates pursuant to
clause (b)(i) above) to purchase all, but not less than all, of the
Certificates and the Class A Certificates upon ten days' written notice to
the Trustee, the Class A Trustee and each other Class C Certificateholder,
provided that (A) if prior to the end of such ten-day period any other
Class C Certificateholder notifies such purchasing Class C
Certificateholder that such other Class C Certificateholder wants to
participate in such purchase, then such other Class C Certificateholder
may join with the purchasing Class C Certificateholder to purchase all,
but not less than all, of the Certificates and the Class A Certificates
pro rata based on the Fractional Undivided Interest in the Class C Trust
held by each such Class C Certificateholder and (B) if prior to the end of
such ten day period any other Class C Certificateholder fails to notify
the purchasing Class C Certificateholder of such other Class C
Certificateholder's desire to participate in such a purchase, then such
other Class C Certificateholder shall lose its right to purchase the
Certificates and the Class A Certificates pursuant to this Section
6.01(b).
(B) each Class D Certificateholder shall have the right (which shall
not expire upon any purchase of the Class A Certificates pursuant to
clause (b)(i) above and the Certificates and the Class A Certificates
pursuant to clause (ii)(A) above) to purchase all, but not less than all,
of the Certificates, the Class A Certificates and the Class C Certificates
upon ten days' written notice to the Trustee, the Class A Trustee, the
Class C Trustee and each other Class D Certificateholder, provided that
(A) if prior to the end of such ten-day period any other Class D
Certificateholder notifies such purchasing Class D Certificateholder that
such other Class D Certificateholder wants to participate in such
purchase, then such other Class D Certificateholder may join with the
purchasing Class D Certificateholder to purchase all, but not less than
all, of the Certificates, the Class A Certificates and the Class C
Certificates pro rata based on the Fractional Undivided Interest in the
Class D Trust held by each such Class D Certificateholder and (B) if prior
to the end of such ten day period any other Class D Certificateholder
fails to notify the purchasing Class D Certificateholder of such other
Class D Certificateholder's desire to participate in such a purchase, then
such other Class D Certificateholder shall lose its right to purchase the
Certificates, the Class A Certificates and the Class C Certificates
pursuant to this Section 6.01(b).
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The purchase price with respect to the Certificates shall be equal
to the Pool Balance of the Certificates, together with accrued and unpaid
interest thereon to the date of such purchase, without premium, but including
any other amounts then due and payable to the Certificateholders under this
Agreement, the Intercreditor Agreement, the Escrow Agreement or any Note
Document or on or in respect of the Certificates; provided, however, that (i) if
such purchase occurs after the record date specified in Section 2.03(b) of the
Escrow Agreement relating to the distribution of unused Deposits and accrued and
unpaid interest thereunder, such purchase price shall be reduced by the
aggregate amount of unused Deposits and interest to be distributed under the
Escrow Agreement (which deducted amounts shall remain distributable to, and may
be retained by the Certificateholder as of such record date) and (ii) if such
purchase occurs after a Record Date, such purchase price shall be reduced by the
amount to be distributed hereunder on the related Distribution date (which
deducted amounts shall remain distributable to, and may be retained by, the
Certificateholder as of such Record Date); provided further that no such
purchase of Certificates shall be effective unless the purchaser shall certify
to the Trustee that contemporaneously with such purchase, such purchaser is
purchasing, pursuant to the terms of this Agreement and the Other Pass Through
Trust Agreements, the Certificates, the Class A Certificates and the Class C
Certificates which are senior to the Class of Certificates (as defined in the
Intercreditor Agreement) held by such purchaser. Each payment of the purchase
price of the Certificates shall be made to an account or accounts designated by
the Trustee and each such purchase shall be subject to the terms of this
Section. Each Certificateholder agrees by its acceptance of its Certificate that
it will, subject to Section 3.04 hereof, upon payment from such Class C
Certificateholder(s) or Class D Certificateholder(s) of the purchase price set
forth in the first sentence of this paragraph, forthwith sell, assign, transfer
and convey to the purchaser thereof (without recourse, representation or
warranty of any kind except for its own acts), all of the right, title, interest
and obligation of such Certificateholder in, this Agreement, the Escrow
Agreement, the Deposit Agreement, the Intercreditor Agreement, the Liquidity
Facility, the Note Documents and all Certificates and Escrow Receipts held by
such Certificateholder (excluding all right, title and interest under any of the
foregoing to the extent such right, title or interest is with respect to an
obligation not then due and payable as respects any action or inaction or state
of affairs occurring prior to such sale) and the purchaser shall assume all of
such Certificateholder's obligations under this Agreement, the Escrow Agreement,
the Deposit Agreement, the Intercreditor Agreement, the Liquidity Facility and
the Note Documents. The Certificates will be deemed to be purchased on the date
payment of the purchase price is made notwithstanding the failure of the
Certificateholders to deliver any Certificates (whether in the form of Physical
Certificates or beneficial interests in Global Certificates) and, upon such a
purchase, (i) the only rights of the Certificateholders will be to deliver the
Certificates to the purchaser and receive the purchase price for the
Certificates and (ii) if the purchaser shall so request, such Certificateholder
will comply with all the provisions of Section 3.04 hereof to enable new
Certificates to be issued to the purchaser in such denominations as it shall
request. All charges and expenses in connection with the issuance of any such
new Certificates shall be borne by the purchaser thereof.
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As used in this Section 6.01(b), the terms "Certificateholders",
"Class", "Class A Certificate", "Class A Certificateholder", "Class A Trust",
"Class A Trustee", "Class C Certificate", "Class C Certificateholder", "Class C
Trust", "Class C Trustee", "Class D Certificate", "Class D Certificateholder",
"Class D Trust" and "Class D Trustee", shall have the respective meanings
assigned to such terms in the Intercreditor Agreement.
Section 6.02. Incidents of Sale of Equipment Notes. Upon any sale of
all or any part of the Equipment Notes made either under the power of sale given
under this Agreement or otherwise for the enforcement of this Agreement, the
following shall be applicable:
(1) Certificateholders and Trustee May Purchase Equipment Notes. Any
Certificateholder, the Trustee in its individual or any other capacity or
any other Person may bid for and purchase any of the Equipment Notes, and
upon compliance with the terms of sale, may hold, retain, possess and
dispose of such Equipment Notes in their own absolute right without
further accountability.
(2) Receipt of Trustee Shall Discharge Purchaser. The receipt of the
Trustee or of the officer making such sale shall be a sufficient discharge
to any purchaser for his purchase money, and, after paying such purchase
money and receiving such receipt, such purchaser or its personal
representative or assigns shall not be obliged to see to the application
of such purchase money, or be in any way answerable for any loss,
misapplication or non-application thereof.
(3) Application of Moneys Received upon Sale. Any moneys received by
the Trustee from the Subordination Agent pursuant to the Intercreditor
Agreement upon any sale made either under the power of sale given by this
Agreement or otherwise for the enforcement of this Agreement shall be
applied as provided in Section 4.02.
Section 6.03. Judicial Proceedings Instituted by Trustee; Trustee
May Bring Suit. If there shall be a failure to make payment of the principal of,
premium, if any, or interest on any Equipment Note, or if there shall be any
failure to pay Rent (as defined in the relevant Lease) under any Lease when due
and payable, then the Trustee, in its own name and as trustee of an express
trust, as holder of such Equipment Notes, to the extent permitted by and in
accordance with the terms of the Intercreditor Agreement and the Financing
Documents (subject to the rights of the applicable Owner Trustee or Owner
Participant to cure any such failure in accordance with Section 8.03 of any
applicable Indenture relating to a Leased Aircraft), shall be entitled and
empowered to institute any suits, actions or proceedings at law, in equity or
otherwise, for the collection of the sums so due and unpaid on such Equipment
Notes or under such Lease and may prosecute any such claim or proceeding to
judgment or final decree with respect to the whole amount of any such sums so
due and unpaid.
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Section 6.04. Control by Certificateholders. Subject to Section 6.03
and the Intercreditor Agreement, the Certificateholders holding Certificates
evidencing Fractional Undivided Interests aggregating not less than a majority
in interest in the Trust shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee with
respect to the Trust or pursuant to the terms of the Intercreditor Agreement, or
exercising any trust or power conferred on the Trustee under this Agreement or
the Intercreditor Agreement, including any right of the Trustee as Controlling
Party under the Intercreditor Agreement or as holder of the Equipment Notes,
provided that
(1) such Direction shall not be in conflict with any rule of law or
with this Agreement and would not involve the Trustee in personal
liability or expense,
(2) the Trustee shall not determine that the action so directed
would be unjustly prejudicial to the Certificateholders not taking part in
such Direction, and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such Direction.
Section 6.05. Waiver of Past Defaults. Subject to the Intercreditor
Agreement, the Certificateholders holding Certificates evidencing Fractional
Undivided Interests aggregating not less than a majority in interest in the
Trust (i) may on behalf of all of the Certificateholders waive any past Event of
Default hereunder and its consequences or (ii) if the Trustee is the Controlling
Party, may direct the Trustee to instruct the applicable Loan Trustee to waive,
any past Indenture Default under any Indenture and its consequences, and thereby
annul any Direction given by such Certificateholders or the Trustee to such Loan
Trustee with respect thereto, except a default:
(1) in the deposit of any Scheduled Payment or Special Payment under
Section 4.01 or in the distribution of any payment under Section 4.02 on
the Certificates, or
(2) in the payment of the principal of (premium, if any) or interest
on the Equipment Notes, or
(3) in respect of a covenant or provision hereof which under Article
IX or X cannot be modified or amended without the consent of each
Certificateholder holding an Outstanding Certificate affected thereby.
Upon any such waiver, such default shall cease to exist with respect
to the Certificates and any Event of Default arising therefrom shall be deemed
to have been cured for every purpose and any direction given by the Trustee on
behalf of the Certificateholders to the relevant Loan Trustee shall be annulled
with respect thereto;
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but no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon. Upon any such waiver, the
Trustee shall vote the Equipment Notes issued under the relevant Indenture to
waive the corresponding Indenture Default.
Section 6.06. Right of Certificateholders to Receive Payments Not to
Be Impaired. Anything in this Agreement to the contrary notwithstanding,
including, without limitation, Section 6.07 hereof, but subject to the
Intercreditor Agreement, the right of any Certificateholder to receive
distributions of payments required pursuant to Section 4.02 hereof on the
Certificates when due, or to institute suit for the enforcement of any such
payment on or after the applicable Regular Distribution Date or Special
Distribution Date, shall not be impaired or affected without the consent of such
Certificateholder.
Section 6.07. Certificateholders May Not Bring Suit Except Under
Certain Conditions. A Certificateholder shall not have the right to institute
any suit, action or proceeding at law or in equity or otherwise with respect to
this Agreement, for the appointment of a receiver or for the enforcement of any
other remedy under this Agreement, unless:
(1) such Certificateholder previously shall have given written
notice to the Trustee of a continuing Event of Default;
(2) Certificateholders holding Certificates evidencing Fractional
Undivided Interests aggregating not less than 25% of the Trust shall have
requested the Trustee in writing to institute such action, suit or
proceeding and shall have offered to the Trustee indemnity as provided in
Section 7.03(e);
(3) the Trustee shall have refused or neglected to institute such an
action, suit or proceeding for 60 days after receipt of such notice,
request and offer of indemnity; and
(4) no direction inconsistent with such written request shall have
been given to the Trustee during such 60-day period by Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating
not less than a majority in interest in the Trust.
It is understood and intended that no one or more of the
Certificateholders shall have any right in any manner whatsoever hereunder or
under the Certificates to (i) surrender, impair, waive, affect, disturb or
prejudice any property in the Trust Property or the lien of any Indenture on any
property subject thereto, or the rights of the Certificateholders or the holders
of the Equipment Notes, (ii) obtain or seek to obtain priority over or
preference with respect to any other such Certificateholder or (iii) enforce any
right under this Agreement, except in the manner herein provided and for the
equal, ratable and common benefit of all the Certificateholders subject to the
provisions of this Agreement.
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Section 6.08. Remedies Cumulative. Every remedy given hereunder to
the Trustee or to any of the Certificateholders shall not be exclusive of any
other remedy or remedies, and every such remedy shall be cumulative and in
addition to every other remedy given hereunder or now or hereafter given by
statute, law, equity or otherwise.
Section 6.09. Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Agreement, or in any suit against the Trustee
for any action taken, suffered or omitted by it as Trustee, a court may require
any party litigant in such suit to file an undertaking to pay the costs of such
suit, and may assess costs against any such party litigant, in the manner and to
the extent provided in the Trust Indenture Act; provided that neither this
Section nor the Trust Indenture Act shall be deemed to authorize any court to
require such an undertaking or to make such an assessment in any suit instituted
by the Company.
ARTICLE VII
THE TRUSTEE
Section 7.01. Certain Duties and Responsibilities. (a) Except during
the continuance of an Event of Default, the Trustee undertakes to perform only
such duties as are specifically set forth in this Agreement, and no implied
covenants or obligations shall be read into this Agreement against the Trustee.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of its
own affairs.
(c) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own gross negligence (or simple negligence in the
handling of funds) or wilful misconduct, except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section; and
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent facts.
(d) Whether or not herein expressly so provided, every provision of
this Trust Agreement relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
Section 7.02. Notice of Defaults. As promptly as practicable after,
and in any event within 90 days after, the occurrence of any default (as such
term is defined
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below) hereunder known to the Trustee, the Trustee shall transmit by mail to the
Company, the Owner Trustees, the Owner Participants, the Loan Trustees and the
Certificateholders in accordance with Section 313(c) of the Trust Indenture Act,
notice of such default hereunder known to the Trustee, unless such default shall
have been cured or waived; provided, however, that, except in the case of a
default in the payment of the principal, premium, if any, or interest on any
Equipment Note or any other Trust Property, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of directors and/or Responsible Officers of the
Trustee in good faith determine that the withholding of such notice is in the
interests of the Certificateholders. For the purpose of this Section, the term
"default" means any event that is, or after notice or lapse of time or both
would become, an Event of Default.
Section 7.03. Certain Rights of Trustee. Subject to the provisions
of Section 315 of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting in reliance upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Request;
(c) whenever in the administration of this Agreement or the
Intercreditor Agreement the Trustee shall deem it desirable that a matter
be proved or established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, rely upon an
Officer's Certificate of the Company, any Owner Trustee or any Loan
Trustee;
(d) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement or the Intercreditor
Agreement at the request or direction of any of the Certificateholders
pursuant to this Agreement or the Intercreditor Agreement, unless such
Certificateholders shall have offered to the Trustee reasonable security
or indemnity against the cost, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
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(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture or other paper or document;
(g) the Trustee may execute any of the trusts or powers under this
Agreement or the Intercreditor Agreement or perform any duties under this
Agreement or the Intercreditor Agreement either directly or by or through
agents or attorneys, and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed
with due care by it under this Agreement or the Intercreditor Agreement;
(h) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the
direction of the Certificateholders holding Certificates evidencing
Fractional Undivided Interests aggregating not less than a majority in
interest in the Trust relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under this Agreement or the
Intercreditor Agreement; and
(i) the Trustee shall not be required to expend or risk its own
funds in the performance of any of its duties under this Agreement, or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk is not reasonably assured to it.
Section 7.04. Not Responsible for Recitals or Issuance of
Certificates. The recitals contained herein and in the Certificates, except the
certificates of authentication, shall not be taken as the statements of the
Trustee, and the Trustee assumes no responsibility for their correctness.
Subject to Section 7.15, the Trustee makes no representations as to the validity
or sufficiency of this Agreement, any Participation Agreement, the Escrow
Agreement, the Deposit Agreement, any Equipment Notes, the Certificates or any
other Note Document, except that the Trustee hereby represents and warrants that
this Agreement has been, and the Intercreditor Agreement, each Note Document and
each Certificate will be, executed, authenticated and delivered by one of its
officers who is duly authorized to execute, authenticate and deliver such
document on its behalf.
Section 7.05. May Hold Certificates. The Trustee, any Paying Agent,
Registrar or any of their Affiliates or any other agent in their respective
individual or any other capacity may become the owner or pledgee of Certificates
and, subject to Sections 310(b) and 311 of the Trust Indenture Act, if
applicable, may otherwise deal with the Company, the Owner Trustees or the Loan
Trustees with the same rights it would have if it were not Trustee, Paying
Agent, Registrar or such other agent.
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Section 7.06. Money Held in Trust. Money held by the Trustee or the
Paying Agent in trust hereunder need not be segregated from other funds except
to the extent required herein or by law and neither the Trustee nor the Paying
Agent shall have any liability for interest upon any such moneys except as
provided for herein.
Section 7.07. Compensation and Reimbursement. The Company agrees:
(1) to pay, or cause to be paid, to the Trustee from time to time
compensation (as set out in a separate fee agreement between the Trustee
and the Company) for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse, or
cause to be reimbursed, the Trustee upon its request for all reasonable
out-of-pocket expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Agreement or the
Intercreditor Agreement (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its own
negligence, willful misconduct or bad faith or as may be incurred due to
the Trustee's breach of its representations and warranties set forth in
Section 7.15;
(3) to indemnify, or cause to be indemnified, the Trustee for, and
to hold it harmless against, any loss, liability or expense (other than
for or with respect to any tax) incurred without gross negligence (or
simple negligence in the handling of funds), willful misconduct or bad
faith, on its part, arising out of or in connection with the acceptance or
administration of this Trust, including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder, except
for any such loss, liability or expense incurred by reason of the
Trustee's breach of its representations and warranties set forth in
Section 7.15. The Trustee shall notify the Company promptly of any claim
for which it may seek indemnity. The Company shall defend the claim and
the Trustee shall cooperate in the defense. The Trustee may have separate
counsel with the consent of the Company (which consent shall not be
unreasonably withheld) and the Company will pay the reasonable fees and
expenses of such counsel. The Company need not pay for any settlement made
without its consent; and
(4) to indemnify, or cause to be indemnified, the Trustee, solely in
its individual capacity, for, and to hold it harmless against, any tax
(except to the extent the Trustee is reimbursed therefor pursuant to the
next paragraph, provided that no indemnification shall be available with
respect to any tax attributable to the Trustee's compensation for serving
as such) incurred without negligence, willful misconduct or bad faith, on
its part, arising out of or in connection with the acceptance or
administration of this Trust, including any
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costs and expenses incurred in contesting the imposition of any such tax.
The Trustee, in its individual capacity, shall notify the Company promptly
of any claim for any tax for which it may seek indemnity. The Trustee
shall permit the Company to contest the imposition of such tax and the
Trustee, in its individual capacity, shall cooperate in the defense. The
Trustee, in its individual capacity, may have separate counsel with the
consent of the Company (which consent shall not be unreasonably withheld)
and the Company will pay the reasonable fees and expenses of such counsel.
The Company need not pay for any taxes paid, in settlement or otherwise,
without its consent.
The Trustee shall be entitled to reimbursement from, and shall have
a lien prior to the Certificates upon, the Trust Property for any tax incurred
without gross negligence (or simple negligence in the handling of funds), bad
faith or willful misconduct, on its part, arising out of or in connection with
the acceptance or administration of such Trust (other than any tax attributable
to the Trustee's compensation for serving as such), including any costs and
expenses incurred in contesting the imposition of any such tax. If the Trustee
reimburses itself from the Trust Property of such Trust for any such tax, it
will mail a brief report within 30 days setting forth the circumstances thereof
to all Certificateholders as their names and addresses appear in the Register.
Section 7.08. Corporate Trustee Required; Eligibility. There shall
at all times be a Trustee hereunder which shall be eligible to act as a trustee
under Section 310(a) of the Trust Indenture Act and shall have a combined
capital and surplus of at least $75,000,000 (or a combined capital and surplus
in excess of $5,000,000 and the obligations of which, whether now in existence
or hereafter incurred, are fully and unconditionally guaranteed by a corporation
organized and doing business under the laws of the United States, any state or
territory thereof or of the District of Columbia and having a combined capital
and surplus of at least $75,000,000). If such corporation publishes reports of
conditions at least annually, pursuant to law or to the requirements of federal,
state, territorial or District of Columbia supervising or examining authority,
then for the purposes of this Section 7.08, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of conditions so published.
In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 7.08 to act as Trustee, the
Trustee shall resign immediately as Trustee in the manner and with the effect
specified in Section 7.09.
Section 7.09. Resignation and Removal; Appointment of Successor. (a)
No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee under Section 7.10.
(b) The Trustee may resign at any time as trustee by giving prior
written notice thereof to the Company, the Authorized Agents, the Owner Trustees
and
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the Loan Trustees. In addition, upon the occurrence of an Event of Default, in
the event the Trustee shall not have received instructions from the
Certificateholders or the Certificateholders with respect to any Other Trust,
the Trustee shall resign. If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Company, the Authorized Agents, the Owner
Trustees, the Loan Trustees and the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the
Certificateholders holding Certificates evidencing Fractional Undivided
Interests aggregating not less than a majority in interest in the Trust
delivered to the Trustee, the Company, the Owner Trustees and the Loan Trustees.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 310 of the Trust
Indenture Act, if applicable, after written request therefor by the
Company or by any Certificateholder who has been a bona fide
Certificateholder for at least six months; or
(2) the Trustee shall cease to be eligible under Section 7.08 and
shall fail to resign after written request therefor by the Company or by
any such Certificateholder; or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any case, (i) the Company may remove the Trustee or (ii) any
Certificateholder who has been a bona fide Certificateholder for at least six
months may, on behalf of itself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
(e) If a Responsible Officer of the Trustee shall obtain actual
knowledge of an Avoidable Tax which has been or is likely to be asserted, the
Trustee shall promptly notify the Company and shall, within 30 days of such
notification, resign hereunder unless within such 30-day period the Trustee
shall have received notice that the Company has agreed to pay such tax. The
Company shall promptly appoint a successor Trustee in a jurisdiction where there
are no Avoidable Taxes.
(f) If the Trustee shall resign, be removed or become incapable of
acting as trustee or if a vacancy shall occur in the office of the Trustee for
any cause, the Company shall promptly appoint a successor Trustee. If, within 90
days after such
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resignation, removal or incapability, or other occurrence of such vacancy, a
successor Trustee shall be appointed by Act of the Certificateholders holding
Certificates evidencing Fractional Undivided Interests aggregating not less than
a majority in interest in the Trust delivered to the Company, the Owner
Trustees, the Loan Trustees and the retiring Trustee, and the Company approves
such appointment, which approval shall not be unreasonably withheld, then the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee and supersede the successor Trustee
appointed as provided above. If no successor Trustee shall have been so
appointed as provided above and accepted appointment in the manner hereinafter
provided, any Certificateholder who has been a bona fide Certificateholder for
at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(g) The successor Trustee shall give notice of the resignation and
removal of the Trustee and appointment of the successor Trustee by mailing
written notice of such event by first-class mail, postage prepaid, to the
Certificateholders as their names and addresses appear in the Register. Each
notice shall include the name of such successor Trustee and the address of its
Corporate Trust Office.
Section 7.10. Acceptance of Appointment by Successor. Every
successor Trustee appointed hereunder shall execute and deliver to the Company,
the Authorized Agents, the Owner Trustees and the Loan Trustees and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on request of the Company or the successor Trustee, such retiring Trustee
shall execute and deliver an instrument transferring to such successor Trustee
all such rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all Trust Property held
by such retiring Trustee hereunder, subject nevertheless to its lien, if any,
provided for in Section 7.07 and the retiring Trustee shall thereupon be
released from further liability hereunder. Upon request of any such successor
Trustee, the Company, the retiring Trustee and such successor Trustee shall
execute and deliver any and all instruments containing such provisions as shall
be necessary or desirable to transfer and confirm to, and for more fully and
certainly vesting in, such successor Trustee all such rights, powers and trusts.
No institution shall accept its appointment as a Trustee hereunder
unless at the time of such acceptance such institution shall be qualified and
eligible under this Article VII.
Section 7.11. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding
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to all or substantially all of the corporate trust business of the Trustee,
shall be the successor of the Trustee hereunder, provided such corporation shall
be otherwise qualified and eligible under this Article, without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
In case any Certificates shall have been executed or authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such execution or
authentication and deliver the Certificates so executed or authenticated with
the same effect as if such successor Trustee had itself executed or
authenticated such Certificates.
Section 7.12. Maintenance of Agencies. (a) There shall at all times
be maintained an office or agency where Certificates may be presented or
surrendered for registration of transfer or for exchange, and for payment
thereof and where notices and demands to or upon the Trustee in respect of such
Certificates may be served. Presentations and demands may be made and notices
may be served at the Corporate Trust Office of the Trustee.
(b) There shall at all times be a Registrar and a Paying Agent
hereunder with respect to the Certificates. Each such Authorized Agent shall be
a bank or trust company, shall be a corporation organized and doing business
under the laws of the United States or any state, with a combined capital and
surplus of at least $75,000,000, or a corporation having a combined capital and
surplus in excess of $5,000,000, the obligations of which are guaranteed by a
corporation organized and doing business under the laws of the United States or
any state, with a combined capital and surplus of at least $75,000,000, and
shall be authorized under such laws to exercise corporate trust powers, subject
to supervision by federal or state authorities. The Trustee shall initially be
the Paying Agent and, as provided in Section 3.04, Registrar hereunder with
respect to the Certificates. Each Registrar shall furnish to the Trustee, at
stated intervals of not more than six months, and at such other times as the
Trustee may request in writing, a copy of the Register maintained by such
Registrar.
(c) Any corporation into which any Authorized Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authorized Agent shall
be a party, or any corporation succeeding to the corporate trust business of any
Authorized Agent, shall be the successor of such Authorized Agent hereunder, if
such successor corporation is otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part of the parties
hereto or such Authorized Agent or such successor corporation.
(d) Any Authorized Agent may at any time resign by giving written
notice of resignation to the Trustee, the Company, the Owner Trustees and the
Loan Trustees. The Company may, and at the request of the Trustee shall, at any
time terminate the agency of any Authorized Agent by giving written notice of
termination to such Authorized Agent and to the Trustee. Upon the resignation or
termination of
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an Authorized Agent or in case at any time any such Authorized Agent shall cease
to be eligible under this Section (when, in either case, no other Authorized
Agent performing the functions of such Authorized Agent shall have been
appointed), the Company shall promptly appoint one or more qualified successor
Authorized Agents, reasonably satisfactory to the Trustee, to perform the
functions of the Authorized Agent which has resigned or whose agency has been
terminated or who shall have ceased to be eligible under this Section. The
Company shall give written notice of any such appointment made by it to the
Trustee, the Owner Trustees and the Loan Trustees; and in each case the Trustee
shall mail notice of such appointment to all Certificateholders as their names
and addresses appear on the Register.
(e) The Company agrees to pay, or cause to be paid, from time to
time to each Authorized Agent reasonable compensation for its services and to
reimburse it for its reasonable expenses.
Section 7.13. Money for Certificate Payments to Be Held in Trust.
All moneys deposited with any Paying Agent for the purpose of any payment on
Certificates shall be deposited and held in trust for the benefit of the
Certificateholders entitled to such payment, subject to the provisions of this
Section. Moneys so deposited and held in trust shall constitute a separate trust
fund for the benefit of the Certificateholders with respect to which such money
was deposited.
The Trustee may at any time, for the purpose of obtaining the
satisfaction and discharge of this Agreement or for any other purpose, direct
any Paying Agent to pay to the Trustee all sums held in trust by such Paying
Agent, such sums to be held by the Trustee upon the same trusts as those upon
which such sums were held by such Paying Agent; and, upon such payment by any
Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.
Section 7.14. Registration of Equipment Notes in Name of
Subordination Agent. The Trustee agrees that all Equipment Notes to be purchased
by the Trust shall be issued in the name of the Subordination Agent or its
nominee and held by the Subordination Agent in trust for the benefit of the
Certificateholders, or, if not so held, the Subordination Agent or its nominee
shall be reflected as the owner of such Equipment Notes in the register of the
issuer of such Equipment Notes.
Section 7.15. Representations and Warranties of Trustee. The Trustee
hereby represents and warrants that:
(a) the Trustee has full power, authority and legal right to receive
the Trust Property assigned by the Related Trustee, assume the obligations
under, and perform, the Assignment and Assumption Agreement, this
Agreement, the Intercreditor Agreement, the Escrow Agreement and the Note
Documents and has taken all necessary action to authorize such receipt,
assumption and performance by it of this Agreement, the Intercreditor
Agreement, the Escrow Agreement and the Note Documents to which it is a
party;
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(b) the receipt of the Trust Property under the Assignment and
Assumption Agreement and the performance by the Trustee of the Assignment
and Assumption Agreement, this Agreement, the Intercreditor Agreement, the
Escrow Agreement and the Note Documents (i) will not violate any provision
of any United States law or Maryland law or any order, writ, judgement, or
decree of any court, arbitrator or governmental authority of the United
States or the State of Maryland applicable to the Trustee or any of its
assets, (ii) will not violate any provision of the articles or by-laws of
the Trustee, or (iii) will not violate any provision of, or constitute,
with or without notice or lapse of time, a default under, or result in the
creation or imposition of any lien on any properties included in the Trust
Property pursuant to the provisions of any mortgage, indenture, contract,
agreement or other undertaking to which it is a party, which violation,
default or lien could reasonably be expected to have an adverse effect on
the Trustee's performance or ability to perform its duties hereunder or
thereunder or on the transactions contemplated herein or therein;
(c) the receipt of the Trust Property under the Assignment and
Assumption Agreement and the performance by the Trustee of the Assignment
and Assumption Agreement, this Agreement, the Intercreditor Agreement, the
Escrow Agreement and the Note Documents will not require the
authorization, consent, or approval of, the giving of notice to, the
filing or registration with, or the taking of any other action in respect
of, any governmental authority or agency of the United States or the state
of the United Sates where it is located regulating the banking and
corporate trust activities of the Trustee; and
(d) the Assignment and Assumption Agreement has been duly executed
and delivered by the Trustee and this Agreement, the Intercreditor
Agreement, the Escrow Agreement and the Note Documents have been, or will
be, as applicable, duly executed and delivered by the Trustee and
constitute, or will constitute, as applicable, the legal, valid and
binding agreements of the Trustee, enforceable against it in accordance
with their respective terms; provided, however, that enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally and
(ii) general principles of equity.
Section 7.16. Withholding Taxes; Information Reporting. (a) The
Trustee, as trustee of the grantor trust created by this Agreement, shall
exclude and withhold from each distribution of principal, premium, if any, and
interest and other amounts due under this Agreement or under the Certificates
any and all withholding taxes applicable thereto as required by law. The Trustee
agrees to act as such withholding agent and, in connection therewith, whenever
any present or future taxes or similar charges are required to be withheld with
respect to any amounts payable in respect of the Certificates, to withhold such
amounts and timely pay the same to the appropriate authority in the name of and
on behalf of the Certificateholders, that it will file any necessary withholding
tax returns or statements when due, and that, as promptly as possible after the
payment thereof, it will deliver to each such
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Certificateholder appropriate documentation showing the payment thereof,
together with such additional documentary evidence as such Certificateholders
may reasonably request from time to time. The Trustee agrees to file any other
information reports as may be required to be filed by it under United States
law.
(b) The Trustee may satisfy certain of its obligations with respect
to this Agreement by retaining, at the expense of the Company, a firm of
independent public accountants (the "Accountants") which shall (i) be
responsible for all tax filing requirements and (ii) perform the obligations of
the Trustee in respect of tax filing requirements. The Trustee shall be deemed
to have discharged its tax filing obligations under this Agreement upon its
retention of the Accountants, and, if the Trustee shall have selected in the
Accountants in good faith and without gross negligence, the Trustee shall not
have any liability with respect to the default or misconduct of the Accountants.
(c) The Trustee, at the request (and expense) of the Company, will
make such United States federal income tax elections as may be necessary to
prevent the Trust from being classified for federal income tax purposes as an
association taxable as a corporation.
Section 7.17. Trustee's Liens. The Trustee in its individual
capacity agrees that it will at its own cost and expense promptly take any
action as may be necessary to duly discharge and satisfy in full any mortgage,
pledge, lien, charge, encumbrance, security interest or claim ("Trustee's
Liens") on or with respect to the Trust Property which is attributable to the
Trustee either (i) in its individual capacity and which is unrelated to the
transactions contemplated by this Agreement, the Intercreditor Agreement, the
Note Purchase Agreement or the Note Documents, or (ii) as Trustee hereunder or
in its individual capacity and which arises out of acts or omissions which are
not contemplated by this Agreement.
Section 7.18. Preferential Collection of Claims. The Trustee shall
comply with Section 311(a) of the Trust Indenture Act, excluding any creditor
relationship listed in Section 311(b) of the Trust Indenture Act. If the Trustee
shall resign or be removed as Trustee, it shall be subject to Section 311(a) of
the Trust Indenture Act to the extent provided therein.
ARTICLE VIII
CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE
Section 8.01. The Company to Furnish Trustee with Names and
Addresses of Certificateholders. The Company will furnish or cause to be
furnished to the Trustee within 15 days after each Record Date with respect to a
Scheduled Payment, and at such other times as the Trustee may request in writing
within 30 days after receipt by the Company of any such request, a list, in such
form as the Trustee
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may reasonably require, of all information in the possession or control of the
Company as to the names and addresses of the Certificateholders, in each case as
of a date not more than 15 days prior to the time such list is furnished;
provided, however, that so long as the Trustee is the sole Registrar, no such
list need be furnished; and provided further, however, that no such list need be
furnished for so long as a copy of the Register is being furnished to the
Trustee pursuant to Section 7.12.
Section 8.02. Preservation of Information; Communications to
Certificateholders. The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Certificateholders contained
in the most recent list furnished to the Trustee as provided in Section 7.12 or
Section 8.01, as the case may be, and the names and addresses of
Certificateholders received by the Trustee in its capacity as Registrar, if so
acting. The Trustee may destroy any list furnished to it as provided in Section
7.12 or Section 8.01, as the case may be, upon receipt of a new list so
furnished.
Section 8.03. Reports by Trustee. Within 60 days after May 15 of
each year commencing with the first full year following the issuance of the
Certificates, the Trustee shall transmit to the Certificateholders, as provided
in Section 313(c) of the Trust Indenture Act, a brief report dated as of such
May 15, if required by Section 313(a) of the Trust Indenture Act.
Section 8.04. Reports by the Company. The Company shall:
(a) file with the Trustee, within 30 days after the Company is
required to file the same with the SEC, copies of the annual reports and
of the information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may from time to time by rules
and regulations prescribe) which the Company is required to file with the
SEC pursuant to section 13 or section 15(d) of the Securities Exchange Act
of 1934, as amended; or, if the Company is not required to file
information, documents or reports pursuant to either of such sections,
then to file with the Trustee and the SEC, in accordance with rules and
regulations prescribed by the SEC, such of the supplementary and periodic
information, documents and reports which may be required pursuant to
section 13 of the Securities Exchange Act of 1934, as amended, in respect
of a security listed and registered on a national securities exchange as
may be prescribed in such rules and regulations;
(b) file with the Trustee and the SEC, in accordance with the rules
and regulations prescribed by the SEC, such additional information,
documents and reports with respect to compliance by the Company with the
conditions and covenants of the Company provided for in this Agreement, as
may be required by such rules and regulations, including, in the case of
annual reports, if required by such rules and regulations, certificates or
opinions of independent public accountants;
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(c) transmit to all Certificateholders, in the manner and to the
extent provided in Section 313(c) of the Trust Indenture Act such
summaries of any information, documents and reports required to be filed
by the Company pursuant to subsections (a) and (b) of this Section 8.04 as
may be required by rules and regulations prescribed by the SEC; and
(d) furnish to the Trustee, not less often than annually, a brief
certificate from the principal executive officer, principal financial
officer or principal accounting officer as to his or her knowledge of the
Company's compliance with all conditions and covenants under this
Agreement (it being understood that for purposes of this paragraph (d),
such compliance shall be determined without regard to any period of grace
or requirement of notice provided under this Agreement).
ARTICLE IX
SUPPLEMENTAL AGREEMENTS
Section 9.01. Supplemental Agreements Without Consent of
Certificateholders. Without the consent of the Certificateholders, the Company
may and the Trustee (subject to Section 9.03) shall, at any time and from time
to time (and at the sole cost and expense of the Company), enter into one or
more agreements supplemental hereto or, if applicable, to the Escrow Agreement,
the Deposit Agreement, the Note Purchase Agreement, the Intercreditor Agreement
or the Liquidity Facility in form and substance satisfactory to the Trustee, for
any of the following purposes:
(1) to evidence the succession of another corporation to the Company
and the assumption by any such successor of the covenants of the Company
herein contained or in the Note Purchase Agreement; or
(2) to add to the covenants of the Company for the benefit of the
Certificateholders, or to surrender any right or power in this Agreement
or in the Note Purchase Agreement conferred upon the Company; or
(3) to correct or supplement any provision in this Agreement, the
Escrow Agreement, the Deposit Agreement, the Note Purchase Agreement, the
Intercreditor Agreement or the Liquidity Facility which may be defective
or inconsistent with any other provision of this Agreement, the Deposit
Agreement, the Escrow Agreement, the Note Purchase Agreement, the
Intercreditor Agreement or any Liquidity Facility, as applicable, or to
cure any ambiguity or to modify any other provisions with respect to
matters or questions arising under this Agreement, the Escrow Agreement,
the Note Purchase Agreement, the Deposit Agreement, the Intercreditor
Agreement or the Liquidity Facility, provided that any such action shall
not materially adversely affect the interests of the Certificateholders;
or
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(4) as provided in the Intercreditor Agreement, to give effect to or
provide for a Replacement Liquidity Facility or to comply with any
requirement of the Commission, any applicable law, rules or regulations of
any exchange or quotation system on which the Certificates are listed, or
any regulatory body;
(5) to modify, eliminate or add to the provisions of this Agreement,
the Deposit Agreement, the Escrow Agreement, the Intercreditor Agreement,
the Note Purchase Agreement or the Liquidity Facility to such extent as
shall be necessary to qualify or continue the qualification of this
Agreement under the Trust Indenture Act, or any similar federal statute
enacted after the execution of this Agreement, and to add to this
Agreement, the Deposit Agreement, the Escrow Agreement, the Intercreditor
Agreement, the Note Purchase Agreement or the Liquidity Facility such
provisions as may be expressly permitted by the Trust Indenture Act; and
(6) to evidence and provide for the acceptance of appointment under
this Agreement, the Deposit Agreement, the Escrow Agreement, the
Intercreditor Agreement, the Note Purchase Agreement or the Liquidity
Facility of a successor Trustee and to add or change any of the provisions
of this Agreement, the Deposit Agreement, the Escrow Agreement, the
Intercreditor Agreement, the Note Purchase Agreement or the Liquidity
Facility as shall be necessary to provide for or facilitate the
administration of the Trust under this Agreement by more than one Trustee,
provided that in each case, such modification or supplement does not
adversely affect the status of the Trust as a grantor trust under Subpart
E, Part I of Subchapter J of Chapter 1 of Subtitle A of the Code for U.S.
federal income tax purposes.
Section 9.02. Supplemental Agreements with Consent of
Certificateholders. With the consent of the Certificateholders holding
Certificates evidencing Fractional Undivided Interests aggregating not less than
a majority in interest in the Trust, by Act of said Certificateholders delivered
to the Company and the Trustee, the Company may, and the Trustee (subject to
Section 9.03) shall, at the sole cost and expense of the Company, enter into an
agreement or agreements supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement, the Deposit Agreement, the Escrow Agreement, the Intercreditor
Agreement, the Liquidity Facility or the Note Purchase Agreement to the extent
applicable to such Certificateholders or of modifying in any manner the rights
and obligations of such Certificateholders under this Agreement, the Deposit
Agreement, the Escrow Agreement, the Intercreditor Agreement, the Liquidity
Facility or the Note Purchase Agreement; provided, however, that no such
supplemental agreement shall, without the consent of the Certificateholder of
each Outstanding Certificate affected thereby:
(1) reduce in any manner the amount of, or delay the timing of, any
receipt by the Trustee (or, with respect to the Deposits, the
Receiptholders) of
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payments on the Deposits or Equipment Notes held in the Trust or
distributions that are required to be made herein on any Certificate, or
change any date of payment of any Certificate, or change the place of
payment where, or the coin or currency in which, any Certificate is
payable, or impair the right to institute suit for the enforcement of any
such payment or distribution on or after the Regular Distribution Date or
Special Distribution Date applicable thereto; or
(2) permit the disposition of any Equipment Note included in the
Trust Property except as permitted by this Agreement, or otherwise deprive
such Certificateholder of the benefit of the ownership of the Equipment
Notes in the Trust; or
(3) alter the priority of distributions specified in the
Intercreditor Agreement in a manner materially adverse to the interests of
the Certificateholders;
(4) modify any of the provisions of this Section 9.02 or Section
6.05, except to increase any such percentage or to provide that certain
other provisions of this Agreement cannot be modified or waived without
the consent of the Certificateholder of each Certificate affected thereby;
(5) modify any of the provisions relating to the rights of the
Certificateholders in respect of the waiver of Events of Default or
receipt of payment; or
(6) adversely affect the status of this Trust as a grantor trust
under Subpart E, Part I of Subchapter J of Chapter 1 of Subtitle A of the
Code for U.S. federal income tax purposes.
It shall not be necessary for any Act of Certificateholders under
this Section to approve the particular form of any proposed supplemental
agreement, but it shall be sufficient if such Act shall approve the substance
thereof.
Section 9.03. Documents Affecting Immunity or Indemnity. If in the
opinion of the Trustee any document required to be executed by it pursuant to
the terms of Section 9.01 or 9.02 affects any interest, right, duty, immunity or
indemnity in favor of the Trustee under this Agreement, the Trustee may in its
discretion decline to execute such document.
Section 9.04. Execution of Supplemental Agreements. In executing, or
accepting the additional trusts created by, any supplemental agreement permitted
by this Article or the modifications thereby of the trusts created by this
Agreement, the Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental agreement is authorized or permitted by this Agreement.
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Section 9.05. Effect of Supplemental Agreements. Upon the execution
of any agreement supplemental to this Agreement under this Article, this
Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Agreement for all purposes; and every
Certificateholder theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
Section 9.06. Conformity with Trust Indenture Act. Every
supplemental agreement executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.
Section 9.07. Reference in Certificates to Supplemental Agreements.
Certificates authenticated and delivered after the execution of any supplemental
agreement pursuant to this Article may bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental agreement; and, in
such case, suitable notation may be made upon Outstanding Certificates after
proper presentation and demand.
ARTICLE X
AMENDMENTS TO INDENTURES AND FINANCING DOCUMENTS
Section 10.01 Amendments and Supplement to Indentures and Other Note
Documents. In the event that the Trustee, as holder (or beneficial owner through
the Subordination Agent) of any Equipment Note in trust for the benefit of the
Certificateholders or as Controlling Party, receives a request for a consent to
any amendment, modification, waiver or supplement under any Indenture or other
Note Document or other related document, the Trustee shall forthwith send a
notice of such proposed amendment, modification, waiver or supplement to each
Certificateholder registered on the Register as of the date of such notice. The
Trustee shall request from the Certificateholders a Direction as to (a) whether
or not to take or refrain from taking (or to direct the Subordination Agent to
take or refrain from taking) any action which a holder of such Equipment Note or
the Controlling Party has the option to direct, (b) whether or not to give or
execute (or to direct the Subordination Agent to give or execute) any waivers,
consents, amendments, modifications or supplements as a holder of such Equipment
Note or as Controlling Party and (c) how to vote or direct the Subordination
Agent to vote any Equipment Note if a vote has been called for with respect
thereto. Provided such a request for Certificateholder Direction shall have been
made, in directing any action or casting any vote or giving any consent as the
holder of any Equipment Note (or in directing the Subordination Agent in any of
the foregoing), (i) other than as Controlling Party, the Trustee shall vote for
or give consent to any such action with respect to such Equipment Note in the
same proportion as that of (x) the aggregate face amount of all Certificates
actually voted in favor of or for giving consent to such action by such
direction of Certificateholders to (y) the aggregate face amount of all
outstanding Certificates of the Trust and (ii) as the Controlling Party, the
Trustee shall vote as directed in such Certificateholder direction
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by the Certificateholders evidencing fractional undivided interests aggregating
not less than a majority in interest in the Trust. For purposes of the
immediately preceding sentence, a Certificate shall have been "actually voted"
if the Holder of such Certificate has delivered to the Trustee an instrument
evidencing such Holder's consent to such Direction prior to two Business Days
before the Trustee directs such action or casts such vote or gives such consent.
Notwithstanding the foregoing, but subject to Section 6.04 and the Intercreditor
Agreement, the Trustee may, in its own discretion and at its own direction,
consent and notify the relevant Loan Trustee of such consent (or direct the
Subordination Agent to consent and notify the relevant Loan Trustee of such
consent) to any amendment, modification, waiver or supplement under the relevant
Indenture or any other Note Document or other related document, if an Event of
Default hereunder shall have occurred and be continuing, or if such amendment,
modification or waiver will not materially adversely affect the interests of the
Certificateholders.
ARTICLE XI
TERMINATION OF TRUST
Section 11.01. Termination of the Trust. The respective obligations
and responsibilities of the Company and the Trustee with respect to the Trust
shall terminate upon distribution to all Certificateholders and the Trustee of
all amounts required to be distributed to them pursuant to this Agreement and
the disposition of all property held as part of the Trust Property; provided,
however, that in no event shall the Trust continue beyond one hundred ten (110)
years following the date of the execution of this Agreement.
Notice of any termination, specifying the Distribution Date upon
which the Certificateholders may surrender their Certificates to the Trustee for
payment of the final distribution and cancellation, shall be mailed promptly by
the Trustee to Certificateholders not earlier than the 60th day and not later
than the 15th day next preceding such final Distribution Date specifying (A) the
Distribution Date upon which the proposed final payment of the Certificates will
be made upon presentation and surrender of Certificates at the office or agency
of the Trustee therein specified, (B) the amount of any such proposed final
payment, and (c) that the Record Date otherwise applicable to such Distribution
Date is not applicable, payments being made only upon presentation and surrender
of the Certificates at the office or agency of the Trustee therein specified,
(B) the amount of any such proposed final payment, and (c) that the Record Date
otherwise applicable to such Distribution Date is not applicable, payments being
made only upon presentation and surrender of the Certificates at the office or
agency of the Trustee therein specified. The Trustee shall give such notice to
the Registrar at the time such notice is given to Certificateholders. Upon
presentation and surrender of the Certificates in accordance with such notice,
the Trustee shall cause to be distributed to Certificateholders such final
payments.
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In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the date specified
in the above-mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. No
additional interest shall accrue on the Certificates after the Regular
Distribution Date (or Special Distribution Date, as the case may be) specified
in the first written notice. In the event that any money held by the Trustee for
the payment of distributions on the Certificates shall remain unclaimed for two
years (or such lesser time as the Trustee shall be satisfied, after sixty days'
notice from the Company, is one month prior to the escheat period provided under
applicable law) after the final distribution date with respect thereto, the
Trustee shall pay to each Loan Trustee the appropriate amount of money relating
to such Loan Trustee and shall give written notice thereof to the related Owner
Trustees, the Owner Participants and the Company.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Limitation on Rights of Certificateholders. The death
or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise affect the rights, obligations, and liabilities of the parties
hereto or any of them.
Section 12.02. Certificates Nonassessable and Fully Paid. Except as
set forth in the last sentence of this Section 12.02, Certificateholders shall
not be personally liable for obligations of the Trust, the Fractional Undivided
Interests represented by the Certificates shall be nonassessable for any losses
or expenses of the Trust or for any reason whatsoever, and Certificates, upon
authentication thereof by the Trustee pursuant to Section 3.03, are and shall be
deemed fully paid. No Certificateholder shall have any right (except as
expressly provided herein) to vote or in any manner otherwise control the
operation and management of the Trust Property, the Trust, or the obligations of
the parties hereto, nor shall anything set forth herein, or contained in the
terms of the Certificates, be construed so as to constitute the
Certificateholders from time to time as partners or members of an association.
Neither the existence of the Trust nor any provision herein is intended to or
shall limit the liability the Certificateholders would otherwise incur if the
Certificateholders owned Trust Property as co-owners, or incurred any
obligations of the Trust, directly rather than through the Trust.
Section 12.03. Notices. (a) Unless otherwise specifically provided
herein, all notices required under the terms and provisions of this Agreement
shall be in English and in writing, and any such notice may be given by United
States mail, courier
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service or telecopy, and any such notice shall be effective when delivered or
received or, if mailed, three days after deposit in the United States mail with
proper postage for ordinary mail prepaid,
if to the Company, to:
Midway Airlines Corporation
000 X. Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx Xxxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
if to the Trustee, to:
The First National Bank of Maryland
00 Xxxxx Xxxxxxx Xxxxxx
Mail Code 101-591
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Department
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
(b) The Company or the Trustee, by notice to the other, may
designate additional or different addresses for subsequent notices or
communications.
(c) Any notice or communication to Certificateholders shall be
mailed by first-class mail to the addresses for Certificateholders shown on the
Register kept by the Registrar. Failure so to mail a notice or communication or
any defect in such notice or communication shall not affect its sufficiency with
respect to other Certificateholders.
(d) If a notice or communication is mailed in the manner provided
above within the time prescribed, it is conclusively presumed to have been duly
given, whether or not the addressee receives it.
(e) If the Company mails a notice or communication to the
Certificateholders, it shall mail a copy to the Trustee and to the Paying Agent
at the same time.
(f) Notwithstanding the foregoing, all communications or notices to
the Trustee shall be deemed to be given only when received by a Responsible
Officer of the Trustee.
-59-
(g) The Trustee shall promptly furnish the Company with a copy of
any demand, notice or written communication received by the Trustee hereunder
from any Certificateholder, Owner Trustee or Loan Trustee.
Section 12.04. Governing Law. THIS AGREEMENT AND THE CERTIFICATES
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
Section 12.05. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions, or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or the Trust, or of the
Certificates or the rights of the Certificateholders thereof.
Section 12.06. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
Section 12.07. Successors and Assigns. All covenants, agreements,
representations and warranties in this Agreement by the Trustee and the Company
shall bind and, to the extent permitted hereby, shall inure to the benefit of
and be enforceable by their respective successors and assigns, whether so
expressed or not.
Section 12.08. Benefits of Agreement. Nothing in this Agreement or
in the Certificates, express or implied, shall give to any Person, other than
the parties hereto and their successors hereunder, and the Certificateholders,
any benefit or any legal or equitable right, remedy or claim under this
Agreement.
Section 12.09. Legal Holidays. In any case where any Regular
Distribution Date or Special Distribution Date relating to any Certificate shall
not be a Business Day, then (notwithstanding any other provision of this
Agreement) payment need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on such
Regular Distribution Date or Special Distribution Date, and no interest shall
accrue during the intervening period.
Section 12.10. Counterparts. For the purpose of facilitating the
execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.
Section 12.11. Communication by Certificateholders with Other
Certificateholders. Certificateholders may communicate with other
Certificateholders with respect to their rights under this Agreement or the
Certificates pursuant to
-60-
Section 312(b) of the Trust Indenture Act. The Company, the Trustee and any and
all other persons benefitted by this Agreement shall have the protection
afforded by Section 312(c) of the Trust Indenture Act.
Section 12.12. Intention of Parties. The parties hereto intend that
the Trust be classified for U.S. federal income tax purposes as a grantor trust
under Subpart E, Part I of Subchapter J of the Internal Revenue Code of 1986, as
amended, and not as a trust or association taxable as a corporation or as a
partnership. Each Certificateholder, by its acceptance of its Certificate or a
beneficial interest therein, agrees to treat the Trust as a grantor trust for
all U.S. federal, state and local income tax purposes. The powers granted and
obligations undertaken pursuant to this Agreement shall be so construed so as to
further such intent.
Section 12.13. Trust Indenture Act Controls. Upon the qualification
of this Agreement under the Trust Indenture Act, this Agreement shall be subject
to the provisions of the Trust Indenture Act and shall, to the extent
applicable, be governed by such provisions. If any provision of this Agreement
limits, qualifies or conflicts with another provision which is required to be
included in this Agreement by the Trust Indenture Act, the required provision
shall control.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized as of the
day and year first written above.
MIDWAY AIRLINES CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Senior Vice President
General Counsel
THE FIRST NATIONAL BANK OF
MARYLAND, as Trustee
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxx X. Xxxxx
Title: Assistant Vice President
-61-
Exhibit A
FORM OF CERTIFICATE
REGISTERED
No. ______________
[THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, ANY PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT
A U.S. PERSON AND IS ACQUIRING THIS CERTIFICATE IN AN OFFSHORE TRANSACTION
IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT; (2) AGREES THAT
IT WILL NOT WITHIN TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF
THIS CERTIFICATE OR THE LAST DATE ON WHICH THIS CERTIFICATE WAS HELD BY
MIDWAY AIRLINES CORPORATION ("MIDWAY") OR ANY AFFILIATE OF MIDWAY, RESELL
OR OTHERWISE TRANSFER THIS CERTIFICATE EXCEPT (A) TO MIDWAY OR ANY
SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
(C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR
ACQUIRING $100,000 OR MORE AGGREGATE PRINCIPAL AMOUNT OF SUCH CERTIFICATE
THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS CERTIFICATE (THE FORM OF WHICH LETTER CAN
BE OBTAINED FROM THE TRUSTEE), (D) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
A-1
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT; AND (3) AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THIS CERTIFICATE IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS CERTIFICATE WITHIN TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE OF THIS CERTIFICATE OR THE LAST DATE ON WHICH THIS
CERTIFICATE WAS HELD BY MIDWAY OR ANY AFFILIATE OF MIDWAY, THE HOLDER MUST
CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE
MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF THE
PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER
MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND MIDWAY SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO
THEM BY REGULATION S UNDER THE SECURITIES ACT. THE PASS THROUGH TRUST
AGREEMENT CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER
ANY TRANSFER OF THIS CERTIFICATE IN VIOLATION OF THE FOREGOING
RESTRICTIONS.]*
BY ITS ACQUISITION HEREOF, THE HOLDER REPRESENTS FOR THE BENEFIT OF MIDWAY
AIRLINES CORPORATION AND EACH OWNER PARTICIPANT THAT (A) IT IS NOT A PLAN
TRANSFEREE (AS DEFINED IN THE PASS THROUGH TRUST AGREEMENT) OR (B) ONE OR
MORE PROHIBITED TRANSACTION STATUTORY OR ADMINISTRATIVE EXEMPTIONS APPLIES
SUCH THAT THE USE OF PLAN ASSETS TO PURCHASE AND HOLD THIS PASS THROUGH
CERTIFICATE WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER
ERISA OR SECTION 4975 OF THE CODE. THE PASS THROUGH TRUST AGREEMENT
CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS CERTIFICATE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
----------
* Not to be included on the face of the Permanent Offshore Global
Certificate.
A-2
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IN EXCHANGE FOR THIS CERTIFICATE IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
CERTIFICATE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTIONS 3.05 AND 3.06 OF THE PASS THROUGH TRUST
AGREEMENT REFERRED TO HEREIN.]*
----------
* To be included on the face of each Global Certificate.
A-3
[GLOBAL CERTIFICATE]*
MIDWAY AIRLINES 1998-1B-S PASS THROUGH TRUST
8.14% Midway Airlines [Initial/Exchange] Pass Through Certificate
Series 1998-1B-S
Final Expected Distribution Date: January 2, 2013
evidencing a fractional undivided interest in a trust, the property of which
includes certain equipment notes each secured by an Aircraft leased to or owned
by Midway Airlines Corporation.
$____________ Fractional Undivided Interest
representing ._____% of the Trust per $1,000 face amount
THIS CERTIFIES THAT ____________, for value received, is the
registered owner of a $_________ (_____________ dollars) Fractional Undivided
Interest in Midway Airlines 1998-1B-S Pass Through Trust (the "Trust") created
pursuant to a Pass Through Trust Agreement, dated as of August 13, 1998 (the
"Agreement"), between The First National Bank of Maryland (the "Trustee") and
Midway Airlines Corporation, a corporation incorporated under Delaware law (the
"Company"), a summary of certain of the pertinent provisions of which is set
forth below. To the extent not otherwise defined herein, the capitalized terms
used herein have the meanings assigned to them in the Agreement. This
Certificate is one of the duly authorized Certificates designated as "8.14%
Midway Airlines [Initial/Exchange] Pass Through Certificates Series 1998-1B-S"
(herein called the "Certificates"). This Certificate is issued under and is
subject to the terms, provisions, and conditions of the Agreement. By virtue of
its acceptance hereof the Certificateholder of this Certificate assents to and
agrees to be bound by the provisions of the Agreement and the Intercreditor
Agreement. The property of the Trust includes certain Equipment Notes and all
rights of the Trust to receive payments under the Intercreditor Agreement and
the Liquidity Facility (the "Trust Property"). Each issue of the Equipment Notes
is secured by, among other things, a security interest in the Aircraft leased to
or owned by the Company.
The Certificates represent fractional undivided interests in the
Trust and the Trust Property, and have no rights, benefits or interest in
respect of any assets or property other than the Trust Property.
Subject to and in accordance with the terms of the Agreement and the
Intercreditor Agreement, from and to the extent of funds then available to the
Trustee,
----------
* To be included on the face of each Global Certificate.
A-4
there will be distributed on each January 2 and July 2 (a "Regular Distribution
Date"), commencing on January 2, 1999, to the Person in whose name this
Certificate is registered at the close of business on the 15th day preceding the
Regular Distribution Date, an amount in respect of the Scheduled Payments on the
Equipment Notes due on such Regular Distribution Date, the receipt of which has
been confirmed by the Trustee, equal to the product of the percentage interest
in the Trust evidenced by this Certificate and an amount equal to the sum of
such Scheduled Payments. Subject to and in accordance with the terms of the
Agreement and the Intercreditor Agreement, in the event that Special Payments on
the Equipment Notes are received by the Trustee, from funds then available to
the Trustee, there shall be distributed on the applicable Special Distribution
Date, to the Person in whose name this Certificate is registered at the close of
business on the 15th day preceding the Special Distribution Date, an amount in
respect of such Special Payments on the Equipment Notes, the receipt of which
has been confirmed by the Trustee, equal to the product of the percentage
interest in the Trust evidenced by this Certificate and an amount equal to the
sum of such Special Payments so received. If a Regular Distribution Date or
Special Distribution Date is not a Business Day, distribution shall be made on
the immediately following Business Day with the same force and effect as if made
on such Regular Distribution Date or Special Distribution Date and no interest
shall accrue during the intervening period. The Trustee shall mail notice of
each Special Payment and the Special Distribution Date therefor to the
Certificateholder of this Certificate.
Except as otherwise provided in the Agreement and notwithstanding
the above, the final distribution on this Certificate will be made after notice
mailed by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency of the
Trustee specified in such notice.
THE AGREEMENT AND THIS CERTIFICATE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Reference is hereby made to the further provisions of this
Certificate set forth in the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
A-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: ____________ __, 0000 XXXXXX XXXXXXXX
0000-0X-X XXXX THROUGH TRUST
By: The First National Bank of
Maryland, as Trustee
By:_______________________________
Name:
Title:
A-6
[FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Certificates referred
to in the within-mentioned Agreement.
The First National Bank of Maryland,
as Trustee
By:_______________________________
Authorized Officer
A-7
[REVERSE OF CERTIFICATE]
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company or the Trustee or any
of their affiliates. The Certificates are limited in right or payment, all as
more specifically set forth on the face hereof and in the Agreement. All
payments or distributions made to Certificateholders under the Agreement shall
be made only from the Trust Property and only to the extent that the Trustee
shall have sufficient income or proceeds from the Trust Property to make such
payments in accordance with the terms of the Agreement. Each Certificateholder
of this Certificate, by its acceptance hereof, agrees that it will look solely
to the income and proceeds from the Trust Property to the extent available for
distribution to such Certificateholder as provided in the Agreement. This
Certificate does not purport to summarize the Agreement and reference is made to
the Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby. A copy of the Agreement may
be examined during normal business hours at the principal office of the Trustee,
and at such other places, if any, designated by the Trustee, by any
Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust. Any such consent by the
Certificateholder of this Certificate shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Certificateholders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Trustee in its capacity as Registrar, or
by any successor Registrar, in the Borough of Manhattan, the City of New York,
duly endorsed or accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Registrar duly executed by the
Certificateholder hereof or such Certificateholder's attorney duly authorized in
writing, and thereupon one or more new Certificates of authorized denominations
evidencing the same aggregate Fractional Undivided Interest in the Trust will be
issued to the designated transferee or transferees.
A-8
The Certificates are issuable only as registered Certificates
without coupons in minimum denominations of $100,000 Fractional Undivided
Interest and integral multiples of $1,000 in excess thereof. As provided in the
Agreement and subject to certain limitations therein set forth, the Certificates
are exchangeable for new Certificates of authorized denominations evidencing the
same aggregate Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee shall require payment by the Holder of a sum
sufficient to cover any tax or governmental charge payable in connection
therewith.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Trustee, the Registrar, nor
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and
the Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement and the disposition of all property held as part of the Trust
Property.
A-9
FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
__________________________
__________________________
please print or typewrite name and address including zip code of assignee
__________________________
the within Certificate and all rights thereunder, hereby irrevocably
constituting and appointing
__________________________
attorney to transfer said Certificate on the books of the Trustee with full
power of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL CERTIFICATES
EXCEPT PERMANENT OFFSHORE GLOBAL AND
OFFSHORE PHYSICAL CERTIFICATES]
In connection with any transfer of this Certificate occurring prior
to __________, the undersigned confirms that without utilizing any general
solicitation or general advertising that:
[Check One]
[ ] (a) this Certificate is being transferred in compliance with the
exemption from registration under the Securities Act of 1933, as
amended, provided by Rule 144A thereunder.
or
[ ] (b) this Certificate is being transferred other than in accordance
with (a) above and documents are being furnished that comply with
the conditions of transfer set forth in this Certificate and the
Agreement.
A-10
If neither of the foregoing boxes is checked, the Trustee or other Registrar
shall not be obligated to register this Certificate in the name of any Person
other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in Section 3.06 of the Agreement
shall have been satisfied.
Date: [Name of Transferor]
-------------- ----------------------------------------
NOTE: The signature must correspond with
the name as written upon the face of the
within-mentioned instrument in every
particular, without alteration or any
change whatsoever.
Signature Guarantee: _______________
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Certificate for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated: ________________
______________________________________
NOTE: To be executed by an executive
officer.
A-11
Exhibit B
FORM OF CERTIFICATE FOR UNLEGENDED CERTIFICATES
[Date]
[Name and address of Trustee]
Attention: Corporate Trust Department
Re: Midway Airlines 1998-1A-O Pass Through Trust (the "Trust"),
8.14% Midway Airlines Pass Through Certificates Series
1998-1B-S (the "Certificates")
Dear Sirs:
This letter relates to U.S. $__________ Fractional Undivided
Interest of Certificates represented by a Certificate (the "Legended
Certificate") which bears a legend outlining restrictions upon transfer of such
Legended Certificate. Pursuant to Section 3.01 of the Pass Through Trust
Agreement relating to the Certificates dated as of August 13, 1998 (the "Trust
Agreement"), between Midway Airlines Corporation ("Midway") and you, we hereby
certify that we are (or we will hold such securities on behalf of) a person
outside the United States to whom the Certificates could be transferred in
accordance with Rule 904 of Regulation S promulgated under the U.S. Securities
Act of 1933, as amended. Accordingly, you are hereby requested to exchange the
legended certificate for an unlegended certificate representing an identical
principal amount of Certificates, all in the manner provided for in the Trust
Agreement.
You and Midway are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Certificateholder]
By:__________________________
Authorized Signature
B-1
Exhibit C
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS PURSUANT TO REGULATION S
[date]
[Name and address of Trustee]
Attention: Corporate Trust Department
Re: Midway Airlines 1998-1B-S Pass Through Trust (the "Trust"),
8.14% Midway Airlines Pass Through Certificates Series
1998-1B-S (the "Certificates")
Sirs:
In connection with our proposed sale of $_______ Fractional Undivided Interest
of the Certificates, we confirm that such sale has been effected pursuant to and
in accordance with Regulation S under the Securities Act of 1933, as amended,
and, accordingly, we represent that:
(1) the offer of the Certificates was not made to a person in the
United States;
(2) either (a) at the time the buy order was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the United
States or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
C-1
In addition, if the sale is made during a restricted period and the
provisions of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S are applicable
thereto, we confirm that such sale has been made in accordance with the
applicable provisions of Rule 903(c)(3) or Rule 904(c)(1), as the case may be.
You, Midway Airlines Corporation are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a copy hereof to
any interested party in any administrative or legal proceedings or official
inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:_______________________________
Authorized Signature
C-2
Exhibit D
FORM OF CERTIFICATE TO BE
DELIVERED IN CONNECTION WITH
TRANSFERS TO NON-QIB ACCREDITED INVESTORS
[date]
[Name and address of Trustee]
Attention: Corporate Trust Department
Re: Midway Airlines 1998-1B-S Pass Through Trust (the "Trust"),
8.14% Midway Airlines Pass Through Certificates Series
1998-1B-S (the "Certificates")
Dear Sirs:
In connection with our proposed purchase of $_______________
aggregate principal amount of the Certificates, we confirm that:
1. We understand that any subsequent transfer of the Certificates is
subject to certain restrictions and conditions set forth in the Pass
Through Trust Agreement dated as of August 13, 1998 relating to the
Certificates (the "Pass Through Trust Agreement") and the undersigned
agrees to be bound by, and not to resell, pledge or otherwise transfer the
Certificates except in compliance with, such restrictions and conditions
and the Securities Act of 1933, as amended (the "Securities Act").
2. We are purchasing Certificates having an aggregate principal
amount of not less than $100,000 and each account (if any) for which we
are purchasing Certificates is purchasing Certificates having an aggregate
principal amount of not less than $100,000.
3. We understand that the Certificates have not been registered
under the Securities Act, and that the Certificates may not be offered or
sold except as permitted in the following sentence. We agree, on our own
behalf and on behalf of any accounts for which we are acting as
hereinafter stated, that if we should sell any Certificate, we will do so
only (A) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (B) to an
institutional "accredited investor" (as defined below) that, prior to such
transfer, furnishes to you and Midway Airlines Corporation a signed letter
substantially in the form of this letter, (C) outside the United States in
D-1
accordance with Rule 904 of Regulation S under the Securities Act, (D)
pursuant to the exemption from registration provided by Rule 144 under the
Securities Act, or (E) pursuant to an effective registration statement
under the Securities Act, and we further agree to provide to any person
purchasing any of the Certificates from us a notice advising such
purchaser that resales of the Notes are restricted as stated herein. We
further understand that the Certificates purchased by us will bear a
legend to the foregoing effect.
4. We understand that, on any proposed resale of any Certificates,
we will be required to furnish to you, Midway Airlines Corporation
("Midway") such certifications, legal opinions and other information as
you, Midway may reasonably require to confirm that the proposed sale
complies with the foregoing restrictions. We further understand that the
Certificates purchased by us will bear a legend to the foregoing effect.
5. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of our investment in the
Certificates and we and any accounts for which we are acting are each able
to bear the economic risk of our or its investment.
6. We are acquiring the Certificates purchased by us for our own
account or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment
discretion.
You and Midway are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
Very truly yours,
[Name of Transferor]
By:______________________________
Authorized Signature
D-2
