DISTRIBUTION TRUST
AGREEMENT
BY AND
AMONG
FLYI, INC. AND ITS DEBTOR
AFFILIATES
AND
ENA ADVISORS,
LLC
[DATE],
200__
ARTICLE 2
ESTABLISHMENT OF THE DISTRIBUTION TRUST
2.1 Creation and
Purposes of the Distribution Trust
2.2
Identification of Beneficiaries
2.3 Transfer of
Initial Distribution Trust Assets
2.5 Distribution
Trustee’s Acceptance
3.1 Creation of
the Trust Accounts
3.2 Distribution
Trust Expenses Account
3.3 Priority
Claims Trust Accounts
3.4 Unsecured
Claims Trust Accounts
3.5
Undeliverable Cash Trust Accounts
ARTICLE 4
ADMINISTRATION OF THE DISTRIBUTION TRUST
4.1 Rights,
Powers and Privileges
4.2 Limitation
on Investigations; Delivery of Documents and Related
Matters
4.3 No Personal
Liability
4.4 Dissolution
of the Debtors
4.5 Agents and
Professionals
4.6
Authentication of Documents
4.7 Investment
Guidelines
4.10 Court
Approval of Distribution Trustee Actions
ARTICLE 5
DISTRIBUTIONS FROM THE DISTRIBUTION TRUST
5.1 Method of
Distributions to Holders of Allowed Claims
5.2 Delivery of
Distributions
5.3 Means of
Cash Payments
5.4 Timing and
Calculation of Amounts to Be Distributed
5.5 Compensation
and Reimbursement for Services Related to Distributions
5.6 Payments
Limited to Trust Accounts
6.1 Rights to
Distributions
6.2 Exemption
From Registration
ARTICLE 7
CERTAIN RIGHTS OF THE DISTRIBUTION TRUSTEE
7.3
Establishment of Litigation Trusts
ARTICLE 8
THIRD PARTY RIGHTS AND LIMITATION OF LIABILITY
8.1 Parties
Dealing With the Distribution Trustee
8.2 Limitation
of Liability
ARTICLE 9
SELECTION, REMOVAL AND COMPENSATION OF THE DISTRIBUTION
TRUSTEE
9.1 Initial
Distribution Trustee
9.3 Removal of
the Distribution Trustee
9.4 Resignation
of the Distribution Trustee
9.5 Appointment
of Successor Distribution Trustee
9.6 Powers and
Duties of Successor Distribution Trustee
9.8 Compensation
and Costs of Administration
ARTICLE 10
MAINTENANCE OF RECORDS; REPORTING
10.2 Reports to
be Filed with the Bankruptcy Court
10.3 Compliance
with Federal Securities Laws
10.4 Tax Returns
and Payments
ARTICLE 11
DURATION OF THE DISTRIBUTION TRUST
11.2 Termination
Upon Distribution of All Distribution Trust Assets
11.3 Termination
After Five Years
11.4 Other
Termination Procedures
12.1 Limitation
on Transferability
12.4 Governing
Law; Submission to Jurisdiction; Service of Process
12.5 Successors
and Assigns
DISTRIBUTION TRUST
AGREEMENT
This DISTRIBUTION TRUST AGREEMENT, dated as of
___________, 200__ (this “ Agreement ”), is
made by and among the debtors listed on the signature page hereto
(collectively, the “ Debtors ”), and ENA
Advisors, LLC, a Utah limited liability company (or any successor
trustee, the “ Distribution Trustee ”), as
Distribution Trustee under the First Amended Joint Plan of
Liquidation for FLYi, Inc. and its Debtor Affiliates, dated
November 21, 2006 (as the same may be amended or modified and as
confirmed by the Confirmation Order, the “ Plan
”).
BACKGROUND
A.
The trust created hereby (the
“ Distribution Trust ”) is created pursuant to,
and to effectuate, Section IV.B.3 of the Plan and constitutes the
“Distribution Trust” as contemplated by the
Plan.
B.
The Distribution Trustee was
jointly selected by the Debtors and the official committee of
unsecured creditors of the Debtors appointed by the United States
Trustee for the District of Delaware pursuant to section 1102 of
the Bankruptcy Code (the “ Creditors’ Committee
”).
C.
Pursuant to the Plan, the
Distribution Trust is established for the purpose of (i)
liquidating the Distribution Trust Assets, (ii) resolving certain
Disputed Claims, (iii) making distributions to holders of certain
Allowed Claims in accordance with the terms of the Plan, and (iv)
otherwise implementing the Plan and administering the
Debtors’ Estates, all as more specifically set forth in this
Agreement and in accordance with the Plan.
D.
The Distribution Trust is intended
to be treated, in part, as a liquidating trust within the meaning
of Treasury Regulations section 301.7701-4(d), for the benefit
of holders of Allowed Claims entitled to distributions of Pending
Payments, and otherwise as one or more disputed ownership funds
within the meaning of Treasury Regulations section
1.468B-9(b)(1).
AGREEMENT
NOW, THEREFORE,
in consideration of the premises and the mutual covenants contained
herein, the Debtors and the Distribution Trustee agree as
follows:
ARTICLE 1
DEFINITIONS AND
INTERPRETATIONS
1.1
Definitions
. Capitalized terms used but not
defined in this Agreement have the meanings ascribed to them in the
Plan. The following capitalized terms used in this Agreement have
the meanings ascribed to them in this Section
1.1:
“ Agreement ” has the meaning
set forth in the introductory paragraph above.
“ Annual Receipts/Disbursements
Report ” means, with respect to each Estate, an unaudited
report Filed with the Bankruptcy Court by the Distribution Trustee,
on behalf of the Distribution Trust, within 90 days after the end
of each calendar year reflecting: (a) all Distribution Trust Assets
liquidated by the Distribution Trust during such calendar year;
(b) all Distribution Trust Assets held by the Distribution
Trust at the end of such calendar year; and (c) all
Distribution Trust Assets disbursed during such calendar year, in
each case itemized for the individual Trust Accounts and
sub-accounts.
“ Bankruptcy Case ” means (a)
when used with reference to a particular Debtor, the chapter 11
case pending for that Debtor in the Bankruptcy Court, and (b) when
used with reference to all Debtors, the chapter 11 cases pending
for the Debtors in the Bankruptcy Court.
“ Beneficiaries ” means
creditors and holders of Claims against the Estates.
“ Claims Report ” means, with
respect to each Estate, a report certified by the claims agent for
such Estate setting forth: (a) a listing, as of the Effective Date,
of: (i) all Allowed Administrative Claims against such Estate; (ii)
all Allowed Priority Tax Claims against such Estate; (iii) all
Allowed Claims against such Estate in each class of Claims under
the Plan; and (iv) all Disputed Claims against such Estate; and (b)
for each Claim so listed: (i) the name, address and federal
taxpayer identification number or social security number (if known)
of the holder thereof as of the Distribution Record Date and
(ii) the Face Amount thereof, including the amount of unpaid
principal and accrued interest (if known).
“ Class 3A Claims ” means the
Claims to be satisfied solely from the FLYi Distribution Trust
Assets in accordance with Section III.B.3 of the Plan.
“
Class 3B Claims ” means the Claims arising under the
FLYi Indenture, all of which are to be satisfied solely from the
FLYi Distribution Trust Assets in accordance with Section III.B.4
of the Plan.
“ Class 4 Claims ” means the
Claims to be satisfied solely from the Independence Distribution
Trust Assets in accordance with Section III.B.5 of the
Plan.
“ Class 5 Claims ” means: (a)
any Claim that would otherwise be classified as a General Unsecured
Claim against FLYi (other than a Class 3B Claim) but for the fact
that such Claim is Allowed in an amount equal to or less than
$1,000 and (b) any Class 3A Claim with respect to which the
holder has elected on its Ballot provided for voting on the Plan to
reduce its Claim to $1,000 and accept treatment in Class
5.
“ Class 6 Claims ” means: (a)
Customer Credit Claims that are not Priority Claims pursuant to the
order of the Bankruptcy Court dated September 22, 2006 and the
customer certification approved by such order and disseminated to
the holders of Customer Credit Claims in connection with the Plan,
(b) any Claim that would otherwise be classified as a General
Unsecured Claim against any Debtor (other than FLYi) but for the
fact that such Claim is Allowed in an amount equal to or less than
$1,000 and (c) any Class 4 Claim with respect to which the holder
has elected on its Ballot provided for voting on the Plan to reduce
its Claim to $1,000 and accept treatment in Class 6.
“ Convertible Notes ” means
the $125,000,000 of public convertible senior notes issued by FLYi
under the FLYi Indenture, bearing an interest rate of six percent
and convertible into FLYi common stock upon the occurrence of
certain events.
“ Creditors’ Committee
” has the meaning set forth in Background Paragraph B of this
Agreement.
“ Current Report ” means a
report Filed with the Bankruptcy Court by the Distribution Trustee,
on behalf of the Distribution Trust, describing developments
affecting the Distribution Trust in any material respect (as
determined by the Distribution Trustee in its Permitted Discretion)
in reasonable detail.
“ Debtors ” has the meaning
set forth in the introductory paragraph of this
Agreement.
“ Disbursing Agent ” means
the Distribution Trustee, in its capacity as a disbursing agent
pursuant to the Plan, or any third party acting as disbursing agent
at the direction of the Distribution Trustee.
“ Distribution Trust Assets ”
means the FLYi Distribution Trust Assets and the Independence
Distribution Trust Assets.
“ Distribution Trust Expenses
Account ” means the segregated trust account to be
established and maintained pursuant to Section IV.E.3 of the Plan
to fund the payment of Distribution Trust Expenses.
“ Distribution Trust Expenses
” means any and all reasonable fees, costs and expenses
incurred by the Distribution Trust, the Distribution Trustee (or
any Disbursing Agent, person, Entity or professional engaged by the
Distribution Trustee) or the Steering Committee on or after the
Effective Date in connection with any of their duties under the
Plan or this Agreement, including any administrative fees,
attorneys’ fees and expenses, insurance fees, taxes and
escrow expenses.
“ Distribution Trust ” has
the meaning set forth in Background Paragraph A of this
Agreement.
“ Distribution Trustee ” has
the meaning set forth in the introductory paragraph of this
Agreement.
“ Face Amount ”
means:
(a) when used in reference to the liquidated amount
of any Claim for which a proof of Claim was Filed on or before the
Bar Date (or was otherwise deemed timely Filed under applicable
law), (i) the full stated amount of such Claim, or (ii) such lesser
amount as determined by the Bankruptcy Court; or
(b) when used in reference to any Claim for which a
proof of Claim was not Filed on or before the Bar Date (or was not
otherwise deemed timely Filed under applicable law) or in reference
to the unliquidated amount of any Claim, the greatest of the
following amounts: (i) the amount of the Claim acknowledged by the
applicable Debtor(s) in any objection Filed to such Claim or in the
Schedules as an undisputed, noncontingent and liquidated Claim;
(ii) the amount estimated by the Bankruptcy Court pursuant to
Section 502(c) of the Bankruptcy Code; and (iii) the amount
established by the Distribution Trustee on behalf of the
Distribution Trust following the Effective Date;
provided , however , if a Claim is an Insured
Claim, then the Face Amount of such Claim shall equal the
applicable deductible under the relevant insurance policy, minus
any reimbursement obligations of the applicable Debtor(s) to the
insurance carrier for sums expended by the insurance carrier on
account of such Claim (including defense costs) if such amount is
less than the amount specified in clause (b) above; and
provided , further , that the Face Amount of any
Claim shall not exceed the amount of such Claim, as determined by a
Final Order or a Stipulation of Amount and Nature of
Claim.
“ FLYi Disputed Claims Reserves
” means, with respect to each of the FLYi Trust Accounts, the
reserve of Cash and other FLYi Distribution Trust Assets retained
in such FLYi Trust Account to satisfy Disputed Claims against the
Estate of FLYi, if, as and when they are Allowed, or, to the extent
such Disputed Claims are not Allowed, to satisfy Claims against the
Estate of FLYi that are Allowed in accordance with the terms of the
Plan.
“ FLYi Distribution Trust Assets
” means all assets of the Estate of FLYi, which consist
solely of any Causes of Action of FLYi, fifty percent (50%) of the
United Claim Settlement Proceeds and any Cash on hand, government
and corporate bonds and other instruments owned by FLYi.
“ FLYi Indenture ” means the
Indenture, dated as of February 25, 2004, by and between Atlantic
Coast Airlines Holdings, Inc., n/k/a FLYi, as issuer, and U.S. Bank
National Association, as trustee, together with each of its
supplemental indentures and amendments.
“ FLYi Priority Claims Trust
Account ” means the segregated trust account to be
established and maintained by the Distribution Trustee pursuant to
Section IV.E.1 of the Plan for the purpose of satisfying Allowed
Administrative Claims, Allowed Priority Tax Claims, Allowed
Priority Claims and Allowed Secured Claims against the Estate of
FLYi, in each case, solely from the FLYi Distribution Trust
Assets.
“ FLYi Trust Accounts ” means
the FLYi Priority Claims Trust Account, the FLYi Unsecured Claims
Trust Account and the FLYi Undeliverable Cash Trust
Account.
“ FLYi Undeliverable Cash Trust
Account ” means the segregated trust account to be
established and maintained by the Distribution Trustee pursuant to
Sections IV.E.2 and VI.D.2 of the Plan to hold undeliverable Cash
for the benefit of holders of Allowed Claims against the Estate of
FLYi solely from the FLYi Distribution Trust Assets.
“ FLYi Unsecured Claims Trust
Account ” means the segregated trust account to be
established and maintained by the Distribution Trustee pursuant to
Section IV.E.2 of the Plan for the purpose of satisfying
(a) Allowed Class 3A Claims (and Class 5 Claims that would
otherwise have been classified as Class 3A Claims) solely from the
FLYi Distribution Trust Assets in accordance with Section III.B.3
of the Plan, and (b) Allowed Class 3B Claims solely from the
FLYi Distribution Trust Assets in accordance with Section III.B.4
of the Plan.
“ General Unsecured Claim ”
means any Claim that is not an Administrative Claim, Priority Tax
Claim, Priority Claim, Secured Claim, Intercompany Claim, Penalty
Claim or Class 3B Claim.
“ Indemnified Parties ”
means, collectively, the Distribution Trustee and any directors,
officers, employees, agents, professionals, principals and other
representatives thereof and the members of the Steering
Committee.
“ Independence Disputed Claims
Reserves ” means, with respect to each of the
Independence Trust Accounts, the reserve of Cash and other
Independence Distribution Trust Assets retained in such
Independence Trust Account to satisfy Disputed Claims against the
Estates of the Debtors other than FLYi, if, as and when they are
Allowed, or, to the extent such Disputed Claims are not Allowed, to
satisfy Claims against such Estates that are Allowed in accordance
with the terms of the Plan.
“ Independence Distribution Trust
Assets ” means all assets of the Estates that are not
FLYi Distribution Trust Assets.
“ Independence Priority Claims Trust
Account ” means the segregated trust account to be
established and maintained by the Distribution Trustee pursuant to
Section IV.E.1 of the Plan for the purpose of satisfying Allowed
Administrative Claims, Allowed Priority Tax Claims, Allowed
Priority Claims and Allowed Secured Claims against the Estates of
the Debtors other than FLYi, in each case, solely from the
Independence Distribution Trust Assets.
“ Independence Trust Accounts
” means the Independence Priority Claims Trust Account, the
Independence Unsecured Claims Trust Account and the Independence
Undeliverable Cash Trust Account.
“ Independence Undeliverable Cash Trust
Account ” means the segregated trust account to be
established and maintained by the Distribution Trustee pursuant to
Sections IV.E.2 and VI.D.2 of the Plan to hold undeliverable Cash
for the benefit of holders of Allowed Claims against the Estates of
the Debtors other than FLYi solely from the Independence
Distribution Trust Assets.
“ Independence Unsecured Claims Trust
Account ” means the segregated trust account to be
established and maintained by the Distribution Trustee pursuant to
Section IV.E.2 of the Plan for the purpose of satisfying
(a) Allowed Class 4 Claims solely from the Independence
Distribution Trust Assets in accordance with Section III.B.5 of the
Plan, and (b) Allowed Class 6 Claims solely from the
Independence Distribution Trust Assets in accordance with Section
III.B.7 of the Plan.
“ Pending Payments ” means
identified amounts of Cash and other Distribution Trust Assets
(excluding undeliverable Cash) held by the Distribution Trust for
distribution or collection and distribution to holders of Allowed
Claims in specific amounts as of the date the Distribution Trust
receives the applicable Distribution Trust Assets.
“ Permitted Discretion ”
means a determination made in good faith and in the exercise of
reasonable business judgment.
“ Permitted Investments ”
means the following investments so long as they have maturities of
90 days or less: (a) obligations issued or guaranteed by the United
States or by any person controlled or supervised by or acting as an
instrumentality of the United States pursuant to authority granted
by the United States Congress; (b) obligations issued or
guaranteed by any state or political subdivision thereof rated
either AA or higher, or MIG 1 or higher, by Moody’s Investors
Service, Inc. or its successor or AA or higher, or an equivalent,
by Standard & Poor’s Ratings Services or its successor;
(c) commercial or finance paper which is rated either P-1 or
higher or an equivalent by Moody’s Investors Service, Inc. or
its successor or A-1 or higher or an equivalent by Standard &
Poor’s Ratings Services or its successor;
(d) certificates of deposit or time deposits of banks or trust
companies, organized under the laws of the United States, having a
minimum equity of $500,000,000; and (e) money market funds
registered under the Investment Company Act of 1940, as amended,
whose shares are registered under the Securities Act of 1933, as
amended, which invests in securities of the type described in
clause (a) above.
“ Plan ” has the meaning set
forth in the introductory paragraph of this Agreement.
“ Quarterly Receipts/Disbursements
Report ” means an unaudited report Filed with the
Bankruptcy Court by the Distribution Trustee, on behalf of the
Distribution Trust, within 45 days after the end of each of the
first three calendar quarters of each calendar year reflecting:
(a) all Distribution Trust Assets received by the Distribution
Trust during such calendar quarter; (b) all Distribution Trust
Assets held by the Distribution Trust at the end of such quarter;
and (c) all Distribution Trust Assets disbursed during such
calendar quarter, in each case itemized for the individual Trust
Accounts and sub-accounts.
“ Schedules ” means the
schedules of assets and liabilities and the statements of financial
affairs Filed by the Debtors, as required by section 521 of
the Bankruptcy Code, as the same may have been or may be amended,
modified or supplemented.
“ Stipulation of Amount and Nature of
Claim ” means a stipulation or other agreement between
the applicable Debtor or the Distribution Trustee and a holder of a
Claim, or an agreed order of the Bankruptcy Court, establishing the
amount and nature of a Claim or Interest.
“ Trust Accounts ” means the
Distribution Trust Expenses Account, the FLYi Trust Accounts, the
Independence Trust Accounts and any other trust account established
by the Debtors or the Distribution Trustee.
“ United States ” or “
U.S. ” means the United States of America.
1.2.1
Certain References
. Unless the context otherwise
requires: (a) all references in this Agreement to Sections or
Articles are to Sections or Articles of or to this Agreement; (b)
words in the singular include the plural and vice versa ;
and (c) the verb “will” will have a mandatory
connotation, indicating the parties’ respective obligations
hereunder. Whenever the words
“include,”“includes” or
“including” are used in this Agreement, they will be
deemed to be followed by the words “without
limitation.” All references to “$” or dollar
amounts are to lawful currency of the United States.
1.2.2
Titles and Headings
. Titles and headings to Sections
and Articles in this Agreement are inserted for convenience of
reference only, and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.
1.2.3
Inconsistencies with the
Plan . In the event of
any inconsistency between any provision of this Agreement, on the
one hand, and any provision of the Plan, on the other hand, the
provisions of the Plan will govern and control.
ARTICLE 2
ESTABLISHMENT OF THE
DISTRIBUTION TRUST
2.1
Creation and Purposes of the
Distribution Trust . The
Debtors and the Distribution Trustee, pursuant to the Plan and in
accordance with the Bankruptcy Code, hereby create a trust, which
is the “Distribution Trust” contemplated by the Plan.
The Distribution Trust is established for the following purposes:
(a) collecting, maintaining and administering any Distribution
Trust Assets for the benefit of the Beneficiaries; (b) liquidating
and distributing (including objecting to Claims and determining the
proper recipients and amounts of distributions to be made from the
Distribution Trust) the Distribution Trust Assets for the benefit
of the Beneficiaries who are determined to hold Allowed Claims as
expeditiously as reasonably possible; (c) pursuing any available
Causes of Action; (d) closing the Bankruptcy Cases; and (e)
otherwise implementing the Plan, all in accordance with the Plan
and this Agreement, and in furtherance thereof, the Distribution
Trustee will have the rights, power, privileges and obligations set
forth in ARTICLE 4 and elsewhere in this Agreement and the
Plan. The Distribution Trust has no objective to, and will not,
engage in the conduct of a trade or business and, subject to
Section 11.3, will terminate upon the completion of its
liquidation and distribution duties.
2.2
Identification of
Beneficiaries . On the
Effective Date, (a) FLYi will deliver to the Distribution Trustee
the Claims Report with respect to FLYi’s Estate, and (b)
Independence will deliver to the Distribution Trustee the Claims
Report with respect to Estates of the Debtors other than
FLYi.
2.3
Transfer of Initial Distribution
Trust Assets . On the
Effective Date, the Debtors will transfer to the Distribution Trust
the Distribution Trust Assets, whereupon title to such Distribution
Trust Assets will irrevocably vest in the Distribution Trust, free
and clear of Claims, Liens and Interests.
2.4
Tax Treatment
. For all U.S. federal income Tax
purposes, the Debtors, the Distribution Trustee and the
Beneficiaries will treat the transfer of Distribution Trust Assets
to the Distribution Trust pursuant to Section 2.3 as:
(a) to the extent of Pending Payments, a transfer of the
Pending Payments directly from the Debtors to the holders of such
Allowed Claims followed by the transfer of such Pending Payments by
the holders of such Allowed Claims to the Distribution Trust in
exchange for the rights to distributions from the Distribution
Trust; and (b) to the extent of amounts that are not Pending
Payments, as a transfer to one or more disputed ownership funds, as
described in Section 3.6. Accordingly, the holders of
Allowed Claims entitled to distribution of Pending Payments will be
treated for federal income Tax purposes as the grantors and deemed
owners of their respective shares of the Distribution Trust Assets
in the amounts of the Pending Payments and any earnings
thereon.
2.5
Distribution Trustee’s
Acceptance . The
Distribution Trustee hereby accepts the duties as trustee imposed
on it by this Agreement and agrees to observe and perform such
duties, on and subject to the terms and conditions set forth in
this Agreement. In connection with and in furtherance of the
purposes of the Distribution Trust, the Distribution Trustee hereby
expressly accepts the transfer of Distribution Trust Assets to the
Distribution Trust pursuant to Section 2.3, subject to the
provisions of the Plan, and the Distribution Trustee hereby further
expressly agrees to establish and maintain the Trust Accounts and
to distribute the Distribution Trust Assets in accordance with the
Plan and this Agreement.
ARTICLE 3
TRUST
ACCOUNTS
3.1
Creation of the Trust
Accounts . On or prior to
the Effective Date, the Distribution Trustee will establish in its
own name with federally insured United States banks each of the
Trust Accounts.
3.2
Distribution Trust Expenses
Account .
3.2.1
Initial Funding
. On the Effective Date, following
the transfer of Distribution Trust Assets to the Distribution Trust
pursuant to Section 2.3, the Distribution Trustee will fund
the Distribution Trust Expenses Account with $7,000,000 in Cash,
which will consist of amounts taken ratably from each of the FLYi
Trust Accounts and each of the Independence Trust
Accounts.
3.2.2
Use of Funds
. Except as otherwise ordered by the
Bankruptcy Court, the Distribution Trustee, in its capacity as
Disbursing Agent, will, in its Permitted Discretion, pay
Distribution Trust Expenses from the Distribution Trust Expenses
Account, without the need for further Bankruptcy Court approval.
Cash in the Distribution Trust Expenses Account will also be used
to pay Taxes owing in respect of any amounts included in the
Distribution Trust Expenses Account in accordance with Section
10.4.
3.2.3
Subsequent Funding
. If, at any time after the initial
funding of the Distribution Trust Expenses Account as contemplated
by Section 3.2.1, the Distribution Trustee determines, in
its Permitted Discretion, that the Cash balance of the Distribution
Trust Expenses Account will be insufficient to make all payments
payable therefrom in accordance with the terms of the Plan and this
Agreement (including any payments for indemnification pursuant to,
and in accordance with, Section 8.3), the Distribution
Trustee may transfer amounts ratably from each of the FLYi
Unsecured Claims Trust Account and the Independence Unsecured
Claims Account (to the extent Cash remains available in either such
account) to the Distribution Trust Expenses Account Cash in an
aggregate amount determined by the Distribution Trustee, in its
Permitted Discretion, to be necessary to ensure that the Cash
balance of the Distribution Trust Expenses Account will be
sufficient to make all such payments. To the fullest extent
possible, any transfer pursuant to this Section 3.2.3 will
be accomplished in a manner intended to avoid or minimize any
adverse impact on the ability to make full distributions of the
Allowed amounts of General Unsecured Claims and the Allowed amounts
of Class 3B Claims, each in accordance with the terms of the
Plan.
3.2.4
Excess Funds
. If, at any time after the initial
funding of the Distribution Trust Expenses Account pursuant to
Section 3.2.1, the Distribution Trustee determines that the
Cash balance of the Distribution Trust Expenses Account is in
excess of the amount that will be sufficient to make all payments
payable therefrom in accordance with the terms of the Plan and this
Agreement, the Distribution Trustee, in its Permitted Discretion,
may transfer such excess Cash ratably to the FLYi Priority Claims
Trust Account, the FLYi Unsecured Claims Trust Account, the
Independence Priority Claims Trust Account and the Independence
Unsecured Trust Claims Account.
3.3
Priority Claims Trust
Accounts .
3.3.1
Initial Funding
. On the Effective Date, after the
initial funding of the Distribution Trust Expenses Account in
accordance with Section 3.2.1, the Distribution Trustee will
(a) fund the FLYi Priority Claims Trust Account with $2,695,686 in
Cash from the FLYi Distribution Trust Assets, and (b) fund the
Independence Priority Claims Trust Account with $50,797,586 in Cash
from the Independence Distribution Trust Assets.
(a)
FLYi Priority Claims Trust
Account . Cash in the
FLYi Priority Claims Trust Account will be used by the Distribution
Trustee only to (i) satisfy the Allowed amounts of
Administrative Claims, Priority Tax Claims, Priority Claims and
Secured Claims against the Estate of FLYi in accordance with the
terms of the Plan, and (ii) pay Taxes owing in respect of any
amounts included in the FLYi Priority Claims Trust Account in
accordance with Section 10.4.
(b)
Independence Priority Claims
Trust Account . Cash in
the Independence Priority Claims Trust Account will be used by the
Distribution Trustee only to (i) satisfy the Allowed amounts
of Administrative Claims, Priority Tax Claims, Priority Claims and
Secured Claims against the Estates of the Debtors other than FLYi
in accordance with the terms of the Plan, and (ii) pay Taxes
owing in respect of any amounts included in the Independence
Priority Claims Trust Account in accordance with
Section 10.4.
3.3.3
Subsequent Funding
.
(a)
FLYi Priority Claims Trust
Account . If, at any time
after the initial funding of the FLYi Priority Claims Trust Account
pursuant to Section 3.3.1, the Distribution Trustee
determines, in its Permitted Discretion, that the Cash balance of
the FLYi Priority Claims Trust Account is insufficient to make all
payments payable therefrom in accordance with the terms of the Plan
and this Agreement, the Distribution Trustee will transfer from the
FLYi Unsecured Claims Trust Account (to the extent Cash remains
available therein) to the FLYi Priority Claims Trust Account Cash
in an amount determined by the Distribution Trustee, in its
Permitted Discretion, to be necessary to ensure that the Cash
balance of the FLYi Priority Claims Trust Account will be
sufficient to make all such payments. To the fullest extent
possible, any transfer pursuant to this Section 3.3.3
will be accomplished in a manner intended to avoid or minimize any
adverse impact on the ability to make distributions of the Allowed
amounts of General Unsecured Claims against the Estate of FLYi and
the Allowed amounts of Class 3B Claims, each in accordance with the
terms of the Plan.
(b)
Independence Priority Claims
Trust Account . If, at
any time after the initial funding of the Independence Priority
Claims Trust Account pursuant to Section 3.3.1, the
Distribution Trustee determines, in its Permitted Discretion, that
the Cash balance of the Independence Priority Claims Trust Account
is insufficient to make all payments payable therefrom in
accordance with the terms of the Plan and this Agreement, the
Distribution Trustee will transfer from the Independence Unsecured
Claims Trust Account (to the extent Cash remains available therein)
to the Independence Priority Claims Trust Account Cash in an amount
determined by the Distribution Trustee, in its Permitted
Discretion, to be necessary to ensure that the Cash balance of the
Independence Priority Claims Trust Account will be sufficient to
make all such payments. To the fullest extent possible, any
transfer pursuant to this Section 3.3.3 will be
accomplished in a manner intended to avoid or minimize any adverse
impact on the ability to make distributions of the Allowed amounts
of General Unsecured Claims against the Estates of the Debtors
other than FLYi in accordance with the terms of the
Plan.
(a)
FLYi Priority Claims Trust
Account . If, at any time
after the initial funding of the FLYi Priority Claims Trust Account
pursuant to Section 3.3.1, the Distribution Trustee
determines that the Cash balance of the FLYi Priority Claims Trust
Account is in excess of the amount that will be sufficient to make
all payments payable therefrom in accordance with the terms of the
Plan and this Agreement, the Distribution Trustee, in its Permitted
Discretion, may transfer such excess Cash to the FLYi Unsecured
Claims Trust Account.
(b)
Independence Priority Claims
Trust Account . If, at
any time after the initial funding of the Independence Priority
Claims Trust Account pursuant to Section 3.3.1, the
Distribution Trustee determines that the Cash balance of the
Independence Priority Claims Trust Account is in excess of the
amount that will be sufficient to make all payments payable
therefrom in accordance with the terms of the Plan and this
Agreement, the Distribution Trustee, in its Permitted Discretion,
may transfer such excess Cash to the Independence Unsecured Claims
Trust Account.
3.3.5
Disputed Claims
Reserves .
(a)
FLYi Priority Claims Trust
Account . On the
Effective Date, in connection with the initial funding of the FLYi
Priority Claims Trust Account pursuant to
Section 3.3.1, the Distribution Trustee will designate
a portion of such initial funding as FLYi Disputed Claims Reserves
in an amount sufficient to pay each holder of a Disputed
Administrative Claim, Disputed Priority Tax Claim, Disputed
Priority Claim and Disputed Secured Claim against the Estate of
FLYi the amount such holder would be entitled to receive if such
Disputed Claim were an Allowed Claim in its Face Amount. To the
extent any such Disputed Claims are not subsequently Allowed, the
Distribution Trustee may transfer excess Cash from the FLYi
Disputed Claims Reserve to the FLYi Unsecured Claims Trust Account
to satisfy Claims against the Estate of FLYi that are Allowed in
accordance with the terms of the Plan. In connection with any
subsequent transfers of Cash to the FLYi Priority Claims Trust
Account pursuant to Section 3.3.3 or 5.2.2(b),
the Distribution Trustee will, in its Permitted Discretion,
designate amounts so transferred, to the extent they are not
identified as Pending Payments, as FLYi Disputed Claims Reserves to
be retained in such Trust Account to satisfy any Disputed
Administrative Claims, Disputed Priority Tax Claims, Disputed
Priority Claims or Disputed Secured Claims in accordance with the
Plan, if, as and when they are Allowed or, to the extent such
Disputed Claims are not Allowed, the Distribution Trustee may
transfer excess Cash from the FLYi Disputed Claims Reserves to the
FLYi Unsecured Claims Trust Account to satisfy Claims against the
Estate of FLYi that are Allowed in accordance with the terms of the
Plan.
(b)
Independence Priority Claims
Trust Account . On the
Effective Date, in connection with the initial funding of the
Independence Priority Claims Trust Account pursuant to
Section 3.3.1, the Distribution Trustee will designate
a portion of such initial funding as Independence Disputed Claims
Reserves in an amount sufficient to pay each holder of a Disputed
Administrative Claim, Disputed Priority Tax Claim, Disputed
Priority Claim and Disputed Secured Claim against the Estates of
the Debtors other than FLYi the amount such holder would be
entitled to receive if such Disputed Claim were an Allowed Claim in
its Face Amount. To the extent any such Disputed Claims are not
subsequently Allowed, the Distribution Trustee may transfer excess
Cash from the Independence Disputed Claims Reserves to the
Independence Unsecured Claims Trust Account to satisfy Claims
against the Estates of the Debtors other than FLYi that are Allowed
in accordance with the terms of the Plan. In connection with any
subsequent transfers of Cash to the Independence Priority Claims
Trust Account pursuant to Section 3.3.3 or
5.2.2(b), the Distribution Trustee will, in its Permitted
Discretion, designate amounts so transferred, to the extent they
are not identified as Pending Payments, as Independence Disputed
Claims Reserves to be retained in such Trust Account to satisfy any
Disputed Administrative Claims, Disputed Priority Tax Claims,
Disputed Priority Claims or Disputed Secured Claims in accordance
with the Plan, if, as and when they are Allowed or, to the extent
such Disputed Claims are not Allowed, the Distribution Trustee may
transfer excess Cash from the Independence Disputed Claims Reserves
to the Independence Unsecured Claims Trust Account to satisfy
Claims against the Estates of the Debtors other than FLYi that are
Allowed in accordance with the terms of the Plan.
3.4
Unsecured Claims Trust
Accounts .
(a) On the Effective Date, after the initial funding
of the Distribution Trust Expenses Account in accordance with
Section 3.2.1 and the initial funding of the FLYi Priority
Claims Trust Account and the Independence Priority Claims Trust
Account in accordance with Section 3.3.1, the Distribution
Trustee will (i) fund the FLYi Unsecured Claims Trust Account with
the remainder of the Cash portion of the FLYi Distribution Trust
Assets, and (ii) fund the Independence Unsecured Claims Trust
Account with the remainder of the Cash portion of the Independence
Distribution Trust Assets.
(b) From and after the Effective Date, and in
addition to any funding that may result from the application of
Section 3.2.4 or 3.3.4, the Distribution Trustee
will
(i) fund the FLYi Unsecured Claims Trust Account
with the net Cash proceeds from the liquidation of any FLYi
Distribution Trust Assets, and (ii) fund the Independence Unsecured
Claims Trust Account with the net Cash proceeds from the
liquidation of any Independence Distribution Trust
Assets.
(a)
FLYi Unsecured Claims Trust
Account . Cash in the
FLYi Unsecured Claims Trust Account will be used by the
Distribution Trustee only to (i) fund the Distribution Trust
Expense Account and the FLYi Priority Claims Trust Account, as
contemplated by Sections 3.2.3 and 3.3.3,
respectively, (ii) satisfy Allowed General Unsecured Claims
against the Estate of FLYi and all Allowed Class 3B Claims, each in
accordance with the terms of the Plan, and (iii) pay Taxes
owing in respect of any amounts included in the FLYi Unsecured
Claims Trust Account in accordance with Section
10.4.
(b)
Independence Unsecured Claims
Trust Account . Cash in
the Independence Unsecured Claims Trust Account will be used by the
Distribution Trustee only to (i) fund the Distribution Trust
Expense Account and the Independence Priority Claims Trust Account,
as contemplated by Sections 3.2.3 and 3.3.3,
respectively, (ii) satisfy Allowed General Unsecured Claims
against the Estates of the Debtors other than FLYi in accordance
with the terms of the Plan, and (iii) pay Taxes owing in
respect of any amounts included in the Independence Unsecured
Claims Trust Account in accordance with Section
10.4.
3.4.3
Disputed Claims
Reserves .
(a)
Initial Funding; Subsequent
Funding From Other Trust Accounts .
(i) In connection with the initial funding of the
FLYi Unsecured Claims Trust Account pursuant to
Section 3.4.1, the Distribution Trustee will designate
a portion of such initial funding as FLYi Disputed Claims Reserves
in an amount sufficient to pay each holder of a Disputed General
Unsecured Claim against the Estate of FLYi and each holder of a
Disputed Class 3B Claim the amount such holder would be entitled to
receive if such Disputed Claim were an Allowed Claim in its Face
Amount. To the extent any such Disputed Claims are not subsequently
Allowed, the amount of such Disputed Claims will be retained in
such Trust Account to satisfy Claims against the Estate of FLYi
that are Allowed in accordance with the terms of the Plan. In
connection with any subsequent transfers of Cash to the FLYi
Unsecured Claims Trust Account pursuant to Section 3.2.4,
3.3.4, 3.4.3 or 5.2.2(b), the Distribution
Trustee will, in its Permitted Discretion, designate amounts so
transferred, to the extent they are not identified as Pending
Payments, as FLYi Disputed Claims Reserves to satisfy the Disputed
General Unsecured Claims against the Estate of FLYi and the
Disputed Class 3B Claims, each in accordance with the terms of the
Plan, if, as and when they are Allowed or, to the extent such
Disputed Claims are not Allowed, to satisfy Claims against the
Estate of FLYi that are Allowed in accordance with the terms of the
Plan.
(ii) In connection with the initial funding of the
Independence Unsecured Claims Trust Account pursuant to
Section 3.4.1, the Distribution Trustee will designate
a portion of such initial funding as Independence Disputed Claims
Reserves in an amount sufficient to pay each holder of a Disputed
General Unsecured Claim against the Estates of the Debtors other
than FLYi the amount such holder would be entitled to receive if
such Disputed Claim were an Allowed Claim in its Face Amount. To
the extent any such Disputed Claims are not subsequently Allowed,
the amount of such Disputed Claims will be retained in such Trust
Account to satisfy Claims against the Estates of the Debtors other
than FLYi that are Allowed in accordance with the terms of the
Plan. In connection with any subsequent transfers of Cash to the
Independence Unsecured Claims Trust Account pursuant to Section
3.2.4, 3.3.4, 3.4.3 or 5.2.2(b), the
Distribution Trustee will, in its Permitted Discretion, designate
amounts so transferred, to the extent they are not identified as
Pending Payments, as Independence Disputed Claims Reserves to
satisfy the Disputed General Unsecured Claims against the Estates
of the Debtors other than FLYi in accordance with the terms of the
Plan, if, as and when they are Allowed or, to the extent such
Disputed Claims are not Allowed, to satisfy Claims against the
Estates of the Debtors other than FLYi that are Allowed in
accordance with the terms of the Plan.
(b)
Deposit of New Cash Following the
Effective Date . Any Cash
that becomes available to the Distribution Trust following the
Effective Date, including as a result of the receipt of any income
or interest generated by the investment of Cash held in the FLYi
Unsecured Claims Trust Account or the Independence Claims Trust
Account, will be deposited in the FLYi Unsecured Claims Trust
Account or the Independence Claims Trust Account, as
applicable.
3.5
Undeliverable Cash Trust
Accounts .
3.5.1
FLYi Undeliverable Cash Trust
Account . After the
Effective Date, if any distribution to a holder of an Allowed Claim
against the Estate of FLYi is returned to the Distribution Trustee
as undeliverable, the Distribution Trustee will deposit the
undeliverable Cash in the FLYi Undeliverable Cash Trust Account.
The Distribution Trustee will hold such funds, in a book-entry
sub-account in the FLYi Undeliverable Cash Trust Account, for the
benefit of such holder. Until such holder notifies the Distribution
Trustee in writing of its then-current address, as contemplated by
Section 5.2.2, no attempt will be made to deliver
subsequent distributions to such holder and any such distributions
that such holder would otherwise be entitled to receive will
instead be transferred from the appropriate FLYi Trust Account to
the FLYi Undeliverable Cash Trust Account and credited to such
book-entry sub-account. All Cash held in such book-entry
sub-account for the benefit of such holder will be invested by the
Distribution Trustee in a manner consistent with the investment and
deposit guidelines set forth in this Agreement. Any income or
interest generated from such investment activities will be held in
such book-entry sub-account for the benefit of such holder until
such holder notifies the Distribution Trustee in writing of its
then-current address as contemplated by Section 5.2.2.
Subject to Section 5.2.2(b), when such holder notifies the
Distribution Trustee in writing of its then-current address as
contemplated by Section 5.2.2, the Distribution Trustee
will deliver to such holder all Cash contained in such
book-entry
