EXHIBIT 4(a)(ix)
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INTERCREDITOR AGREEMENT
Dated as of
December 14, 0000
XXXXX
XXXXX XXXXXX BANK AND TRUST COMPANY
not in its individual capacity
but solely as Trustee under the
XX Xxxxxxx Xxxx Xxxxxxx Xxxxx 0000-0X,
XX Xxxxxxx Xxxx Through Trust 1998-1B
and
US Airways Pass Through Trust 1998-1C
ABN AMRO BANK N.V.,
acting through its Chicago Branch
as Class A Liquidity Provider,
as Class B Liquidity Provider,
and
as Class C Liquidity Provider
AND
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity except
as expressly set forth herein but
solely as Subordination Agent and Trustee
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TABLE OF CONTENTS
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Page
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ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions 2
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
SECTION 2.1. Agreement to Terms of Subordination; Payments from
Monies Received Only 21
SECTION 2.2. Trust Accounts 22
SECTION 2.3. Deposits to the Collection Account and Special
Payments Account 24
SECTION 2.4. Distributions of Special Payments 24
SECTION 2.5. Designated Representatives 26
SECTION 2.6. Controlling Party 27
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
SECTION 3.1. Written Notice of Distribution 29
SECTION 3.2. Distribution of Amounts on Deposit in the
Collection Account 31
SECTION 3.3. Distribution of Amounts on Deposit Following a
Triggering Event 32
SECTION 3.4. Other Payments 34
SECTION 3.5. Payments to the Trustees and the Liquidity Providers 35
SECTION 3.6. Liquidity Facilities 35
ARTICLE IV
EXERCISE OF REMEDIES
SECTION 4.1. Directions from the Controlling Party 42
SECTION 4.2. Remedies Cumulative 43
SECTION 4.3. Discontinuance of Proceedings 44
SECTION 4.4. Right of Certificateholders to Receive Payments
Not to Be Impaired 44
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SECTION 4.5. Undertaking for Costs 44
ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
SECTION 5.1. Notice of Indenture Default or Triggering Event 44
SECTION 5.2. Indemnification 45
SECTION 5.3. No Duties Except as Specified in Intercreditor
Agreement 45
SECTION 5.4. Notice from the Liquidity Providers and Trustees 46
ARTICLE VI
THE SUBORDINATION AGENT
SECTION 6.1. Authorization; Acceptance of Trusts and Duties 46
SECTION 6.2. Absence of Duties 46
SECTION 6.3. No Representations or Warranties as to Documents 46
SECTION 6.4. No Segregation of Monies; No Interest 46
SECTION 6.5. Reliance; Agents; Advice of Counsel 47
SECTION 6.6. Capacity in Which Acting 47
SECTION 6.7. Compensation 47
SECTION 6.8. May Become Certificateholder 48
SECTION 6.9. Subordination Agent Required; Eligibility 48
SECTION 6.10. Money to Be Held in Trust 48
ARTICLE VII
INDEMNIFICATION OF SUBORDINATION AGENT
SECTION 7.1. Scope of Indemnification 48
ARTICLE VIII
SUCCESSOR SUBORDINATION AGENT
SECTION 8.1. Replacement of Subordination Agent; Appointment of
Successor 49
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ARTICLE IX
SUPPLEMENTS AND AMENDMENTS
SECTION 9.1. Amendments, Waivers, etc. 50
SECTION 9.2. Subordination Agent Protected 51
SECTION 9.3. Effect of Supplemental Agreements 51
SECTION 9.4. Notice to Rating Agencies 51
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Termination of Intercreditor Agreement 52
SECTION 10.2. Intercreditor Agreement for Benefit of Trustees,
Liquidity Providers and Subordination Agent 52
SECTION 10.3. Notices 52
SECTION 10.4. Severability 53
SECTION 10.5. No Oral Modifications or Continuing Waivers 54
SECTION 10.6. Successors and Assigns 54
SECTION 10.7. Headings 54
SECTION 10.8. Counterpart Form 54
SECTION 10.9. Subordination 54
SECTION 10.10. Governing Law 55
SECTION 10.11. Submission to Jurisdiction; Waiver of Jury
Trial; Waiver of Immunity 55
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INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT dated as of December 14, 1998, among STATE
STREET BANK AND TRUST COMPANY, a Massachusetts trust company ("State
Street"), not in its individual capacity but solely as Trustee of each Trust
(each as defined below); ABN AMRO BANK N.V., a bank organized under the laws
of The Netherlands, acting through its Chicago Branch ("ABN AMRO"), as Class
A Liquidity Provider, Class B Liquidity Provider and Class C Liquidity
Provider; and STATE STREET BANK AND TRUST COMPANY, not in its individual
capacity except as expressly set forth herein, but solely as Subordination
Agent and trustee hereunder (in such capacity, together with any successor
appointed pursuant to Article VIII hereof, the "Subordination Agent").
WHEREAS, all capitalized terms used herein shall have the
respective meanings referred to in Article I hereof;
WHEREAS, pursuant to each Indenture (i) in the case of each
Aircraft that is owned by US Airways at the time such Indenture is entered
into (the "Owned Aircraft"), US Airways will issue on a recourse basis three
series of Equipment Notes to finance the purchase of such Aircraft, and (ii)
in the case of each Aircraft that is leased to US Airways pursuant to a
related Lease at the time such Indenture is entered into (the "Leased
Aircraft"), the related Owner Trustee will issue on a nonrecourse basis three
series of Equipment Notes to finance the purchase of such Aircraft;
WHEREAS, pursuant to the Financing Agreements, each Trust will
acquire Equipment Notes having an interest rate equal to the interest rate
applicable to the Certificates to be issued by such Trust;
WHEREAS, pursuant to each Trust Agreement, the Trust created
thereby proposes to issue a single class of Certificates (a "Class") bearing
the interest rate and having the final distribution date described in such
Trust Agreement on the terms and subject to the conditions set forth therein;
WHEREAS, pursuant to the Underwriting Agreement, the Underwriters
propose to purchase the Certificates issued by the Class A Trust and the
Class B Trust in the aggregate face amount set forth opposite the name of
such Trust on Schedule I thereto on the terms and subject to the conditions
set forth therein;
WHEREAS, pursuant to the Class C Purchase Agreement, Airbus
Industrie Financial Services ("AIFS") proposes to purchase all of the
Certificates issued by the Class C Trust on the terms and subject to the
conditions set forth therein;
WHEREAS, the Liquidity Provider proposes to enter into three
separate revolving credit agreements with the Subordination Agent, as agent
for the Trustee of each of the Class A
Trust, the Class B Trust and the Class C Trust, respectively, for the benefit
of the Certificateholders of such Trust; and
WHEREAS, it is a condition precedent to the obligations of the
Underwriters under the Underwriting Agreement that the Subordination Agent,
the Trustees and the Liquidity Providers agree to the terms of subordination
set forth in this Agreement in respect of each Class of Certificates, and the
Subordination Agent, the Trustees and the Liquidity Provider, by entering
into this Agreement, hereby acknowledge and agree to such terms of
subordination and the other provisions of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. 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 references in this Agreement to designated "Articles",
"Sections" and other subdivisions are to the designated Articles, Sections
and other subdivisions of this Agreement;
(3) 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 or other subdivision; and
(4) the term "including" shall mean "including without limitation".
"ABN AMRO" has the meaning assigned to such term in the recitals to
this Agreement.
"Acceleration" means, with respect to the amounts payable in
respect of the Equipment Notes issued under any Indenture, such amounts
becoming immediately due and payable by declaration or otherwise.
"Accelerate", "Accelerated" and "Accelerating" have meanings correlative to
the foregoing.
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"Adjusted Expected Distributions" means, with respect to the
Certificates of any Trust on any Current Distribution Date, the sum of
(x) accrued and unpaid interest on such Certificates (excluding interest, if
any, payable with respect to the Deposits related to such Trust) and (y) the
greater of:
(A) the difference between (x) the Pool Balance of such
Certificates as of the immediately preceding Distribution Date (or, if the
Current Distribution Date is the first Distribution Date, the original
aggregate face amount of the Certificates of such Trust) and (y) the Pool
Balance of such Certificates as of the Current Distribution Date calculated
on the basis that (i) the principal of the Non-Performing Equipment Notes
held in such Trust has been paid in full and such payments have been
distributed to the holders of such Certificates, (ii) the principal of the
Performing Equipment Notes held in such Trust has been paid when due (but
without giving effect to any Acceleration of Performing Equipment Notes) and
such payments have been distributed to the holders of such Certificates and
(iii) the principal of any Equipment Notes formerly held in such Trust that
have been sold pursuant to the terms hereof has been paid in full and such
payments have been distributed to the holders of such Certificates, but
without giving effect to any reduction in the Pool Balance as a result of any
distribution attributable to Deposits occurring after the immediately
preceding Distribution Date (or, if the Current Distribution Date is the
first Distribution Date, occurring after the initial issuance of the
Certificates of such Trust), and
(B) the amount of the excess, if any, of (i) the Pool Balance of
such Class of Certificates as of the immediately preceding Distribution Date
(or, if the Current Distribution Date is the first Distribution Date, the
original aggregate face amount of the Certificates of such Trust), less the
amount of the Deposits for such Class of Certificates as of such preceding
Distribution Date (or, if the Current Distribution Date is the first
Distribution Date, the original aggregate amount of the Deposits for such
Class of Certificates) other than any portion of such Deposits thereafter
used to acquire Equipment Notes pursuant to the Note Purchase Agreement, over
(ii) the Aggregate LTV Collateral Amount for such Class of Certificates for
the Current Distribution Date;
provided that, until the date of the initial LTV Appraisals, clause (B) shall
not apply.
For purposes of calculating Adjusted Expected Distributions with
respect to the Certificates of any Trust, any premium paid on the Equipment
Notes held in such Trust that has not been distributed to the
Certificateholders of such Trust (other than such premium or a portion
thereof applied to the payment of interest on the Certificates of such Trust
or the reduction of the Pool Balance of such Trust) shall be added to the
amount of Adjusted Expected Distributions.
"Advance", with respect to any Liquidity Facility, means any
Advances as defined in such Liquidity Facility.
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"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control
with such Person. For the purposes of this definition, "control" means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person whether through the ownership of
voting securities or by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
"Aggregate LTV Collateral Amount" for any Class of Certificates for
any Distribution Date means the sum of the applicable LTV Collateral Amounts
for each Leased Aircraft and Owned Aircraft, minus the Pool Balance for each
Class of Certificates, if any, senior to such Class, after giving effect to
any distribution of principal on such Distribution Date with respect to such
senior Class or Classes.
"AIFS" has the meaning assigned to such term in the recitals to
this Agreement.
"Aircraft" means, with respect to each Indenture, the "Aircraft"
referred to therein.
"Appraisal" means a current fair market value appraisal (which may
be a "desktop" appraisal) performed by any Appraiser or any other nationally
recognized appraiser on the basis of an arm's-length transaction between an
informed and willing purchaser under no compulsion to buy and an informed and
willing seller under no compulsion to sell and both having knowledge of all
relevant facts.
"Appraised Current Market Value" of any Leased Aircraft or Owned
Aircraft means the lower of the average and the median of the three most
recent Appraisals of such Aircraft.
"Appraisers" means AVITAS, Inc., AvSolutions, Inc. and Xxxxxx Xxxxx
and Xxxxx, Inc.
"Available Amount" means, with respect to any Liquidity Facility on
any drawing date, subject to the proviso contained in the first sentence of
Section 3.6(g) hereof, an amount equal to (a) the Stated Amount of such
Liquidity Facility at such time, less (b) the aggregate amount of each
Interest Drawing honored by the Liquidity Provider under such Liquidity
Facility on or prior to such date which has not been reimbursed or reinstated
as of such date; provided that, following a Downgrade Drawing, a Non-
Extension Drawing or a Final Drawing under such Liquidity Facility, the
Available Amount of such Liquidity Facility shall be zero.
"Business Day" means any day other than a Saturday or Sunday or a
day on which commercial banks are required or authorized to close in
Pittsburgh, Pennsylvania, New York, New York, or, so long as any Certificate
is outstanding, the city and state in which any Trustee, the Subordination
Agent or any Loan Trustee maintains its Corporate Trust Office or receives
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and disburses funds, and that, solely with respect to draws under any
Liquidity Facility, also is a "Business Day" as defined in such Liquidity
Facility.
"Cash Collateral Account" means the Class A Cash Collateral
Account, the Class B Cash Collateral Account or the Class C Cash Collateral
Account, as applicable.
"Certificate" means a Class A Certificate, a Class B Certificate or
a Class C Certificate, as applicable.
"Certificateholder" means any holder of one or more Certificates.
"Class" has the meaning assigned to such term in the preliminary
statements to this Agreement.
"Class A Cash Collateral Account" means an Eligible Deposit Account
in the name of the Subordination Agent maintained at an Eligible Institution,
which shall be the Subordination Agent if it shall so qualify, into which all
amounts drawn under the Class A Liquidity Facility pursuant to Section
3.6(c), 3.6(d) or 3.6(i) shall be deposited.
"Class A Certificateholder" means, at any time, any holder of one
or more Class A Certificates.
"Class A Certificates" means the certificates issued by the Class A
Trust, substantially in the form of Exhibit A to the Class A Trust Agreement,
and authenticated by the Class A Trustee, representing fractional undivided
interests in the Class A Trust, and any certificates issued in exchange
therefor or replacement thereof pursuant to the terms of the Class A Trust
Agreement.
"Class A Liquidity Facility" means, initially, the Revolving Credit
Agreement dated as of the date hereof, between the Subordination Agent, as
agent and trustee for the Class A Trustee, ABN AMRO and, from and after the
replacement of such agreement pursuant hereto, the Replacement Liquidity
Facility therefor, if any, in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Class A Liquidity Provider" means ABN AMRO, together with any
Replacement Liquidity Provider which has issued a Replacement Liquidity
Facility to replace the Class A Liquidity Facility pursuant to Section
3.6(e).
"Class A Trust" means the US Airways Pass Through Trust 1998-1A
created and administered pursuant to the Class A Trust Agreement.
"Class A Trust Agreement" means the Pass Through Trust Agreement
dated as of December 4, 1998, between US Airways and the Class A Trustee (the
"Basic Agreement"), as
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supplemented by the Supplement No. 1998-1A thereto dated as of the date
hereof, governing the creation and administration of the US Airways Pass
Through Trust 1998-1A and the issuance of the Class A Certificates, as the
same may be amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"Class A Trustee" means State Street Bank and Trust Company, not in
its individual capacity except as expressly set forth in the Class A Trust
Agreement, but solely as trustee under the Class A Trust Agreement, together
with any successor trustee appointed pursuant thereto.
"Class B Cash Collateral Account" means an Eligible Deposit Account
in the name of the Subordination Agent maintained at an Eligible Institution,
which shall be the Subordination Agent if it shall so qualify, into which all
amounts drawn under the Class B Liquidity Facility pursuant to Section
3.6(c), 3.6(d) or 3.6(i) shall be deposited.
"Class B Certificateholder" means, at any time, any holder of one
or more Class B Certificates.
"Class B Certificates" means the certificates issued by the Class B
Trust, substantially in the form of Exhibit A to the Class B Trust Agreement,
and authenticated by the Class B Trustee, representing fractional undivided
interests in the Class B Trust, and any certificates issued in exchange
therefor or replacement thereof pursuant to the terms of the Class B Trust
Agreement.
"Class B Liquidity Facility" means, initially, the Revolving Credit
Agreement dated as of the date hereof, between the Subordination Agent, as
agent and trustee for the Class B Trustee, and ABN AMRO, and, from and after
the replacement of such Agreement pursuant hereto, the Replacement Liquidity
Facility therefor, if any, in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Class B Liquidity Provider" means ABN AMRO, together with any
Replacement Liquidity Provider which has issued a Replacement Liquidity
Facility to replace the Class B Liquidity Facility pursuant to Section
3.6(e).
"Class B Trust" means the US Airways Pass Through Trust 1998-1B
created and administered pursuant to the Class B Trust Agreement.
"Class B Trust Agreement" means the Basic Agreement, as
supplemented by the Supplement No. 1998-1B thereto dated as of the date
hereof, governing the creation and administration of the US Airways Pass
Through Trust 1998-1B and the issuance of the Class B Certificates, as the
same may be amended, supplemented or otherwise modified from time to time in
accordance with its terms.
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"Class B Trustee" means State Street Bank and Trust Company, not in
its individual capacity except as expressly set forth in the Class B Trust
Agreement, but solely as trustee under the Class B Trust Agreement, together
with any successor trustee appointed pursuant thereto.
"Class C Cash Collateral Account" means an Eligible Deposit Account
in the name of the Subordination Agent maintained at an Eligible Institution,
which shall be the Subordination Agent if it shall so qualify, into which all
amounts drawn under the Class C Liquidity Facility pursuant to Section
3.6(c), 3.6(d) or 3.6(i) shall be deposited.
"Class C Certificateholder" means, at any time, any holder of one
or more Class C Certificates.
"Class C Certificates" means the certificates issued by the Class C
Trust, substantially in the form of Exhibit A to the Class C Trust Agreement,
and authenticated by the Class C Trustee, representing fractional undivided
interests in the Class C Trust, and any certificates issued in exchange
therefor or replacement thereof pursuant to the terms of the Class C Trust
Agreement.
"Class C Liquidity Facility" means, initially, the Revolving Credit
Agreement dated as of the date hereof, between the Subordination Agent, as
agent and trustee for the Class C Trustee, and ABN AMRO, and, from and after
the replacement of such Agreement pursuant hereto, the Replacement Liquidity
Facility therefor, if any, in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Class C Liquidity Provider" means ABN AMRO, together with any
Replacement Liquidity Provider which has issued a Replacement Liquidity
Facility to replace the Class C Liquidity Facility pursuant to Section
3.6(e).
"Class C Purchase Agreement" means the Purchase Agreement dated
_______, 1998 between US Airways and AIFS relating to the purchase of all of
the Class C Certificates by AIFS, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms.
"Class C Trust" means the US Airways Pass Through Trust 1998-1C
created and administered pursuant to the Class C Trust Agreement.
"Class C Trust Agreement" means the Basic Agreement, as
supplemented by the Supplement No. 1998-1C thereto dated as of the date
hereof, governing the creation and administration of the US Airways Pass
Through Trust 1998-1C and the issuance of the Class C Certificates, as the
same may be amended, supplemented or otherwise modified from time to time in
accordance with its terms.
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"Class C Trustee" means State Street Bank and Trust Company, not in
its individual capacity except as expressly set forth in the Class C Trust
Agreement, but solely as trustee under the Class C Trust Agreement, together
with any successor trustee appointed pursuant thereto.
"Closing Date" means December 14, 1998.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time, and Treasury Regulations promulgated thereunder.
"Collection Account" means the Eligible Deposit Account established
by the Subordination Agent pursuant to Section 2.2 which the Subordination
Agent shall make deposits in and withdrawals from in accordance with this
Agreement.
"Controlling Party" means the Person entitled to act as such
pursuant to the terms of Section 2.6.
"Corporate Trust Office" means, with respect to any Trustee, the
Subordination Agent or any Loan Trustee, the office of such Person in the
city at which, at any particular time, its corporate trust business shall be
principally administered.
"Current Distribution Date" means a Distribution Date specified as
a reference date for calculating the Expected Distributions or the Adjusted
Expected Distributions with respect to the Certificates of any Trust as of
such Distribution Date.
"Delivery Period Expiry Date" means the earlier of (a) October 31,
1999 and (b) the date on which Equipment Notes with respect to all New
Aircraft (or Substitute Aircraft in lieu thereof) have been purchased by the
Trusts in accordance with the Note Purchase Agreement.
"Deposit Agreement" shall mean, with respect to any Class, the
Deposit Agreement pertaining to such Class dated the date hereof between the
Escrow Agent, and the Depositary, as the same may be amended, modified or
supplemented from time to time in accordance with the terms thereof.
"Depositary" means (i) with respect to the Class A Certificates and
the Class B Certificates, Credit Suisse First Boston, as depositary under the
Deposit Agreement relating to each such Class of Certificates and (ii) with
respect to the Class C Certificates, Citibank, N.A., as depositary under the
Deposit Agreement relating to such Class of Certificates.
"Deposits" with respect to any Class, shall have the meaning set
forth in the Deposit Agreement pertaining to such Class.
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"Designated Representatives" means the Subordination Agent
Representatives, the Trustee Representatives and the LP Representatives
identified under Section 2.5.
"Distribution Date" means a Regular Distribution Date or a Special
Distribution Date.
"Dollars" means United States dollars.
"Downgrade Drawing" has the meaning assigned to such term in
Section 3.6(c).
"Downgraded Facility" has the meaning assigned to such term in
Section 3.6(c).
"Drawing" means an Interest Drawing, a Final Drawing, a Non-
Extension Drawing or a Downgrade Drawing, as the case may be.
"Eligible Deposit Account" means either (a) a segregated account
with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the
laws of the United States of America or any one of the states thereof or the
District of Columbia (or any U.S. branch of a foreign bank), having corporate
trust powers and acting as trustee for funds deposited in such account, so
long as any of the securities of such depository institution has a long-term
unsecured debt rating from each Rating Agency of at least A-3 or its
equivalent. An Eligible Deposit Account may be maintained with a Liquidity
Provider so long as such Liquidity Provider is an Eligible Institution;
provided that such Liquidity Provider shall have waived all rights of set-off
and counterclaim with respect to such account.
"Eligible Institution" means (a) the corporate trust department of
the Subordination Agent or any Trustee, as applicable, or (b) a depository
institution organized under the laws of the United States of America or any
one of the states thereof or the District of Columbia (or any U.S. branch of
a foreign bank), which has a long-term unsecured debt rating from each Rating
Agency of at least A-3 or its equivalent.
"Eligible Investments" means (a) investments in obligations of, or
guaranteed by, the United States Government having maturities no later than
90 days following the date of such investment, (b) investments in open market
commercial paper of any corporation incorporated under the laws of the United
States of America or any state thereof with a short-term unsecured debt
rating issued by Xxxxx'x and S&P of at least A-1 and P-1, respectively,
having maturities no later than 90 days following the date of such investment
or (c) investments in negotiable certificates of deposit, time deposits,
banker's acceptances, commercial paper or other direct obligations of, or
obligations guaranteed by, commercial banks organized under the laws of the
United States or of any political subdivision thereof (or any U.S. branch of
a foreign bank) with issuer ratings of at least B/C by Thomson Bankwatch,
having maturities no later than 90 days following the date of such
investment; provided, however, that (x) all Eligible Investments that
9
are bank obligations shall be denominated in U.S. dollars; and (y) the
aggregate amount of Eligible Investments at any one time that are bank
obligations issued by any one bank shall not be in excess of 5% of such
bank's capital surplus; provided further that (1) any investment of the types
described in clauses (a), (b) and (c) above may be made through a repurchase
agreement in commercially reasonable form with a bank or other financial
institution qualifying as an Eligible Institution so long as such investment
is held by a third party custodian also qualifying as an Eligible
Institution, and (2) all such investments set forth in clause (a), (b) or (c)
above mature no later than the Business Day immediately preceding the next
Regular Distribution Date; provided further, however, that in the case of any
Eligible Investment issued by a domestic branch of a foreign bank, the income
from such investment shall be from sources within the United States for
purposes of the Code.
"Equipment Notes" means, at any time, the Series A Equipment Notes,
the Series B Equipment Notes and the Series C Equipment Notes, collectively,
and in each case, any Equipment Notes issued in exchange therefor or
replacement thereof pursuant to the terms of the Indentures.
"Escrow Agent" means First Security Bank, National Association, as
escrow agent under each Escrow and Paying Agent Agreement, together with its
successors in such capacity.
"Escrow and Paying Agent Agreement" shall mean, with respect to any
Class, the Escrow and Paying Agent Agreement pertaining to such Class dated
the date hereof between the Escrow Agent, the Underwriters (in the case of
the Class A and Class B Certificates) or AIFS (in the case of the Class C
Certificates), the Trustee for such Class and the Paying Agent, as the same
may be amended, modified or supplemented from time to time in accordance with
the terms thereof.
"Expected Distributions" means, with respect to the Certificates of
any Trust on any Current Distribution Date, the sum of (x) accrued and unpaid
interest on such Certificates (excluding interest, if any, payable with
respect to the Deposits related to such Trust) and (y) the difference between
(A) the Pool Balance of such Certificates as of the immediately preceding
Distribution Date (or, if the Current Distribution Date is the first
Distribution Date, the original aggregate face amount of the Certificates of
such Trust) and (B) the Pool Balance of such Certificates as of the Current
Distribution Date calculated on the basis that (i) the principal of the
Equipment Notes held in such Trust has been paid when due (whether at stated
maturity or upon redemption, prepayment, purchase or Acceleration or
otherwise) and such payments have been distributed to the holders of such
Certificates and (ii) the principal of any Equipment Notes formerly held in
such Trust that have been sold pursuant to the terms hereof has been paid in
full and such payments have been distributed to the holders of such
Certificates, but without giving effect to any reduction in the Pool Balance
as a result of any distribution attributable to Deposits occurring after the
immediately preceding Distribution Date (or, if the Current Distribution Date
is the first Distribution Date, occurring after the initial issuance of the
Certificates of such Trust).
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For purposes of calculating Expected Distributions with respect to the
Certificates of any Trust, any premium paid on the Equipment Notes held in
such Trust which has not been distributed to the Certificateholders of such
Trust (other than such premium or a portion thereof applied to the payment of
interest on the Certificates of such Trust or the reduction of the Pool
Balance of such Trust) shall be added to the amount of such Expected
Distributions.
"Expiry Date" with respect to any Liquidity Facility, shall have
the meaning set forth in such Liquidity Facility.
"Fee Letter" means, the Fee Letter between ABN AMRO and the
Subordination Agent with respect to the Liquidity Facilities and any fee
letter entered into between the Subordination Agent and any Replacement
Liquidity Provider.
"Final Distributions" means, with respect to the Certificates of
any Trust on any Distribution Date, the sum of (x) the aggregate amount of
all accrued and unpaid interest on such Certificates (excluding interest, if
any, payable with respect to the Deposits relating to such Trust) and (y) the
Pool Balance of such Certificates as of the immediately preceding
Distribution Date (less the amount of the Deposits for such Class of
Certificates as of such preceding Distribution Date other than any portion of
such Deposits thereafter used to acquire Equipment Notes pursuant to the Note
Purchase Agreement). For purposes of calculating Final Distributions with
respect to the Certificates of any Trust, any premium paid on the Equipment
Notes held in such Trust which has not been distributed to the
Certificateholders of such Trust (other than such premium or a portion
thereof applied to the payment of interest on the Certificates of such Trust
or the reduction of the Pool Balance of such Trust) shall be added to the
amount of such Final Distributions.
"Final Drawing" has the meaning assigned to such term in Section
3.6(i).
"Final Legal Distribution Date" means (i) with respect to the Class
A Certificates, July 30, 2019, (ii) with respect to the Class B Certificates,
July 30, 2019 and (iii) with respect to the Class C Certificates, January 30,
2014.
"Financing Agreement" means each of the Participation Agreements
and the Note Purchase Agreement.
"Indenture" means each of the Trust Indentures entered into by the
Loan Trustee, and the Owner Trustee or US Airways, pursuant to the Note
Purchase 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" means, with respect to any Indenture, any Event
of Default (as such term is defined in such Indenture) thereunder.
11
"Interest Drawing" has the meaning assigned to such term in Section
3.6(a).
"Interest Payment Date" means, with respect to any Liquidity
Facility each date on which interest is due and payable under Section
3.07(c), (d) or (e) of such Liquidity Facility on a Downgrade Drawing, Non-
Extension Drawing or Final Drawing thereunder.
"Investment Earnings" means investment earnings on funds on deposit
in the Trust Accounts net of losses and investment expenses of the
Subordination Agent in making such investments.
"Lease" means, with respect to each Indenture pertaining to a
Leased Aircraft, the "Lease" referred to therein.
"Leased Aircraft" has the meaning assigned to such term in the
preliminary statements of this Agreement.
"Lending Office" means, with respect to any Liquidity Facility, the
lending office of the Liquidity Provider thereunder, presently located at
Chicago, Illinois, or such other lending office as such Liquidity Provider
from time to time shall notify the applicable Trustee as its lending office
under any such Liquidity Facility, provided that such Liquidity Provider
shall not change its Lending Office to a Lending Office outside the United
States of America except in accordance with Section 3.01, 3.02 or 3.03 of any
such Liquidity Facility.
"Lien" means any mortgage, pledge, lien, charge, claim, disposition
of title, encumbrance, lease, sublease, sub-sublease or security interest of
any kind, including, without limitation, any thereof arising under any
conditional sales or other title retention agreement.
"Liquidity Event of Default" with respect to any Liquidity
Facility, has the meaning assigned to such term in such Liquidity Facility.
"Liquidity Expenses" means all Liquidity Obligations other than (i)
the principal amount of any Drawings under the Liquidity Facilities and (ii)
any interest accrued on any Liquidity Obligations.
"Liquidity Facility" means, at any time, the Class A Liquidity
Facility, the Class B Liquidity Facility or the Class C Liquidity Facility.
"Liquidity Obligations" means all principal, interest, fees and
other amounts owing to the Liquidity Providers under the Liquidity
Facilities, Section 9.1 of the Participation Agreements or the Fee Letter.
"Liquidity Provider" means, at any time, the Class A Liquidity
Provider, the Class B Liquidity Provider or the Class C Liquidity Provider,
as applicable.
12
"Loan Trustee" means, with respect to any Indenture, the loan
trustee thereunder.
"LP Incumbency Certificate" has the meaning assigned to such term
in Section 2.5(b).
"LP Representatives" has the meaning assigned to such term in
Section 2.5(b).
"LTV Appraisals" has the meaning assigned to such term in Section
4.1(a).
"LTV Collateral Amount" of any Leased Aircraft or Owned Aircraft
for any Class of Certificates means, as of any Distribution Date, the lesser
of (i) the LTV Ratio for such Class of Certificates multiplied by the
Appraised Current Market Value of such Aircraft (or with respect to any such
Aircraft which has suffered an Event of Loss under and as defined in the
relevant Lease (in the case of a Leased Aircraft) or Indenture (in the case
of an Owned Aircraft), the amount of the insurance proceeds paid to the
related Loan Trustee in respect thereof to the extent then held by such Loan
Trustee (and/or on deposit in the Special Payments Account) or payable to
such Loan Trustee in respect thereof) and (ii) the outstanding principal
amount of the Equipment Notes secured by such Aircraft after giving effect to
any principal payments of such Equipment Notes on or before such Distribution
Date.
"LTV Ratio" means for the Class A Certificates 40.5%, for the Class
B Certificates 51.0%, and for the Class C Certificates, 67.0%.
"Majority Liquidity Providers" means, at any time, Liquidity
Providers holding at least 66-2/3% of the aggregate outstanding Liquidity
Obligations at such time.
"Minimum Sale Price" means, with respect to any Aircraft or the
Equipment Notes issued in respect of such Aircraft, at any time, the lesser
of (a) 75% of the Appraised Current Market Value of such Aircraft and (b) the
aggregate outstanding principal amount of such Equipment Notes, plus accrued
and unpaid interest thereon.
"Moody's" means Xxxxx'x Investors Service, Inc.
"New Aircraft" shall have the meaning set forth in the Note
Purchase Agreement.
"Non-Controlling Party" means, at any time, any Trustee or
Liquidity Provider which is not the Controlling Party at such time.
"Non-Extended Facility" has the meaning assigned to such term in
Section 3.6(d).
"Non-Extension Drawing" has the meaning assigned to such term in
Section 3.6(d).
13
"Non-Performing Equipment Note" means an Equipment Note issued
pursuant to an Indenture that is not a Performing Equipment Note.
"Note Purchase Agreement" means the Note Purchase Agreement dated
as of the date hereof, among US Airways, each Trustee, the Escrow Agent, the
Subordination Agent and the Paying Agent.
"Officer's Certificate" of any Person means a certification signed
by a Responsible Officer of such Person.
"Operative Agreements" means this Agreement, the Liquidity
Facilities, the Indentures, the Trust Agreements, the Underwriting Agreement,
the Class C Purchase Agreement, the Financing Agreements, the Leases, the Fee
Letter, the Equipment Notes and the Certificates, together with all exhibits
and schedules included with any of the foregoing and each of the other
documents and instruments referred to in the definitions of "Operative
Documents" contained in the Leases or any Owned Aircraft Indenture.
"Outstanding" means, when used with respect to each Class of
Certificates, as of the date of determination, all Certificates of such Class
theretofore authenticated and delivered under the related Trust Agreement,
except:
(i) Certificates of such Class theretofore canceled by the
Registrar (as defined in such Trust Agreement) or delivered to the Trustee
thereunder or such Registrar for cancellation;
(ii) Certificates of such Class for which money in the full amount
required to make the final distribution with respect to such Certificates
pursuant to Section 11.01 of such Trust Agreement has been theretofore
deposited with the related Trustee in trust for the holders of such
Certificates as provided in Section 4.01 of such Trust Agreement pending
distribution of such money to such Certificateholders pursuant to such final
distribution payment; and
(iii) Certificates of such Class in exchange for or in lieu of
which other Certificates have been authenticated and delivered pursuant to
such Trust Agreement;
provided, however, that in determining whether the holders of the requisite
Outstanding amount of such Certificates have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, any
Certificates owned by US Airways or any of its Affiliates shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether such Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only
Certificates that such Trustee knows to be so owned shall be so disregarded.
Certificates so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the applicable
Trustee the pledgee's
14
right so to act with respect to such Certificates and that the pledgee is not
US Airways or any of its Affiliates.
"Overdue Scheduled Payment" means any Scheduled Payment which is
not in fact received by the Subordination Agent within five days after the
Scheduled Payment Date relating thereto.
"Owned Aircraft" has the meaning assigned to such term in the
preliminary statements of this Agreement.
"Owner Trustee" means, with respect to any Indenture pertaining to
a Leased Aircraft, the Owner Trustee (as defined therein) not in its
individual capacity but solely as trustee under the related owner trust
agreement, together with any successor trustee appointed pursuant to such
owner trust agreement.
"Participation Agreement" means, with respect to each Indenture,
the "Participation Agreement" referred to therein.
"Payee" has the meaning assigned to such term in Section 2.4(e).
"Paying Agent" means State Street Bank and Trust Company, as paying
agent under each Escrow and Paying Agent Agreement, together with its
successors in such capacity.
"Performing Equipment Note" means an Equipment Note issued pursuant
to an Indenture with respect to which no payment default has occurred and is
continuing (without giving effect to any Acceleration); provided that in the
event of a bankruptcy proceeding involving US Airways under Title 11 of the
United States Code (the "Bankruptcy Code"), (i) any payment default existing
during the 60-day period under Section 1110(a)(1)(A) of the Bankruptcy Code
(or such longer period as may apply under Section 1110(b) of the Bankruptcy
Code) (the "Section 1110 Period") shall not be taken into consideration,
unless during the Section 1110 Period the trustee in such proceeding or US
Airways refuses to assume or agree to perform its obligations under the Lease
related to such Equipment Note (in the case of a Leased Aircraft) or under
the Indenture related to such Equipment Note (in the case of an Owned
Aircraft) and (ii) any payment default occurring after the date of the order
of relief in such proceeding shall not be taken into consideration if such
payment default is cured under Section 1110(a)(1)(B) of the Bankruptcy Code
before the later of 30 days after the date of such default or the expiration
of the Section 1110 Period.
"Performing Note Deficiency" means any time that less than 65% of
the then aggregate outstanding principal amount of all Equipment Notes are
Performing Equipment Notes.
15
"Person" means any individual, corporation, partnership, joint
venture, association, limited liability company, joint-stock company, trust,
trustee, unincorporated organization or government or any agency or political
subdivision thereof.
"Pool Balance" means, with respect to each Trust or the
Certificates issued by any Trust, as of any date, (i) the original aggregate
face amount of the Certificates of such Trust less (ii) the aggregate amount
of all payments made in respect of the Certificates of such Trust or in
respect of Deposits relating to such Trust other than payments made in
respect of interest or premium thereon or reimbursement of any costs and
expenses in connection therewith. The Pool Balance for each Trust or for the
Certificates issued by any Trust as of any Distribution Date shall be
computed after giving effect to any special distribution with respect to
unused Deposits, payment of principal of the Equipment Notes or payment with
respect to other Trust Property held in such Trust and the distribution
thereof to be made on that date.
"Proceeding" means any suit in equity, action at law or other
judicial or administrative proceeding.
"PTC Event of Default" means, with respect to each Trust Agreement,
the failure to pay within 10 Business Days of the due date thereof: (i) the
outstanding Pool Balance of the applicable Class of Certificates on the Final
Legal Distribution Date for such Class or (ii) interest due on such
Certificates on any Distribution Date (unless the Subordination Agent shall
have made an Interest Drawing, or a withdrawal from the Cash Collateral
Account, with respect thereto in an aggregate amount sufficient to pay such
interest and shall have distributed such amount to the Trustee entitled
thereto).
"Rating Agencies" means, collectively, at any time, each nationally
recognized rating agency which shall have been requested to rate the
Certificates and which shall then be rating the Certificates. The initial
Rating Agencies will be Moody's and Standard & Poor's.
"Ratings Confirmation" means, with respect to any action proposed
to be taken, a written confirmation from each of the Rating Agencies that
such action would not result in (i) a reduction of the rating for any Class
of Certificates below the then current rating for such Class of Certificates
or (ii) a withdrawal or suspension of the rating of any Class of
Certificates.
"Regular Distribution Dates" means each January 30, and July 30,
commencing on January 30, 1999; 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.
"Replacement Liquidity Facility" means, for any Liquidity Facility,
an irrevocable revolving credit agreement in substantially the form of the
replaced Liquidity Facility, including reinstatement provisions, or in such
other form (which may include a letter of credit) as shall permit the Rating
Agencies to confirm in writing their respective ratings then in effect for
the
16
Certificates (before downgrading of such ratings, if any, as a result of the
downgrading of the applicable Liquidity Provider), in a face amount (or in an
aggregate face amount) equal to the amount of interest payable on the
Certificates of such Trust (at the Stated Interest Rate for such Trust, and
without regard to expected future principal payments) on the three Regular
Distribution Dates following the date of replacement of such Liquidity
Facility and issued by a Person (or Persons) having unsecured short-term debt
ratings issued by both Rating Agencies which are equal to or higher than the
Threshold Rating. Without limitation of the form that a Replacement
Liquidity Facility otherwise may have pursuant to the preceding sentence, a
Replacement Liquidity Facility for any Class of Certificates may have a
stated expiration date earlier than 15 days after the Final Maturity Date of
such Class of Certificates so long as such Replacement Liquidity Facility
provides for a Non-Extension Drawing as contemplated by Section 3.6(d)
hereof.
"Replacement Liquidity Provider" means a Person who issues a
Replacement Liquidity Facility.
"Required Amount" means, with respect to each Liquidity Facility,
or the Cash Collateral Account, for any Class, for any day, the sum of the
aggregate amount of interest, calculated at the rate per annum equal to the
Stated Interest Rate for the related Class of Certificates, that would be
payable on such Class of Certificates on each of the three successive Regular
Distribution Dates immediately following such day or, if such day is a
Regular Distribution Date, on such day and the succeeding two Regular
Distribution Dates, in each case calculated on the basis of the Pool Balance
of such Class of Certificates on such date and without regard to expected
future payments of principal on such Class of Certificates.
"Responsible Officer" means (i) with respect to the Subordination
Agent and each of the Trustees, any officer in the corporate trust
administration department of the Subordination Agent or such 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, and (ii) with respect to each
Liquidity Provider, any authorized officer of such Liquidity Provider.
"Scheduled Payment" means, with respect to any Equipment Note, (i)
any payment of principal or interest on such Equipment Note (other than an
Overdue Scheduled Payment) due from the obligor thereon or (ii) any payment
of interest on the corresponding Class of Certificates with funds drawn under
any Liquidity Facility, 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 of, premium, if any, or interest resulting from the redemption
or purchase of any Equipment Note shall not constitute a Scheduled Payment.
17
"Scheduled Payment Date" means, with respect to any Scheduled
Payment, the date on which such Scheduled Payment is scheduled to be made.
"Series A Equipment Notes" means the 6.85% Series A Equipment Notes
issued pursuant to each Indenture by the related Owner Trustee or US Airways,
as the case may be, and authenticated by the Loan Trustee thereunder, and any
such Equipment Notes issued in exchange therefor or replacement thereof
pursuant to the terms of such Indenture.
"Series B Equipment Notes" means the 7.35% Series B Equipment Notes
issued pursuant to each Indenture by the related Owner Trustee or US Airways,
as the case may be, and authenticated by the Loan Trustee thereunder, and any
such Equipment Notes issued in exchange therefor or replacement thereof
pursuant to the terms of such Indenture.
"Series C Equipment Notes" means the 6.82% Series C Equipment Notes
issued pursuant to each Indenture by the related Owner Trustee or US Airways,
as the case may be, and authenticated by the Loan Trustee thereunder, and any
such Equipment Notes issued in exchange therefor or replacement thereof
pursuant to the terms of such Indenture.
"Special Distribution Date" means, with respect to any Special
Payment, the date chosen by the Subordination Agent pursuant to Section
2.4(a) for the distribution of such Special Payment in accordance with this
Agreement.
"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).
"Special Payments Account" means the Eligible Deposit Account
created pursuant to Section 2.2 as a sub-account to the Collection Account.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc.
"State Street" has the meaning assigned to such terms in the
preliminary statements to this Agreement.
"Stated Amount" with respect to any Liquidity Facility, means the
Maximum Commitment (as defined in such Liquidity Facility) of the applicable
Liquidity Provider thereunder.
"Stated Expiration Date" has the meaning specified in Section
3.6(d).
18
"Stated Interest Rate" means (i) with respect to the Class A
Certificates, 6.85% per annum, (ii) with respect to the Class B Certificates,
7.35% per annum, and (iii) with respect to the Class C Certificates, 6.82%
per annum.
"Subordination Agent" has the meaning assigned to it in the
preliminary statements to this Agreement.
"Subordination Agent Incumbency Certificate" has the meaning
assigned to such term in Section 2.5(a).
"Subordination Agent Representatives" has the meaning assigned to
such term in Section 2.5(a).
"Substitute Aircraft" shall have the meaning set forth in the Note
Purchase Agreement.
"Tax" and "Taxes" mean any and all taxes, fees, levies, duties,
tariffs, imposts, and other charges of any kind (together with any and all
interest, penalties, loss, damage, liability, expense, additions to tax and
additional amounts or costs incurred or imposed with respect thereto) imposed
or otherwise assessed by the United States of America or by any state, local
or foreign government (or any subdivision or agency thereof) or other taxing
authority, including, without limitation: taxes or other charges on or with
respect to income, franchises, windfall or other profits, gross receipts,
property, sales, use, capital stock, payroll, employment, social security,
workers' compensation, unemployment compensation, or net worth and similar
charges; taxes or other charges in the nature of excise, withholding, ad
valorem, stamp, transfer, value added, taxes on goods and services, gains
taxes, license, registration and documentation fees, customs duties, tariffs,
and similar charges.
"Tax Letter" means the Tax Letter dated December 14, 1998 between
ABN AMRO and US Airways with respect to the Liquidity Facilities, and all tax
letters entered into between US Airways and any Replacement Liquidity
Provider.
"Termination Notice" with respect to any Liquidity Facility has the
meaning assigned to such term in such Liquidity Facility.
"Threshold Rating" means the short-term unsecured debt rating of P-
1 by Moody's and A-1+ by Standard & Poor's, in the case of the Class A
Liquidity Provider, and the short-term unsecured debt rating of P-1 by
Moody's and A-1 by Standard & Poor's, in the case of the Class B Liquidity
Provider and the Class C Liquidity Provider.
"Treasury Regulations" means regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to
specific provisions of proposed
19
or temporary regulations shall include analogous provisions of final Treasury
Regulations or other successor Treasury Regulations.
"Triggering Event" means (x) the occurrence of an Indenture Default
under all of the Indentures resulting in a PTC Event of Default with respect
to the most senior Class of Certificates then Outstanding, (y) the
Acceleration of all of the outstanding Equipment Notes (provided that, with
respect to the period prior to the Delivery Period Expiry Date, such
Equipment Notes have an aggregate principal balance in excess of
$300,000,000) or (z) the occurrence of a US Airways Bankruptcy Event.
"Trust" means any of the Class A Trust, the Class B Trust or the
Class C Trust.
"Trust Accounts" has the meaning assigned to such term in Section
2.2(a).
"Trust Agreement" means any of the Class A Trust Agreement, the
Class B Trust Agreement or the Class C Trust Agreement.
"Trust Property" with respect to any Trust, has the meaning set
forth in the Trust Agreement for such Trust.
"Trustee" means any of the Class A Trustee, the Class B Trustee or
the Class C Trustee.
"Trustee Incumbency Certificate" has the meaning assigned to such
term in Section 2.5(a).
"Trustee Representatives" has the meaning assigned to such term in
Section 2.5(a).
"Underwriters" means Xxxxxx Xxxxxxx & Co. Incorporated, Credit
Suisse First Boston Corporation, Xxxxxx Brothers Inc., and Salomon Brothers
Inc.
"Underwriting Agreement" means the Underwriting Agreement dated
December 4, 1998 among the Underwriters and US Airways, relating to the
purchase of the Class A Certificates and the Class B Certificates by the
Underwriters, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with its terms.
"US Airways" means US Airways, Inc., a Delaware corporation, and
its successors and assigns.
"US Airways Bankruptcy Event" means the occurrence and continuation
of any of the following:
20
(a) US Airways shall consent to the appointment of or the taking of
possession by a receiver, trustee or liquidator of itself or of a substantial
part of its property, or US Airways shall admit in writing its inability to
pay its debts generally as they come due, or does not pay its debts generally
as they become due or shall make a general assignment for the benefit of
creditors, or US Airways shall file a voluntary petition in bankruptcy or a
voluntary petition or an answer seeking reorganization, liquidation or other
relief in a case under any bankruptcy laws or other insolvency laws (as in
effect at such time) or an answer admitting the material allegations of a
petition filed against US Airways in any such case, or US Airways shall seek
relief by voluntary petition, answer or consent, under the provisions of any
other bankruptcy or other similar law providing for the reorganization or
winding-up of corporations (as in effect at such time) or US Airways shall
seek an agreement, composition, extension or adjustment with its creditors
under such laws, or US Airways's board of directors shall adopt a resolution
authorizing corporate action in furtherance of any of the foregoing; or
(b) an order, judgment or decree shall be entered by any court of
competent jurisdiction appointing, without the consent of US Airways, a
receiver, trustee or liquidator of US Airways or of any substantial part of
its property, or any substantial part of the property of US Airways shall be
sequestered, or granting any other relief in respect of US Airways as a
debtor under any bankruptcy laws or other insolvency laws (as in effect at
such time), and any such order, judgment or decree of appointment or
sequestration shall remain in force undismissed, unstayed and unvacated for a
period of 60 days after the date of entry thereof; or
(c) a petition against US Airways in a case under any bankruptcy
laws or other insolvency laws (as in effect at such time) is filed and not
withdrawn or dismissed within 60 days thereafter, or if, under the provisions
of any law providing for reorganization or winding-up of corporations which
may apply to US Airways, any court of competent jurisdiction assumes
jurisdiction, custody or control of US Airways or of any substantial part of
its property and such jurisdiction, custody or control remains in force
unrelinquished, unstayed and unterminated for a period of 60 days.
"US Airways Provisions" has the meaning specified in Section
9.1(a).
"Written Notice" means, from the Subordination Agent, any Trustee
or Liquidity Provider, a written instrument executed by the Designated
Representative of such Person. An invoice delivered by a Liquidity Provider
pursuant to Section 3.1 in accordance with its normal invoicing procedures
shall constitute Written Notice under such Section.
21
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
SECTION 2.1. Agreement to Terms of Subordination; Payments from
Monies Received Only. (a) Each Trustee hereby acknowledges and agrees to
the terms of subordination set forth in this Agreement in respect of each
Class of Certificates and agrees to enforce such provisions and cause all
payments in respect of the Equipment Notes and the Liquidity Facilities to be
applied in accordance with the terms of this Agreement. In addition, each
Trustee hereby agrees to cause the Equipment Notes purchased by the related
Trust to be registered in the name of the Subordination Agent or its nominee,
as agent and trustee for such Trustee, to be held in trust by the
Subordination Agent solely for the purpose of facilitating the enforcement of
the subordination and other provisions of this Agreement.
(b) Except as otherwise expressly provided in the next succeeding
sentence of this Section 2.1, all payments to be made by the Subordination
Agent hereunder shall be made only from amounts received by it that
constitute Scheduled Payments, Special Payments, payments under Section 6(c)
of the Participation Agreements or payments under Section 7 of the Note
Purchase Agreement, and only to the extent that the Subordination Agent shall
have received sufficient income or proceeds therefrom to enable it to make
such payments in accordance with the terms hereof. Each of the Trustees and
the Subordination Agent hereby agrees and, as provided in each Trust
Agreement, each Certificateholder, by its acceptance of a Certificate, and
each Liquidity Provider, by entering into the Liquidity Facility to which it
is a party, has agreed to look solely to such amounts to the extent available
for distribution to it as provided in this Agreement and to the relevant
Deposits and that none of the Trustees, Owner Trustees, Loan Trustees, Owner
Participants nor the Subordination Agent is personally liable to any of them
for any amounts payable or any liability under this Agreement, any Trust
Agreement, any Liquidity Facility or such Certificate, except (in the case of
the Subordination Agent) as expressly provided herein or (in the case of the
Trustees) as expressly provided in each Trust Agreement or (in the case of
the Owner Trustees and the Loan Trustees) as expressly provided in any
Operative Agreement.
SECTION 2.2. Trust Accounts. (a) Upon the execution of this
Agreement, the Subordination Agent shall establish and maintain in its name
(i) the Collection Account as an Eligible Deposit Account, bearing a
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Trustees, the Certificateholders and the
Liquidity Providers, and (ii) as a sub-account in the Collection Account, the
Special Payments Account as an Eligible Deposit Account, bearing a
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Trustees, the Certificateholders and the
Liquidity Providers. The Subordination Agent shall establish and maintain
the Cash Collateral Accounts pursuant to and under the circumstances set
forth in Section 3.6(f) hereof. Upon such establishment and maintenance
under Section 3.6(f) hereof, the Cash Collateral Accounts shall, together
with the Collection Account, constitute the "Trust Accounts" hereunder.
22
(b) Funds on deposit in the Trust Accounts shall be invested and
reinvested by the Subordination Agent in Eligible Investments selected by the
Subordination Agent if such investments are reasonably available and have
maturities no later than the earlier of (i) 90 days following the date of
such investment and (ii) the Business Day immediately preceding the Regular
Distribution Date or the date of the related distribution pursuant to Section
2.4 hereof, as the case may be, next following the date of such investment;
(or, in the case of any amount on deposit in the Cash Collateral Account with
respect to any Liquidity Facility (with respect to such Liquidity Facility,
the "Relevant Amount"), (A) in the case of a portion of the Relevant Amount
equal to the amount scheduled to be paid to the Liquidity Provider with
respect to such Liquidity Facility on the Regular Distribution Date next
following the date of such investment in accordance with clause (iv), (v) or
(vi) of Section 3.6(f), the Business Day immediately preceding such Regular
Distribution Date, or (B) in the case of a portion of the Relevant Amount
equal to the Relevant Amount minus the amount described in clause (A) above,
the Business Day immediately preceding the scheduled Interest Payment Date
with respect to such Liquidity Facility next following the date of such
investment); provided, however, that following the making of a Downgrade
Drawing or a Non-Extension Drawing under any Liquidity Facility, the
Subordination Agent shall invest and reinvest such amounts in Eligible
Investments at the direction of US Airways (or, if and to the extent so
specified to the Subordination Agent by US Airways with respect to any
Liquidity Facility, the Liquidity Provider with respect to such Liquidity
Facility); provided further, however, that upon the occurrence and during the
continuation of a Triggering Event, the Subordination Agent shall invest and
reinvest such amounts in accordance with the written instructions of the
Controlling Party. Unless otherwise expressly provided in this Agreement
(including, without limitation, with respect to Investment Earnings on
deposit in the Cash Collateral Accounts, Section 3.6(f) hereof), any
Investment Earnings shall be deposited in the Collection Account when
received by the Subordination Agent and shall be applied by the Subordination
Agent in the same manner as the other amounts on deposit in the Collection
Account are to be applied and any losses shall be charged against the
principal amount invested, in each case net of the Subordination Agent's
reasonable fees and expenses in making such investments. The Subordination
Agent shall not be liable for any loss resulting from any investment,
reinvestment or liquidation required to be made under this Agreement other
than by reason of its willful misconduct or gross negligence. Eligible
Investments and any other investment required to be made hereunder shall be
held to their maturities except that any such investment may be sold (without
regard to its maturity) by the Subordination Agent without instructions
whenever such sale is necessary to make a distribution required under this
Agreement. Uninvested funds held hereunder shall not earn or accrue
interest.
(c) The Subordination Agent shall possess all right, title and
interest in all funds on deposit from time to time in the Trust Accounts and
in all proceeds thereof (including all income thereon, except as otherwise
expressly provided herein with respect to Investment Earnings). The Trust
Accounts shall be held in trust by the Subordination Agent under the sole
dominion and control of the Subordination Agent for the benefit of the
Trustees, the Certificateholders and the Liquidity Providers, as the case may
be. If, at any time, any of the
23
Trust Accounts ceases to be an Eligible Deposit Account, the Subordination
Agent shall within 10 Business Days (or such longer period, not to exceed 30
calendar days, to which each Rating Agency may consent) establish a new
Collection Account, Special Payments Account or Cash Collateral Account, as
the case may be, as an Eligible Deposit Account and shall transfer any cash
and/or any investments to such new Collection Account, Special Payments
Account or Cash Collateral Account, as the case may be. So long as State
Street is an Eligible Institution, the Trust Accounts shall be maintained
with it as Eligible Deposit Accounts.
SECTION 2.3. Deposits to the Collection Account and Special
Payments Account. (a) The Subordination Agent shall, upon receipt thereof,
deposit in the Collection Account all Scheduled Payments received by it.
(b) The Subordination Agent shall, on each date when one or more
Special Payments are made to the Subordination Agent as holder of the
Equipment Notes, deposit in the Special Payments Account the aggregate amount
of such Special Payments.
SECTION 2.4. Distributions of Special Payments. (a) Notice of
Special Payment. Except as provided in Section 2.4(e) below, upon receipt by
the Subordination Agent, as registered holder of the Equipment Notes, of any
notice of a Special Payment (or, in the absence of any such notice, upon
receipt by the Subordination Agent of a Special Payment), the Subordination
Agent shall promptly give notice thereof to each Trustee and the Liquidity
Providers. The Subordination Agent shall promptly calculate the amount of
the redemption or purchase of Equipment Notes or the amount of any Overdue
Scheduled Payment, as the case may be, comprising such Special Payment under
the applicable Indenture or Indentures and shall promptly send to each
Trustee a Written Notice of such amount and the amount allocable to each
Trust. Such Written Notice shall also set the distribution date for such
Special Payment (a "Special Distribution Date"), which shall be the Business
Day which immediately follows the later to occur of (x) the 15th day after
the date of such Written Notice or (y) the date the Subordination Agent has
received or expects to receive such Special Payment. Amounts on deposit in
the Special Payments Account shall be distributed in accordance with
Sections 2.4(b) and 2.4(c) hereof, as applicable.
(b) Redemptions and Purchases of Equipment Notes. (i) So long as
no Triggering Event shall have occurred (whether or not continuing), the
Subordination Agent shall make distributions pursuant to this Section 2.4(b)
of amounts on deposit in the Special Payments Account on account of the
redemption, purchase (including, without limitation, a purchase resulting
from a sale of the Equipment Notes permitted by Article IV hereof) or
prepayment of all of the Equipment Notes issued pursuant to an Indenture on
the Special Distribution Date for such Special Payment in the following order
of priority:
first, such amount as shall be required to pay (A) all accrued and
unpaid Liquidity Expenses then in arrears plus (B) the product of (x)
the aggregate amount of all accrued and unpaid Liquidity Expenses not in
arrears to such Special Payment Date multiplied by
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(y) a fraction, the numerator of which is the aggregate outstanding
principal amount of Equipment Notes being redeemed, purchased or prepaid
on such Special Payment Date and the denominator of which is the
aggregate outstanding principal amount of all Equipment Notes, shall be
distributed to the Liquidity Providers pari passu on the basis of the
amount of Liquidity Expenses owed to each Liquidity Provider;
second, such amount as shall be required to pay (A) all accrued and
unpaid interest then in arrears on all Liquidity Obligations (including
interest accrued and unpaid on any Interest Drawing or any Applied
Provider Advance (as defined in any Liquidity Facility)) plus (B) the
product of (x) the aggregate amount of all accrued and unpaid interest
on all Liquidity Obligations not in arrears to such Special Payment Date
(at the rate provided in the applicable Liquidity Facility) multiplied
by (y) a fraction, the numerator of which is the aggregate outstanding
principal amount of Equipment Notes being redeemed, purchased or prepaid
on such Special Payment Date and the denominator of which is the
aggregate outstanding principal amount of all Equipment Notes, shall be
distributed to the Liquidity Providers pari passu on the basis of the
amount of such Liquidity Obligations owed to each Liquidity Provider;
third, such amount as shall be required (A) if any Cash Collateral
Account had been previously funded as provided in Section 3.6(f), to
fund such Cash Collateral Account up to its Required Amount shall be
deposited in such Account, (B) if any Liquidity Facility shall become a
Downgraded Facility or a Non-Extended Facility at a time when
unreimbursed Interest Drawings under such Liquidity Facility have
reduced the Available Amount thereunder to zero, to deposit into the
related Cash Collateral Account an amount equal to such Account's
Required Amount shall be deposited in such Account, and (C) if, with
respect to any particular Liquidity Facility, neither subclause (A) nor
subclause (B) of this clause "third" are applicable, to pay or reimburse
the Liquidity Provider in respect of such Liquidity Facility in an
amount equal to the amount of any unreimbursed Interest Drawings under
such Liquidity Facility shall be distributed to such Liquidity Provider,
pari passu on the basis of the amounts of all such deficiencies and/or
unreimbursed Interest Drawings;
fourth, if, with respect to any particular Liquidity Facility, any
amounts are to be distributed pursuant to either subclause (A) or (B) of
clause "third" above, then the Liquidity Provider with respect to such
Liquidity Facility shall be paid the excess of (x) the aggregate
outstanding amount of unreimbursed Advances (whether or not then due)
under such Liquidity Facility over (y) the Required Amount for the
relevant Class, pari passu on the basis of such amounts in respect of
each Liquidity Provider;
fifth, such amount as shall be required to pay in full Expected
Distributions to the holders of Class A Certificates on such Special
Distribution Date shall be distributed to the Class A Trustee;
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sixth, such amount as shall be required to pay in full Expected
Distributions to the holders of Class B Certificates on such Special
Distribution Date shall be distributed to the Class B Trustee;
seventh, such amount as shall be required to pay in full Expected
Distributions to the holders of Class C Certificates on such Special
Distribution Date shall be distributed to the Class C Trustee; and
eighth, the balance, if any, of such Special Payment shall be
transferred to the Collection Account for distribution in accordance
with Section 3.2 hereof.
For the purposes of this Section 2.4(b), clause (x) of the definition of
"Expected Distributions" shall be deemed to read as follows: "(x) accrued,
due and unpaid interest on such Certificates together with (without
duplication) accrued and unpaid interest on a portion of such Certificates
equal to the outstanding principal amount of Equipment Notes being redeemed,
purchased or prepaid (immediately prior to such redemption, purchase or
prepayment) (excluding interest, if any, payable with respect to the Deposits
related to such Trust)".
(ii) Upon the occurrence of a Triggering Event (whether or not
continuing), the Subordination Agent shall make distributions pursuant to
this Section 2.4(b) of amounts on deposit in the Special Payments Account on
account of the redemption or purchase of all of the Equipment Notes issued
pursuant to an Indenture on the Special Distribution Date for such Special
Payment in accordance with Section 3.3 hereof.
(c) Other Special Payments. Except as provided in clause (e)
below, any amounts on deposit in the Special Payments Account other than in
respect of amounts to be distributed pursuant to Section 2.4(b) shall be
distributed on the Special Distribution Date therefor in accordance with
Article III hereof.
(d) Investment of Amounts in Special Payments Account. Any amounts
on deposit in the Special Payments Account prior to the distribution thereof
pursuant to Section 2.4(b) or (c) shall be invested in accordance with
Section 2.2(b). Investment Earnings on such investments shall be distributed
in accordance with Section 2.4(b) or (c), as the case may be.
(e) Certain Payments. The Subordination Agent will distribute
promptly upon receipt thereof (i) any indemnity payment received by it from
the Owner Participant, the Owner Trustee or US Airways in respect of any
Trustee, any Liquidity Provider, any Paying Agent, any Depositary or any
Escrow Agent (collectively, the "Payees") and (ii) any compensation
(including, without limitation, any fees payable to any Liquidity Provider
under Section 2.03 of any Liquidity Facility) received by it from the Owner
Participant, the Owner Trustee or US Airways under any Operative Agreement in
respect of any Payee, directly to the Payee entitled thereto.
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SECTION 2.5. Designated Representatives. (a) With the delivery
of this Agreement, the Subordination Agent shall furnish to each Liquidity
Provider and each Trustee, and from time to time thereafter may furnish to
each Liquidity Provider and each Trustee, at the Subordination Agent's
discretion, or upon any Liquidity Provider's or Trustee's request (which
request shall not be made more than one time in any 12-month period), a
certificate (a "Subordination Agent Incumbency Certificate") of a Responsible
Officer of the Subordination Agent certifying as to the incumbency and
specimen signatures of the officers of the Subordination Agent and the
attorney-in-fact and agents of the Subordination Agent (the "Subordination
Agent Representatives") authorized to give Written Notices on behalf of the
Subordination Agent hereunder. Until each Liquidity Provider and Trustee
receives a subsequent Subordination Agent Incumbency Certificate, it shall be
entitled to rely on the last Subordination Agent Incumbency Certificate
delivered to it hereunder.
(b) With the delivery of this Agreement, each Trustee shall furnish
to the Subordination Agent, and from time to time thereafter may furnish to
the Subordination Agent, at such Trustee's discretion, or upon the
Subordination Agent's request (which request shall not be made more than one
time in any 12-month period), a certificate (a "Trustee Incumbency
Certificate") of a Responsible Officer of such Trustee certifying as to the
incumbency and specimen signatures of the officers of such Trustee and the
attorney-in-fact and agents of such Trustee (the "Trustee Representatives")
authorized to give Written Notices on behalf of such Trustee hereunder.
Until the Subordination Agent receives a subsequent Trustee Incumbency
Certificate, it shall be entitled to rely on the last Trustee Incumbency
Certificate delivered to it hereunder.
(c) With the delivery of this Agreement, each Liquidity Provider
shall furnish to the Subordination Agent, and from time to time thereafter
may furnish to the Subordination Agent, at such Liquidity Provider's
discretion, or upon the Subordination Agent's request (which request shall
not be made more than one time in any 12-month period), a certificate (an "LP
Incumbency Certificate") of any Responsible Officer of such Liquidity
Provider certifying as to the incumbency and specimen signatures of any
officer, attorney-in-fact, agent or other designated representative of such
Liquidity Provider (the "LP Representatives" and, together with the
Subordination Agent Representatives and the Trustee Representatives, the
"Designated Representatives") authorized to give Written Notices on behalf of
such Liquidity Provider hereunder. Until the Subordination Agent receives a
subsequent LP Incumbency Certificate, it shall be entitled to rely on the
last LP Incumbency Certificate delivered to it hereunder.
SECTION 2.6. Controlling Party. (a) The Trustees and the
Liquidity Providers hereby agree that, with respect to any Indenture at any
given time, the Loan Trustee thereunder will be directed (i) in taking, or
refraining from taking, any action under such Indenture or with respect to
the Equipment Notes issued thereunder, so long as no Indenture Default has
occurred and is continuing thereunder, by the holders of at least a majority
of the outstanding principal amount of such Equipment Notes (provided that,
for so long as the Subordination Agent is the registered holder of the
Equipment Notes, the Subordination Agent shall act with respect to this
27
clause (i) in accordance with the directions of the Trustees (in the case of
each such Trustee, with respect to the Equipment Notes issued under such
Indenture and held as Trust Property of such Trust) constituting, in the
aggregate, directions with respect to such principal amount of Equipment
Notes), and (ii) after the occurrence and during the continuance of an
Indenture Default thereunder (which, in the case of an Indenture pertaining
to a Leased Aircraft, has not been cured by the applicable Owner Trustee or
the applicable Owner Participant, if applicable, pursuant to Section 4.03 of
such Indenture), in taking, or refraining from taking, any action under such
Indenture or with respect to such Equipment Notes, including exercising
remedies thereunder (including Accelerating the Equipment Notes issued
thereunder or foreclosing the Lien on the Aircraft securing such Equipment
Notes), by the Controlling Party.
(b) The Person who shall be the "Controlling Party" with respect to
any Indenture shall be: (x) the Class A Trustee; (y) upon payment of Final
Distributions to the holders of Class A Certificates, the Class B Trustee;
and (z) upon payment of Final Distributions to the holders of Class B
Certificates, the Class C Trustee. For purposes of giving effect to the
foregoing, the Trustees (other than the Controlling Party) irrevocably agree
(and the Certificateholders (other than the Certificateholders represented by
the Controlling Party) shall be deemed to agree by virtue of their purchase
of Certificates) that the Subordination Agent, as record holder of the
Equipment Notes, shall exercise its voting rights in respect of the Equipment
Notes as directed by the Controlling Party and any vote so exercised shall be
binding upon the Trustees and all Certificateholders.
The Subordination Agent shall give written notice to all of the
other parties to this Agreement promptly upon a change in the identity of the
Controlling Party. Each of the parties hereto agrees that it shall not
exercise any of the rights of the Controlling Party at such time as it is not
the Controlling Party hereunder; provided, however, that nothing herein
contained shall prevent or prohibit any Non-Controlling Party from exercising
such rights as shall be specifically granted to such Non-Controlling Party
hereunder and under the other Operative Agreements.
(c) Notwithstanding the foregoing, at any time after 18 months from
the earliest to occur of (i) the date on which the entire Available Amount
under any Liquidity Facility shall have been drawn (for any reason other than
a Downgrade Drawing or a Non-Extension Drawing) and remain unreimbursed, (ii)
the date on which the entire amount of any Downgrade Drawing or Non-Extension
Drawing has been withdrawn from a Cash Collateral Account to pay interest on
the related Class of Certificates and remains unreimbursed and (iii) the date
on which all Equipment Notes shall have been Accelerated (provided that with
respect to the period prior to the Delivery Period Expiry Date, such
Equipment Notes have an aggregate outstanding principal balance in excess of
$300,000,000), the Liquidity Providers with a majority of unreimbursed
Liquidity Obligations shall have the right to elect, by Written Notice to the
Subordination Agent and each of the Trustees, to become the Controlling Party
hereunder with respect to any Indenture at any time from and including the
last day of such 18-month period.
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(d) The exercise of remedies by the Controlling Party under this
Agreement shall be expressly limited by Section 4.1(a)(ii) hereof.
(e) The Controlling Party shall not be entitled to require or
obligate any Non-Controlling Party to provide funds necessary to exercise any
right or remedy hereunder.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
SECTION 3.1. Written Notice of Distribution. (a) No later than
3:00 P.M. (New York City time) on the Business Day immediately preceding each
Regular Distribution Date (or Special Distribution Date for purposes of
Section 2.4(b) hereof, as the case may be), each of the following Persons
shall deliver to the Subordination Agent a Written Notice setting forth the
following information as at the close of business on such Business Day:
(i) With respect to the Class A Certificates, the Class A Trustee
shall separately set forth the amounts to be paid in accordance with clause
"fifth" of Section 3.2 or 2.4(b), as the case may be, hereof;
(ii) With respect to the Class B Certificates, the Class B Trustee
shall separately set forth the amounts to be paid in accordance with clause
"sixth" of Section 3.2 or 2.4(b), as the case may be, hereof;
(iii) With respect to the Class C Certificates, the Class C Trustee
shall separately set forth the amounts to be paid in accordance with clause
"seventh" of Section 3.2 or 2.4(b), as the case may be, hereof;
(iv) With respect to each Liquidity Facility, the Liquidity
Provider thereunder shall separately set forth the amounts to be paid in
accordance with clauses "first", "second", "third" and "fourth" of Section
3.2 or 2.4(b), as the case may be, hereof; and
(v) Each Trustee shall set forth the amounts to be paid in
accordance with clause "eighth" of Section 3.2 hereof.
The notices required under this Section 3.1(a) may be in the form of a
schedule or similar document provided to the Subordination Agent by the
parties referenced therein or by any one of them, which schedule or similar
document may state that, unless there has been a prepayment of the
Certificates, such schedule or similar document is to remain in effect until
any substitute notice or amendment shall be given to the Subordination Agent
by the party providing such notice.
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(b) Following the occurrence of a Triggering Event, the
Subordination Agent shall request the following information from the
following Persons, and each of the following Persons shall, upon the request
of the Subordination Agent, deliver a Written Notice to the Subordination
Agent setting forth for such Person the following information:
(i) With respect to the Class A Certificates, the Class A Trustee
shall separately set forth the amounts to be paid in accordance with clauses
"first" (to reimburse payments made by the Class A Certificateholders
pursuant to subclause (iii) of clause "first" of Section 3.3 hereof) and
"seventh" of Section 3.3 hereof;
(ii) With respect to the Class B Certificates, the Class B Trustee
shall separately set forth the amounts to be paid in accordance with clauses
"first" (to reimburse payments made by the Class B Certificateholders
pursuant to subclause (iii) of clause "first" of Section 3.3 hereof) and
"eighth" of Section 3.3 hereof;
(iii) With respect to the Class C Certificates, the Class C Trustee
shall separately set forth the amounts to be paid in accordance with clauses
"first" (to reimburse payments made by the Class C Certificateholders
pursuant to subclause (iii) of clause "first" of Section 3.3 hereof) and
"ninth" of Section 3.3 hereof;
(iv) With respect to each Liquidity Facility, the Liquidity
Provider thereunder shall separately set forth the amounts to be paid to it
in accordance with subclause (iii) of clause "first" of Section 3.3 hereof
and clauses "second", "third", "fourth" and "fifth" of Section 3.3 hereof;
and
(v) Each Trustee shall set forth the amounts to be paid in
accordance with clause "sixth" of Section 3.3 hereof.
(c) At such time as a Trustee or a Liquidity Provider shall have
received all amounts owing to it (and, in the case of a Trustee, the
Certificateholders for which it is acting) pursuant to Section 2.4, 3.2 or
3.3 hereof, as applicable, and, in the case of a Liquidity Provider, its
commitment under the related Liquidity Facility shall have terminated or
expired, such Person shall, by a Written Notice, so inform the Subordination
Agent and each other party to this Agreement.
(d) As provided in Section 6.5 hereof, the Subordination Agent
shall be fully protected in relying on any of the information set forth in a
Written Notice provided by any Trustee or any Liquidity Provider pursuant to
paragraphs (a) through (c) above and shall have no independent obligation to
verify, calculate or recalculate any amount set forth in any Written Notice
delivered in accordance with such paragraphs.
(e) Any Written Notice delivered by a Trustee or a Liquidity
Provider, as applicable, pursuant to Section 3.1(a), 3.1(b) or 3.1(c) hereof,
if made prior to 10:00 A.M. (New
30
York City time) shall be effective on the date delivered (or if delivered
later shall be effective as of the next Business Day). Subject to the terms
of this Agreement, the Subordination Agent shall as promptly as practicable
comply with any such instructions; provided, however, that any transfer of
funds pursuant to any instruction received after 10:00 A.M. (New York City
time) on any Business Day may be made on the next succeeding Business Day.
(f) In the event the Subordination Agent shall not receive from any
Person any information set forth in paragraph (a) or (b) above which is
required to enable the Subordination Agent to make a distribution to such
Person pursuant to Section 3.2 or 3.3 hereof, the Subordination Agent shall
request such information and, failing to receive any such information, the
Subordination Agent shall not make such distribution(s) to such Person. In
such event, the Subordination Agent shall make distributions pursuant to
clauses "first" through "ninth" of Section 3.2 and clauses "first" through
"ninth" of Section 3.3 to the extent it shall have sufficient information to
enable it to make such distributions, and shall continue to hold any funds
remaining, after making such distributions, until the Subordination Agent
shall receive all necessary information to enable it to distribute any funds
so withheld.
(g) On such dates (but not more frequently than monthly) as any
Liquidity Provider or any Trustee shall request, but in any event
automatically at the end of each calendar quarter, the Subordination Agent
shall send to such party a written statement reflecting all amounts on
deposit with the Subordination Agent pursuant to Section 3.1(f) hereof.
SECTION 3.2. Distribution of Amounts on Deposit in the Collection
Account. Except as otherwise provided in Sections 2.4, 3.1(f), 3.3, 3.4 and
3.6(b), amounts on deposit in the Collection Account (or, in the case of any
amount described in Section 2.4(c), on deposit in the Special Payments
Account) shall be promptly distributed on each Regular Distribution Date (or,
in the case of any amount described in Section 2.4(c), on the Special
Distribution Date thereof) in the following order of priority and in
accordance with the information provided to the Subordination Agent pursuant
to Section 3.1(a) hereof:
first, such amount as shall be required to pay all accrued and
unpaid Liquidity Expenses owed to each Liquidity Provider shall be
distributed to the Liquidity Providers pari passu on the basis of the
amount of Liquidity Expenses owed to each Liquidity Provider;
second, such amount as shall be required to pay in full the
aggregate amount of interest accrued on all Liquidity Obligations (at
the rate, or in the amount, provided in the applicable Liquidity
Facility) and unpaid shall be distributed to the Liquidity Providers
pari passu on the basis of the amount of such Liquidity Obligations owed
to each Liquidity Provider;
third, such amount as shall be required (A) if any Cash Collateral
Account had been previously funded as provided in Section 3.6(f), to
fund such Account up to its
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Required Amount shall be deposited in such Account, (B) if any Liquidity
Facility shall become a Downgraded Facility or a Non-Extended Facility
at a time when unreimbursed Interest Drawings under such Liquidity
Facility have reduced the Available Amount thereunder to zero, to
deposit into the related Cash Collateral Account an amount equal to such
Account's Required Amount shall be deposited in such Cash Collateral
Account, and (C) if, with respect to any particular Liquidity Facility,
neither subclause (A) nor subclause (B) of this clause "third" is
applicable, to pay or reimburse the Liquidity Provider in respect of
such Liquidity Facility in an amount equal to the amount of all
Liquidity Obligations then due under such Liquidity Facility (other than
amounts payable pursuant to clause "first" or "second" of this Section
3.2) shall be distributed to such Liquidity Provider, pari passu on the
basis of the amounts of all such deficiencies and/or unreimbursed
Liquidity Obligations;
fourth, if, with respect to any particular Liquidity Facility, any
amounts are to be distributed pursuant to either subclause (A) or (B) of
clause "third" above, then the Liquidity Provider with respect to such
Liquidity Facility shall be paid the excess of (x) the aggregate
outstanding amount of unreimbursed Advances (whether or not then due)
under such Liquidity Facility over (y) the Required Amount for the
relevant Class, pari passu on the basis of such amounts in respect of
each Liquidity Provider;
fifth, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class A Certificates on such
Distribution Date shall be distributed to the Class A Trustee;
sixth, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class B Certificates on such
Distribution Date shall be distributed to the Class B Trustee;
seventh, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class C Certificates on such
Distribution Date shall be distributed to the Class C Trustee;
eighth, such amount as shall be required to pay in full the
aggregate unpaid amount of fees and expenses payable as of such
Distribution Date to the Subordination Agent and each Trustee pursuant
to the terms of this Agreement and the Trust Agreements, as the case may
be, shall be distributed to the Subordination Agent and such Trustee;
and
ninth, the balance, if any, of any such amount remaining thereafter
shall be held in the Collection Account for later distribution in
accordance with this Article III.
SECTION 3.3. Distribution of Amounts on Deposit Following a
Triggering Event. (a) Except as otherwise provided in Sections 3.1(f) and
3.6(b) hereof, upon the
32
occurrence of a Triggering Event and at all times thereafter, all funds in
the Collection Account or the Special Payments Account shall be promptly
distributed by the Subordination Agent in the following order of priority:
first, such amount as shall be required to reimburse (i) the
Subordination Agent for any out-of-pocket costs and expenses actually
incurred by it (to the extent not previously reimbursed) in the
protection of, or the realization of the value of, the Equipment Notes
or any Trust Indenture Estate, shall be applied by the Subordination
Agent in reimbursement of such costs and expenses, (ii) each Trustee for
any amounts of the nature described in clause (i) above actually
incurred by it under the applicable Trust Agreement (to the extent not
previously reimbursed), shall be distributed to such Trustee, and (iii)
any Liquidity Provider or Certificateholder for payments, if any, made
by it to the Subordination Agent or any Trustee in respect of amounts
described in clause (i) above, shall be distributed to such Liquidity
Provider or to the applicable Trustee for the account of such
Certificateholder, in each such case, pari passu on the basis of all
amounts described in clauses (i) through (iii) above;
second, such amount remaining as shall be required to pay all
accrued and unpaid Liquidity Expenses shall be distributed to each
Liquidity Provider pari passu on the basis of the amount of Liquidity
Expenses owed to each Liquidity Provider;
third, such amount remaining as shall be required to pay accrued
and unpaid interest on the Liquidity Obligations as provided in the
Liquidity Facilities shall be distributed to each Liquidity Provider
pari passu on the basis of the amount of such accrued and unpaid
interest owed to each Liquidity Provider;
fourth, such amount remaining as shall be required (A) if any Cash
Collateral Account had been previously funded as provided in Section
3.6(f), unless (i) a Performing Note Deficiency exists and a Liquidity
Event of Default shall have occurred and be continuing with respect to
the relevant Liquidity Facility or (ii) a Final Drawing shall have
occurred with respect to such Liquidity Facility, to fund such Account
up to its Required Amount (less the amount of any repayments of Interest
Drawings under such Liquidity Facility while subclause (A)(i) above is
applicable) shall be deposited in such Account, (B) if any Liquidity
Facility shall become a Downgraded Facility or a Non-Extended Facility
at a time when unreimbursed Interest Drawings under such Liquidity
Facility have reduced the Available Amount thereunder to zero, unless a
Performing Note Deficiency exists and a Liquidity Event of Default shall
have occurred and be continuing with respect to the relevant Liquidity
Facility or (ii) a Final Drawing shall have occurred with respect to
such Liquidity Facility, to deposit into the related Cash Collateral
Account an amount equal to such Account's Required Amount (less the
amount of any repayments of Interest Drawings under such Liquidity
Facility while subclause (B)(i) above is applicable) shall be deposited
in such Cash Collateral Account, and (C) if, with respect to any
particular Liquidity Facility, neither subclause (A) nor
33
subclause (B) of this clause "fourth" are applicable, to pay in full the
outstanding amount of all Liquidity Obligations then due under such Liquidity
Facility (other than amounts payable pursuant to clause "second" or "third"
of this Section 3.3) shall be distributed to such Liquidity Provider, pari
passu on the basis of the amounts of all such deficiencies and/or
unreimbursed Liquidity Obligations;
fifth, if, with respect to any particular Liquidity Facility, any
amounts are to be distributed pursuant to either subclause (A) or (B) of
clause "fourth" above, then the Liquidity Provider with respect to such
Liquidity Facility shall be paid the excess of (x) the aggregate
outstanding amount of unreimbursed Advances (whether or not then due)
under such Liquidity Facility over (y) the Required Amount for the
relevant Class (less the amount of any repayments of Interest Drawings
under such Liquidity Facility while subclause (A)(i) or (B)(i), as the
case may be, of clause "fourth" above is applicable), pari passu on the
basis of such amounts in respect of each Liquidity Provider;
sixth, such amount as shall be required to reimburse or pay (i) the
Subordination Agent for any Tax (other than Taxes imposed on
compensation paid hereunder), expense, fee, charge or other loss
incurred by or any other amount payable to the Subordination Agent
in connection with the transactions contemplated hereby (to the extent
not previously reimbursed), shall be applied by the Subordination Agent
in reimbursement of such amount, (ii) each Trustee for any Tax (other
than Taxes imposed on compensation paid under the applicable Trust
Agreement), expense, fee, charge, loss or any other amount payable to
such Trustee under the applicable Trust Agreements (to the extent not
previously reimbursed), shall be distributed to such Trustee, and (iii)
each Certificateholder for payments, if any, made by it pursuant to
Section 5.2 hereof in respect of amounts described in clause (i) above,
shall be distributed to the applicable Trustee for the account of such
Certificateholder, in each such case, pari passu on the basis of all
amounts described in clauses (i) through (iii) above;
seventh, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class A Certificates shall be
distributed to the Class A Trustee;
eighth, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class B Certificates shall be
distributed to the Class B Trustee; and
ninth, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class C Certificates shall be
distributed to the Class C Trustee.
SECTION 3.4. Other Payments. (a) Any payments received by the
Subordination Agent for which no provision as to the application thereof is
made in this
34
Agreement shall be distributed by the Subordination Agent (i) in the order of
priority specified in Section 3.3 hereof and (ii) to the extent received or
realized at any time after the Final Distributions for each Class of
Certificates have been made, in the manner provided in clause "first" of
Section 3.3 hereof.
(b) On any Interest Payment Date under each Liquidity Facility
which is not a Distribution Date, the Subordination Agent shall pay to the
Liquidity Provider under such Liquidity Facility from, and to the extent of,
amounts on deposit in the Collection Account, an amount equal to the amount
of interest then due and payable to such Liquidity Provider under such
Liquidity Facility.
(c) Except as otherwise provided in Section 3.3 hereof, if the
Subordination Agent receives any Scheduled Payment after the Scheduled
Payment Date relating thereto, but prior to such payment becoming an Overdue
Scheduled Payment, then the Subordination Agent shall deposit such Scheduled
Payment in the Collection Account and promptly distribute such Scheduled
Payment in accordance with the priority of distributions set forth in Section
3.2 hereof; provided that, for the purposes of this Section 3.4(c) only, each
reference in clause "eighth" of Section 3.2 to "Distribution Date" shall be
deemed to mean the actual date of payment of such Scheduled Payment and each
reference in clause "fifth", "sixth" or "seventh" of Section 3.2 to
"Distribution Date" shall be deemed to refer to such Scheduled Payment Date.
SECTION 3.5. Payments to the Trustees and the Liquidity Providers.
Any amounts distributed hereunder to any Liquidity Provider shall be paid to
such Liquidity Provider by wire transfer of funds to the address such
Liquidity Provider shall provide to the Subordination Agent. The
Subordination Agent shall provide a Written Notice of any such transfer to
the applicable Liquidity Provider, as the case may be, at the time of such
transfer. Any amounts distributed hereunder by the Subordination Agent to
any Trustee which shall not be the same institution as the Subordination
Agent shall be paid to such Trustee by wire transfer funds at the address
such Trustee shall provide to the Subordination Agent.
SECTION 3.6. Liquidity Facilities. (a) Interest Drawings. If on
any Distribution Date, after giving effect to the subordination provisions of
this Agreement, the Subordination Agent shall not have sufficient funds for
the payment of any amounts due and owing in respect of accrued interest on
the Class A Certificates, the Class B Certificates or the Class C
Certificates (at the Stated Interest Rate for such Class of Certificates),
then, prior to 1:00 p.m.(New York City time) on such Distribution Date, the
Subordination Agent shall request a drawing (each such drawing, an "Interest
Drawing") under the Liquidity Facility with respect to such Class of
Certificates in an amount equal to the lesser of (i) the amount of such
accrued interest (at the Stated Interest Rate for such Class of Certificates)
and (ii) the Available Amount under such Liquidity Facility, and shall pay
such amount to the Trustee with respect to such Class of Certificates in
payment of such accrued interest.
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(b) Application of Interest Drawings. Notwithstanding anything to
the contrary contained in this Agreement, (i) all payments received by the
Subordination Agent in respect of an Interest Drawing under the Class A
Liquidity Facility and all amounts withdrawn by the Subordination Agent from
the Class A Cash Collateral Account, and payable in each case to the Class A
Certificateholders, shall be promptly distributed to the Class A Trustee,
(ii) all payments received by the Subordination Agent in respect of an
Interest Drawing under the Class B Liquidity Facility and all amounts
withdrawn by the Subordination Agent from the Class B Cash Collateral
Account, and payable in each case to the Class B Certificateholders, shall be
promptly distributed to the Class B Trustee, and (iii) all payments received
by the Subordination Agent in respect of an Interest Drawing under the Class
C Liquidity Facility and all amounts withdrawn by the Subordination Agent
from the Class C Cash Collateral Account, and payable in each case to the
Class C Certificateholders, shall be promptly distributed to the Class C
Trustee.
(c) Downgrade Drawings. If at any time the short-term unsecured
debt rating of any Liquidity Provider issued by either Rating Agency is lower
than the applicable Threshold Rating, within 10 days after receiving notice
of such downgrading (but not later than the expiration date of the Liquidity
Facility issued by the downgraded Liquidity Provider (the "Downgraded
Facility")), such Liquidity Provider or US Airways may arrange for a
Replacement Liquidity Provider to issue and deliver a Replacement Liquidity
Facility to the Subordination Agent. If a Downgraded Facility has not been
replaced in accordance with the terms of this paragraph, the Subordination
Agent shall, on such 10th day (or if such 10th day is not a Business Day, on
the next succeeding Business Day) (or, if earlier, the expiration date of
such Downgraded Facility), request a drawing in accordance with and to the
extent permitted by such Downgraded Facility (such drawing, a "Downgrade
Drawing") of all available and undrawn amounts thereunder. Amounts drawn
pursuant to a Downgrade Drawing shall be maintained and invested as provided
in Section 3.6(f) hereof. The Liquidity Provider may also arrange for a
Replacement Liquidity Provider to issue and deliver a Replacement Liquidity
Facility at any time after such Downgrade Drawing so long as such Downgrade
Drawing has not been reimbursed in full to the Liquidity Provider.
(d) Non-Extension Drawings. If any Liquidity Facility with respect
to any Class of Certificates is scheduled to expire on a date (the "Stated
Expiration Date") prior to the date that is 15 days after the Final Legal
Distribution Date for such Class of Certificates, then, no earlier than the
60th day and no later than the 40th day prior to the then Stated Expiration
Date, the Subordination Agent shall request that such Liquidity Provider
extend the Stated Expiration Date for a period of 364 days after the Stated
Expiration Date (unless the obligations of such Liquidity Provider thereunder
are earlier terminated in accordance with such Liquidity Facility). The
Liquidity Provider shall advise the Borrower, no earlier than 40 days and no
later than 25 days prior to such Stated Expiration Date, whether, in its sole
discretion, it agrees to so extend the Stated Expiration Date. If, on or
before such 25th day, such Liquidity Facility shall not have been so extended
or replaced in accordance with Section 3.6(e), or if the Liquidity Provider
fails irrevocably and unconditionally to advise the Borrower on or before the
25th day prior to the Stated Expiration Date then in effect that such Stated
Expiration Date shall be so extended, the
36
Subordination Agent shall, on such 25th day (or as soon as possible
thereafter), in accordance with and to the extent permitted by the terms of
the expiring Liquidity Facility (a "Non-Extended Facility"), request a
drawing under such expiring Liquidity Facility (such drawing, a "Non-
Extension Drawing") of all available and undrawn amounts thereunder. Amounts
drawn pursuant to a Non-Extension Drawing shall be maintained and invested in
accordance with Section 3.6(f) hereof.
(e) Issuance of Replacement Liquidity Facility. (i) At any time,
US Airways may, at its option, with cause or without cause, arrange for a
Replacement Liquidity Facility to replace any Liquidity Facility for any
Class of Certificates (including any Replacement Liquidity Facility provided
pursuant to Section 3.6(e)(ii) hereof); provided, however, that ABN AMRO
shall not be replaced by US Airways as a Liquidity Provider with respect to
any Class of Certificates prior to the fifth anniversary of the Closing Date
unless (A) there shall have become due to the initial Liquidity Provider, or
the initial Liquidity Provider shall have demanded, amounts pursuant to
Section 3.01, 3.02 or 3.03 of any Liquidity Facility or pursuant to the Tax
Letter and the replacement of the initial Liquidity Provider would reduce or
eliminate the obligation to pay such amounts or US Airways determines in good
faith that there is a substantial likelihood that the initial Liquidity
Provider will have the right to claim any such amounts (unless the initial
Liquidity Provider waives, in writing, any right it may have to claim such
amounts), which determination shall be set forth in a certificate delivered
by US Airways to the initial Liquidity Provider setting forth the basis for
such determination and accompanied by an opinion of outside counsel selected
by US Airways and reasonably acceptable to the initial Liquidity Provider
verifying the legal conclusions, if any, of such certificate relating to such
basis, provided that, in the case of any likely claim for such amounts based
upon any proposed, or proposed change in, law, rule, regulation,
interpretation, directive, requirement, request or administrative practice,
such opinion may assume the adoption or promulgation of such proposed matter,
(B) it shall become unlawful or impossible for the initial Liquidity Provider
(or its Lending Office) to maintain or fund its LIBOR Advances as described
in Section 3.10 of any Liquidity Facility, (C) the short-term unsecured debt
rating of the initial Liquidity Provider is downgraded by Standard & Poor's
from A-1+ to A-1 and there is a resulting downgrade in the rating by any
Rating Agency of any Class of Certificates, (D) a Downgrade Drawing or a Non-
Extension Drawing shall have occurred under any Liquidity Facility or (E) the
initial Liquidity Provider shall have breached any of its payment (including,
without limitation, funding) obligations under any Liquidity Facility. If
such Replacement Liquidity Facility is provided at any time after a Downgrade
Drawing or Non-Extension Drawing has been made, all funds on deposit in the
relevant Cash Collateral Account will be returned to the Liquidity Provider
being replaced.
(ii) If any Liquidity Provider shall determine not to extend any of
its Liquidity Facility in accordance with Section 3.6(d), then such
Liquidity Provider may, at its option, arrange for a Replacement
Liquidity Facility to replace such Liquidity Facility during the period
no earlier than 40 days and no later than 25 days prior to the then
effective Stated Expiration Date of such Liquidity Facility.
37
(iii) No Replacement Liquidity Facility arranged by US Airways or a
Liquidity Provider in accordance with clause (i) or (ii) above,
respectively, shall become effective and no such Replacement Liquidity
Facility shall be deemed a "Liquidity Facility" under the Operative
Agreements (in each case other than insofar as necessary to permit the
repayment of amounts owed to the replaced Liquidity Provider), unless
and until (A) each of the conditions referred to in clause (iv) below
shall have been satisfied, (B) if such Replacement Liquidity Facility
shall materially adversely affect the rights, remedies, interests or
obligations of the Class A Certificateholders, the Class B
Certificateholders or the Class C Certificateholders under any of the
Operative Agreements, the applicable Trustee shall have consented, in
writing, to the execution and issuance of such Replacement Liquidity
Facility and (C) in the case of a Replacement Liquidity Facility
arranged by a Liquidity Provider under Section 3.6(e)(ii), such
Replacement Liquidity Facility is acceptable to US Airways.
(iv) In connection with the issuance of each Replacement Liquidity
Facility, the Subordination Agent shall (x) prior to the issuance of
such Replacement Liquidity Facility, obtain written confirmation from
each Rating Agency that such Replacement Liquidity Facility will not
cause a reduction of any rating then in effect for any Class of
Certificates by such Rating Agency (without regard to any downgrading of
any rating of any Liquidity Provider being replaced pursuant to Section
3.6(c) hereof), (y) pay all Liquidity Obligations then owing to the
replaced Liquidity Provider (which payment shall be made first from
available funds in the Cash Collateral Account as described in clause
(v) of Section 3.6(f) hereof, and thereafter from any other available
source, including, without limitation, a drawing under the Replacement
Liquidity Facility) and (z) cause the issuer of the Replacement
Liquidity Facility to deliver the Replacement Liquidity Facility to the
Subordination Agent, together with a legal opinion opining that such
Replacement Liquidity Facility is an enforceable obligation of such
Replacement Liquidity Provider.
(v) Upon satisfaction of the conditions set forth in clauses (iii)
and (iv) of this Section 3.6(e), (w) the replaced Liquidity Facility
shall terminate, (x) the Subordination Agent shall, if and to the extent
so requested by US Airways or the Liquidity Provider being replaced,
execute and deliver any certificate or other instrument required in
order to terminate the replaced Liquidity Facility, shall surrender the
replaced Liquidity Facility to the Liquidity Provider being replaced and
shall execute and deliver the Replacement Liquidity Facility and any
associated Fee Letter, (y) each of the parties hereto shall enter into
any amendments to this Agreement necessary to give effect to (1) the
replacement of the applicable Liquidity Provider with the applicable
Replacement Liquidity Provider and (2) the replacement of the applicable
Liquidity Facility with the applicable Replacement Liquidity Facility
and (z) the applicable Replacement Liquidity Provider shall be deemed to
be a Liquidity Provider with the rights and obligations of a Liquidity
Provider hereunder and under the other Operative Agreements and such
Replacement Liquidity
38
Facility shall be deemed to be a Liquidity Facility hereunder and under
the other Operative Agreements.
(f) Cash Collateral Accounts; Withdrawals; Investments. In the
event the Subordination Agent shall draw all available amounts under the
Class A Liquidity Facility, the Class B Liquidity Facility or the Class C
Liquidity Facility pursuant to Section 3.6(c), 3.6(d) or 3.6(i) hereof, or in
the event amounts are to be deposited in the Cash Collateral Account pursuant
to subclause (B) of clause "third" of Section 2.4(b), subclause (B) of clause
"third" of Section 3.2 or subclause (B) of clause "fourth" of Section 3.3,
amounts so drawn or to be deposited, as the case may be, shall be deposited
by the Subordination Agent in the Class A Cash Collateral Account, the Class
B Cash Collateral Account or the Class C Cash Collateral Account,
respectively. All amounts on deposit in each Cash Collateral Account shall
be invested and reinvested in Eligible Investments in accordance with
Section 2.2(b) hereof. Investment Earnings on amounts on deposit in the Cash
Collateral Account with respect to each Liquidity Facility shall be deposited
in the Collection Account on each Interest Payment Date under such Liquidity
Facility and applied on such Interest Payment Date in accordance with Section
3.2, 3.3 or 3.4 (as applicable). The Subordination Agent shall deliver a
written statement to US Airways and the Liquidity Provider one day prior to
each Interest Payment Date setting forth the aggregate amount of Investment
Earnings held in the Cash Collateral Accounts as of such date. In addition,
from and after the date funds are so deposited, the Subordination Agent shall
make withdrawals from such account as follows:
(i) on each Distribution Date, the Subordination Agent shall,
to the extent it shall not have received funds to pay accrued and unpaid
interest due and owing on the Class A Certificates (at the Stated
Interest Rate for the Class A Certificates) from any other source,
withdraw from the Class A Cash Collateral Account, and pay to the Class
A Trustee, an amount equal to the lesser of (x) an amount necessary to
pay accrued and unpaid interest (at the Stated Interest Rate for the
Class A Certificates) on such Class A Certificates and (y) the amount on
deposit in the Class A Cash Collateral Account;
(ii) on each Distribution Date, the Subordination Agent shall,
to the extent it shall not have received funds to pay accrued and unpaid
interest due and owing on the Class B Certificates (at the Stated
Interest Rate for the Class B Certificates) from any other source,
withdraw from the Class B Cash Collateral Account, and pay to the Class
B Trustee, an amount equal to the lesser of (x) an amount necessary to
pay accrued and unpaid interest (at the Stated Interest Rate for the
Class B Certificates) on such Class B Certificates and (y) the amount on
deposit in the Class B Cash Collateral Account;
(iii) on each Distribution Date, the Subordination Agent shall,
to the extent it shall not have received funds to pay accrued and unpaid
interest due and owing on the Class C Certificates (at the Stated
Interest Rate for the Class C Certificates) from any other source,
withdraw from the Class C Cash Collateral Account, and pay to the Class
C Trustee, an amount equal to the lesser of (x) an amount necessary to
pay accrued and
39
unpaid interest (at the Stated Interest Rate for the Class C
Certificates) on such Class C Certificates and (y) the amount on
deposit in the Class C Cash Collateral Account;
(iv) 0n each date on which the Pool Balance of the Class A Trust
shall have been reduced by payments made to the Class A
Certificateholders pursuant to Section 2.4, 3.2 or 3.3 hereof or
pursuant to Section 2.03 of the Escrow and Paying Agent Agreement for
such Class, the Subordination Agent shall withdraw from the Class A Cash
Collateral Account such amount as is necessary so that, after giving
effect to the reduction of the Pool Balance on such date (including any
such reduction resulting from a prior withdrawal of amounts on deposit
in the Class A Cash Collateral Account on such date), an amount equal to
the sum of the Required Amount (with respect to the Class A Liquidity
Facility) plus Investment Earnings on deposit in such Cash Collateral
Account will be on deposit in the Class A Cash Collateral Account and
shall first, pay such amount to the relevant Class A Liquidity Provider
until the Liquidity Obligations (with respect to the Class A
Certificates) owing to such Liquidity Provider shall have been paid in
full, and second, deposit any remaining amount in the Collection
Account;
(v) on each date on which the Pool Balance of the Class B Trust
shall have been reduced by payments made to the Class B
Certificateholders pursuant to Section 2.4, 3.2 or 3.3 hereof or
pursuant to Section 2.03 of the Escrow and Paying Agent Agreement for
such Class, the Subordination Agent shall withdraw from the Class B Cash
Collateral Account such amount as is necessary so that, after giving
effect to the reduction of the Pool Balance on such date (including any
such reduction resulting from a prior withdrawal of amounts on deposit
in the Class B Cash Collateral Account on such date), an amount equal to
the sum of the Required Amount (with respect to the Class B Liquidity
Facility) plus Investment Earnings on deposit in such Cash Collateral
Account will be on deposit in the Class B Cash Collateral Account and
shall first, pay such amount to the relevant Class B Liquidity Provider
until the Liquidity Obligations (with respect to the Class B
Certificates) owing to such Liquidity Provider shall have been paid in
full, and second, deposit any remaining amount in the Collection
Account;
(vi) on each date on which the Pool Balance of the Class C Trust
shall have been reduced by payments made to the Class C
Certificateholders pursuant to Section 2.4, 3.2 or 3.3 hereof or
pursuant to Section 2.03 of the Escrow and Paying Agent Agreement for
such Class, the Subordination Agent shall withdraw from the Class C Cash
Collateral Account such amount as is necessary so that, after giving
effect to the reduction of the Pool Balance on such date (including any
such reduction resulting from a prior withdrawal of amounts on deposit
in the Class C Cash Collateral Account on such date), an amount equal to
the sum of the Required Amount (with respect to the Class C Liquidity
Facility) plus Investment Earnings on deposit in such Cash Collateral
Account will be on deposit in the Class C Cash Collateral Account and
shall first, pay such amount to the relevant Class C Liquidity Provider
until the Liquidity Obligations (with
40
respect to the Class C Certificates) owing to such Liquidity Provider shall
have been paid in full, and second, deposit any remaining amount in the
Collection Account;
(vii) if a Replacement Liquidity Facility for any Class of
Certificates shall be delivered to the Subordination Agent following the
date on which funds have been deposited into the Cash Collateral Account
for such Class of Certificates, the Subordination Agent shall withdraw
all amounts on deposit in such Cash Collateral Account and shall pay
such amounts to the replaced Liquidity Provider until all Liquidity
Obligations owed to such Person shall have been paid in full, and shall
deposit any remaining amount in the Collection Account; and
(viii) following the payment of Final Distributions with respect to
any Class of Certificates, on the date on which the Subordination Agent
shall have been notified by the Liquidity Provider for such Class of
Certificates that the Liquidity Obligations owed to such Liquidity
Provider have been paid in full, the Subordination Agent shall withdraw
all amounts on deposit in the Cash Collateral Account in respect of such
Class of Certificates and shall deposit such amount in the Collection
Account.
(g) Reinstatement. With respect to any Interest Drawing under the
Liquidity Facility for any Trust, upon the reimbursement of the applicable
Liquidity Provider for all or any part of the amount of such Interest
Drawing, together with any accrued interest thereon, the Available Amount of
such Liquidity Facility shall be reinstated by an amount equal to the amount
of such Interest Drawing so reimbursed to the applicable Liquidity Provider
but not to exceed the Stated Amount for such Liquidity Facility; provided,
however, that such Liquidity Facility shall not be so reinstated in part or
in full at any time if (x) both a Performing Note Deficiency exists and a
Liquidity Event of Default shall have occurred and be continuing with respect
to the relevant Liquidity Facility or (y) a Final Drawing shall have occurred
with respect to such Liquidity Facility. In the event that, with respect to
any particular Liquidity Facility (i) funds are withdrawn from any Cash
Collateral Account pursuant to clause (i) or (ii) of Section 3.6(f) hereof or
(ii) such Liquidity Facility shall become a Downgraded Facility or a Non-
Extended Facility at a time when unreimbursed Interest Drawings under such
Liquidity Facility have reduced the Available Amount thereunder to zero, then
funds received by the Subordination Agent at any time other than (x) any time
when a Liquidity Event of Default shall have occurred and be continuing with
respect to such Liquidity Facility and a Performing Note Deficiency exists or
(y) any time after a Final Drawing shall have occurred with respect to such
Liquidity Facility shall be deposited in such Cash Collateral Account as and
to the extent provided in clause "third" of Section 2.4(b), clause "third" of
Section 3.2 or clause "fourth" of Section 3.3, as applicable, and applied in
accordance with Section 3.6(f) hereof.
(h) Reimbursement. The amount of each drawing under the Liquidity
Facilities shall be due and payable, together with interest thereon, on the
dates and at the rates, respectively, provided in the Liquidity Facilities.
41
(i) Final Drawing. Upon receipt from a Liquidity Provider of a
Termination Notice with respect to any Liquidity Facility, the Subordination
Agent shall, not later than the date specified in such Termination Notice, in
accordance with and to the extent permitted by the terms of such Liquidity
Facility, request a drawing under such Liquidity Facility of all available
and undrawn amounts thereunder (a "Final Drawing"). Amounts drawn pursuant
to a Final Drawing shall be maintained and invested in accordance with
Section 3.6(f) hereof.
(j) Reduction of Stated Amount. Promptly following each date on
which the Required Amount of the Liquidity Facility for a Class of
Certificates is reduced as a result of a reduction in the Pool Balance with
respect to such Certificates, the Subordination Agent shall, if any such
Liquidity Facility provides for reductions of the Stated Amount of such
Liquidity Facility and if such reductions are not automatic, request such
Liquidity Provider for such Class of Certificates to reduce such Stated
Amount to an amount equal to the Required Amount with respect to such
Liquidity Facility (as calculated by the Subordination Agent after giving
effect to such payment). Each such request shall be made in accordance with
the provisions of the applicable Liquidity Facility.
(k) Relation to Subordination Provisions. Interest Drawings under
the Liquidity Facilities and withdrawals from the Cash Collateral Accounts,
in each case, in respect of interest on the Certificates of any Class, will
be distributed to the Trustee for such Class of Certificates, notwithstanding
Sections 3.2, 3.3 and 3.6(h) hereof.
ARTICLE IV
EXERCISE OF REMEDIES
SECTION 4.1. Directions from the Controlling Party. (a) (i)
Following the occurrence and during the continuation of an Indenture Default
under any Indenture, the Controlling Party shall direct the Subordination
Agent, which in turn shall direct the Loan Trustee under such Indenture, in
the exercise of remedies available to the holders of the Equipment Notes
issued pursuant to such Indenture, including, without limitation, the ability
to vote all such Equipment Notes in favor of Accelerating such Equipment
Notes in accordance with the provisions of such Indenture. Subject to the
Owner Trustees' and the Owner Participants' rights, if any, set forth in the
Indentures with respect to Leased Aircraft to purchase the Equipment Notes
and the provisions of the next paragraph, if the Equipment Notes issued
pursuant to any Indenture have been Accelerated following an Indenture
Default with respect thereto, the Controlling Party may sell, assign,
contract to sell or otherwise dispose of and deliver all (but not less than
all) of such Equipment Notes to any Person at public or private sale, at any
location at the option of the Controlling Party, all upon such terms and
conditions as it may reasonably deem advisable in accordance with applicable
law.
42
(ii) Subject to the Owner Trustees' and the Owner Participants'
rights, if any, set forth in the Indentures with respect to Leased
Aircraft to purchase the Equipment Notes, and notwithstanding the
foregoing, so long as any Certificates remain Outstanding, during the
period ending on the date which is nine months after the earlier of (x)
the Acceleration of the Equipment Notes issued pursuant to any Indenture
or (y) the occurrence of a US Airways Bankruptcy Event, without the
consent of each Trustee, (A) no Aircraft subject to the Lien of such
Indenture or such Equipment Notes may be sold if the net proceeds from
such sale would be less than the Minimum Sale Price for such Aircraft or
such Equipment Notes, and (B) with respect to any Leased Aircraft, the
amount and payment dates of rentals payable by US Airways under the
Lease for such Aircraft may not be adjusted, if, as a result of such
adjustment, the discounted present value of all such rentals would be
less than 75% of the discounted present value of the rentals payable by
US Airways under such Lease before giving effect to such adjustment, in
each case, using the weighted average interest rate of the Equipment
Notes issued pursuant to such Indenture as the discount rate.
(iii) At the request of the Controlling Party, the Subordination
Agent may from time to time during the continuance of an Indenture
Default (and before the occurrence of a Triggering Event) commission LTV
Appraisals with respect to the Aircraft subject to such Indenture.
(iv) After a Triggering Event occurs and any Equipment Note becomes
a Non-Performing Equipment Note, the Subordination Agent shall obtain
Appraisals with respect to all of the Aircraft (the "LTV Appraisals") as soon
as practicable and additional LTV Appraisals on or prior to each anniversary
of the date of such initial LTV Appraisals; provided that if the Controlling
Party reasonably objects to the appraised value of the Aircraft shown in such
LTV Appraisals, the Controlling Party shall have the right to obtain or cause
to be obtained substitute any LTV Appraisals (including any LTV Appraisals
based upon physical inspection of the Aircraft).
(b) The Controlling Party shall take such actions as it may
reasonably deem most effectual to complete the sale or other disposition of
such Aircraft or Equipment Notes. In addition, in lieu of any sale,
assignment, contract to sell or other disposition, the Controlling Party may
maintain possession of such Equipment Notes and continue to apply monies
received in respect of such Equipment Notes in accordance with Article III
hereof. In addition, in lieu of such sale, assignment, contract to sell or
other disposition, or in lieu of such maintenance of possession, the
Controlling Party may, subject to the terms and conditions of the related
Indenture, instruct the Loan Trustee under such Indenture to foreclose on the
Lien on the related Aircraft.
SECTION 4.2. Remedies Cumulative. Each and every right, power and
remedy given to the Trustees, the Liquidity Providers, the Controlling Party
or the Subordination Agent specifically or otherwise in this Agreement shall
be cumulative and shall be in addition to every
43
other right, power and remedy herein specifically given or now or hereafter
existing at law, in equity or by statute, and each and every right, power and
remedy whether specifically herein given or otherwise existing may, subject
always to the terms and conditions hereof, be exercised from time to time and
as often and in such order as may be deemed expedient by any Trustee, any
Liquidity Provider, the Controlling Party or the Subordination Agent, as
appropriate, and the exercise or the beginning of the exercise of any power
or remedy shall not be construed to be a waiver of the right to exercise at
the same time or thereafter any other right, power or remedy. No delay or
omission by any Trustee, any Liquidity Provider, the Controlling Party or the
Subordination Agent in the exercise of any right, remedy or power or in the
pursuit of any remedy shall impair any such right, power or remedy or be
construed to be a waiver of any default or to be an acquiescence therein.
SECTION 4.3. Discontinuance of Proceedings. In case any party to
this Agreement (including the Controlling Party in such capacity) shall have
instituted any Proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, entry or otherwise, and such Proceeding shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to the Person instituting such Proceeding, then and in every such
case each such party shall, subject to any determination in such Proceeding,
be restored to its former position and rights hereunder, and all rights,
remedies and powers of such party shall continue as if no such Proceeding had
been instituted.
SECTION 4.4. Right of Certificateholders to Receive Payments Not
to Be Impaired. Anything in this Agreement to the contrary notwithstanding
but subject to each Trust Agreement, the right of any Certificateholder or
any Liquidity Provider, respectively, to receive payments hereunder
(including without limitation pursuant to Section 2.4, 3.2 or 3.3 hereof)
when due, or to institute suit for the enforcement of any such payment on or
after the applicable Distribution Date, shall not be impaired or affected
without the consent of such Certificateholder or such Liquidity Provider,
respectively.
SECTION 4.5. Undertaking for Costs. In any Proceeding for the
enforcement of any right or remedy under this Agreement or in any Proceeding
against any Controlling Party or the Subordination Agent for any action taken
or omitted by it as Controlling Party or Subordination Agent, as the case may
be, a court in its discretion may require the filing by any party litigant in
the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees
and expenses, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party
litigant. The provisions of this Section do not apply to a suit instituted
by the Subordination Agent, a Liquidity Provider or a Trustee or a suit by
Certificateholders holding more than 10% of the original principal amount of
any Class of Certificates.
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ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
SECTION 5.1. Notice of Indenture Default or Triggering Event.
(a) In the event the Subordination Agent shall have actual knowledge of the
occurrence of an Indenture Default or a Triggering Event, as promptly as
practicable, and in any event within 10 days after obtaining knowledge
thereof, the Subordination Agent shall transmit by mail or courier to the
Rating Agencies, the Liquidity Providers and the Trustees notice of such
Indenture Default or Triggering Event, unless such Indenture Default or
Triggering Event shall have been cured or waived. For all purposes of this
Agreement, in the absence of actual knowledge on the part of a Responsible
Officer, the Subordination Agent shall not be deemed to have knowledge of any
Indenture Default or Triggering Event unless notified in writing by one or
more Trustees, one or more Liquidity Providers or one or more
Certificateholders.
(b) Other Notices. The Subordination Agent will furnish to each
Liquidity Provider and Trustee, promptly upon receipt thereof, duplicates or
copies of all reports, notices, requests, demands, certificates, financial
statements and other instruments furnished to the Subordination Agent as
registered holder of the Equipment Notes or otherwise in its capacity as
Subordination Agent to the extent the same shall not have been otherwise
directly distributed to such Liquidity Provider or Trustee, as applicable,
pursuant to the express provision of any other Operative Agreement.
SECTION 5.2. Indemnification. The Subordination Agent shall not
be required to take any action or refrain from taking any action under
Section 5.1 (other than the first sentence thereof) or Article IV hereof
unless the Subordination Agent shall have been indemnified (to the extent and
in the manner reasonably satisfactory to the Subordination Agent) against any
liability, cost or expense (including counsel fees and expenses) which may be
incurred in connection therewith. The Subordination Agent shall not be under
any obligation to take any action under this Agreement and nothing contained
in this Agreement shall require the Subordination Agent to expend or risk its
own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder 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 or liability is not reasonably
assured to it. The Subordination Agent shall not be required to take any
action under Section 5.1 (other than the first sentence thereof) or Article
IV hereof, nor shall any other provision of this Agreement be deemed to
impose a duty on the Subordination Agent to take any action, if the
Subordination Agent shall have been advised by counsel that such action is
contrary to the terms hereof or is otherwise contrary to law.
SECTION 5.3. No Duties Except as Specified in Intercreditor
Agreement. The Subordination Agent shall not have any duty or obligation to
take or refrain from taking any action under, or in connection with, this
Agreement, except as expressly provided by the terms of
45
this Agreement; and no implied duties or obligations shall be read into this
Agreement against the Subordination Agent. The Subordination Agent agrees
that it will, in its individual capacity and at its own cost and expense (but
without any right of indemnity in respect of any such cost or expense under
Section 7.1 hereof) promptly take such action as may be necessary to duly
discharge all Liens on any of the Trust Accounts or any monies deposited
therein which result from claims against it in its individual capacity not
related to its activities hereunder or any other Operative Agreement.
SECTION 5.4. Notice from the Liquidity Providers and Trustees. If
any Liquidity Provider or Trustee has notice of an Indenture Default or a
Triggering Event, such Person shall promptly give notice thereof to all other
Liquidity Providers and Trustees and to the Subordination Agent, provided,
however, that no such Person shall have any liability hereunder as a result
of its failure to deliver any such notice.
ARTICLE VI
THE SUBORDINATION AGENT
SECTION 6.1. Authorization; Acceptance of Trusts and Duties. Each
of the Class A Trustee, the Class B Trustee and the Class C Trustee hereby
designates and appoints the Subordination Agent as the agent and trustee of
such Trustee under the applicable Liquidity Facility and authorizes the
Subordination Agent to enter into the applicable Liquidity Facility as agent
and trustee for such Trustee. Each of the Liquidity Providers and the
Trustees hereby designates and appoints the Subordination Agent as the
Subordination Agent under this Agreement. State Street hereby accepts the
duties hereby created and applicable to it as the Subordination Agent and
agrees to perform the same but only upon the terms of this Agreement and
agrees to receive and disburse all monies received by it in accordance with
the terms hereof. The Subordination Agent shall not be answerable or
accountable under any circumstances, except (a) for its own willful
misconduct or gross negligence (or ordinary negligence in the handling of
funds), (b) as provided in Section 2.2 hereof and (c) for liabilities that
may result from the material inaccuracy of any representation or warranty of
the Subordination Agent made in its individual capacity in any Operative
Agreement. The Subordination Agent shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Subordination
Agent, unless it is proved that the Subordination Agent was negligent in
ascertaining the pertinent facts.
SECTION 6.2. Absence of Duties. The Subordination Agent shall
have no duty to see to any recording or filing of this Agreement or any other
document, or to see to the maintenance of any such recording or filing.
SECTION 6.3. No Representations or Warranties as to Documents.
The Subordination Agent in its individual capacity does not make nor shall be
deemed to have made
46
any representation or warranty as to the validity, legality or enforceability
of this Agreement or any other Operative Agreement or as to the correctness
of any statement contained in any thereof, except for the representations and
warranties of the Subordination Agent, made in its individual capacity, under
any Operative Agreement to which it is a party. The Certificateholders, the
Trustees and the Liquidity Providers make no representation or warranty
hereunder whatsoever.
SECTION 6.4. No Segregation of Monies; No Interest. Any monies
paid to or retained by the Subordination Agent pursuant to any provision
hereof and not then required to be distributed to any Trustee or any
Liquidity Provider as provided in Articles II and III hereof or deposited
into one or more Trust Accounts need not be segregated in any manner except
to the extent required by such Articles II and III and by law, and the
Subordination Agent shall not (except as otherwise provided in Section 2.2
hereof) be liable for any interest thereon; provided, however, that any
payments received or applied hereunder by the Subordination Agent shall be
accounted for by the Subordination Agent so that any portion thereof paid or
applied pursuant hereto shall be identifiable as to the source thereof.
SECTION 6.5. Reliance; Agents; Advice of Counsel. The
Subordination Agent shall not incur liability to anyone in acting upon any
signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond or other document or paper believed by it
to be genuine and believed by it to be signed by the proper party or parties.
As to the Pool Balance of any Trust as of any date, the Subordination Agent
may for all purposes hereof rely on a certificate signed by any Responsible
Officer of the applicable Trustee, and such certificate shall constitute full
protection to the Subordination Agent for any action taken or omitted to be
taken by it in good faith in reliance thereon. As to any fact or matter
relating to the Liquidity Providers or the Trustees the manner of
ascertainment of which is not specifically described herein, the
Subordination Agent may for all purposes hereof rely on a certificate, signed
by any Responsible Officer of the applicable Liquidity Provider or Trustee,
as the case may be, as to such fact or matter, and such certificate shall
constitute full protection to the Subordination Agent for any action taken or
omitted to be taken by it in good faith in reliance thereon. The
Subordination Agent shall assume, and shall be fully protected in assuming,
that each of the Liquidity Providers and each of the Trustees are authorized
to enter into this Agreement and to take all action to be taken by them
pursuant to the provisions hereof, and shall not inquire into the
authorization of each of the Liquidity Providers and each of the Trustees
with respect thereto. In the administration of the trusts hereunder, the
Subordination Agent may execute any of the trusts or powers hereof and
perform its powers and duties hereunder directly or through agents or
attorneys and may consult with counsel, accountants and other skilled persons
to be selected and retained by it, and the Subordination Agent shall not be
liable for the acts or omissions of any agent appointed with due care or for
anything done, suffered or omitted in good faith by it in accordance with the
advice or written opinion of any such counsel, accountants or other skilled
persons.
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SECTION 6.6. Capacity in Which Acting. The Subordination Agent
acts hereunder solely as agent and trustee herein and not in its individual
capacity, except as otherwise expressly provided in the Operative Agreements.
SECTION 6.7. Compensation. The Subordination Agent shall be
entitled to reasonable compensation, including expenses and disbursements,
for all services rendered hereunder and shall have a priority claim to the
extent set forth in Article III hereof on all monies collected hereunder for
the payment of such compensation, to the extent that such compensation shall
not be paid by others. The Subordination Agent agrees that it shall have no
right against any Trustee or Liquidity Provider for any fee as compensation
for its services as agent under this Agreement. The provisions of this
Section 6.7 shall survive the termination of this Agreement.
SECTION 6.8. May Become Certificateholder. The institution acting
as Subordination Agent hereunder may become a Certificateholder and have all
rights and benefits of a Certificateholder to the same extent as if it were
not the institution acting as the Subordination Agent.
SECTION 6.9. Subordination Agent Required; Eligibility. There
shall at all times be a Subordination Agent hereunder which shall be a
corporation organized and doing business under the laws of the United States
of America or of any State or the District of Columbia having a combined
capital and surplus of at least $100,000,000 (or 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 of America, any State thereof or of the District of
Columbia and having a combined capital and surplus of at least $100,000,000),
if there is such an institution willing and able to perform the duties of the
Subordination Agent hereunder upon reasonable or customary terms. Such
corporation shall be a citizen of the United States and shall be authorized
under the laws of the United States or any State thereof or of the District
of Columbia to exercise corporate trust powers and shall be subject to
supervision or examination by federal, state or District of Columbia
authorities. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of any of the aforesaid
supervising or examining authorities, then, for the purposes of this Section
6.9, 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
condition so published.
In case at any time the Subordination Agent shall cease to be
eligible in accordance with the provisions of this Section, the Subordination
Agent shall resign immediately in the manner and with the effect specified in
Section 8.1.
SECTION 6.10. Money to Be Held in Trust. All Equipment Notes,
monies and other property deposited with or held by the Subordination Agent
pursuant to this Agreement shall be held in trust for the benefit of the
parties entitled to such Equipment Notes, monies and other property. All
such Equipment Notes, monies or other property shall be held in the Trust
Department of the institution acting as Subordination Agent hereunder.
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ARTICLE VII
INDEMNIFICATION OF SUBORDINATION AGENT
SECTION 7.1. Scope of Indemnification. The Subordination Agent
shall be indemnified hereunder to the extent and in the manner described in
Section 6(c) of the Participation Agreements and Section 7 of the Note
Purchase Agreement. The indemnities contained in such Sections of such
agreements shall survive the termination of this Agreement.
ARTICLE VIII
SUCCESSOR SUBORDINATION AGENT
SECTION 8.1. Replacement of Subordination Agent; Appointment of
Successor. The Subordination Agent may resign at any time by so notifying
the Trustees and the Liquidity Providers. The Controlling Party may remove
the Subordination Agent for cause by so notifying the Subordination Agent and
may appoint a successor Subordination Agent. The Controlling Party shall
remove the Subordination Agent if:
(1) the Subordination Agent fails to comply with Section 6.9
hereof;
(2) the Subordination Agent is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Subordination Agent or its property; or
(4) the Subordination Agent otherwise becomes incapable of acting.
If the Subordination Agent resigns or is removed or if a vacancy
exists in the office of Subordination Agent for any reason (the Subordination
Agent in such event being referred to herein as the retiring Subordination
Agent), the Controlling Party shall promptly appoint a successor
Subordination Agent.
A successor Subordination Agent shall deliver (x) a written
acceptance of its appointment as Subordination Agent hereunder to the
retiring Subordination Agent and (y) a written assumption of its obligations
hereunder and under each Liquidity Facility to each party hereto, upon which
the resignation or removal of the retiring Subordination Agent shall become
effective, and the successor Subordination Agent shall have all the rights,
powers and duties of the Subordination Agent under this Agreement. The
successor Subordination Agent shall mail a notice of its succession to the
Liquidity Providers and the Trustees. The retiring Subordination
49
Agent shall promptly transfer its rights under each of the Liquidity
Facilities and all of the property held by it as Subordination Agent to the
successor Subordination Agent.
If a successor Subordination Agent does not take office within 60
days after the retiring Subordination Agent resigns or is removed, the
retiring Subordination Agent or one or more of the Trustees may petition any
court of competent jurisdiction for the appointment of a successor
Subordination Agent.
If the Subordination Agent fails to comply with Section 6.9 hereof
(to the extent applicable), one or more of the Trustees or one or more of the
Liquidity Providers may petition any court of competent jurisdiction for the
removal of the Subordination Agent and the appointment of a successor
Subordination Agent.
Notwithstanding the foregoing, no resignation or removal of the
Subordination Agent shall be effective unless and until a successor has been
appointed. No appointment of a successor Subordination Agent shall be
effective unless and until the Rating Agencies shall have delivered a Ratings
Confirmation.
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS
SECTION 9.1. Amendments, Waivers, etc. (a) This Agreement may not
be supplemented, amended or modified without the consent of each Trustee
(acting, except in the case of any amendment pursuant to Section 3.6(e)(v)(y)
hereof, with the consent of holders of Certificates of the related Class
evidencing interests in the related Trust aggregating not less than a
majority in interest in such Trust or as otherwise authorized pursuant to the
relevant Trust Agreement), the Subordination Agent and each Liquidity
Provider; provided, however, that this Agreement may be supplemented, amended
or modified without the consent of (x) any Trustee if such supplement,
amendment or modification (i) is in accordance with Section 9.1(c) hereof or
(ii) cures an ambiguity or inconsistency or does not materially adversely
affect such Trustee or the holders of the related Class of Certificates and
(y) any Liquidity Provider if such supplement, amendment or modification is
in accordance with Section 9.1 hereof; provided further, however, that, if
such supplement, amendment or modification (A) would (x) directly or
indirectly modify or supersede, or otherwise conflict with, Section 2.2(b),
Section 3.6(e), Section 3.6(f)(other than the last sentence thereof), or the
second sentence of Section 10.6 (collectively, together with this proviso and
Section 9.1, the "US Airways Provisions") or (y) otherwise adversely affect
the interests of a potential Replacement Liquidity Provider or of US Airways
with respect to its ability to replace any Liquidity Facility or with respect
to its payment obligations under any Financing Agreement, Leased or Owned
Aircraft Indenture or (B) is made pursuant to Section 9.1(c), then such
supplement, amendment or modification shall not be effective without the
additional written consent of US Airways. Notwithstanding the foregoing,
without the consent
50
of each Certificateholder and each Liquidity Provider, no supplement,
amendment or modification of this Agreement may (i) reduce the percentage of
the interest in any Trust evidenced by the Certificates issued by such Trust
necessary to consent to modify or amend any provision of this Agreement or to
waive compliance therewith or (ii), except as provided in Section 9.1(c),
modify Section 2.4, 3.2 or 3.3 hereof, relating to the distribution of monies
received by the Subordination Agent hereunder from the Equipment Notes or
pursuant to the Liquidity Facilities. Nothing contained in this Section
shall require the consent of a Trustee at any time following the payment of
Final Distributions with respect to the related Class of Certificates.
(b) In the event that the Subordination Agent, as the registered
holder of any Equipment Notes, receives a request for its consent to any
amendment, modification, consent or waiver under such Equipment Notes, the
Indenture pursuant to which such Equipment Notes were issued, or the related
Lease, Participation Agreement or other related document, (i) if no Indenture
Default shall have occurred and be continuing with respect to such Indenture,
the Subordination Agent shall request directions with respect to each Series
of such Equipment Notes from the Trustee of the Trust which holds such
Equipment Notes and shall vote or consent in accordance with the directions
of such Trustee and (ii) if any Indenture Default (which, in the case of any
Indenture pertaining to a Leased Aircraft, has not been cured by the
applicable Owner Trustee or the applicable Owner Participant, if applicable,
pursuant to Section 4.03 of such Indenture) shall have occurred and be
continuing with respect to such Indenture, the Subordination Agent will
exercise its voting rights as directed by the Controlling Party, subject to
Sections 4.1 and 4.4 hereof; provided that no such amendment, modification or
waiver shall, without the consent of each Liquidity Provider, reduce the
amount of rent, supplemental rent or stipulated loss values payable by US
Airways under any Lease or reduce the amount of principal or interest payable
by US Airways under any Equipment Note issued under any Indenture in respect
of an Owned Aircraft.
SECTION 9.2. Subordination Agent Protected. If, in the reasonable
opinion of the institution acting as the Subordination Agent hereunder, any
document required to be executed pursuant to the terms of Section 9.1 affects
any right, duty, immunity or indemnity with respect to it under this
Agreement or any Liquidity Facility, the Subordination Agent may in its
discretion decline to execute such document.
SECTION 9.3. Effect of Supplemental Agreements. Upon the
execution of any amendment, consent or supplement hereto pursuant to the
provisions hereof, this Agreement shall be and be deemed to be and shall be
modified and amended in accordance therewith and the respective rights,
limitations of rights, obligations, duties and immunities under this
Agreement of the parties hereto and beneficiaries hereof shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental agreement shall be and be deemed to be and shall be part of the
terms and conditions of this Agreement for any and all purposes. In
executing or accepting any supplemental agreement permitted by this Article
IX, the Subordination Agent
51
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.
SECTION 9.4. Notice to Rating Agencies. Promptly following its
receipt of each amendment, consent, modification, supplement or waiver
contemplated by this Article IX, the Subordination Agent shall send a copy
thereof to each Rating Agency.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Termination of Intercreditor Agreement. Following
payment of Final Distributions with respect to each Class of Certificates and
the payment in full of all Liquidity Obligations to the Liquidity Providers
and provided that there shall then be no other amounts due to the
Certificateholders, the Trustees, the Liquidity Providers and the
Subordination Agent hereunder or under the Trust Agreements, and that the
commitment of the Liquidity Providers under the Liquidity Facilities shall
have expired or been terminated, this Agreement and the trusts created hereby
shall terminate and this Agreement shall be of no further force or effect.
Except as aforesaid or otherwise provided, this Agreement and the trusts
created hereby shall continue in full force and effect in accordance with the
terms hereof.
SECTION 10.2. Intercreditor Agreement for Benefit of Trustees,
Liquidity Providers and Subordination Agent. Subject to the second sentence
of Section 10.6 and the provisions of Section 4.4, nothing in this Agreement,
whether express or implied, shall be construed to give to any Person other
than the Trustees, the Liquidity Providers and the Subordination Agent any
legal or equitable right, remedy or claim under or in respect of this
Agreement.
SECTION 10.3. Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices, requests, demands,
authorizations, directions, consents, waivers or documents provided or
permitted by this Agreement to be made, given, furnished or filed shall be in
writing, mailed by certified mail, postage prepaid, or by confirmed telecopy
and
52
(i) if to the Subordination Agent, addressed to at its office at:
STATE STREET BANK AND TRUST COMPANY
Xxx Xxxxxxxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
Attention: Corporate Trust Department
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(ii) if to any Trustee, addressed to it at its office at:
STATE STREET BANK AND TRUST COMPANY
Xxx Xxxxxxxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
Attention: Corporate Trust Department
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(iii) if to the Liquidity Provider, addressed to it at its office
at:
ABN AMRO Bank N.V.
000 Xxxxx XxXxxxx Xxxxxx, #000
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
ABN AMRO Bank N.V.
000 Xxxxx XxXxxxx Xxxxxx, #000
Xxxxxxx, XX 00000-0000
Attention: Loan Administration
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Whenever any notice in writing is required to be given by any Trustee or
Liquidity Provider or the Subordination Agent to any of the other of them,
such notice shall be deemed given and such requirement satisfied when such
notice is received. Any party hereto may change the address to
53
which notices to such party will be sent by giving notice of such change to
the other parties to this Agreement.
SECTION 10.4. Severability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 10.5. No Oral Modifications or Continuing Waivers. No
terms or provisions of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
or other Person against whom enforcement of the change, waiver, discharge or
termination is sought and any other party or other Person whose consent is
required pursuant to this Agreement and any waiver of the terms hereof shall
be effective only in the specific instance and for the specific purpose
given.
SECTION 10.6. Successors and Assigns. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit
of, each of the parties hereto and the successors and assigns of each, all as
herein provided. In addition, the US Airways Provisions shall inure to the
benefit of US Airways and its successors and assigns, and (without limitation
of the foregoing) US Airways is hereby constituted, and agreed to be, an
express third party beneficiary of the US Airways Provisions.
SECTION 10.7. Headings. The headings of the various Articles and
Sections herein and in the table of contents hereto are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
SECTION 10.8. Counterpart Form. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same agreement.
SECTION 10.9. Subordination. (a) As between the Liquidity
Providers, on the one hand, and the Trustees and the Certificateholders, on
the other hand, this Agreement shall be a subordination agreement for
purposes of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code, as amended from
time to time.
(b) Notwithstanding the provisions of this Agreement, if prior to
the payment in full to the Liquidity Providers of all Liquidity Obligations
then due and payable, any party hereto shall have received any payment or
distribution in respect of Equipment Notes or any other amount under the
Indentures or other Operative Agreements which, had the subordination
provisions of this Agreement been properly applied to such payment,
distribution or other amount, would not have been distributed to such Person,
then such payment, distribution or other
54
amount shall be received and held in trust by such Person and paid over or
delivered to the Subordination Agent for application as provided herein.
(c) If any Trustee, any Liquidity Provider or the Subordination
Agent receives any payment in respect of any obligations owing hereunder (or,
in the case of the Liquidity Providers, in respect of the Liquidity
Obligations), which is subsequently invalidated, declared preferential, set
aside and/or required to be repaid to a trustee, receiver or other party,
then, to the extent of such payment, such obligations (or, in the case of the
Liquidity Providers, such Liquidity Obligations) intended to be satisfied
shall be revived and continue in full force and effect as if such payment had
not been received.
(d) The Trustees (on behalf of themselves and the holders of
Certificates), the Liquidity Providers and the Subordination Agent confirm
that the payment priorities specified in Sections 2.4, 3.2 and 3.3 shall
apply in all circumstances, notwithstanding the fact that the obligations
owed to the Trustees and the holders of Certificates are secured by certain
assets and the Liquidity Obligations may not be so secured. The Trustees
expressly agree (on behalf of themselves and the holders of Certificates) not
to assert priority over the holders of Liquidity Obligations due to their
status as secured creditors in any bankruptcy, insolvency or other legal
proceeding.
(e) Each of the Trustees (on behalf of themselves and the holders
of Certificates), the Liquidity Providers and the Subordination Agent may
take any of the following actions without impairing its rights under this
Agreement:
(i) obtain a Lien on any property to secure any amounts owing to
it hereunder, including, in the case of the Liquidity Providers, the
Liquidity Obligations,
(ii) obtain the primary or secondary obligation of any other
obligor with respect to any amounts owing to it hereunder, including, in
the case of the Liquidity Providers, any of the Liquidity Obligations,
(iii) renew, extend, increase, alter or exchange any amounts owing
to it hereunder, including, in the case of the Liquidity Providers, any
of the Liquidity Obligations, or release or compromise any obligation of
any obligor with respect thereto,
(iv) refrain from exercising any right or remedy, or delay in
exercising such right or remedy, which it may have, or
(v)take any other action which might discharge a subordinated
party or a surety under applicable law;
55
provided, however, that the taking of any such actions by any of the
Trustees, the Liquidity Providers or the Subordination Agent shall not
prejudice the rights or adversely affect the obligations of any other party
under this Agreement.
SECTION 10.10. Governing Law. THIS AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE.
SECTION 10.11. Submission to Jurisdiction; Waiver of Jury Trial;
Waiver of Immunity. (a) Each of the parties hereto hereby irrevocably and
unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any other Operative Agreement,
or for recognition and enforcement of any judgment in respect hereof or
thereof, to the nonexclusive general jurisdiction of the courts of the
State of New York, the courts of the United States of America for the
Southern District of New York, and the appellate courts from any
thereof;
(ii) consents that any such action or proceeding may be brought
in such courts, and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form and mail), postage
prepaid, to each party hereto at its address set forth in Section 10.3
hereof, or at such other address of which the other parties shall have
been notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to xxx in any other jurisdiction.
(b) EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING
ESTABLISHED, including, without limitation, contract claims, tort claims,
breach of duty claims and all other common law and statutory claims. Each of
the parties warrants and represents that it has reviewed this waiver with its
legal counsel, and that it knowingly and voluntarily waives its jury trial
rights following consultation with such legal counsel. THIS WAIVER IS
IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS
WAIVER SHALL APPLY TO ANY
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SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT.
(c) The Liquidity Provider hereby waives any immunity it may have
from the jurisdiction of the courts of the United States of America or of any
State and waives any immunity any of its properties located in the United
States of America may have from attachment or execution upon a judgment
entered by any such court under the United States Foreign Sovereign
Immunities Act of 1976 or any similar successor legislation.
57
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective officers thereunto duly authorized,
as of the day and year first above written.
STATE STREET BANK AND TRUST COMPANY
not in its individual capacity but solely as
Trustee for each of the Trusts
By
-----------------------------
Name:
Title:
ABN AMRO BANK N.V., acting through its Chicago
Branch, as Class A Liquidity Provider,
Class B Liquidity Provider and
Class C Liquidity Provider
By
------------------------------
Name:
Title:
By
Name:
Title:
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity except
as expressly set forth herein but
solely as Subordination Agent and trustee
By
------------------------------
Name:
Title:
58
