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DEPOSIT AGREEMENT
(Class D)
Dated as of August 13, 1998
between
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION
as Escrow Agent
and
FIRST UNION NATIONAL BANK
as Depositary
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DEPOSIT AGREEMENT (Class D) dated as of August 13, 1998 (as amended,
modified or supplemented from time to time, this "Agreement") between FIRST
UNION TRUST COMPANY, NATIONAL ASSOCIATION, as Escrow Agent under the Escrow and
Paying Agent Agreement referred to below (in such capacity, together with its
successors in such capacity, the "Escrow Agent"), and FIRST UNION NATIONAL BANK,
as depositary bank (the "Depositary").
In consideration of the obligations contained herein, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
SECTION 1.1 Acceptance of Depositary. The Depositary hereby agrees
to act as depositary bank as provided herein and in connection therewith to
accept all amounts to be delivered to or held by the Depositary pursuant to the
terms of this Agreement. The Depositary further agrees to hold, maintain and
safeguard the Deposit and the Account (as defined below) during the term of this
Agreement in accordance with the provisions of this Agreement. The Escrow Agent
shall not have any right to withdraw, assign or otherwise transfer moneys held
in the Account except as permitted by this Agreement.
SECTION 1.2 Establishment of Accounts. The Escrow Agent hereby
instructs the Depositary, and the Depositary agrees, to establish the separate
deposit account number 2080000623036 (the "Account"), in the name of the Escrow
Agent and all on the terms and conditions set forth in this Agreement.
SECTION 2.1 Deposit. The Escrow Agent shall direct ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
Co. Incorporated and Credit Suisse First Boston Corporation (the "Initial
Purchasers") to deposit with the Depositary on the date of this Agreement (the
"Deposit Date") in Federal (same day) funds by wire or other transfer to: First
Union National Bank, Reference: Midway 1998-1, and the Depositary shall accept
from the Initial Purchasers, on behalf of the Escrow Agent, the sum of
US$5,502,000, which amount represents the proceeds of the ▇▇▇▇▇▇ ▇▇▇▇-▇ ▇▇▇▇
Through Certificate offering. Upon acceptance of such sum, the Depositary shall
credit such amount (the "Deposit") to the Account. No amount shall be deposited
in the Account other than the Deposit.
SECTION 2.2 Interest. (a) The Deposit shall bear interest from and
including the date of deposit to but excluding the date of withdrawal at the
Applicable Rate (as defined below) (computed on the basis of a year of twelve
30-day months) payable to the Paying Agent on behalf of the Escrow Agent
semi-annually in arrears on each January 2 and July 2, and on the date of the
Final Withdrawal (as defined below), commencing on January 2, 1999 (each, an
"Interest Payment Date"), all in accordance with the terms of this Agreement
(whether or not the Deposit is withdrawn on an Interest Payment Date). Interest
accrued on the Deposit that is withdrawn pursuant to a Notice of Purchase
Withdrawal (as defined below) shall be paid on the next Interest Payment Date,
notwithstanding any intervening Final Withdrawal (as defined below). If the date
on which any payment due on the Deposit would otherwise
fall on a day which is not a Business Day (as defined below), such payment shall
be made on the next succeeding Business Day, and no additional interest shall
accrue in respect of such extension.
(b) For purposes of this Agreement:
"Applicable Rate" means 8.86% per annum plus, in the event the
Depositary receives an Increase Notice (as defined below) and until such
time, if any, as the Depositary receives the Rescission Notice (as defined
below), .50% per annum, effective on the date specified in such Increase
Notice to and including such date, if any, specified in such Rescission
Notice.
"Increase Notice" means a notice in the form attached hereto as
Exhibit C, signed by the Escrow Agent, which shall be delivered in the
event that any increase in interest rate is required to be effected
pursuant to the terms of a certain registration rights agreement (the
"Registration Agreement") dated as of the date hereof between Midway,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, Credit Suisse First Boston and The
First National Bank of Maryland, as Trustee.
"Rescission Notice" means a notice in the form attached hereto as
Exhibit D, signed by the Escrow Agent, which shall be delivered in the
event that any increase in the interest rate referred to in the definition
of "Increase Notice" is no longer required pursuant to the Registration
Agreement (as defined above).
SECTION 2.3 Withdrawals. (a) On and after the date of the
establishment of the Deposit, the Escrow Agent may, by providing at least one
Business Day's prior notice of withdrawal to the Depositary in the form of
Exhibit A hereto (a "Notice of Purchase Withdrawal"), withdraw all or a portion
of the Deposit, except that at any time prior to the any such withdrawal, the
Escrow Agent or the Pass Through Trustee may, by notice to the Depositary,
cancel such withdrawal (including on the scheduled date therefor), and
thereafter the Deposit shall continue to be maintained by the Depositary in
accordance with the original terms thereof. As used herein, "Business Day" means
any day, other than a Saturday, Sunday or other day on which commercial banks
are authorized or required by law to close in New York, New York, Charlotte,
North Carolina, Wilmington, Delaware or Baltimore, Maryland.
(b) The Escrow Agent may, by providing at least 15 days' prior
notice of withdrawal to the Depositary in the form of Exhibit B hereto (a
"Notice of Final Withdrawal"), withdraw the entire amount of the remaining
Deposit together with the payment by the Depositary of all accrued and unpaid
interest on the Deposit to but excluding the specified date of withdrawal (a
"Final Withdrawal"), on such date as shall be specified in such Notice of Final
Withdrawal. If a Notice of Final Withdrawal has not been given to the Depositary
on or before October 7, 1999 (provided that, if a labor strike occurs at
Bombardier Inc. prior to October 1, 1999 (a "Labor Strike"), such date shall be
extended by adding thereto the number of days that such strike continued in
effect (the "Additional Days")) and any portion of the Deposit is unwithdrawn on
such
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date, the Depositary shall pay the amount of the Final Withdrawal to the Paying
Agent on October 31, 1999 (provided that if a Labor Strike occurs, such date
shall be extended by the Additional Days).
(c) If the Depositary receives a duly completed Notice of Purchase
Withdrawal or Notice of Final Withdrawal complying with the provisions of this
Agreement, it shall make the payments specified therein in accordance with the
provisions of this Agreement.
SECTION 3. Termination. This Agreement shall terminate on the fifth
Business Day after the later of the date on which (i) the entire amount of the
Deposit shall have been withdrawn and paid as provided herein and (ii) all
accrued and unpaid interest on the Deposit shall have been paid as provided
herein, but in no event prior to the date on which the Depositary shall have
performed in full its obligations hereunder.
SECTION 4. Payments. All payments made by the Depositary hereunder
shall be paid in United States Dollars and immediately available funds by wire
transfer (i) in the case of accrued interest on the Deposit payable under
Section 2.2 hereof or any Final Withdrawal, directly to the Paying Agent at The
First National Bank of Maryland, ABA# ▇▇▇▇▇▇▇▇▇, Account No. ▇▇▇-▇▇-▇▇▇,
Attention: Credit Trust Receipts, Reference: Midway EETC, or to such other
account as the Paying Agent may direct from time to time in writing to the
Depositary and the Escrow Agent and (ii) in the case of any withdrawal of any
portion of the Deposit pursuant to a Notice of Purchase Withdrawal, directly to
or as directed by the Pass Through Trustee as specified and in the manner
provided in such Notice of Purchase Withdrawal. The Depositary hereby waives any
and all rights of set-off, combination of accounts, right of retention or
similar right (whether arising under applicable law, contract or otherwise) it
may have against the Deposit howsoever arising.
SECTION 5. Representation and Warranties. Each of the Depositary and
the Escrow Agent hereby represents and warrants (as to itself only) to Midway,
the Subordination Agent, the Pass Through Trustee, the Paying Agent and to each
other that:
(a) it is a bank duly organized and validly existing in good
standing under the laws of its jurisdiction of organization and is duly
qualified to conduct banking business in the United States and the State
of North Carolina (in the case of the Depositary) and the State of
Delaware (in the case of the Escrow Agent);
(b) it has full power, authority and legal right to conduct its
business and operations as currently conducted and to enter into and
perform its obligations under this Agreement;
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(c) the execution, delivery and performance of this Agreement have
been duly authorized by all necessary corporate action on the part of it
and do not require any stockholder approval, or approval or consent of any
trustee or holder of any indebtedness or obligations of it, and such
document has been duly executed and delivered by it and constitutes its
legal, valid and binding obligations enforceable against it in accordance
with the terms hereof;
(d) no authorization, consent or approval of or other action by, and
no notice to or filing with, any United States federal or state
governmental authority or regulatory body is required for the execution,
delivery or performance by it of this Agreement;
(e) neither the execution, delivery or performance by it of this
Agreement, nor compliance with the terms and provisions hereof, conflicts
or will conflict with or results or will result in a breach or violation
of any of the terms, conditions or provisions of, or will require any
consent or approval under, any law, governmental rule or regulation or the
charter documents, as amended, or bylaws, as amended, of it or any similar
instrument binding on it or any order, writ, injunction or decree of any
court or governmental authority against it or by which it or any of its
properties is bound or any indenture, mortgage or contract or other
agreement or instrument to which it is a party or by which it or any of
its properties is bound, or constitutes or will constitute a default
thereunder or results or will result in the imposition of any lien upon
any of its properties; and
(f) there are no pending or, to its knowledge, threatened actions,
suits, investigations or proceedings (whether or not purportedly on behalf
of it) against or affecting it or any of its property before or by any
court or administrative agency which, if adversely determined, (i) would
adversely affect the ability of it to perform its obligations under this
Agreement or (ii) would call into question or challenge the validity of
this Agreement or the enforceability hereof in accordance with the terms
hereof, nor is the Depositary or the Escrow Agent in default with respect
to any order of any court, governmental authority, arbitration board or
administrative agency so as to adversely affect its ability to perform its
obligations under this Agreement.
SECTION 6. Transfer. Neither party hereto shall be entitled to
assign or otherwise transfer this Agreement (or any interest herein) and any
purported assignment in violation thereof shall be void. This Agreement shall be
binding upon the parties hereto and their respective successors.
SECTION 7. Amendment, Etc. This Agreement may not be amended, waived
or otherwise modified except by an instrument in writing signed by the party
against whom the amendment, waiver or other modification is sought to be
enforced and by the Pass Through Trustee.
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SECTION 8. Notices. Unless otherwise expressly provided herein, any
notice or other communication under this Agreement shall be in writing
(including by facsimile) and shall be deemed to be given and effective upon
receipt thereof. All notices shall be sent to (x) in the case of the Depositary,
to First Union Capital Markets Group, One First Union Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Telecopier:
▇▇▇-▇▇▇-▇▇▇▇ or (y) in the case of the Escrow Agent, to First Union Trust
Company, National Association, One ▇▇▇▇▇▇ Square, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Administration,
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇, in each case, with a copy to the Pass Through Trustee,
The First National Bank of Maryland, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Mail Code 101-591,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Department (Telecopier:
(▇▇▇) ▇▇▇-▇▇▇▇) and to Midway, Midway Airlines Corporation, ▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel
(Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇) (or at such other address as any such party may
specify from time to time in a written notice to the parties hereto). On or
prior to the execution of this Agreement, the Escrow Agent has delivered to the
Depositary a certificate containing specimen signatures of the representatives
of the Escrow Agent who are authorized to give notices and instructions with
respect to this Agreement. The Depositary may conclusively rely on such
certificate until the Depositary receives written notice from the Escrow Agent
to the contrary.
SECTION 9. Obligations Unconditional. The Depositary hereby
acknowledges and agrees that its obligation to repay the Deposit together with
interest thereon as provided herein is absolute, irrevocable and unconditional
and constitutes a full recourse obligation of the Depositary enforceable against
it to the full extent of all of its assets and properties.
SECTION 10. Entire Agreement. This Agreement (including all
attachments hereto) sets forth all of the promises, covenants, agreements,
conditions and understandings between the Depositary and the Escrow Agent with
respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements and undertakings, inducements or conditions, express
or implied, oral or written.
SECTION 11. Governing Law. This Agreement, and the rights and
obligations of the Depositary and the Escrow Agent with respect to the Deposits,
shall be governed by, and construed in accordance with, the laws of the State of
New York and subject to the provisions of Regulation D of the Board of Governors
of the Federal Reserve System (or any successor), as the same may be modified
and supplemented and in effect from time to time.
SECTION 12. Waiver of Jury Trial Right. EACH OF THE DEPOSITARY AND
THE ESCROW AGENT ACKNOWLEDGES AND ACCEPTS THAT IN ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT SUCH PARTY IRREVOCABLY WAIVES ITS
RIGHT TO A TRIAL BY JURY.
SECTION 13. Counterparts. This Agreement may be executed in one or
more counterparts, all of which taken together shall constitute one instrument.
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IN WITNESS WHEREOF, the Escrow Agent and the Depositary have caused
this Deposit Agreement to be duly executed as of the day and year first above
written.
FIRST UNION TRUST COMPANY
as Escrow Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Vice President
FIRST UNION NATIONAL BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
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EXHIBIT A
NOTICE OF PURCHASE WITHDRAWAL
First Union National Bank
One First Union Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Reference is made to the Deposit Agreement (Class D) dated as of
August 13, 1998 (the "Deposit Agreement") between First Union Trust Company,
National Association, as Escrow Agent, and First Union National Bank, as
Depositary (the "Depositary") and to Account No. 2080000623036 (the "Account").
In accordance with Section 2.3(a) of the Deposit Agreement, the
undersigned hereby requests the withdrawal of $________________ from the
Account.
The undersigned hereby directs the Depositary to pay the proceeds of
the Deposit to The First National Bank of Maryland, ABA No. ▇▇▇▇▇▇▇▇▇, Account
No. ▇▇▇-▇▇-▇▇▇, Attention: Credit Trust Receipts, Reference: Midway EETC on
__________, 199_, upon the telephonic request of a representative of the Pass
Through Trustee.
FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION
as Escrow Agent
By ______________________________________
Name:
Title:
Dated: _______ __, 199_
EXHIBIT B
NOTICE OF FINAL WITHDRAWAL
First Union National Bank
One First Union Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Reference is made to the Deposit Agreement (Class D) dated as of
August 13, 1998 (the "Deposit Agreement") between First Union Trust Company,
National Association, as Escrow Agent, and First Union National Bank, as
Depositary (the "Depositary").
In accordance with Section 2.3(b) of the Deposit Agreement, the
undersigned hereby requests the withdrawal of the entire amount of the Deposit.
The undersigned hereby directs the Depositary to pay the proceeds of
the Deposit and accrued interest thereon to the Paying Agent at The First
National Bank of Maryland, ABA No. ▇▇▇▇▇▇▇▇▇, Account No. ▇▇▇-▇▇-▇▇▇, Attention:
Credit Trust Receipts, Reference: Midway EETC.
FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION
as Escrow Agent
By ______________________________________
Name:
Title:
Dated: _________, 199_
EXHIBIT C
INCREASE NOTICE
First Union National Bank
One First Union Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Reference is made to the Deposit Agreement (Class D) dated as of
August 13, 1998 (the "Deposit Agreement") between First Union Trust Company,
National Association, as Escrow Agent, and First Union National Bank, as
Depositary (the "Depositary").
The undersigned hereby notifies the Depositary that the Applicable
Rate shall increase by .50% per annum, effective __________, 199__.
FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION
as Escrow Agent
By ______________________________________
Name:
Title:
Dated: _________, 199_
EXHIBIT D
RESCISSION NOTICE
First Union National Bank
One First Union Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Reference is made to the Deposit Agreement (Class D) dated as of
August 13, 1998 (the "Deposit Agreement") between First Union Trust Company,
National Association, as Escrow Agent, and First Union National Bank, as
Depositary (the "Depositary").
The undersigned hereby notifies the Depositary that the Applicable
Rate shall decrease by .50% per annum, effective __________, 199__.
FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION
as Escrow Agent
By ______________________________________
Name:
Title:
Dated: _________, 199_
